Business Principles Chapter 1

a tangible product you can hold in your hand (computer, clothes, etc)

goods

an intangible product (education, healthcare, insurance, travel, etc.)

services

what does successfully fulfilling a market mean?

it means you can make money for yourself and provide jobs for others

define business

any activity that seeks to provide goods and services to others while operating at a profit

what is an entreprenuer?

a person who risks time and money to start and manage a business

what is revenue?

the total amount of money a business takes in during a given period by selling goods and services

what is profit?

the amount of money a business earns above and beyond what it spends for salaries and other expenses

what is loss?

loss occurs when a business’s expenses are more than its revenues

what is risk?

the chance an entrepreneur takes of losing time and money on a business that may not prove profitable

businesses take risks, but with great risks should come great profit. Risk should match ______ _______

risk should match profit potential

what is the standard of living?

the amount of goods and services people can buy with the money they have

what is quality of life?

the general well-being of a society in terms of its political freedom, natural environment, education, healthcare, safety, amount of leisure, and rewards that add to personal satisfaction

what are stakeholders?

all the people who stand to gain or lose by the policies and activities of a business and whose concerns the businesses need to address

a world class company must respond to ____ __________

ALL stakeholders

What is outsourcing?

contracting with other companies to do some of the firm’s functions like production or accounting

what is insourcing?

Foreign companies opening offices and factories within the United States

what are the five factors of production?

land, labor, capital, entrepreneurship, and knowledge

which of the five factors of production contribute the most to making countries rich?

entrepreneurship and knowledge

define efficiency

producing goods and servies using the least amount of resources

define productivity

the amount of output you generate given the amount of input

define empowerment

giving frontline workers the responsibility, authority, and freedom to respond quickly to customer requests (learn how your staff learns and how they want to be managed)

what are demographics?

the population in terms of size, density, and characteristics like age, race gender, and income

what are four important changes to the global environment that impact businesses?

growth of global competition, increase of free trade amongst nations, development of efficient distribution systems, advances in communication systems

describe the evolution of business (eras)

agriculture era, manufacturing era, service era, information-based era

how has efficiency impacted farmers and agriculture?

efficiency has led to fewer farmers employed with larger farms

which era of business generated the most increase in employment? (70% of US economy)

the service era/industry

the combined efforts of _________, ____________, and ______________ are required to maintain a high quality of life

businesses, nonprofit organizations, and government agencies