Chapters 1-3

Understanding Business by Nickels

personalized - does not include everything

CHAPTER 1

Elements of Business Environment

• economic&legal

• technological

• competitive

• social

Global factors = trade agreements, wars/threats, economic conditions, climate change

Communism vs Socialism vs Capitalism

Communism - everything restricted and managed by gov

Socialism - only basic economy restricted (ex. mining)

Capitalism - only regulations, no gov control

Business - any activity seeking to provide goods and services for profit

Challenges of new leaders since the global information-based revolution;

• service era closing (though still the largest)

• learning world quality standard

Monetary vs Fiscal Policy

Monetary Policy - economic balance by money supply and interest rates

Fiscal Policy - increasing and decreasing taxes and gov spending to stabilize the economy

Business Cycles

boom → recession → depression → recovery

CHAPTER 2

Franchising - good idea w/business sells others the right to use business name and sell product or service in a given territory in a specified manner

Licensing - give right to manufacture or use the trademark to foreign company for a small fee

• Export Assistance Centers handle direct exporting and provide hands-on exporting assistance and trade-finance support for small and medium-sized businesses

• think foreign subsidiary as parent country with other country like U.S and Britain before Declaration of Independence

• Small and medium business are often better prepared to extend into global markets and react quickly to opportunities

Obstacles in Global Markets

• sociocultural

• economic&financial

• legal&regulatory

• physical&environmental

Trade Protectionism - limit on number of products in certain categories that a nation can import

Joint Venture - partnership in which two or more countries, often from different countries, join to undertake a major project

Contract Manufacturing - foreign country’s production of private-labeled goods to which a domestic company attaches brand name or trademark

Common Market - regional group of countries with common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members

Ethonocentricity - attitude that your own culture is superior to other cultures

Outsourcing - process whereby a firm contracts with other companies, often in other countries, to do some or all of its functions.

CHAPTER 3

Ethics

Society set standards for moral behavior.

• Business should be managed ethically because…

  • reduced likelihood of lawsuits by employees or customers

  • reduced employee turnover

  • businesses with good reputations attract customers

• Must communicate with outside parties/stakeholders such as CUSTOMERS when implementing new ethics program

Compliance-Based Ethic Codes - emphasizes preventing unlawful behavior by increasing control and penalizing wrongdoers

Integrity-Based Ethic Code - organization’s guiding values, creates environment that supports ethically sounds behavior, and stresses shared accountability

Social Audit - evaluate progress toward implementing socially responsible programs

Corporate Responsibility vs Policy → might not be completely accurate

• Responsibility includes anything having to do with acting responsibility within society (treating employees fairly) = concerns for welfare of society

• Policy refers to position firms take on social and political issues