Chapter 1: Taking risk & making profits

1.1 Describe the relationship between profit and risks, and show how businesses and nonprofit organization can raise the standard of living for all

Nonprofit Organizations

  • an entity whose goals do not include making a personal profit for its owners or organizers

  • achieve social or educational objectives

Financial Management in nonprofits

  • generate financial gains

  • utilized to meet and further their social or educational goals

1.2 Explain how entrepreneurship and other factors of production contribute to the creation of wealth

Positives of an entrepreneur

  • freedom to succeed

  • ability to make ur own decisions

  • possibility of accumulating wealth

Negatives of an entrepreneur

  • not as many benefits

  • no health insurance

  • no paid vacations

  • freedom to fail

Importance of an entrepreneur

  • to create wealth for its citizens, entrepreneurs must produce goods and services

The five factors of production

Land

  • natural resources

Labor

  • workers

Capital

  • machines

  • tools

  • buildings

Entrepreneurship

  • business innovation

Knowledge

  • expertise and skills

1.3 Analyze the effects of the economic environment and taxes on businesses

Allowing private ownership of businesses

  • encourages entrepreneurship by giving individuals the freedom to start and grow their enterprises

Minimizing government interference

  • free exchange of goods and services

  • creates a more conducive environment for businesses to thrive

Passing laws that enable businesspeople to write enforceable contracts

  • provides legal protections and stability for commercial transactions

Tradable currency

  • in world markets which facilitates international trade and investment,

  • allows entrepreneurial opportunities

Minimizing corruption

  • ensures a fair and transparent business environment where merit and innovation is rewarded

1.4 Describe the effects of technology on businesses

Increases productivity

What is productivity?

  • the amount of output you generate given the amount of input

Transforming the workplace

  • brought forth innovative concepts that have revolutionized business practices

  • Ex. advancements in tech such as phones and the internet

E-commerce

  • buying and selling of goods online

What are the two types of e-commerce?

  • Business-to-consumer (B2C)

  • where companies sell products or services directly to individual customers

Business to business (B2B): where companies conduct transactions with other businesses

Database

  • electronic storage file for information

  • efficiently organize store and retrieve vast amounts of customer data, enabling them to provide personalized services and respond quickly to consumer needs

Identity theft

  • obtaining someone’s personal information such as Social Security aand credit card info for illegal purposes

1.5 Demonstrate how businesses can meet and beat competition

Exceeding customer expectations

  • low prices and great customer service

Competing by restricting and empowerment

  • A manager gives frontline employees more decision-making power to get a better idea of what consumers want

Empowerment

  • giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer request.

1.6 Analyze the social changes affecting businesses

demography

  • the statistical study of the human population with regard to its size, density and other characteristics

Managing diversity

Inclusion

  • having a voice that is hard

Belonging

  • feeling part of a community

Ways businesses conduct their advertisements depend on which generation they’re trying to reach

1.7 Identify what businesses must do to meet global challenges, including war and terrorism

War & Terrorism

  • drained trillions of dollars from U.S. economy

  • Money was diverted to the Ukraine war effort

  • Increased unrest creates uncertainty, which may be the biggest risk in business

Does business expand to global markets? new jobs will be created

Ecological environments

Climate change

  • the movement of the temperature of the planet over time

Greening

  • the trend towards saving energy and producing products that cause less harm to the environment

1.8 Review how past trends are being repeated in the present and what those trends mean for tomorrow’s college graduates

In the 1800s, agriculture led the US to economic development

In the 20th century, this moved jobs from farms to factories

Past trends will impact how we see the world because of the prior knowledge we have gained. We can look at the positive impacts to improve our decisions and make wise choices. In terms of these negative aspects, we can make sure nothing happens