Business and Ethics Study Guide

Final Exam - Study Guide

• Exam date: Monday, 16 Dec (12:30 – 3:30 PM)
• Subject: Business and related topics (based on provided text)

Chapter 1: The Concept of Business and Profit

• Business is an organization that provides goods or services to earn profits.
• Profit is the difference between a business's revenues and its expenses.
• Profit is the amount of money gained after selling goods and services minus the expenses.

Chapter 2: Ethics

• Ethics: People's beliefs about what is right and wrong or good and bad in actions that affect others.
• Ethical behavior: Behavior that conforms to individual beliefs and social norms about what's right and good.
• Unethical behavior: Behavior that conforms to individual beliefs and social norms about what is defined as wrong and bad.

Dimensions of the External Environment

• Domestic Business Environment: The environment in which a firm conducts its operations and derives its revenues (customers, suppliers, competitors).
• Global Business Environment: International forces that affect a business; various factors affect the global environment at both general and immediate levels (international suppliers, cultures, currencies).
• Technological Environment: Includes all the ways by which firms create value for their constituents; technology includes human knowledge, work methods, physical equipment, electronics, telecommunications, and various processing systems (mobile apps for online shopping).
• Political-Legal Environment: Relationship between business and government, usually in the form of government regulation of business (employment laws, tax policies, safety and health standards).
• Sociocultural Environment: Customs, mores, values, and demographic characteristics of the society in which an organization functions (acceptable to society or not, recycling).
• Economic Environment: Relevant conditions that exist in the economic system in which a company operates (economic system, spending power of consumer, inflation, unemployment).

Five Factors of Production

• Labor: The human resource element in businesses, including physical and intellectual contributions people make in economic production.
• Capital: The financial resources needed to create and operate a business enterprise.
• Entrepreneurs: An individual who accepts the risks and opportunities entailed by creating and operating a business.
• Physical Resources: Tangible things that organizations use to conduct their business.
• Information Resources: Businesses rely on information resources (market forecasts, specialized knowledge of people, and economic data).

Types of Economic Systems

• Planned Economy: A system where a centralized government controls all or most factors of production and allocation decisions (Example: Communism).
• Market Economy: Ownership of both factors of production and businesses is private. Producers and consumers are free to sell and buy as they choose (Example: Capitalism).
  • Communism: A type of planned economy with a high degree of government control and high social services (e.g., North Korea, China).
  • Socialism: An alternative to communism on a spectrum with planned and market economies that leans toward a higher degree of government control for certain goods/services but allows for some private markets (Examples may not be included).
  • Capitalism: A type of market economy with a low degree of government control and low level of social services (e.g., U.S. & Japan).

Chapter 3: Importance of Small Businesses

• Job Creation: Small businesses are an important source of new jobs.
• Innovation: Small businesses are sources of revolutionary ideas and inventions.
• Contributions to Big Businesses: Small businesses provide many services and raw materials to big businesses.

Chapter 8: Forms of Employee Behavior

• Employee Behavior: The pattern of actions by members of an organization that directly or indirectly influences the organization's effectiveness.
• Performance Behavior: The total set of work-related behaviors that the organization expects employees to display.
• Organizational Citizenship: The behavior of individuals who make a positive overall contribution to the organization beyond performance requirements.
• Counterproductive Behavior: Employee behavior that goes against the legitimate interests of an organization (e.g., absenteeism, turnover, resignations, violence, harassment, poor quality of work, theft, or misuse of property).

Chapter 9: Early Approaches to Leadership

• Task-Focused Leader Behavior: Leader behavior focusing on how tasks should be performed to meet goals and achieve performance standards.
• Employee-Focused Leader Behavior: Leader behavior focusing on employee satisfaction, motivation, and well-being.

Chapter 10: HR Planning

• Job Analysis: A systematic examination of jobs within an organization, resulting in a job description and job specification.
• Job Description: Lists duties, responsibilities, working conditions, tools, materials, equipment, and information used to perform the job.
• Job Specification: Lists skills, abilities, and credentials needed to perform the job effectively.

Chapter 11: Marketing

• Utility: The ability of a product to satisfy a human want or need.
• Consumer Behavior: The study of the decision-making process by which people buy and consume products.
• Data Warehousing: The collection, storage, and retrieval of customer data in electronic files.
• Data Mining: The application of electronic technologies for searching, sifting, and reorganizing data pools to uncover useful information.

Chapter 14: Business Communication Technologies Using the Internet

• Intranet: An organization's private network of internally linked websites accessible only to employees.
• Extranet: A system allowing outsiders limited access to a firm's internal information network.
• Internet: A global network connecting computers around the world.

Chapter 15: Accounting

• Accounting: A comprehensive system for collecting, analyzing, and communicating financial information, tracking, and recording financial activity.
• Users of Accounting Information: Business managers, employees, investors, creditors, tax authorities, and government regulatory agencies.

Chapter 16: Money

• Money: A portable, divisible, durable, and stable object serving as a medium of exchange, a store of value, and a measure of worth.
• M-1 (Spendable Money Supply): A measure including cash, checks, and checking accounts.

Chapter 16: Financial Institutions

• Commercial banks: Accept deposits, make loans, earn profits, pay interest, and dividends (examples mentioned).
• Savings institutions: Established to promote general savings.
• Credit unions: Non-profit, cooperative financial institutions owned by members (often employees of a particular organization) for saving and borrowing.
• Non-deposit institutions: Use inflowing funds for purposes other than earning interest (pension funds, insurance companies, finance companies, securities investment dealers, and more).

Additional Topics

• Globalization: Process by which the world economy becomes a single interdependent system.
• Balance of Trade: The total economic value of a country's exports minus its imports.
• Legal and Political Differences: Local content laws, business practice laws (quotas, embargoes, tariffs, and subsidies).
• Operations Planning: Capacity planning, location planning, layout planning, quality planning, methods planning (relevant steps).
• Lean Production System: A production system designed for smooth production flows that avoids inefficiencies, eliminates unnecessary inventories, and continuously improves processes.
• Supply Chain Management (SCM): A system of companies that work together to create a product; includes the flow of information, materials, and services starting with raw-materials suppliers, adding value, until it reaches the end customer.
• The Stakeholder Model of Responsibility: Companies concentrate on employees, customers, investors, suppliers, and local/international communities.
• Five Basic Management Skills: Technical skills, human relations skills, conceptual skills, decision-making skills, and time management skills.
• Key terms related to Management and Leadership styles (Transformational, Transactional, Charismatic, others).
• Marketing Strategy: All marketing programs and activities; includes: Product, Pricing, Place, and Promotion.
• IT Risks and Threats: Hackers, Identity theft.
• IT Protection Measures: Firewalls (and related devices).

Prepare for your upcoming final exam on Business concepts and ethics. This study guide covers the fundamentals of business, including profit definitions and ethical considerations, alongside the dimensions of the external environment. Brush up on these key topics to ensure you're ready for the exam!