Podcast
Questions and Answers
Which of the following best describes a conflict of interest?
Which of the following best describes a conflict of interest?
What is corporate social responsibility (CSR)?
What is corporate social responsibility (CSR)?
What characterizes strategic CSR?
What characterizes strategic CSR?
Which of the following rights is NOT typically associated with consumer rights under CSR?
Which of the following rights is NOT typically associated with consumer rights under CSR?
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What is sustainable development in the context of business?
What is sustainable development in the context of business?
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How can small businesses impact the economy?
How can small businesses impact the economy?
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Which aspect of consumerism pressures businesses to meet consumer needs?
Which aspect of consumerism pressures businesses to meet consumer needs?
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What is identity theft primarily classified as?
What is identity theft primarily classified as?
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What is one factor contributing to the increase in the number of small businesses?
What is one factor contributing to the increase in the number of small businesses?
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Which characteristic is more likely to be associated with small businesses compared to larger organizations?
Which characteristic is more likely to be associated with small businesses compared to larger organizations?
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What best describes the 'entrepreneurial spirit'?
What best describes the 'entrepreneurial spirit'?
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Which of the following is NOT typically included in an effective business plan?
Which of the following is NOT typically included in an effective business plan?
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What is the primary purpose of seed money?
What is the primary purpose of seed money?
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What role does an advisory board play in a small business?
What role does an advisory board play in a small business?
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Which type of investor typically provides funding later in a business's life cycle and in larger amounts?
Which type of investor typically provides funding later in a business's life cycle and in larger amounts?
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Which method involves soliciting funds from the general public for business purposes?
Which method involves soliciting funds from the general public for business purposes?
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Why might someone choose to start their own company?
Why might someone choose to start their own company?
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What is a common feature of business incubators?
What is a common feature of business incubators?
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What is a business model primarily concerned with?
What is a business model primarily concerned with?
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Which term describes organizations that provide goods and services without profit motives?
Which term describes organizations that provide goods and services without profit motives?
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What is meant by 'competitive advantage'?
What is meant by 'competitive advantage'?
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Which is typically a feature of capital-intensive businesses?
Which is typically a feature of capital-intensive businesses?
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What does the economic environment primarily affect?
What does the economic environment primarily affect?
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What characterizes a monopoly in a market?
What characterizes a monopoly in a market?
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Which term refers to the ability of buyers to purchase products at various price points?
Which term refers to the ability of buyers to purchase products at various price points?
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What is a primary role of human resources (HR) in an organization?
What is a primary role of human resources (HR) in an organization?
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What does the term 'insider trading' refer to?
What does the term 'insider trading' refer to?
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What is one key aspect of a code of ethics?
What is one key aspect of a code of ethics?
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What defines a recession in economic terms?
What defines a recession in economic terms?
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What does scarcity refer to in economics?
What does scarcity refer to in economics?
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In what economic system does the government control most factors of production?
In what economic system does the government control most factors of production?
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What is ethical behavior in business primarily concerned with?
What is ethical behavior in business primarily concerned with?
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Study Notes
Business Basics
- Any profit-seeking organization providing goods or services to satisfy customer needs.
- Revenue: Money a company earns from selling goods/services.
- Business model: Concise description of how a business plans to generate revenue.
- Profit: Revenue minus all costs involved in doing business.
- Competitive advantage: A feature that makes a product/company more appealing to its target market.
- Not-for-profit organization: Provides goods/services without profit motive.
- Goods-producing businesses: Create value by making tangible things.
- Service businesses: Create value by performing activities benefiting customers.
Risk and Reward
- Goods-producing businesses are often capital-intensive.
- Service businesses are often labor-intensive.
- Barrier to entry: Resources or capabilities needed to enter a market.
- Business Mindset: Recognizes the decisions & challenges needed to satisfy customer needs.
Business Environments
- Social environment: Trends and forces shaping society at large.
- Stakeholders: Internal/external groups affected by a company's decisions.
- Technological environment: Practical application of science to innovations, products, processes.
- Disruptive technologies: Fundamentally change an industry, potentially creating or destroying companies.
- Economic environment: Conditions & forces affecting goods, services, labor costs, and buyer/seller behavior.
- Legal and regulatory environment: Laws/regulations at various levels (local, state, national, international).
- Market environment: Target customers, buying influences, competitors offering similar products.
Business Functions
- Research & Development (R&D): Conceive and design new products.
- Information Technology (IT): Systems for communication, information sharing, and offering new services.
- Manufacturing, Production, or Operations: Where goods are made or services are performed.
- Purchasing, Logistics, Facilities Management: Sub-functions within manufacturing/operations.
- Marketing: Identifies market opportunities, develops products, creates branding/advertising, sets prices.
- Finance and Accounting: Manages finances, ensures funds are available, monitors spending, reports to management & external audiences.
- Human Resources (HR): Recruits, hires, develops, and supports employees.
Professionalism in Business
- Performing at a high level and with purpose and pride.
Economy
- The sum total of economic activity within a region.
Economics
- Study of how society uses scarce resources to produce and distribute goods/services.
- Microeconomics: Study of consumer, business, and industry decisions on quantity and prices.
- Macroeconomics: Study of "big picture" economy including firm competition, government policies, and resource allocation.
Factors of Production
- Natural resources: Land, forests, minerals, water, etc.
- Human resources: People working for a company.
- Capital: Funds for business operations and physical/human-made elements (factories, computers).
Business Concepts
- Entrepreneurship: Combining innovation, initiative, and risk-taking to create new businesses.
- Knowledge: Expertise gained through experience or association.
- Scarcity: Finite supply of productive resources.
- Opportunity cost: Value of the best alternative not chosen.
- Economic system: Policies defining a society's economic structure (e.g., free-market, planned).
- Free-market system: Market buyers and sellers determine production and quantities.
- Capitalism: System with economic freedom and competition.
- Planned system: Government controls factors of production and resource allocation.
- Socialism: Public ownership of key industries + private ownership of less vital industries.
- Nationalization: Government takeover of companies or industries.
- Privatization: Transferring government-performed services to private businesses.
Market Dynamics
- Demand: Buyers' willingness and ability to purchase at various prices.
- Supply: Quantity of a product a seller is willing to provide at various prices.
- Competition: Rivalry among businesses.
- Pure competition: Many buyers/sellers, no one entity controls prices.
- Monopoly: One dominant company controls prices.
- Monopolistic competition: Many sellers each slightly differentiate their products.
- Oligopoly: Few suppliers control a good or service (often only two).
Economic Cycles and Indicators
- Recession: Decline in national income, employment, and production (at least six months of GDP decline).
- Business cycle: Fluctuations in economic growth over several years.
- Unemployment rate: Proportion of the labor force without a job.
- Inflation: Steady increase in prices throughout the economy.
- Deflation: Steady decrease in prices throughout the economy.
Government's Role in a Free Market
- Protect stakeholders.
- Foster competition.
- Encourage innovation and development.
- Stabilize and stimulate the economy.
Government Regulation
- Regulation: Utilizing laws and policies to govern economic activity.
- Deregulation: Removing regulations allowing the market to self-correct.
- Gross Domestic Product (GDP): Value of all final goods/services produced within a nation's borders (excludes overseas operations).
Business Ethics
- Ethics: Rules or standards guiding individual or group conduct.
- Transparency: Affected parties can observe relevant aspects of transactions or decisions.
- Insider trading: Using confidential information to benefit from market fluctuations.
- Ethical behavior: Competing fairly, communicating truthfully, being transparent, not harming others.
Ethical Decision-Making
- Cultural differences: Can influence ethical perceptions.
- Knowledge: Understanding ethical principles informs decision-making.
- Organizational behavior: Company culture and practices influence ethical choices.
- Code of ethics: Written statement outlining guiding organizational principles.
- Whistle-blowing: Disclosure of illegal or unethical behavior within a company.
- Ethical lapse: A morally, legally, or ethically wrong decision.
- Ethical dilemma: Situation where multiple perspectives offer valid support.
- Conflict of interest: Competing loyalties potentially leading to ethical lapses (personal gain influences decisions).
Corporate Social Responsibility (CSR)
- Corporate social responsibility (CSR): Business has obligations beyond profit.
- Philanthropy: Donating to charitable, humanitarian, or educational organizations.
- Strategic CSR: Social contributions aligned with business strategy.
- Sustainable development: Minimizing pollution, resource depletion, ensuring resources for future generations.
- Consumerism: Movement advocating for consumer rights.
- Identity theft: Stealing personal information for fraud.
CSR: Consumer Rights
- Buy safe products and safely.
- Be informed about products.
- Choose products freely.
- Be heard.
Small Business
- Independently owned and operated, not dominant in its field, employs fewer than 500 people (number varies by industry).
Importance of Small Businesses
- Provide jobs.
- Introduce new products.
- Meet the needs of larger organizations.
- Inject money into the economy.
- Take risks larger companies avoid.
- Offer specialized goods/services.
Characteristics of Small Businesses
- Narrow focus.
- Limited resources.
- Easy to innovate.
- Quick decision-making and adaptability to market changes.
Factors Increasing Small Business Growth
- E-commerce.
- Social media.
- Technological advancements.
- Diversity in entrepreneurship.
- Corporate downsizing and outsourcing.
Entrepreneurial Spirit
- Positive, forward-thinking desire to create profitable businesses.
Motivations for Starting a Business
- Control over one's future.
- Tired of working for someone else.
- Passion for new products.
- Personal business goals.
- Lack of attractive employment opportunities.
Business Plan
- Summarizes a business venture, goals, and plans to achieve those goals.
Key Elements of a Business Plan
- Summary.
- Mission and objectives.
- Company overview.
- Products and services.
- Management and key personnel.
- Target market.
- Marketing strategy.
- Design and development plans.
- Operations plan.
- Start-up schedule.
- Major risk factors.
- Financial projections.
- Exit strategy.
Supporting Small Businesses
- Advisory board: Subject-area experts and contacts to advise business owners.
- Business incubators: Facilities housing small businesses and providing support.
- Seed money: Initial capital for a business.
- Micro lenders: Organizations loaning smaller amounts to ineligible businesses.
- Venture capitalists (VCs): Investors providing money for start-ups or turnarounds in exchange for ownership.
- Angel investors: Private individuals investing in start-ups (typically smaller amounts).
- Initial public offering (IPO): A company's first public share offering.
- Crowd funding: Raising project funds, investment, or loans from the public.
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Description
Explore the fundamentals of business operations, including the distinction between goods-producing and service businesses. This quiz covers critical concepts like revenue, profit, competitive advantage, and risk assessment in business models. Test your understanding of how these factors influence the success of an organization.
