Business Claims and Evidence

• A claim is a statement or assertion that is open to debate, often concerning financial performance, strategy effectiveness, or data interpretation in business.
• Claims can be factual, value-based, or causal.
• Factual claims are statements verifiable with empirical evidence.
• Value claims reflect judgment, like deeming a product the best.
• Causal claims suggest cause-and-effect relationships.

Assessing Evidence Quality

• Assess evidence quality by relevance, credibility, accuracy, consistency, and sufficiency.
• Relevance indicates if the evidence directly supports the claim.
• Credibility involves the reliability and trustworthiness of the source.
• Accuracy means the evidence is correct and free of errors.
• Consistency checks if the evidence aligns with other evidence.
• Sufficiency asks if there is enough evidence for the claim.

Identifying and Evaluating Assumptions

• Underlying assumptions are unspoken beliefs supporting an argument's reasoning.
• Identify assumptions by questioning what is being taken for granted.
• Evaluation includes considering if the assumption is reasonable and holds across contexts.

Underlying Values

• Underlying values are fundamental principles affecting decisions and views.
• Values in business relate to ethics, sustainability, social responsibility, or profit.
• These influence decisions, especially with ambiguity or ethical concerns.

Causal Claims

• A causal claim asserts one event directly affects another.
• Understanding causal claims is vital for informed business decisions.
• Establishing causality requires demonstrating the cause precedes, no third variable is responsible and the relationship is consistent.

Challenges of Causal Reasoning

• Confounding variables can affect the cause-and-effect relationship.
• Directionality issues arise when proving which event is the cause.
• Correlations do not confirm causation.
• Controlled experiments are reliable for establishing causal relationships.
• Statistical analysis can aid in controlling for confounding variables.
• Longitudinal studies help track cause and effect over time.

Building a Persuasive Argument

• Ethos involves establishing your credibility.
• Pathos appeals to the audience’s emotions and values.
• Logos uses facts and logical reasoning.
• Repetition reinforces key points.
• Appeal to authority uses expert citations.
• Counter-arguments address opposing views.

Writing an Effective Essay

• The introduction should hook the reader, introduce the topic, and state the thesis.
• Body paragraphs should each focus on a single point supporting the thesis.
• The conclusion summarizes the main points and restates the thesis.

Financial Statements

• The balance sheet shows assets, liabilities, and equity at a specific time.
• The income statement summarizes revenues, costs, and expenses over a period.
• The cash flow statement tracks the flow of cash in and out of the business.
• The statement of changes in equity shows changes in ownership equity.

Roles of Accountants

• Accountants record financial transactions, prepare financial statements, and ensure compliance.
• Accountants also provide strategic financial advice.
• CPA (Certified Public Accountant) requires passing exams and meeting experience requirements.
• Accountants ensure statements are accurate and comply with regulations.
• Accountants are increasingly responsible for advising on strategy, managing risks, and ensuring ethical practices.
• Accountants may lack training in strategic and ethical decision-making or experience conflicts of interest.

Money and the Financial System

• Money is a medium of exchange.
• The financial system includes institutions and markets facilitating capital flow.
• Banks and insurance companies help savers connect with borrowers.

Value Creation and Extraction

• Value creation is making a product worth more than its production cost.
• Value extraction takes profits from existing value, often through resource control.

Business Functions

• The value chain perspective looks at how parts of a business contribute to value creation.
• Management sciences use quantitative methods for solving problems.
• Operations management deals with processes that transform inputs into outputs.
• Supply chain management handles the flow of goods and services to the customer.
• International business involves trade and investment across borders.

Human Resources and Motivation

• Organizational behavior focuses on workplace dynamics.
• HR management handles recruitment and employee welfare.
• Extrinsic motivation is driven by external rewards.
• Intrinsic motivation is driven by internal factors.
• The economic view sees motivation as a response to incentives.
• Incentives are rewards or punishments to encourage certain behaviors.
• The effect of monetary incentives on undermining intrinsic motivation is debated.

Marketing and Social Good

• Marketing promotes products, manages customer relationships, and researches the market.
• Brand evolution has shifted from simple identifiers to comprehensive experiences.
• Marketing can promote social change or address social issues.

Forms of Ownership

• Cooperatives, ESOPs, and B Corps focus on shared ownership and social responsibility.
• The new economic movement emphasizes sustainable business practices and ethical consumption.
• Challenges include resistance from traditional businesses.