Podcast
Questions and Answers
What is the main goal of U.S. business?
What is the main goal of U.S. business?
- Ensuring equal distribution of wealth
- Maximizing profits and shareholder value (correct)
- Maintaining a steady employee retention rate
- Minimizing costs at all times
How do external environments affect the success or failure of an organization?
How do external environments affect the success or failure of an organization?
- They primarily impact employee satisfaction levels
- They have no impact on the organization's success or failure
- They only affect the organization's financial statements
- They can influence customer behavior and market demand (correct)
What elements contribute to resource distribution in the United States economic system?
What elements contribute to resource distribution in the United States economic system?
- Government intervention and control of all resources
- Collaborative resource allocation by all businesses
- Private enterprise exclusivity in resource distribution
- Markets, demand, and supply dynamics (correct)
How is the performance of an economic system evaluated?
How is the performance of an economic system evaluated?
What is the definition of profits in a business context?
What is the definition of profits in a business context?
Which term refers to everything outside an organization’s boundaries that might affect it?
Which term refers to everything outside an organization’s boundaries that might affect it?
What is the system for allocating a nation's resources among its citizens, both individuals and organizations?
What is the system for allocating a nation's resources among its citizens, both individuals and organizations?
Which type of economy relies on a centralized government to control all or most factors of production and allocation decisions?
Which type of economy relies on a centralized government to control all or most factors of production and allocation decisions?
In which type of economy do individual producers and consumers control production and allocation by creating combinations of supply and demand?
In which type of economy do individual producers and consumers control production and allocation by creating combinations of supply and demand?
What is the process of converting government enterprises into privately owned companies called?
What is the process of converting government enterprises into privately owned companies called?
In a market economy, what does 'demand' refer to?
In a market economy, what does 'demand' refer to?
'Supply' in a market economy refers to:
'Supply' in a market economy refers to:
'Private property rights' in a private enterprise system refer to:
'Private property rights' in a private enterprise system refer to:
'Freedom of choice' in a private enterprise system allows individuals to:
'Freedom of choice' in a private enterprise system allows individuals to:
'Profits' in a private enterprise system serve as a lure for some people to:
'Profits' in a private enterprise system serve as a lure for some people to:
In a market economy, what occurs when two or more businesses vie for the same resources or customers?
In a market economy, what occurs when two or more businesses vie for the same resources or customers?
What is the difference between social responsibility and ethics?
What is the difference between social responsibility and ethics?
How do individuals develop their personal codes of ethics?
How do individuals develop their personal codes of ethics?
What are the four general approaches to social responsibility?
What are the four general approaches to social responsibility?
How do issues of social responsibility and ethics affect small businesses?
How do issues of social responsibility and ethics affect small businesses?
Which term refers to the standards of behavior that guide individual managers in their work?
Which term refers to the standards of behavior that guide individual managers in their work?
What is the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment called?
What is the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment called?
According to the Stakeholder Model of Responsibility, what do companies strive to be responsible to first and foremost?
According to the Stakeholder Model of Responsibility, what do companies strive to be responsible to first and foremost?
What does 'unethical behavior' refer to?
What does 'unethical behavior' refer to?
What are two of the most common approaches to formalizing top management commitment to ethical business practices?
What are two of the most common approaches to formalizing top management commitment to ethical business practices?
What is the process of making an ethical judgment based on the rightness or wrongness of a proposed activity or policy called?
What is the process of making an ethical judgment based on the rightness or wrongness of a proposed activity or policy called?
What does 'ethics' refer to?
What does 'ethics' refer to?
'Social responsibility' refers to the overall way in which a business attempts to balance its commitments to which groups?
'Social responsibility' refers to the overall way in which a business attempts to balance its commitments to which groups?
'Business ethics' refers to ethical or unethical behaviors by employees in which context?
'Business ethics' refers to ethical or unethical behaviors by employees in which context?
'Managerial ethics' refers to standards of behavior that guide whom in their work?
'Managerial ethics' refers to standards of behavior that guide whom in their work?
What do companies strive to be responsible to first and foremost according to the 'Stakeholder Model of Responsibility'?
What do companies strive to be responsible to first and foremost according to the 'Stakeholder Model of Responsibility'?
What are two of the most common approaches to formalizing top management commitment to ethical business practices?
What are two of the most common approaches to formalizing top management commitment to ethical business practices?
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Study Notes
Business Goals and Environmental Influences
- Main goal of U.S. business: To generate profits for its owners or stakeholders.
- External Environments Affecting Businesses: Factors outside an organization's control can significantly impact its success or failure. These factors can include economic conditions, political climate, social trends, technological advancements, and competitive landscape.
U.S. Economic System
- Resource Distribution: The U.S. economic system relies on a market-based approach where resources are allocated based on supply and demand.
- Factors of Production: Key resources include land, labor, capital, and entrepreneurship.
- Economic Performance Evaluation: Measured through factors like GDP growth, unemployment rate, inflation, and productivity.
Economic Systems
- Command Economy: The government centrally controls resources and production, making all key economic decisions.
- Market Economy: Based on the principles of supply and demand, where individual producers and consumers determine what is produced and consumed.
- Privatization: The process of transferring government-owned enterprises to private ownership.
Key Concepts in Private Enterprise Systems
- Demand: Refers to the willingness and ability of buyers to purchase goods or services at various prices.
- Supply: Refers to the willingness and ability of sellers to produce and offer goods or services for sale at various prices.
- Private Property Rights: Individuals and organizations have the right to own and control their property, including land, buildings, and intellectual property.
- Freedom of Choice: Individuals have the right to choose their occupations, employers, and purchases.
- Profits: Serve as an incentive for businesses to innovate, expand, and create new products and services.
Market Dynamics and Competition
- Competition: When two or more businesses strive for the same resources or customers, leading to price pressures and market competition.
Ethics and Social Responsibility
- Social Responsibility: The overall way a business attempts to balance its commitments to various stakeholders, including employees, customers, investors, and the community.
- Ethics: Standards of behavior that guide individuals in their personal and professional lives.
- Personal Codes of Ethics: Developed through individual experiences, values, and beliefs.
- Social Responsibility Approaches:
- Economic Model: Focuses on maximizing profits.
- Legal Model: Focuses on complying with legal requirements.
- Ethical Model: Focuses on doing what is considered right and fair.
- Philanthropic Model: Focuses on actively contributing to the community and social causes.
- Ethics and Small Businesses: Small businesses are increasingly facing pressure to demonstrate ethical behavior and social responsibility.
- Managerial Ethics: Standards of behavior that guide individual managers in their decision-making and actions.
Stakeholder Model of Responsibility
- Stakeholders: Individuals or groups that have a vested interest in the success of a business.
- Stakeholder Model: Emphasizes the responsibility of companies to consider the well-being of all stakeholders, not just shareholders.
- Unethical Behavior: Actions that violate ethical standards or legal requirements.
- Formalizing Ethical Business Practices:
- Codes of Ethics: Written documents outlining the company's ethical values and standards.
- Ethics Training Programs: Provide employees with guidance and education on ethical decision-making.
- Ethical Judgment: The process of evaluating the rightness or wrongness of a proposed action based on ethical principles.
Key Definitions
- Ethics: Standards of behavior based on what is right and wrong.
- Social Responsibility: The overall way a business balances its commitments to stakeholders.
- Business Ethics: Ethical or unethical behaviors by employees within the context of their work.
- Managerial Ethics: Standards of behavior that guide managers in their work.
- Stakeholder Model of Responsibility: A model emphasizing the responsibility of companies to stakeholders.
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