MIE 201 Study Guide PDF

Study Guide: MIE 201 Chapter One: The Dynamics of Business and Economics ​ Nature of Business: ○​ Provides products (tangible & intangible) to satisfy needs and wants. ​ Example: Tangible - Smartphones; Intangible - Streaming services like Netflix....

Study Guide: MIE 201 Chapter One: The Dynamics of Business and Economics ​ Nature of Business: ○​ Provides products (tangible & intangible) to satisfy needs and wants. ​ Example: Tangible - Smartphones; Intangible - Streaming services like Netflix. ○​ Primary goal: Profit through customer satisfaction. ○​ Stakeholders: Customers, employees, community. ​ Economics & Factors of Production: ○​ Natural Resources: Not man-made (e.g., water, air, metals). ​ Example: Timber used in furniture production. ○​ Human Resources: Labor (jobs). ​ Example: Construction workers building homes. ○​ Financial Resources: Capital. ​ Example: Money invested to start a new business. ○​ Intangible Resources: Reputation. ​ Example: Positive reviews on Yelp boosting a restaurant’s image. ​ Economic Systems: ○​ Communism: State-controlled; low living standards, shortages, corruption. ​ Example: North Korea’s centrally planned economy. ○​ Socialism: Government controls major industries; higher taxes, better living standards. ​ Example: Healthcare and education in Sweden. ○​ Capitalism: Private ownership; modified capitalism includes some government regulation. ​ Example: The U.S. economy, where private companies dominate but laws regulate practices. ​ Market Dynamics: ○​ Demand: Quantity consumers will buy. ​ Example: Increased demand for hand sanitizers during the COVID-19 pandemic. ○​ Supply: Quantity businesses will sell. ​ Example: Farmers producing a higher yield of crops after favorable weather. ○​ Equilibrium Price: Where demand equals supply. ​ Example: Gasoline prices stabilizing at $3.50 per gallon. ​ Types of Competition: ○​ Pure Competition: Many sellers; prices set by supply/demand. ​ Example: Agricultural products like wheat or corn. ○​ Monopolistic Competition: Differentiated products (e.g., branding). ​ Example: Starbucks coffee being priced higher due to branding.  ○​ Oligopoly: Few sellers control pricing. ​ Example: Major airlines like Delta and United. ○​ Monopoly: One seller dominates (e.g., utilities). ​ Example: Local water supply company. ​ Economic Indicators: ○​ GDP: Measures economic output; excludes overseas profits. ​ Example: The GDP of the U.S. includes all products and services produced domestically. ○​ Budget Deficit: Spending > tax revenue. ​ Example: U.S. government spending on stimulus packages during a recession. Chapter Two: Business Ethics and Social Responsibility ​ Business Ethics: ○​ Principles that determine acceptable conduct. ○​ Influenced by organizational culture and stakeholder expectations. ​ Restoring Trust in Business: ○​ Partner for change. ​ Example: Tech companies collaborating on data privacy. ○​ Integrate science with societal needs. ​ Example: Communicating vaccine safety and efficacy clearly during public health campaigns. ○​ Provide individuals with control and transparency. ​ Example: Companies offering opt-out options for data collection. ​ Ethics in Action: ○​ Set the "Tone at the Top": Leaders exemplify ethical behavior. ​ Example: A CEO emphasizing zero tolerance for workplace harassment. ○​ Educate and train employees on ethical practices. ​ Social Responsibility: ○​ Obligation to positively impact society. ​ Example: A company switching to biodegradable packaging. ○​ Difference from ethics: ​ Ethics: Individual/group decisions (micro-level). ​ Example: Deciding not to accept a bribe. ​ Social Responsibility: Organizational activities (macro-level). ​ Example: Organizing a company-wide volunteer day. ​ Law & Regulations: ○​ Sarbanes-Oxley Act: Criminalizes securities fraud. ​ Example: Enacted after Enron’s accounting scandal. ○​ Dodd-Frank Act: Protects consumers in financial markets. ​ Example: Establishing regulations for mortgage lending. ​ Ethical Issues in Business:  ○​ Bribery. ​ Example: Offering money to expedite government approvals. ○​ Misuse of company resources. ​ Example: Using the company credit card for personal purchases. ○​ Conflicts of interest. ​ Example: Awarding contracts to a family member’s company. ○​ Abusive behavior. ​ Example: Bullying or intimidation in the workplace. ​ Improving Ethical Behavior: ○​ Develop and enforce codes of ethics. ○​ Encourage whistleblowing. ​ Example: Reporting financial misconduct within the company. ​ Sustainability: ○​ Focus on reducing pollution, recycling, and eco-friendly initiatives. ​ Example: Companies like Tesla are focusing on electric vehicles to reduce emissions. ○​ Avoid "greenwashing" (misleading claims about environmental efforts). ​ Example: A brand falsely advertising its products as “100% eco-friendly.”