BUAD110 Chapter 1 - Intro

BUAD110 Chapter 1 - Intro - Chapter 1 Managing within the...

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Unformatted text preview: Chapter 1 Managing within the Dynamic Business Environment: Taking Risks and Making Profit Business and Entrepreneurship: Revenues, Profits, and Losses- Business any activity that seeks to provide goods and services to others while operating at a profit- Profit- the amount of money a business earns above and beyond what it spends for salaries and other expenses- Starting a business risky = not all make profit- Entrepreneur a person who risks time and money to start and manage a business- Business provides income and all the worldly goods an entrepreneur needs I. Matching Risk with Profit- Revenue- total amount of money a business takes in during a given period of selling goods and services- Loss occurs when expenses are more than revenue- Business losing money over time = need to close- Risk the chance an entrepreneur takes of losing time and money on a business that may not prove profitable- Companies that take the most risk, make the most profit II. Businesses Add to the Standard of Living and Quality of Life- Business are a not only a source of wealth but also of employment - Wealthy business generate and pay taxes that may help those in their community- A nations businesses are part of an economic system that contributes to the standard of living and quality of life for everyone in the country- Standard of Living- the amount of goods and services people can buy with the money they have- Reasons good cost more in one country vs. another higher taxes/strict govt regulations --finding the right level makes a country prosperous- Quality of Life general well-being of a society in terms of political freedom, a clean natural environment, education, healthcare, safety, free time, and everything else that leads to satisfaction and joy- joy life brings beyond possession of goods- high quality of life = cooperation by businesses, non-profits, and govt- more money produced by business, more it has to offer to improve quality of life for everyone III. Responding to the Various Business Stakeholders- Stakeholders all the people that stand to gain or lose by the policies and activities of a business- All affected by products, policies, and practices of business- Challenge of 21 st century = balance needs of all stakeholders- Outsourcing- contracting with other companies (often in other countries) to do some or all of the functions of a firm- Serious consequences to states whove lost jobs to overseas- Insourcing is setting up design and production facilities in the USA- Creates new jobs and helps offset # of jobs being outsourced- Outsourcing may not be good for all stakeholders but business leaders make decisions on all factors including profit IV. Using Business Principles in Nonprofit OrganizationsIV....
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BUAD110 Chapter 1 - Intro - Chapter 1 Managing within the...

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