BMGT110 Study Guide 1

BMGT110 Study Guide 1 - BMGT110 Study Guide Chpts. 1,2,5,6...

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BMGT110 Study Guide Chpts. 1,2,5,6 2.14.12 Chapter 1: Taking Risks and Making Profits Within the Dynamic Business Environment Goods: Tangible products such as computers, food, clothing, cars, and appliances Services: Intangible products such as education, health care, insurance, recreation, travel, and tourism Business: Any activity that seeks to provide goods and services to others while operating at a profit Entrepreneur: A person who risks time and money to start and manage a business Revenue: The total amount of money a business takes in during a given period by selling goods and services Profit: The amount of money a business earns above and beyond what is spends for salaries and other expenses Loss: When a business’s expenses are more than its revenues Risk: The chance an entrepreneur takes of losing time and money on a business that may not prove profitable Big risks, big profit (taking a bigger chance such as opening a business in a city as oppose to a suburban area where taxes and rent are higher, but there is less competition proving better for you as a business owner) Important for businesses to be ethical as well as generous Standard of Living: The amount of goods and services people can buy with the money they have Quality of Life: The general well being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide The more money businesses create, more potentiality to improve quality of life for everyone Working a higher standard of living may lower the quality of life if it means less time with family or friends Stakeholders: All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address Major role of business managers: Balancing demands of stockholders and employees (paying employees cuts into stockholder’s profits) Outsourcing: Contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks Insourcing: Foreign companies opening offices and factories in the US Nonprofit Organization: An organization whose goals do not include making a personal profit for its owners or organizers 5 Factors of Production: 1. Land (and natural resources used to make homes, cars, etc.) 2. Labor (workers though now technology is replacing them)
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3. Capital (Machines, tools, whatever is used in the production of goods, may not include money, manufacturing the product) 4. Entrepreneurship (The risk they are willing to take of starting a business using these resources One way for gov to actively promote entrepreneurship is to allow private ownership of business; best thing for gov to do is to minimize the interference with the free exchange of goods and services. 5.
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This note was uploaded on 02/26/2012 for the course BMGT 110 taught by Professor Nelson during the Spring '08 term at Maryland.

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BMGT110 Study Guide 1 - BMGT110 Study Guide Chpts. 1,2,5,6...

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