Business Management
Business >>> The organized effort of individuals to produce and sell, for a profit, the goods and services
that satisfy society's needs.
What are the four resources a business needs in order to be successful? >>> Human resources, material
resources, informational resources, and financial resources.
What do service businesses do? >>> They provide services.
Ex: Haircuts, legal advice, tax preparation, etc.
Intermediary >>> Go-between; mediator.
Are businesses that understand customer needs, and work to satisfy those needs successful? >>> Yes
Profit >>> The remains after all business expenses have been deducted from sales revenue.
What is the formula for profit? >>> Sales revenue - expenses
Economics >>> The study of how wealth is created and distributed.
Economy >>> The system through which a society creates and distributes wealth.
Capitalism >>> A system in which individuals own and operate the majority of businesses that provide
goods and services.
Socialism >>> A system in which the government owns and controls the means of production.
Communism >>> A system where factors of production are owned and directed by the state.
What type of economy is the U.S.? >>> Capitalist
Why is the U.S. a mixed economy? >>> They include both capitalism and socialism.
What do businesses purchase after they sell their goods and services? >>> Factors of production.
Factors of Production >>> Land, labor, and capital.
What does the government do in exchange for taxes? >>> They provide public services not provided by
businesses.
,Ex: Law Enforcement
Command Economy >>> An economic system in which the government controls a country's economy.
What type of economies are in command economy? >>> Socialism and communism.
Competition >>> Competing on sales for potential customers.
Pure Competition >>> Large number of small that businesses that sell the same type of products with
the same characteristics.
What are some characteristics of a pure competition? >>> - It is easy to enter leave the market
- All prices are basically the same
Supply >>> Quantity of a product producers are willing to sell.
Demand >>> Quantity of a product buyers are willing to purchase.
Market Price (equilibrium) >>> The price at which the amount that buyers wish to buy equals the
amount that sellers wish to sell.
Monopoly Competition >>> A one seller market.
What are some characteristics of a monopoly competition? >>> - No competition
- Great degree of power
- Power of pricing
- Hard to enter and leave the mark
Monopolistic Competition >>> A large number of small businesses that sell similar products.
What are some characteristics of a monopolistic competition? >>> - Similar products, different
characteristics.
- Good degree of information (not perfect though).
- Most common type of market.
- Easy to enter and leave the market.
Oligopoly >>> A few large business that sell identical or very similar products.
Ex: Automobiles, oil industries, etc.
What are some characteristics of a oligopoly competition? >>> - Sizable investment needed to enter.
, - Compete on price and characteristics.
Barter System >>> A system in which people buy and sell goods by exchanging one item for another; no
money is involved.
Domestic System >>> The manufacture of goods in the household setting; a production system that
gave way to the factory system.
Factory System >>> A method of production that brought many workers and machines together into
one place.
Specialization >>> In production, a system in which each worker performs a single part of an entire
process.
Service Economy >>> An economy in which more effort is devoted to the production of services than to
the production of goods.
Ethics >>> A system of moral principles.
Business Ethics >>> The application of moral standards to business situations.
Fairness and Honesty >>> Business people are expected to refrain from knowingly deceiving,
misrepresenting, or intimidating others.
Organizational Relationships >>> Business people should put the welfare of others and the company
above their own welfare.
Conflict of Interest >>> Situation in which an employee must choose between a business's welfare and
personal gain.
Communications >>> Business communications that are false, misleading, or deceptive are both illegal
and unethical.
What are some examples of external influence that encourage ethical behavior? >>> - Governmental
- Trade Association
What are some examples of internal influence that encourage ethical behavior? >>> - Code of Ethics
- Employee Training
Whistle-Blowing >>> Informing the press or government officials about unethical practices within one's
organization.
Code of Ethics >>> A set of guidelines for maintaining ethics in the workplace.
Social Responsibility >>> The duty to do what is best for the good of society.
Business >>> The organized effort of individuals to produce and sell, for a profit, the goods and services
that satisfy society's needs.
What are the four resources a business needs in order to be successful? >>> Human resources, material
resources, informational resources, and financial resources.
What do service businesses do? >>> They provide services.
Ex: Haircuts, legal advice, tax preparation, etc.
Intermediary >>> Go-between; mediator.
Are businesses that understand customer needs, and work to satisfy those needs successful? >>> Yes
Profit >>> The remains after all business expenses have been deducted from sales revenue.
What is the formula for profit? >>> Sales revenue - expenses
Economics >>> The study of how wealth is created and distributed.
Economy >>> The system through which a society creates and distributes wealth.
Capitalism >>> A system in which individuals own and operate the majority of businesses that provide
goods and services.
Socialism >>> A system in which the government owns and controls the means of production.
Communism >>> A system where factors of production are owned and directed by the state.
What type of economy is the U.S.? >>> Capitalist
Why is the U.S. a mixed economy? >>> They include both capitalism and socialism.
What do businesses purchase after they sell their goods and services? >>> Factors of production.
Factors of Production >>> Land, labor, and capital.
What does the government do in exchange for taxes? >>> They provide public services not provided by
businesses.
,Ex: Law Enforcement
Command Economy >>> An economic system in which the government controls a country's economy.
What type of economies are in command economy? >>> Socialism and communism.
Competition >>> Competing on sales for potential customers.
Pure Competition >>> Large number of small that businesses that sell the same type of products with
the same characteristics.
What are some characteristics of a pure competition? >>> - It is easy to enter leave the market
- All prices are basically the same
Supply >>> Quantity of a product producers are willing to sell.
Demand >>> Quantity of a product buyers are willing to purchase.
Market Price (equilibrium) >>> The price at which the amount that buyers wish to buy equals the
amount that sellers wish to sell.
Monopoly Competition >>> A one seller market.
What are some characteristics of a monopoly competition? >>> - No competition
- Great degree of power
- Power of pricing
- Hard to enter and leave the mark
Monopolistic Competition >>> A large number of small businesses that sell similar products.
What are some characteristics of a monopolistic competition? >>> - Similar products, different
characteristics.
- Good degree of information (not perfect though).
- Most common type of market.
- Easy to enter and leave the market.
Oligopoly >>> A few large business that sell identical or very similar products.
Ex: Automobiles, oil industries, etc.
What are some characteristics of a oligopoly competition? >>> - Sizable investment needed to enter.
, - Compete on price and characteristics.
Barter System >>> A system in which people buy and sell goods by exchanging one item for another; no
money is involved.
Domestic System >>> The manufacture of goods in the household setting; a production system that
gave way to the factory system.
Factory System >>> A method of production that brought many workers and machines together into
one place.
Specialization >>> In production, a system in which each worker performs a single part of an entire
process.
Service Economy >>> An economy in which more effort is devoted to the production of services than to
the production of goods.
Ethics >>> A system of moral principles.
Business Ethics >>> The application of moral standards to business situations.
Fairness and Honesty >>> Business people are expected to refrain from knowingly deceiving,
misrepresenting, or intimidating others.
Organizational Relationships >>> Business people should put the welfare of others and the company
above their own welfare.
Conflict of Interest >>> Situation in which an employee must choose between a business's welfare and
personal gain.
Communications >>> Business communications that are false, misleading, or deceptive are both illegal
and unethical.
What are some examples of external influence that encourage ethical behavior? >>> - Governmental
- Trade Association
What are some examples of internal influence that encourage ethical behavior? >>> - Code of Ethics
- Employee Training
Whistle-Blowing >>> Informing the press or government officials about unethical practices within one's
organization.
Code of Ethics >>> A set of guidelines for maintaining ethics in the workplace.
Social Responsibility >>> The duty to do what is best for the good of society.
