,Summary understanding business 2024 nickels mchugh 9781266813016 14th edition all chapters
, Summary understanding business 2024 nickels mchugh 9781266813016 14th edition all chapters
This summary is concise and clear. made by the study group in 2024 for exam preparations (Erasmus Universiteit
Rotterdam, The Netherlands)
Chapter 1 – Taking Risks and Generating Profits in a Dynamic Business Environment
Entrepreneurship and Wealth Building
A business is any activity that offers goods (tangible products) or services (intangible products) for profit. Entrepreneurs
are individuals who invest time and money to start and manage ventures.
Revenue, Profit, and Loss: Revenue is the total income from sales. Profit is what remains after covering all costs,
while a loss occurs when expenses exceed revenue. Modern businesses increasingly track both financial and non-
financial metrics, like customer retention and sustainability performance.
Risk and Reward: Entrepreneurs face the possibility of losing resources, but calculated risks often lead to
innovation and growth. Startups today frequently use data analytics to better evaluate potential risks and market
opportunities.
Standard of Living and Quality of Life: Standard of living measures how much people can buy with their income.
Quality of life reflects broader societal well-being, including health, education, safety, environmental quality, and
leisure. Sustainable business practices increasingly contribute to improving quality of life.
Stakeholders: Stakeholders include employees, customers, suppliers, investors, and the community. Companies
often outsource or insource functions to balance efficiency with local economic impact.
Nonprofit Organizations: Nonprofits focus on social goals rather than personal profit. Social entrepreneurs use
business strategies to address societal challenges. Strong nonprofit teams are supported by realistic goals,
meaningful work, and attention to employee well-being.
, Summary understanding business 2024 nickels mchugh 9781266813016 14th edition all chapters
Entrepreneurship vs. Working for Others
Opportunities for Entrepreneurs: Millions succeed in starting businesses. The number of minority- and women-
owned businesses has grown significantly. Emerging technologies, online platforms, and global markets create
new entrepreneurial opportunities.
Wealth Creation and Factors of Production: Wealth stems from land, labor, capital, entrepreneurship, and
increasingly, knowledge and innovation.
Business Environment: External factors—economic, cultural, legal, technological—either facilitate or constrain
business growth.
Economic and Legal Environment
Governments support business by allowing private ownership, protecting contracts, minimizing corruption, and
maintaining a stable, tradable currency. Modern regulatory frameworks increasingly emphasize digital commerce,
cybersecurity, and environmental standards.
Technology and the Business Environment
Benefits of Technology: Technology—from software and digital platforms to AI and medical devices—improves
effectiveness, efficiency, and productivity. Businesses use social media to engage customers and drive campaigns.
E-commerce Growth: Online buying and selling, both B2C and B2B, continue to expand, offering global market
access.
Customer Responsiveness and Security: Databases allow businesses to manage information efficiently.
Protecting personal data is critical; measures include strong passwords, secure document disposal, monitoring
credit, and avoiding phishing scams. Identity theft prevention remains a top priority.