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Management Exam Notes.docx

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BUSI 1600U
Shaprio, Morden

Chapter 1 Taking Risks and making Profits within the dynamic Business EnvironmentEntrepreneurship and Wealth BuildingGoods Tangible products ex Computers food clothing cars and appliancesServices Intangible productsex Education Health Care Insurance Recreation Travel and TourismOne result of successfully filling a market need is that you can make money for yourself by giving customers what they wantBusiness Any activity that seeks to provide goods and services to others while operating at a profitEntrepreneur A person who risks time and money to start and manage a businessLearns there is a need forreliable accountanta good lawyerstrong managersMay go through financial institutions or to venture capital firms to borrow more moneyRevenue Profits and LossesRevenue The total amount of money that is received during a given period for goods sold services rendered and other financial sourcesProfit The amount of money a business earns above and beyond what it spends for salaries and other expensesLoss Occurs when a businesss expenses are more than its revenuesMost business failures are due toPoor managementProblems associated with cash flowMatching Risk with ProfitRisk Refers to the chance of loss the degree of probability of loss and the amount of possible lossThe chance an entrepreneur takes of losing time and money on a business that may not prove profitableResearch can help you find the right balance between risk and profit for youTo decided your own best you have to calculate the risks and potential rewards of each decisionStandard of Living and Quality of LifeThe wealth businesses generate and the taxes they pay help everyone in their communitiesStandard of living Refers to the amount of goods and services people can buy with the money they haveQuality of life Refers to the general wellbeing 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 provideHigh quality of lifeCombines efforts of businesses nonprofit organizations and government agenciesWorking to build higher standard of livinglower the quality of life through less time with family and more stressResponding to the Various Business StakeholdersStakeholders All of the people who stand to gain or lose by the policies and activities of a businessBusiness influence government policiesthrough the activities and efforts ofTheir associationsLobbyistsTrade unionsA Business and its StakeholdersstChallenge of the 21 century Organizations to balance the need of all stakeholdersex The need for the business to make profits must be balanced against the needs of employees for sufficient income Need to stay competitive calls for offshoring jobs to other countries recognizing that this sound business strategy might do harmto the communities because jobs were lostOffshoring entails sourcing part of the purchased inputs outside of the country If you take all the parts and ask say Asia to assemble the product its called offshoring decisions affect the boundaries of the firmwhat production takes place within the firm and what is purchased from outside the firmOutsourcing contracting with other companies to do someall the functioning of a firm production accounting Do I make it or buy it involve decisions both to purchase outside of the firm and to do so from abroad Interest in outsourcingforetell changes in industrial structure it may signify changes in international trading patternsUsing Business Principles in NonProfit OrganizationsNonprofit organization An organization whose goals do not include making a personal profit for its owners or organizers
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