Ch. 1 study guide

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University of Toronto Mississauga
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Ch. 1 -Business: any activity that seeks to provide a good or service to others while operating at a profit -entrepreneur: someone who risks time and money to start and manage a business -stakeholders: all the people who stand to gain or lose by the policies and activities of a business. This includes customers, employees, investors (stockholders), financial institutions (bank and credit unions), suppliers, surrounding customers, among a few others. -business can affect government policies through their activities and efforts of their lobbyists, associations, and trade unions -Outsourcing: assigning various functions, such as accounting, security, production, maintenance, and legal work, to outside organizations. Could do great harm to the community because many jobs would be lost. Lowers costs to outsource. It may be legal to outsource, but is that best for all stakeholders, including workers? Business leaders must make decisions based on all factors, including the need to make a profit. As you can see, pleasing all stakeholders is not easy and it calls for trade-offs that are not always pleasing to one or another stakeholder. -Insourcing: bringing in jobs, but not coming in as much as outsourcing. -Non-profit organizations: an organization whose goals dont include making a personal profit for its owners and organizers, such as hospitals, schools, and charities. Non-profit organizations often strive for financial gains, but such gains are sued to meet the stated social or educational goals of the organization rather than for personal profit. -Social Entrepreneurs: are people who use business principles to start and manage non- profit organizations and help countries with their social issues. -Quality of life: refers to the general well-being of a society in terms of political freedom, a clean natural environment, education, health care, safety, free time, and everything else that leads to satisfaction and joy. -Entrepreneurship vs working for others: the advantage of working for others is that somebody else assumes the entrepreneurial risk and provides you with benefits such as paid vacation time and health insurance. The other riskier path is to start your own business (become an entrepreneur). Many small business fail each year, thus it takes a brave person to start a small business or to turn a business around. Furthermore, as an entrepreneur you dont receive any benefits such as paid leave and health insurance, you have to provide them yourself. -Factors of production: the resources used to create wealth. 1. Land: land and natural resources
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