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Chapter 1

COMM 100 Chapter Notes - Chapter 1: Nonprofit Organization, Cash Flow, Offshoring


Department
Commerce
Course Code
COMM 100
Professor
David Crawford
Chapter
1

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Chapter 1
The Dynamic Business Environment
Business: Any activity that seeks to provide goods and services to others while operating at a
profit.
Profit: The amount a business earns above and beyond what it spends for salaries and other
expenses.
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.
Loss: a business’s expense are more than its revenues.
Risk: the chance an entrepreneur takes of losing time and money on a business that may not
prove profitable.
Stakeholders: all of the people who stand to gain or lose by the policies and activities of a
business. E.g: customers, employees, banks, government... Businesses can also influence
government policies through the activities and efforts of their associations, lobbyists, and trade
unions.
Offshoring(离离离离): sourcing part of the purchased inputs outside of the country.
Outsourcing (): contracting with companies to do some or all of the functions of a firm within
or outside of the country.
Non-profit organization : organization whose goals do not include making a personal profit for its
owners or organizaers. E.g hospitals, schools.
Most business failures are due to poor management or problems associated with cash flow.
As a potential business owner, you need to do research, calculate the risks and the potential
rewards of each decision.
Working for others is that somebody else assumes the entrepreneurial risk and provides you with
benefits.
Five Factors of Production
-Land (natural resources): are used to make homes , cars, and other products.
-Labour (workers) : People are important resource in producing goods, many have been replaced
by technology.
-Capital (physical assets not money): machines, tools, buildings.
-Entrepreneurship: All the resources in the world have little value unless enrepreneurs are willing
to take the risk of staring businesses to use those resources.
-Knowledge: Information technology has revolutionized business, making it possible to quickly
determine wants and needs.
What makes countries rich today is a combination of entrepreneurship and the effective use of
knowledge. The business environment either encourages or discourages entrepreneurship.
The Business Environment: consists of the surrounding factors that either help or hinder the
development of businesses. Creating the right business environment is the foundation for social
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