Understanding Business 10e Chapter 1

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Department
Business and Management
Course
BMGT 110
Professor
Howard Frank
Semester
Spring

Description
● Business - any activity that seeks to provide goods and services to others while operating at a profit. ● Goods - tangible products such as computers, food, clothing, cars, and appliances ● Services - intangible products such as education, health care, insurance, recreation and travel and tourism. ● Entrepreneur - a person who risk 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. ● Profit - the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation. ● Loss - occurs when a business expenses are more than its revenues. ● Risk - is the change entrepreneur takes of losing time and money on a business that may not prove profitable. ● Standard of living - the amount of goods and services people can buy with the money they have. ● Quality of life - the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards to add to the satisfaction and joy that other goods and services provide. ● Stakeholders - All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address. Include: customers, employees, stockholders, suppliers, dealers, bankers, people in the surrounding community, the media, environmentalists, and the elected government leaders. ● Outsourcing - means contracting with other companies(often in other countries) to do some or all the functions of a firm. Opposite: Insourcing foreign companies coming to the U.S ● Nonprofit organization - an organization whose goals do not include making a personal profit for its owners or organizers. ● Social entrepreneurs - people who use business principles to start and manage not-for- profits and help address social issues. ● Factors of production - the resources used to create wealth: land, labor, capital(machines, tools, buildings, or whatever else is used in the production of goods it may not include money.) , entrepreneurship, knowledge. ● What makes rich countries rich today is a combination of entrepreneurship and the effective use of knowledge ● Five elements of the business environment ○ The economic and legal environment ■ freedom of ownership
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