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Chapter 1

BUSN 201 Chapter Notes - Chapter 1: Profit Motive, Oligopoly, Economic System


Department
Business
Course Code
BUSN 201
Professor
Manika Avasthi
Chapter
1

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Foundations of Business
Chapter 1
1.1 Apples Success
- Products, loyal customers, willingness to take risks, luck, & Steve Jobs
1.2 Introduction
- Internet communication affects business
1.3 Getting Down to Business
Profit-Making Business: Activity that provides goods and services to consumers for the purpose of
making a profit
Profit: Difference between the revenue that a company brings in from selling goods and services &
the cost of generating this revenue
Not-for Profit Organizations: organizations established to provide social or educational services.
Receive funds from:
Private foundations
Individuals
Government agencies
For-Profit Social Enterprise: business that, beyond the profit motive, has a social mission built into
its business model
TOMS buy one pair, company donates another pair
Participants
- Owners: business idea and gather resources (money and people)
- Employees: work for company to reach its goals
- Customers
[Functional Areas of Business]
Management
- Process of planning for, organizing, directing and controlling a company’s resources so that it can
achieve its goals
o Managers responsibility
Operations
- Person who designs and oversees the process that converts resources into good or services
- Responsible for ensuring products are of high quality
Marketing
- Activity, set of institutions and processes for creating, communicating, delivering and exchanging
offerings that have value for customers, clients, partners and society at large
- Develop the benefits and features of products
Accounting
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Foundations of Business
Chapter 1
- Financial advisor responsible for measuring, summarizing and communicating financial and
managerial information
o Financial accountants: prepare statements to help users, inside and outside of
organization
o Managerial accountants: prepare information for internal use only
Finance
- Activities involves in planning for, obtaining and managing a company’s funds
o How much money does the company need?
o How and where will it get money?
o How and when should the money be paid back?
[External Forces that Influence Business Activities]
- Economy
o People have money = eat out
- Government
o Standards monitored by agencies
- Consumer trends
- Public pressure to act as good citizens
1.4 What is Economics?
Economics: the study of the production, distribution and consumption of goods and services
Resources: inputs used to produce outputs
Land and other resources
Labor
Capital, buildings, equipment
Entrepreneurship
Factors of Production: resources ^^^^ combines to produce goods and services
[Input and Output Markets]
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