BusinessEssentials

1、8Chapter 1Define business and profitsBusiness are the organizations that provides goods and services that are sold to earn profitsProfits are the difference between a businesss revenue and costDistinguish between business and non-profit organizationsThe right to pursue profits distinguishes a busine

2、ss from non-profit organizationsIdentify the factors of productionCapital, labor, information, physical resources and entrepreneurshipGlobal economic systemsEconomic system is a nations system for allocating its resources among its citizens, bo什1individuals and organizations.Planned system relies on

3、 a centralized government to control all or most factors of productionand to make all or most production and allocation decisions.Mixed market economy that features characteristics of both planned and market economy.Distinguish microeconomics and macroeconomicsMacroeconomics focus on the markets sup

4、ply and demand, determines the overall price level.Macroeconomics concentrates on the national growth and the changes in citizens1incomeMicroeconomics facilitates the decision marking for the smaller business sectors Macroeconomics have a focus on the unemployment rate, GDP and the development of th

5、eentire economy.Explain the factors that drive the supply and demand Supply: price, technical factor, resourcesDemand: price, price of related products, say, substitute and complementary items, customerspreference and optimism for the future, the number of buyers in the marketDescribe each of four d

6、ifferent types of market structure in a private enterprise system Perfect competition: the products are the same; the market has a number of buyers and sellers,with unlimited barrier for entry and exit.Monopolistic competition: a market that has a large numbers of firms and each has a smallproportio

7、n of the market share and slightly differentiated productsOligopolistic market: a market that has a few sellers and each has identifiable products and thepower to influence the price of productsMonopoly: there is one provider of goods or services and therefore set the price of productsIdentify and d

8、escribe什le four stages of the business cycleRecession, depression, recovery, prosperityExplain how productivity, price-level changes and employment levels affect the stability of anation s economy8If the productivity is low, the products are not enough and the prices rise. The power ofpurchasing dec

9、lines The low unemployment leads to the shortage of labor, the business raise the wages they arewilling to pay. Then, because higher labor costs eat into profit margins, they raise the prices ofthe products. In the end, the purchasing power declines.Stability is a condition in which the amount of mo

10、ney available in an economic system and thequantity of goods and services produced in it are growing at the same rate.Discuss the monetary policy and fiscal policy are used to manage an econom/s performanceFiscal policy manages the collection and spending of its revenues, say, tax rates. Monetarypol

11、icy focus on controlling the size of the nations money supply.8Chapter 2Explain the concept of business ethics and social responsibilityBusiness ethics refers to ethical or unethical behaviors by employees in the context of theirjobs Social responsibility refers to the overall way in which a busines

12、s attempts to balance itscommitments to relevant groups and individuals in its social environment.Describe the factors that influence business ethics, at individual, organizational, legal, societallevels.Individual: values, work experience, social status, family backgroundOrganizational: job dimensi

13、ons, the top management s philosophy, corporate culture, rewardsystemEnvironment: competition, economic conditions, social institutionLegal: ambiguity of laws, the supervision of conducting regulationsSociety: universal values, moral standardsList the stages in the development of ethical standardsOb

14、structionist stance: approach to social responsibility that involves doing as little as possibleand may involve attempts to deny or cover up violationsDefensive stance: approaches to social responsibility by which a company meets onlyminimum legal requirements in its commitments to groups and indivi

15、duals in its socialenvironmentsAccommodative stance: if specifically asked to do so, exceeds legal minimums in itscommitments in its social environmentProactive stance: a company actively seeks opportunities to contribute to the well-being ofgroups and individuals in its social environment.Identify

16、common ethical dilemmas in the workplaceConflicts of interest, honesty or integrity, loyalty or truth, whistle-blowingDiscuss how organizations shape ethical behaviorEthical awareness- ethical reasoning - Ethical action - Ethical leadershipSummarize the responsibilities of business to什le general pub

17、lic customers, employees andinvestorsConsumer rights: fair pricing, ethics in advertisingRights of employees: legal and social commitments, ethical commitmentsRights of investors: proper financial management, no insider trading, legal interpretation offinanceChapter 3Identify the industries in which

18、 most small business are established:Service, retailing, construction, finance and insurance, manufacturing, transportation andother.8Compare the advantages and disadvantages of small businessPros: lower costs, filling distant communities, superior customer servicesCons: management shortcoming, inad

19、equate financing, vulnerability of economic downturns,government regulationsExplain how franchising can provide opportunities for both franchisers and franchiseesFranchisers benefit from the parental corporations* experience and expertise. They caneasily set up their business because the popular bra

20、nd name. Whats more, the franchiser mayselect the location, negotiate the lease, purchase the equipment and supply the financing Franchisees expand the business by encouraging others to join them, make it easier toattract the consumers, lower the cost of advertising and increase the likelihood of su

21、ccess Identify personality traits that typically characterize successful entrepreneursHard work, market demand for the products and services, managerial expertise, luckIdentify three different types of entrepreneurs:Classic entrepreneur: set up the business and allocate resources so that they can ta

22、p themarketIntrapreneur: develop innovations within a large organization Change Agent: revitalize anestablished firm to keep it competitiveSummarize the three basic forms of business ownership and the pros and cons of each form.Proprietorship: sole proprietorship: low start-up costs, tax benefits, s

23、imple legalprocedures, not share profits with others. Cons: unlimited liability, lack of continuity, when theproprietor dies, the business dissolves, and find it hard to borrow money from banks General proprietorship: the ability to grow by adding new talent and invested money,make it easy to borrow

24、 money from bank and begin with some kind of agreement. Partner mayalso agree to bind themselves in ways not specific by IJW. However, the most drawbacks areunlimited liability. The potential lack of continuity is another. A related disadvantage isdifficulty in transferring ownership Limited partner

25、ship allows limited partners who cannot take active roles in operationsbut invested money and are liable for debts only to the extent of their investments.Cooperatives: combine the freedom of sole proprietorship with the financial power ofcorporations.Corporation: legal status as separate entities,

26、property rights and obligations, indefinitelife span Pros: limited liability and continuity, being able to transfer ownership. Cons: maycreate complication, high start-up costs, more governmental regulations and complex legalrequirements. The most obvious drawback is double taxation. It consists of

27、closed corporation,publicly held corporations, S corporation, limited liability corporation and professionalcorporations, multinational corporations.Strategic Alliance: two or more companies collaborate on a project for mutual gain.Joint Venture: When the partnership is shared, it is called joint ve

28、nture.Merger and Acquisitions: Two companies are combined into one, it is merger. When onebuys another firm, it is acquisition 8Describe the recent trends in small business:EmergenceofE-commerce,globalopportunities,crossoversfrombigbusiness,opportunities for minorities and women.8Chapter 4Discuss th

29、e relationship of absolute and comparative advantage to international tradeAbsolute advantage: when a country can produce something that is cheaper than/ or of higherquality than any other countryComparative advantage: goods are produced more efficiently or better than other nations.Both of them tra

30、nslate into competitive advantages. In international trade, nations prefer toproduce the goods in which they have advantages Describe how nations measure international trade and the significance of exchange rates.Balance of trade: economic value of all products a country exports minus the economic v

31、alueof all products it importsTrade deficit, trade surplusBalance of payments: flow of all money into or out of a countryExchange rate fluctuation can have a important impact on balance of trade （Refer to cases inmacroeconomics）Identify the major barriers that confront global businessSocial and cult

32、ural difference: understand the culture difference, say , the language factors andsubtle value differencesEconomic differences:Legal and political difference: quotas, tariffs（关税），subsidies聿贝占），Local content laws: requirements that products sold in a country be at least partly madethereBusiness pract

33、ice laws: host countries govern business practices within their jurisdictionsCartels: associations of producers that control supply and pricesDumping: selling a product abroad for less than the cost of production at homeExplain how international trade organizations and economic communities reduce ba

34、rriers tointernational tradeNAFTA: removes most tariffsEU: These nations have eliminated most quotas and set uniform tariff levels on productsimported and exported within their groupWTO: encouraging nations to protect domestic industries within agreed-upon limits and toengage in multilateral negotia

35、tions.Promote trade by encouraging members to adopt fair trade practicesReduce trade barriers by promoting multilateral negotiationsEstablish fair procedures for resolving disputes among membersCompare the different levels of involvement used by business when entering global marketsExporter and impo

36、rters, international firms, multinational firmsIndependent agents, licensing arrangement, branch office, strategic alliances, foreign directinvestmentDistinguish between a global business strategy and a multidomestic business strategy Global8business strategy : offering a standardized, worldwide pro

37、duct that sold in an essentially samemannerMultidomestic business strategy: developing and marketing different products to meetall-round needs in countries8Chapter 5Summarize the major benefits of planningTime management, maintaining the budget and staffing needs(By comparing the previousschedules a

38、gainst the traffic received by the store during the same time within a previousschedule period, a manager can create a cost-effective by eliminating overstaffing whileassures the staff are ample Distinguish among strategic planning, tactical planning and operational planning. Strategicplanning reflects decisions about resources allocations, company priorities and the stepsneeded to meet strategic steps.Tactical plans are shorter-term plans for implementing specific a