As a factor of production, the term capital includes:
tools, machinery, and buildings.
The technology environment would include studies of information technology.
Age, race, gender, religion, etc. are items included in the study of demographics.
A business should try to adapt to the factors in the environment.
In Tom Jeffries roofing proposal he describes materials to be used and aprice. When the customer signs the bid it
becomes an enforceable contract – Economic & Legal Force
Snap for Seniors – Eve is an entrepreneur who started a business to serve the growing number of older americans. Snap
for seniors lists housing providers and matches the elderly to needs with facilities – Social force
Walmart – In china, Walmart has nearly doubled in size and made in china stickers are visible all over Walmart stores in
the U.S. – Global Force
Borders Booksellers struggled for years and eventually declared bankruptsy as consumers increasingly turned to
downloaded books from the internet rather than buying hard copies – Technological Force
When the Blackberry phone system quit working it affected 70 million customers. Those customers turned to other cell
phones which offered the reliable service business customers demand at a lower price – Competitive force
In order to start a business, a certain level of risk is associated. But businesses affect every aspect of our society. Business
affects the high standard of living in the united states and provides us with a high quality of life. Business must deal with
various factors, including technology and competition. The founders of the company IContact decided to take the
associated risk in starting a business and have addressed many of the factors facing a business.
The business environment includes the economic environment, the technological environment, the competitive
environment, the social environment, and the global business environment. On top of the five 5 elements of the
business environment each business uses one or more of the five factors of production. On top of these aspects,
businesses today are faced with more globalism than ever before.
5 elements of the business environment:
- Economic
- Technological
- Competitive
- Social
- Global business
,People like Ryan and Aaron of IContact, who risk time and money to start and manage a business are called
entrepreneurs.
Although Icontact now enjoys revenue of $10 million and expects that figure to double in the next year, it is not yet
profitable. In order for icontact to make a profit, its revenues must exceed its expenses.
Aaron and Ryan’s business was able to thrive in American because of political freedom, natural environment, education,
health care, leisure time, safety, and other benefits. In other words they were able to thrive because of america’s high
quality of life.
Aaron mentioned that Icontact considers the needs of the community and the environment. Members of the community
and environmentalists are considered some of Icontacts stakeholders.
The ability to start and grow icontact was primarily based on the existence of the internet. The internet is considered a
key part of the technological environment.
5 factors of production:
- Land
- Labor
- Capital
- Entrepreneurship
- Knowledge
Icontact is committed to dealing sensitively to workers and customers from a wide variety of backgrounds and cultures.
This is known as managing diversity.
Thomas lennon, actor, producer, and screenwriter discusses his road to success, the risks of starting a business, making
profits, and working for others. Having achieved much success in his own career, lennon offers advice for those looking to
make it in Hollywood. Entrepreneurs positively impact the business climate through the availability of goods and services
to others in exchange for a profit.
The business environment includes the economic, technological, legal, social, global and competitive environments.
Every business begins with an entrepreneur. In order for entrepreneurs to be successful in the dynamic business
environment, a certain level of risk must be undertaken. Through risk, entrepreneurs and businesses affect the high
standard of living and quality of life in the united states while providing opportunities for making profits in global
markets.
Business is defined as any activity that seeks to provide goods and services to others with the goal of earning a profit.
Tom lennon is in the business of providing entertainment for many audiences. Tom is self-employed and therefore, is
considered to be an entrepreneur.
As an entrepreneur, tom also works for other people. What benefit do entrepreneurs receive by working for others?
Security of employment
Much like Tom, entrepreneurs may experience a high degree of flexibility and opportunity. However, entrepreneurs are
challenged by the demands of the business environment. Which of the following is NOT one of the five elements of the
,business environment that can either help or hinder the development of a business? Not – financial environment IS =
economic environment.
Entrepreneurs take risks. What risk did tom take to become a successful entrepreneur? Possible failure
Business - Commercial activity engaged in as a means of livelihood or profit.
Demography - Statistical study of a population as to age, gender, income, education, etc.
Empowerment - Enabling/authorizing lower-level employees to take action and make decisions.
Entrepreneur - A person who risks time, energy, and money to start and manage a business.
Productivity - The amount of output per unit of input (i.e., labor, equipment).
Quality of Life - General well-being of individuals and societies, measured by indicators such as health care,
leisure, clean air, etc.
Standard of living - Financial health of society, measured by income and consumption of goods and services.
Stakeholders - Individuals and/or groups of people who stand to gain or lose by a business’s policies and activities.
Goods - Any physical products offered by a business.
Loss - The end result if a business’s expenses exceed the amount of money it earns during a given period.
Non-profit - Organization that operates for the common good and not to generate individual wealth.
Outsourcing – Assigning business functions like accounting or production to outside organizations.
Profit - Financial benefit realized when the amount of revenue gained from a business activity exceeds its
expenses.
Revenue - Income received by an organization from its normal business activities.
Risk - The threat of loss due to some unforeseen internal or external occurrence.
Services - Intangible products such as health care, insurance and recreation.
When referring to risk, which of the following statements is reasonable?
Although risk means taking a chance at losing, your business is likely to always turn a profit.
Good business strategy encourages less risk, because the least risky ventures usually make more profit.
Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities.
Although risk means taking a chance, a start-up will usually manage to get off the ground faster if the stakes are
high.
Profits equal _______.
the owner’s annual salary
the sales dollars that a business acquires, over time
revenues plus expenses, less taxes
the funds available for business growth, after expenses and salaries are paid
, which of the following circumstances is most likely to reduce one’s standard of living?
An increase in the cost of some goods such as escalating gasoline prices
A decrease in the cost of some goods such as a decrease in housing prices
Stable prices and an increase in employee wages
Losing your job, but gaining a sizeable inheritance
When developing and maintaining good stakeholder relationships, companies find that _______.
it’s almost always best to continue to keep costs low, even if it means outsourcing most of the production
insourcing is always a good trade-off to outsourcing
most often, they must balance the needs of the stakeholders with the need to make profits
caring for the environment comes before caring for the well-being of employees
Judy started a business called Music and Memories™. She recognized that music, socialization, and memory-
challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. Though she
strives for a financial gain, she uses the excess funds for enriching her programs instead of a personal profit. Her
organization is classified as:
nonprofit
insourced
profit-seeking
outsourced
The number of businesses owned by immigrants, minority groups, and women has ________ in recent years.
declined
stabilized
grown
dramatically decreased
Which of the following is (are) not considered a factor of production?
Knowledge
Land
Capital
Taxes
Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that
he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which
two other factors of production does he need to succeed?
Capital and land
Labor and knowledge
Entrepreneurship and capital
Entrepreneurship and knowledge
encourage entrepreneurial growth, governments might _______.
pass laws that enable businesspeople to write contracts that are enforceable in court
establish a high tax rate to support loans for small businesses
take over ownership of small businesses when they are first getting started
reduce the value of their currency to encourage foreign investment
