Transcript Business Fundamentals Notes

BBI 2O
Introduction to Business
BELL WORK
Skim through chapter 1, write
down any bolded terms you are
not familiar with. (5 minutes)
Read “Pita Pit”, page 5. Answer
questions #1, #2 (5 minutes)
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Unit 1
UNIT 1: Business
Fundamentals
Chapter 1:
Economic Basics
What is a Business?
“I feel that luck is
preparation meeting
opportunity”
~ Oprah Winfrey
What is a Business?
There are many ways to classify a
business.
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What is a Business?
A For-profit Business
“an organization that produces
or sells goods or services to
satisfy the needs, wants, and
demands of consumers for the
purposes of making a profit”
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What is a Business?
A For-profit Business
Profit: money left after all
expenses have been paid
Expenses: money spent on
running the business (wages,
supplies)
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What is a Business?
A For-profit Business
Costs: money spent for the
production of the good or
service
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Businesses try to keep profits up
by keeping costs and expenses
down.
What is a Business?
A For-profit Business
Profit = Revenue – Expenses
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If profit is negative, it is called
a loss.
What is a Business?
A For-profit Business
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A business which makes profit
may use the money to:
• expand/grow operations
• improve products/services
• give to owner/shareholders
What is a Business?
Non-profit and Not-for-profit
Businesses
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NP: does not look to make
profit, but raises funds for a
specific goal (charities,
charitable organizations)
Examples?
What is a Business?
Non-profit and Not-for-profit
Businesses
NFP: does not seek to make
profit, extra monies used to
improve services
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Examples?
What is a Business?
Non-profit and Not-for-profit
Businesses
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Co-operative: A group of
people who come together to
meet a set of goals in a
democratically controlled
business.
What is a Business?
Size of Business
Small or medium sized
business: less than 500 people
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What is a Business?
Forms of Business
Ownership
will be covered in chapter 2
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What is a Business?
Goods or Services?
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Businesses either sell goods
(physical things you take
home) or provide services (do
something) in exchange for
money.
Some do both.
What is a Business?
Goods or Services?
Businesses
that
sell
G IVE
goods
 Businesses that
provide services
 Businesses that do
both.

ME
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Unit 1
5
What is a Business?
Distribution
How are goods & services
delivered?
– Bricks and mortar business,
telemarketing, catalogue,
virtual store (internet)
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Examples?
What is a Business?
Role in the Community
What does the business do for
the community?
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What is a Business?
Jobs
What type of jobs does it
provide?
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What is a Business?
HOMEWORK
• read pages 6-9
• questions: page 10 #3, 4
• read pages 10-14
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The Role of the Consumer
Role of the Consumer
Producers manufacture goods for
consumers. Companies that
attract more consumers can make
more sales and more profit.
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Role of the Consumer
The interaction between producer
and consumer creates the
marketplace.
PRODUCER
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CONSUMER
MARKETPLACE
Role of the Consumer
Years ago, business dictated what
was produced, and in what
quantities.
Eventually, consumers started to
tell manufacturers their needs and
wants, creating competition.
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Role of Consumer
Name some new trends and
related products on the market.
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Role of the Consumer
Consider High-Definition TV trends:
RIM (Blackberry) vs. Apple (iPhone)
Who will decide which technology will
win?
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Role of the Consumer
Consumers also decide when a
product will no longer be
produced. When no one wants a
product anymore, it becomes
obsolete.
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What are some things you know of
that have become obsolete?
Role of the Consumer
Consumers also influence price.
Companies used to have pricing
power (could charge what they
want), but with competition
consumers can shop around for
the best deal.
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Role of the Consumer
Consumers also have consumer
purchasing power—as
customers they dictate how much
they are willing to pay, but also
the level of service.
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Role of the Consumer
HOMEWORK
• Questions: page 14, q #5, 6, 7
• Read pages 15-19
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Starting a Business
Starting a Business
People who start their own
businesses are called
entrepreneurs.
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Starting a Business
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Entrepreneurs need:
• self-confidence
• a flair for innovation
• the ability to work alone
• an aptitude for managing
others
Starting a Business
Consumer Needs and Wants
Sometimes a business is started
to satisfy consumer needs.
Needs are things that are
necessary for survival.
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You need food, clothing.
Starting a Business
Consumer Needs and Wants
Wants are things that are not
necessary for survival, but add
comfort and pleasure to our
lives.
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You want a burger, A&F shirt.
Starting a Business
Attracting Consumer Interest
It is important to understand
how consumers make buying
decisions. This will help decide
what to make, how to market
and distribute the product.
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Starting a Business
Attracting Consumer Interest
Businesses need to listen to
what the consumer wants. The
challenge is then to get those
customers to buy your product.
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Starting a Business
Attracting Consumer Interest
BRAINSTORM
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What can companies do to attract
more customers?
Starting a Business
Attracting Consumer Interest
Sample answers:
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•
•
•
•
•
•
•
•
create a new product
modify an existing product
more heavily promote a product
offer purchase incentives (coupons)
convince consumers they need (want) the product
develop different uses for product
offer free samples
in-store demonstrations
Starting a Business
Attracting Consumer Interest
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The task is to come up with a
product the consumer needs or
wants, at a price they’re willing
to pay, in a place that is
convenient, and promote it so
they know about it.
Starting a Business
HOMEWORK
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• complete worksheets C & E
for tomorrow
• start working on Entrepreneur
assignment
• read pages 20-22
BELL WORK
“Being in business means making
decisions all the time, every day.”
WRITE
DOWN
DON’T
WRITE
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G IVE
ME
5
With a partner, pick a
business. Write down
five decisions that a
business needs to make
in an average day. (5
minutes)
Homework Check
• Hand in worksheet C & E
• Reminder: “Do You Have
What it Takes to Be an
Entrepreneur” activity due
tomorrow in class
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Making Good Business
Decisions
Making Good Bus. Decisions
The five-step decision-making
model can be used to help in any
business situation.
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(as we go through this note, refer
to example in textbook, pages 2022)
Consider this:
Cambridge Stick Inc. makes hockey and
ringette sticks. Cambridge Stick is a major
sponsor of the ringette national
championships which are being held in
Cambridge and demand for their sticks has
sky-rocketed - so much that it cannot keep
up with demand.
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Making Good Bus. Decisions
1. Determine what decision has
to be made.
What is the problem? What
issue needs to be resolved?
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Making Good Bus. Decisions
2. Identify the alternatives.
Brainstorm as many
solutions to the problem as
possible.
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Making Good Bus. Decisions
3. Evaluate the advantages and
disadvantages of each.
What are the pros and cons
of each option?
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Making Good Bus. Decisions
4. Make a decision and take
action.
Choose the best alternative,
and go with it.
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Making Good Bus. Decisions
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5. Evaluate the decision.
After some time, review the
decision. Was it the best
choice? Would you do
something differently or
considered something else
next time?
Making Good Bus. Decisions
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1. Determine what decision has to
be made.
2. Identify the alternatives.
3. Evaluate the advantages and
disadvantages of each.
4. Make a decision and take action.
5. Evaluate the decision.
Making Good Bus. Decisions
HOMEWORK
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• Finish Entrepreneurial
assignment
• Pick a significant decision you
made/need to make, apply the
decision-making process
• Question: page 22, #13
• Apply Q #13 to your decision
BELL WORK
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Think of that big bag of potato
chips you are going to have after
this class. What are ALL of the
things that went into making that
bag of chips? [And I do mean
ALL!] List one under the other.
(on your own, 5 minutes)
Economic Resources
Economic Resources
Economic resources, or factors of
production are how products are
made available to consumers.
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Economic Resources
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Natural Resources
- Materials that come from the
earth, water, or air
- Most are non-renewable (oil),
or take a long time to renew
(trees)
- Businesses are limited
Economic Resources
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Human Resources
- Also called labour, “HR”
- The people who are involved
in the production of the
product
- Most businesses have an HR
department
Economic Resources
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Capital Resources
- The buildings, equipment,
vehicles, factories used
- Usually last a long time,
require large initial investment
- Money is considered capital
too!
Economic Resources
Interdependence
- Almost all companies have
some dependence on other
companies
- Works on many levels
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You get the Cambridge Times–what are
all the things you depend on to get that
newspaper? Classify each.
Economic Resources
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Economic Systems
- A way to deal with the
selection, production,
distribution and consumption
of products
- Gov’t and business work
together
- Try to make best use of
resources, develop alternatives
Economic Resources
TASK
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Go back to the list you
generated during bell work.
Identify each item as either a
natural resource, human
resource, or capital resource.
Submit to teacher.
Economic Resources
HOMEWORK
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• Questions: page 28, q #15, 16
• Read pages 28-32
→ pay special attention to
the two tables
• CHAPTER 1 FORMATIVE
QUIZ Friday (F.I.T.B.)
Demand, Supply, and Price
Demand, Supply, and Price
Demand is quantity consumers
are willing/able to buy at a
particular price. Generally:
lower price = greater demand
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Called the law of demand.
Demand, Supply, and Price
The Demand Curve
High prices → Demand is low
Price
Slide
Low prices → Demand is high
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Quantity
Demand, Supply, and Price
Demand is created by:
• Consumer awareness/interest
• Ample supply
• Reasonable/competitive price
• Easy access
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Demand, Supply, and Price
Factors that Affect Demand
Leave 8-10 blank lines to
summarize table 1.2 (page 29)
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Demand, Supply, and Price
Supply is the quantity that
business is willing to provide for a
range of prices people are willing
to pay. Generally,
Higher price = higher supply
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Called the law of supply.
Demand, Supply, and Price
The Supply Curve
High prices → Supply is high
Price
Low prices → Supply is low
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Quantity
Demand, Supply, and Price
Supply is created by a company’s
desire to satisfy consumers’ needs
and wants for a price.
Sometimes, a business will try to
create demand for a product
through marketing it well.
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Demand, Supply, and Price
Factors that Affect Supply
Leave 8-10 blank lines to
summarize table 1.3 (page 31)
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Demand, Supply, and Price
Price is determined by many
factors, including demand and
supply. Another important factor
is cost of production.
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Demand, Supply, and Price
HOMEWORK
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• Summarize tables into notes
• Questions: page 32, q #18, 21
• Chapter Review questions:
page 33, q #1, 4, 5, 6, 7, 8, 12
• CHAPTER 1 FORMATIVE
F.I.T.B. QUIZ FRIDAY
BELL WORK
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In your groups, speculate about
the types of decisions business
people must make before opening
a business. Record your ideas so
that you can compare them with
your answers to the questions you
will complete at the end of this
chapter. (10 minutes)
UNIT 1: Business
Fundamentals
Chapter 2:
Types of Businesses
Forms of Business
Ownership
Forms of Bus. Ownership
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Who is your boss?
Who is your boss’s boss?
Can you become part owner?
Forms of business ownership and
type of business help describe
how the business is organized and
run.
Forms of Bus. Ownership
Sole Proprietorship
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• Owned by one person, who
performs most roles and owns
everything
• Owner gets all profits, takes all
the losses → called unlimited
liability
Forms of Bus. Ownership
Sole Proprietorship
• Easiest and least expensive to
set up
• Easiest for tax purposes →
income recorded under
personal income
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Forms of Bus. Ownership
Partnerships
• Two or more individuals share
costs and responsibilities
• Terms of partnership recorded
in partnership agreement
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Forms of Bus. Ownership
Partnerships
• Main advantage is working
relationship between partners,
usually they have
complementary talents
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Forms of Bus. Ownership
Partnerships
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General partnership
• All partners have unlimited
liability (can be held
responsible for the other
partner’s business related
debts)
Forms of Bus. Ownership
Partnerships
Limited partnership
• Partners have limited
liability (only responsible
for their share)
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Forms of Bus. Ownership
Corporations
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• Business with a legal status
• Can be as small as one person,
or multinational
• Some owned by individuals,
families, small groups
Forms of Bus. Ownership
Corporations
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• Ownership often broken into
small units, shares, which are
sold through a stock exchange
(ie. TSX) → a publicly traded
corporation
• Those who buy: shareholders
Forms of Bus. Ownership
Corporations
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• Since there are many owners, a
board of directors runs corp.
• Shareholders have limited
liability, not responsible for
debts
• Get profits as dividends
Forms of Bus. Ownership
Corporations
Private Corporation
• Only a few people control
stock
• Not publicly traded
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Forms of Bus. Ownership
Corporations
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Public Corporation
• Sell shares to raise money
• 1 share = 1 vote; those with
most shares influence
company decisions (usually
orig. owner, execs)
Forms of Bus. Ownership
Corporations
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Crown Corporation
• Business owned by the
federal or provincial
government
Federal: VIA Rail, CBC
Provincial: LCBO
Forms of Bus. Ownership
Co-operatives
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• business owned by
workers/those who use it
• Run by board of dirs.
• Each member only gets 1 vote
• Profits shared based on use
Forms of Bus. Ownership
Franchises
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• A franchiser licenses the
rights to the business to a
franchisee for a fee
• Franchisee runs business
according to agreement
Examples: Subway, Quiznos
Forms of Bus. Ownership
Franchises
• Franchisee also pays monthly
fee, has to purchase product
through franchiser, sometimes
gets trained by franchiser, has
to maintain uniform quality
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Forms of Bus. Ownership
HOMEWORK
• Chapter Review questions:
page 33, q #1, 4, 5, 6, 7, 8, 12
• CHAPTER 1 FORMATIVE
QUIZ TOMORROW
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Going into Business
Going into Business
(Skip this section in the textbook)
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International Business
Structures
Int’l Business Structures
There are various business
structures for companies looking
to expand their business outside
of Canada’s borders.
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Int’l Business Structures
Joint Ventures
Two businesses combine
skills/abilities to benefit both
parties.
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Int’l Business Structures
International Franchises
A company licenses itself to
business in another country to
start business in that country.
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Int’l Business Structures
Strategic Alliances
Agreements between
businesses where each business
commits resources to achieve a
common objective.
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Int’l Business Structures
Mergers
Two or more companies join
together to form one to create
greater benefit (sometimes
called a takeover, especially if
met with resistance).
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Int’l Business Structures
Offshoring
Relocating some of the
company’s resources to
another country, usually to
reduce operating costs and
expenses.
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Int’l Business Structures
Multinational Corporations
A company that does business
in several different countries.
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Int’l Business Structures
HOMEWORK
• Questions: pg 68, q #18, 20, 21
• Chapter Review: pg 69, q #2,
3, 5, 14
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UNIT 1: Business
Fundamentals
Chapter 3:
Business Ethics & Social
Responsibility
Bus. Ethics & Soc. Resp.
In your small groups:
• Read “Kicking Horse Coffee
Co.”, page 73-74.
• Answer questions 1 and 2
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Bus. Ethics & Soc. Resp.
What is ethical behaviour?
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• Acting in a way that conforms
to social standards about what
is right and good
• Our values tell us what we
think is important, morals are
rules of what is good and bad
Bus. Ethics & Soc. Resp.
What role should ethics play
in business?
Society’s
ethics
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Individual’s
ethics
Business’s
ethics
Bus. Ethics & Soc. Resp.
What role should ethics play
in business?
• Many companies develop a
code of ethics explaining how
employees respond to different
situations
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Tylenol, Chicago, 1982
Bus. Ethics & Soc. Resp.
How can businesses resolve
ethical dilemmas?
• An ethical dilemma is a moral
problem with potential right or
wrong answers
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Values and
morals?
OR
Profitability and
competitiveness?
Bus. Ethics & Soc. Resp.
How can businesses resolve
ethical dilemmas?
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• Some dilemmas: downsizing,
pollution, toxic waste disposal,
resource depletion, laws,
employee rights, product
safety, workplace safety…
Bus. Ethics & Soc. Resp.
How can businesses resolve
ethical dilemmas?
Questions to ask to help resolve:
1. Who will be helped?
2. Who will be hurt?
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Bus. Ethics & Soc. Resp.
How can businesses resolve
ethical dilemmas?
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Questions to ask to help resolve:
3. What are the benefits/
problems with this
decision?
4. Will the decision survive
the test of time?
Bus. Ethics & Soc. Resp.
How can businesses resolve
ethical dilemmas?
• Whistleblowing: an employee
informing officials or public
about a legal/ethical violation
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• False financial practices,
ignoring safety & health codes
Int’l Business Structures
HOMEWORK
• Questions: pg 68, q #18, 20, 21
• Chapter Review: pg 69, q #2,
3, 5, 14
• Study for test Tuesday
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Bus. Ethics & Soc. Resp.
Fraud
• List 9 types of fraud into your
notes
Unethical Behaviour
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• Copy table 3.1 left column into
your notes
Bus. Ethics & Soc. Resp.
Accounting Scandals
• Embezzlement: accountant or
senior executives create phony
accounts and direct money to
themselves
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Bus. Ethics & Soc. Resp.
Insider Trading
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• Using information unavailable
to the public for your own
financial gain in the stock
market
• Investigated by securities
commission
Ethics & Corporate Social
Responsibility
Ethics and C.S.R.
- CSR exhibited through values,
ethics, contributions to
community
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Ethics and C.S.R.
Providing a
safe and
healthy work
environment
Adopting fair
labour
policies
Protecting
the
environment
CSR
Principles
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Being truthful
in advertising
Avoiding
price
discrimination
Donating to
charity
Ethics and C.S.R.
Duty to report
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• Corporations must disclose all
important information to
shareholders, business
partners, lenders, insurers,
communities, regulators,
consumers, employees, and
investigators
Ethics and C.S.R.
Laws that Govern Corporate
Ethics
There are laws that govern how a
business can interact with others.
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Ethics and C.S.R.
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1. Workplace Safety
In Ontario, the Occupational
Health and Safety Act (OHSA)
was instituted to ensure
workplace safety and health.
→ defines rights and
responsibilities of workers
Ethics and C.S.R.
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1. Workplace Safety
Workers have the right:
• to refuse unsafe work;
• to participate in H&S
activities; and
• to know about the hazards of
their workplace.
Ethics and C.S.R.
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2. Antidiscrimination Issues
Gender discrimination is less
of an issue. However, some
companies still discriminate.
Women or disabled workers
face a glass ceiling (invisible
barrier to promotions).
Ethics and C.S.R.
3. Harassment
Refers to behaviour that is
threatening, disturbing, or
unacceptable. Businesses must
protect employees from this.
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Ethics and C.S.R.
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4. Accessibility Issues
Businesses have a duty to
accommodate workers to
eliminate discrimination (it’s
in the Canadian Human Rights
Act). Help must be provided to
disabled employees.
Ethics and C.S.R.
5. Environmental Responsibility
Because of several large
disasters in the 1980s and
1990s, Canada introduced the
Canadian Environmental
Protection Act in 1999.
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Ethics and C.S.R.
5. Environmental Responsibility
Some companies still don’t
comply—for some it is more
costly to comply than it is to
pay the fines.
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Ethics & Soc. Resp.
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6. Labour Practices
In Ontario, the Employment
Standards Act establishes
conditions for employment.
→ hours of work, overtime
pay, minimum wage, holidays,
benefits, leaves, termination
Ethics and C.S.R.
Fair Trade
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A “voluntary” ethical behaviour.
Fair trade is the practice of
helping producers in developing
countries bypass expensive
middlemen so they can sell their
goods for a fair profit.
UNIT 1: Business
Fundamentals
Chapter 4:
International Business
What is International
Business?
What is Int’l Business?
A domestic transaction is the
selling of items produced in the
same country.
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An international transaction is
the selling of items produced in
other countries.
What is Int’l Business?
These transactions are referred to
as foreign trade. Foreign trade
contribues to the global economy.
International trade offers many
benefits to businesses.
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What is Int’l Business?
Benefits
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Access to Markets
• Canada: 32 million
• World: 6.5 billion
Easy for global product
producers, may be more difficult
for producers of other products.
What is Int’l Business?
Benefits
Cheaper Labour
• Standard of living and cost of
living lower in many other
countries, therefore lower
wages
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What is Int’l Business?
Benefits
Increased Quality of Goods
• Search the world for parts to
create the best possible
products for customers
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What is Int’l Business?
Benefits
Increased Quantity
• An increase in sales may mean
greater production, efficiency,
higher employment, expansion
of business
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What is Int’l Business?
Benefits
Access to Resources
• Find materials to build
products from around the
world
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What is Int’l Business?
The Five Ps of Int’l Business
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• Product
• Price
• Proximity
• Preference
• Promotion
What is Int’l Business?
Costs of Int’l Trade
• Offshore outsourcing
• Human rights issues and labour
abuses
• Environmental degradation
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What is Int’l Business?
Barriers to Int’l Business
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• Tariffs / custom duties
• Non-tariff barriers (prod. ban)
• Cost of importing/exporting
• Excise taxes
• Currency fluctuations
BRAINSTORM
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What are all the things that you
would serve at Christmas / Easter
dinner? List items.
Categorize items as:
• made in Canada
• made in Canada using
imported ingredients
• imported from another country
Flow of Goods & Services
Flow of Goods & Services
Balance of Trade
Relationship between imports and
exports
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imports > exports = trade deficit
exports > imports = trade surplus
Flow of Goods & Services
Importing: buying & shipping
something from a foreign country
Exporting: selling & shipping
something to a foreign country
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Ideally, export > import… Why?
Canada’s Major Trading Partners
$280B
$258B
$369B
$370B
$11.6B
$11.2B
$11.8B
$10.5B
$11.3B
$9.1B
$14.2B
$9.7B
$25.3B
$19B
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$29B
$35.3B
2005 Figures, taken from the Statistics Canada website
Flow of Goods & Services
HOMEWORK
Questions: page 127, #6, 8, 10-12
Questions: page 133, #13, 14
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Canada and Int’l Trade
Agreements
Canada & Int’l Trade Agr.
• World Trade Organization
(WTO)
• North American Free Trade
Agreement (NAFTA)
• Group of Eight (G8)
• European Union (EU)
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Canada & Int’l Trade Agr.
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Canada & Int’l Trade Agr.
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Canada & Int’l Trade Agr.
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