Chapter 1: Taking Risks and Making Profits within the Dynamic

Business Environment
GOODS and SERVICES: Page – 4
Goods
Services
BUSINESS and ENTREPRENEURSHIP: Page – 4
Business
Entrepreneur
REVENUE, PROFIT and LOSS: Page – 4
Revenue
Profit
Loss
RISK: Page – 5
QUALITY of LIFE & STANDARD of LIVING: Page – 5 & 6
Quality of Life
Standard of Living

 The United States has one of the highest standards of living in the world, even though
workers in some other countries, such as Germany and Japan, may on average make
more money per hour. Why?
Businesses add to Quality of Life and Standard of Living by:
 fulfilling a need for the community
 providing jobs to the citizens
 paying tax to government.
STAKEHOLDERS: Page – 6 & 7
Stakeholders
Who are Stakeholders?
Outsourcing
NONPROFIT ORGANIZATIONS: Page – 7
FIVE FACTORS of PRODUCTION: Page – 10 & 11
Land (or natural resources)
Labor (workers)
Capital
Entrepreneurship
Knowledge
 What do we find when we compare the factors of production in rich and
poor countries?

1
TODAY’S DYNAMIC BUSINESS ENVIRONMENT: Page – 11
ECONOMIC and LEGAL ENVIRONMENT: Page – 11, 12 & 13
A government can promote business by:
1. Minimizing spending and keeping taxes and regulations to a minimum.
2. Allowing private ownership of businesses.
3. Minimizing interference with the free exchange of goods and services.
4. Passing laws that enable businesspeople to write enforceable contracts.
5. Establishing a currency that’s tradable in world markets. Example: $
6. Minimizing corruption.
TECHNOLOGICAL ENVIRONMENT: Page – 14, 15 & 16
Technology
Effectiveness
Efficiency
Productivity: (Productivity = Output/ Input)
E-Commerce
B2C
B2B
Databases
Identity Theft
COMPETITIVE ENVIRONMENT: Page – 16
Empowerment
SOCIAL ENVIRONMENT: Page – 17 & 18
Demography
Managing Diversity
Societal Changes
GLOBAL ENVIRONMENT: Page – 18 & 19
Climate Change