Chapter 1:
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Goods
o Goods are tangible, physical products that one sells
o Cars, Phones, Clothes, Food, etc.
Services
o Services are intangible, experiences sold to customers
o Medical exam, Airline flight, Massage, etc.
Expenses
o Expenses are the things companies must pay for to make goods and services happen
Profit
o If revenues are more than expenses a business is at Profit
For-Profit vs Non-Profit
o For-Profit business is in business to make profit for its owners
o Non-Profit business in business to make enough money to stay afloat
o While Non-Profit businesses are not in the business to make money, it still must make
enough to pay for expenses
Entrepreneur
o Someone willing to risk time and money to start and manage a business
BIG Ideas
o Idea 1: Scan the environment
o Idea 2: SWOT Analysis helps focus business
▪ Strengths, Weaknesses (Internal Reflection)
▪ Opportunities, Threats (External Reflection)
o Idea 3: Define your Mission and Vision
▪ Mission statement describes the purpose of a company, needs to be specific
enough to understand how the company works, but generalized enough to be
flexible and have longevity
▪ Vision statement is the goal of the company itself
o Idea 4: Understanding Stakeholders
▪ Owners, Customers, and Employees make a business
o Idea 5: Without Profits, a business fails
▪ It is not unusual for a start-up company to not turn profits for the first year or
two
▪ Revenue – Expenses = Profit
o Idea 6: Trade-Offs are everywhere
▪ Factors of Production: Land, Labor, Capital, and Entrepreneurial Ability
▪ Opportunity Cost: The benefit lost from the alternative not chosen
o Idea 7: Incentives Matter
▪ Positive Incentives encourage people to do or act on something because of a
“deal”
▪ Negative Incentives discourage people to do or act on something because of a
“penalty” or such
o Idea 8: People make decisions at the Margin
If the additional or “extra” unit provides a higher marginal benefit than cost,
consumers will buy it
Idea 9: Trade can make everyone better off
▪ Positive Sum Game
• Both parties can mutually benefit from trade
▪ Zero Sum Game
• One party benefits while the other does not or is affected negatively
Idea 10: Framing Decisions Matters
▪ When a company needs to make more money, they will often raise the cost of a
product by shrinking the size, but then they reframe the packaging or product
itself to encourage consumers to still buy their products
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Chapter 2:
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Rewarding Customer Loyalty
o Airline Frequent Flyer Programs
o Hotel Frequent Guest Programs
o Supermarket Frequent Shopper Programs
o Restuarant Frequent Dinner Programs
Companies not only make more money off loyalty or rewards programs, but they also gather
data which they can sell as well
Companies gather data through everything we do
Automation in Manufacturing
o Waterwheels and windmills
o Automated Machinery
o Assembly Lines
o Robotics
Automation in Services
o ATMS
o Self-Service Checkouts
o Self-Service Kiosks
o Healthcare
Automation
o Replaces routine, repetitive tasks
Jobs Most Likely to be Automated
o Telemarketers
o Title Examiners
o Sewers
o Mathematical Technicians
o Insurance Underwriters
o Watch Repairers
o Cargo and Freight Agents
o Tax Preparers
Jobs Least Likely to be Automated
o Recreational Therapist
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o First-line supervisors of mechanics, installers, repairers
o Emergency Management Directors
o Mental Health and Substance abuse social workers
o Audiologists
o Occupational Therapists
o Orthotists and prosthetists
o Healthcare social workers
Telecommuting and Remote Work
o Number of workers in 2022 who chose to work remotely was 24% higher than 2021
o 66% of workers would look for another job if the ability to work remotely were taken
away
o 62% feel more productive working remotely
o Hybrid workers saved an average of 19.11 per day they worked remotely
Advantages of Remote Work to Employers
o Less need to provide an office space
o Larger talent pool
o Increased employee productivity
Advantages of Remote Work to Employees
o Less time commuting
o Saving money over time
Disadvantages of Remote Work to Employees
o Fewer opportunities to collaborate with coworkers
o Greater feelings of detachment
o More difficult to disconnect outside of work hours
Shopping
o Read reviews of products and retailers
o Compare retailers' products
o Complete Purchase Transactions
o Provide Feedback
Education
o Synchronous Delivery
▪ Face-to-Face learning
o Asynchronous Delivery
▪ Online Learning
o Hybrid Delivery
▪ Mix of both styles of learning
Social Media
o Nothing is truly private
o Deleting does not get rid of something
o Most employers use social media to look for information about you
o Protect your personal brand
The Internet of Things
o Managing devices through the Internet
o 11.3 billion IoT devices in 2021
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o 29.47 billion IoT devices by 2030
Managing Finances
o ATMS
o Online Banking
o Managing Financial Services Online
o Protecting Against Hackers
▪ Public Networks
▪ Virtual Private Networks (VPNs)
Leadership
o Creates the Strategy
▪ Develops the Culture
Organizational Culture
o Definition: The sum of the values, beliefs, practices, and behaviors that contribute to the
social and psychological environment of an organization
Developing an Effective Strategy
o SWOT Analysis
▪ Where does the company have a sustainable competitive advantage?
▪ What can the company do better than its competitors?
▪ Identify the company’s core competency
Coporate Strategy
o Defines the business, market, or industry in which the organization will operate
o Types of Coporate Strategies
▪ Concentration
▪ Vertical Integration
• Forward Vertical Integration
• Backward Vertical Integration
▪ Related Diversification
▪ Unrelated Diversification
Business Strategy
o Low-Cost Strategy
▪ More people the buy the better, providing items or services at a lower price
o Differentiation Strategy
▪ Rolex, Louis Vuitton, Porsche
Strategy Implementation
o Specific
o Measurable
o Attainable
o Realistic
o Timely
▪ SMART Goals
Finding the right Organizational Structure
o Mechanistic
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▪ Bureaucratic and Formalized Structures
o Centralized
▪ Decisions are made at the top
o Organic
▪ More informal, flexible, and less rigid
o Decentralized
▪ Decision-making is pushed lower
o Span of Control
▪ Flat
▪ Hierarchical
o Flat Structures work well when:
▪ Work is clearly defined
▪ Managers are capable and supported
▪ Jobs are similar
▪ Performance measures are comparable
▪ Subordinates prefer autonomy
Management Functions
o Planning
o Organizing
o Leading
o Controlling
Leading the Organization
o Kotter’s 8 Principles of Leading Change
▪ Create a sense of urgency
▪ Form a powerful coalition
▪ Create a vision for change
▪ Remove Obstacles
▪ Create short-term wins
o Transformational Leaders
▪ Abraham Lincoln, MLK
o Transactional Leader
▪ Focuses on tasks at hand
▪ Bill Gates, George Bush
Cultural Influences on Leadership
o GLOBE Research Project
▪ Autonomous Leadership
▪ Self-Protective Leadership
o Hofstede’s Value Survey
▪ Individualistic/Collectivism
▪ Power Distance
▪ Masculinity/femininity
▪ Uncertainty Avoidance
▪ Long-term Orientation
▪ Indulgence
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Demand Curve
o Y Axis is the Price
o X Axis is the unit of measure
Variables influencing Demand
o Price of unit per measurement
o Other Independent Variables
▪ Price of substitute goods
▪ Price of complementary goods
▪ Income
o Tastes and Preferences
o Expectations
o Number of Buyers
Law of Demand
o If the price of a good or service decreases, the quantity demand of that good or service
will increase
Variables influencing Supply
o Price of Inputs to Production
o Technology
o Expectations
o Number of Sellers
Types of Economics
o Competitive Market Economies
▪ United States
o Centrally Planned Economies
▪ North Korea
o Mixed Economies
Gross Domestic Product (GDP)
o The sum of the market value of all final goods and services produced within a country in
a given period of time
▪ Gross
• Not adjusted for depreciation
▪ Domestic
• Produced and sold within the country
▪ Product
• The item or service sold
o Nominal GDP
▪ Market value of final goods and services produced at current year prices
o Real GDP
▪ Market value of the economic product calculations adjusted for changes in price
levels
o Per Capita
▪ Total GDP divided by the population
GDP Categories
▪ Consumption (69%)
▪ Investments (17%)
▪ Government Expenditure (18%)
▪ Net Exports (-4%)
Inflation
o Price Level
o Consumer Price Index (CPI)
o Inflation Rate
Unemployment
o Unemployment Rate = Those who have been looking for work / Total Population
o Types of unemployment
▪ Frictional
• Takes time to find the right job
▪ Structural
▪ Cyclical
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Exchange Rate
▪ Currency Appreciation
• A currency’s value increases in terms of another country
▪ Currency Depreciation
• A currency’s value decreases in terms of another currency
Fiscal and Monetary Policy
o Fiscal Policy
▪ Decisions a government makes regarding collecting tax revenue from citizens
and corporations and how it will spend the money it collects
o Monetary Policy
▪ Decisions made by a country’s central bank about interest rates and the money
supply
Chapter 5: Ethical Decisions in Business
Three question test
o Is it legal?
o Would you like to be treated that way?
o Would I want to hide this from others?
The golden rule
o Treat others the way you’d like to be treated
Relativism, Universalism, and Utilitarianism
o Ethical Relativism: Morality is relative to the norms of one’s culture
o Ethical Universalism: A universal ethic applies for all, regardless of any distinguishing
characteristic
o Ethical Utilitarianism: The end justifies the means
Ethical Behavior in the Internet Age
o Anonymity
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o Cyberbullying
o Fake Reviews
Coporate Ethics
o Written Code of Ethics
o Internal Corporate Culture
Stakeholders
o Stockholders
o Employees
o Customers
o Management
o Suppliers
o Buyers
o Community
o Government
Huawei
o Telephone switching equipment
o Expanded beyond Chinese Market
o Growth fueled by rapidly expanding domestic market
o Lower labor costs were an advantage initially
o Ability to meet customers’ needs
International Trade
o Basic Terminology
▪ Exports
▪ Imports
o Balance of Trade
▪ Trade Surplus: Exports > Imports
▪ Trade Deficit: Imports > Exports
Why do countries trade?
o Comparative Advantage
▪ Specializing in the production of goods or services with the lowest opportunity
cost
o Access to new markets
o More competition
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