Role of Business

The purpose of a nonprofit business is:

Direct any and all profits to a charitable cause, service, or organization dedicated to helping others.

InfoTech is a computer application firm based in Silicon Valley and has been responsible for introducing some of the highest-rated applications available for personal productivity. Two brothers originally founded the company, but they quickly realized they needed to convert the business into a corporation and establish functional areas within the company to handle various aspects of operations. The company is now considering expanding operations by building a production facility in another country. The Board of Directors has approved this move, and now it will become the responsibility of which functional area to secure the necessary funding for the expansion?

finance

Triangle.com has decided to implement a new, comprehensive Accounting system that takes advantage of cloud technology. Which of the following groups would be considered the primary stakeholder for this project?

The Finance department

Alice takes her car to the dealership for a routine scheduled maintenance i.e., oil change, filter change, lubrication, and tire rotation. Alice receives a call from the dealership later that day stating that the technician discovered serious wear in her two front tires during the rotation and recommends replacing the tires. Alice agrees and tells the dealership that she will purchase two new tires and asks if they can be installed by the time she picks up her vehicle. Has the dealership provided a good or a service for Alice?

The dealership has provided both a good and a service.

Wells Fargo Bank recently took a big hit to its brand image and stock value when it was discovered that bank employees were opening new customer accounts without the consent or even knowledge of its' customers. Which of the external environments can this development be linked to?

The legal environment

The Micram company, which makes plastic containers, decides to relocate its operations to another state. The company is moving because the new state offers new business investment credits. Which external stakeholders will be affected by Micram closing its current location?

The local government

All of these are considered to be external forces that affect business EXCEPT:

Traditional environment

The terms "profit," "loss," and "value" can be described by the following, respectively:

When revenue exceeds costs; when costs exceed revenue; the perceived benefits by a customer of price to the time and money spent.

When a guest in a hotel purchases a toothbrush and toothpaste from the gift shop, the guest has purchased what from the hotel?

a good

A for-profit business exists to maximize profits for owners. In contrast, what type of business uses its profits to provide a public service?

a nonprofit business

The Susan G. Komen organization raises money for breast cancer research by asking for donations, organizing races, and selling t-shirts and other merchandise. Susan G. Komen does not return its profits to the owners, but uses them to provide a public service. For this reason, the Susan G. Komen organization is:

a nonprofit business.

External forces that affect businesses include:

advances in technology.

Which functional area of a business is responsible for converting the factors of production into goods and services?

operations

External stakeholders consist of the following groups:

shareholders, customers, suppliers, community, and government.

A business collects demographic information about what potential and current customers purchase, where they live, and how they spend their time. This business is responding to the:

social environment.

If a company adjust its processes to offer good service and high-quality products at competitive prices, they are responding to which external force?

the competitive environment

Sasha, a business manager, must consider many external factors that could affect her business. As she considers the low cost of labor in other countries around the globe when making business decisions, Sasha is considering:

the global business environment.

Denice invented a small, portable purse hook that allows a purse to be hung from a table and not touch the floor. She knows that there is a market for her purse hook and takes a loan out on her home to finance a small start-up company in Rock Creek, WI. As an entrepreneur, Denice's primary motivation for opening the business is:

the potential of making a profit if the business succeeds.

Natural resources would include which of the following?

wind

Which of the following are external stakeholders in a business?

creditors

How do we define the term "business"?

A business is any activity that provides goods or services to consumers for the purpose of making a profit.

Cathy starts a mobile car detailing business. After some initial growth, she hires two workers to help her keep up with customer demand. Cathy supplies the materials (soap, wax, etc.) for the operation which, in addition to paying the employees, constitutes her operating expenses. Cathy's revenues exceed her expenses and she donates 10% of her profits from her bank account to the local Humane Society. Is Cathy's business a for-profit or nonprofit?

It is a for-profit.

What are the four factors of production needed by business to operate?

Natural resources, labor, capital, and entreprenuership.

The purpose of a for-profit business is:

Return profits to the owners of the business.

An organization that provides goods or services for the purpose of making a profit is called a(n):

business.

Sea-Worthy is an ocean-shipping company. The company decided to develop their own internal ERP (Enterprise Resource Management) system since none of the existing commercial packages met the specific needs of their unique business segment. Halfway into development by their IT department, the company came to the realization that this system could be licensed to their competitors to offset their development cost and fund future enhancements. Which functional area of the company would be responsible for creating revenue from this internal system?

marketing

A function is responsible for aligning products and services to customer needs. Which function is driving this alignment?

marketing/sales

Wilderness Canine is a gourmet dog food company founded in 2012. Wilderness Canine's founders believe that fresh, frozen dog food is healthier than dog food in bags or pouches, but the company struggled to get its product into the freezer section in grocery stores. The consumer was not accustomed to looking in the freezer for dog food. Which function was responsible for understanding consumer behavior and aligning product to consumer preferences?

marketing/sales

For a for-profit business, the primary goal is to:

maximize profits for owners.

Caitlin is a gourmet chef who operates a seaside organic restaurant. Caitlin prefers to utilize only ingredients that she grows herself and she has decided to produce her own sea salt for her recipes. This would require the following four factors of production: Labor, in the form of her staff gathering and boiling; capital, in the form of buckets, filters, jars and stoves; entrepreneurship, in the form of Caitlin initiating the production of her own sea salt, and; ________, in the form of sea water and sun.

natural resources

The amount a business earns after deducting what it spends for rent, salaries, and other expenses is:

profit.