INTRO TO BUSINESS TEST REVIEW

1. INTRO TO BUSINESS TEST REVIEW CHAPTER 1 ECONOMIC DECISIONS CHAPTER 2 ECONOMIC SYSTEMS CHAPTER 3 ECONOMIC ROLES CHAPTER 7 STRATEGIC MANAGEMENT

2. CHAPTER 1 • ECONOMIC DECISIONS • NEEDS—are the basics for survival items such as food, clothing, shelter. • WANTS—are the types of things that add pleasure to our lives. We could live without them but it makes life easier and more comfortable. • GOODS—are the things you can see and touch they are tangible items. • SERVICES—are the wants that are satisfied by the means of other people.

3. CHAPTER 1 ECONOMIC DECISIONS • ECONOMIC RESOURCES—are the means to which goods and services are produced. • 3 TYPES OF ECONOMIC RESOURCES ARE: • NATURAL—All of the materials which come from the Earth. • HUMAN—are the people who work to produce the goods/services. • CAPITAL—tools, equipment, $$$ to produce the goods/services.

4. CHAPTER 1 ECONOMIC DECISIONS • CAPITAL—this term is often used when referring to the factors of production. • SCARCITY—is the inability/ability to get a good/service. It is also called the “basic economic problem”. • GOVERNMENT ISSUES: just as scarcity effects people in everyday life so it affects the government. All factions of the government face the problem in supplying enough for the unlimited wants there is.

5. CHAPTER 1 ECONOMIC DECISIONS ::THE DECISION MAKING PROCESS:: • DEFINE—the problem must be in order to solve it. • IDENTIFY—choices here may be a multitude of choices but you must choose the one’s best to suit your need. • AD/DISADVANTAGES—be sure that gain outweighs the loss you will have. • CHOOSE—you must make a choice • ACT—act on your choice and be decisive. • REVIEW—did you make a wise decision.

6. CHAPTER 2 ECONOMIC SYSTEMS KEY ECONOMIC QUESTIONS: • What goods and services are to be produced? • How should the goods and services be produced? • And for whom should the goods and services be produced?

7. CHAPTER 2 • ECONOMIC SYSTEMS • TYPES OF ECONOMIC SYSTEMS • CUSTOM BASED—goods are produced the way they have always been produced. Passed down through generations. • DIRECTED—or planned the economy is planned and controlled by the government. • MARKET—thesetypes of economies are usually where democracy takes place where buyers and sellers exchange goods/services at a marketplace with some form of money.

8. CHAPTER 2 ECONOMIC SYSTEMS UNITED STATES ECONOMICSYSTEMS CAPITALISM—means that economic resources are privately owned by individuals other than by the government. Owners are free to decide what they wish to do with the resources they produce. FREE ENTERPRISE– is the freedom to produce goods/services based on an individuals preferences. VOLUNTARY EXCHANGE—the means as to how economic services become marketable are the demands of the marketplace. This exchange takes place due to wants and needs of the consumers.

9. CHAPTER 2 ECONOMIC SYSTEMS Private Enterprise—abusiness that provides goods and services with limited governmental interference or direction. This ensures your right to decide how you will earn a living. • Private Property–gives you the right to do, use and/or dispose things of value of which you own. In the U.S. you may do anything with your property as long as you don’t break any laws in the process. • PROFIT—the money left over from sales after subtracting all costs of operating the business. Owners are entitle to profits because they run the risk of losing the $$ they invested to begin business.

10. CHAPTER 2 ECONOMIC SYSTEMS THINGSTHAT TRIGGER U.S. PURCHASES PROFIT MOTIVE—the desire to work hard and be creative and earn a higher profit. People are willing to invest money, time and effort due to having a profit motive. • COMPETITION–is the gamesmanship between rival companies to produce and sell goods and services for a price to buyers. This gives the consumer an opportunity to make choices. • FREEDOM OF CHOICE—is the right the consumer has to purchase a particular brand over another or use another merchant instead of another. The freedom and right to purchase has many different rationale to determine what is important to each buyer.

11. CHAPTER 3 ECONOMIC ROLES THE “3” ECONOMIC ROLES FOR CONSUMER • CONSUMER ROLE • WORKER ROLE • CITIZEN ROLE

12. CHAPTER 3 ECONOMIC ROLES CONSUMER’S ROLE ***Impression made with buying decisions. ***Individual consumers purchase more than 2/3 of goods and services. ***As a consumer you help businesses make their decisions by your purchase by the demand.

13. CHAPTER 3 • ECONOMIC ROLES • Consumer’s Role on Demand • Demand effects price---The price is affected by what YOU are willing to pay for it. • Demand determines supply—The supply is affected because businesses know how much to manufacture based on market demand. • Demand & Supply affect pricing—The pricing is affected based on the consumers demand so if the market all of a sudden creates a high need for a product the supply is lower thusthe price goes up. • Competition is a good thing—Why? Because the prices are kept at a reasonable level. This keeps businesses from cornering market by setting their own price.

14. CHAPTER 3 • ECONOMIC ROLES • Worker’s Role • Your standard of living—The standard of living is affected based on your ability to purchase particular products. This affects your success as a productive employee too. • Worker productivity—high productivity allows us to attain a high standard of living.The more productive we are as employees increases our wealth and in turn raises our standard of living.

15. CHAPTER 3 • ECONOMIC ROLES • Citizen’s Role • TAXES---as a citizen you pay taxes from the money you earn this in turn provides a “public service” to the community through the builiding of parks, schools and civic centers. • PUBLIC GOODS—Make a community a better place in whit to live improving the quality of life for everyone. And this is done by the citizen’s role from paying taxes. (Name some of the ways this takes place)

16. CHAPTER 4 • ECONOMIC MEASUREMENTS • ONE OF THE MEANS IS THE (GDP) • GDP===Gross Domestic Product • The dollar value of all goods and services • produced in our country. • THREE CATEGORIES OF EXPENDITURE • What consumers spend for food, clothing, and housing. • What businesses spend for buildings, equipment, and supplies. • What government agencies spend to pay employees and buy supplies.

17. CHAPTER 4 ECONOMIC MEASUREMENTS ANOTHER MEAN: Business Cycle The movement from good times to bad times in the economy is called the “business cycle”.

18. CHAPTER 4 ECONOMIC MEASUREMENTS BIG“4” TO THE BUSINESS CYCLE • PROSPERITY—This is the “high point” of the business cycle when everyone wants work is employed and abundance of supply. • RECESSION—the period where the demand begins to decrease and businesses lower production on goods/services. • DEPRESSION– Is the phase high periods of unemployment and the market is weak. • RECOVERY– Unemployment starts to decrease and the demand for goods and services begins to go steadily upward.

19. CHAPTER 4 ECONOMIC MEASUREMENTS ::Other factors affect Measure:: INFLATION—ISACONSTANT INCREASE IN PRICES THIS HAPPENS WHEN DEMAND IS GREATER THAN THE SUPPLY FOR GOODS/SERVICES. DEFLATION—DECREASE IN GENERAL PRICE LEVEL. THIS OCCURS DURING PERIOD OF RECESSION OR DEPRESSION. PRICES ARE LOWER BUT ABILITY TO BUY IS LOW AS WELL.

20. CHAPTER 1-5 REVIEW SUMMARY • KNOW THE FACTORS THAT MAKE BUSINESSES DECISIONS • DEFINE ECONOMIC RESOURCES..WHAT ARE THE 3 TYPES? • DEFINE CAPITAL…DEFINE SCARCITY.. • WHAT ARE THE “6 STEPS” TO THE DECISION MAKING PROCESS? • WHAT ARE THE TYPES OF ECONOMIC SYSTEMS AS TEXT DEFINES? • WHAT ARE THE THREE THINGS WHICH TRIGGER U.S. PURCHASES? • WHAT ARE THE “3 TYPES” OF U.S. ECONOMIC SYSTEMS? DEFINE • DEFINE----PRIVATE PROPERTY…PROFIT…PRIVATE ENTERPRISE. • KNOW THE “3” ECONOMIC ROLES BE ABLE TO DEFINE THEM. • KNOW THE CONSUMER ROLE AND THE EFFECT THEY HAVE ON DEMAND. • WHAT ARE THE CONSUMER’S ROLES WHAT RESPONSIBILITIES DO THEY HAVE. • WHAT ITEMS ARE AFFECTED BY THE CITIZEN’S ROLE? WHY? • WHAT IS THE “GDP”? • WHAT ARE THE “3” CATEGORIES OF EXPENDITURES? • PLEASE DEFINE THE BUSINESS CYCLE..WHAT IMPACTS ARE THE BIG “4”? BE ABLE TO DEFINE EACH. • WHAT DO THE TERMS INFLATION AND DEFLATION MEAN? HOW AND WHAT CAUSES THIS IMPACT?

22. 10 Rules to Building a Great Business Winter 2008 Mr. Calkins Intro to Business

23. 10 Rules to Building a Great Business Believe in your vision and your business. Define shared values and let values rule. Build and synergize corporate capabilities. Focus on and care about your customer. Create a winning organizations Reinvent your business continually. Be a Market leader introduce disruptive products. Live speed Institutionalize innovation Make business fun!!!!!!!!!!!

24. The “10” Rules to Success • #1 Believe in your vision and your business. • Create an inspiring vision establish shared values • Lead change manage resistance to change. • Lead by example practice what you preach be the example. • Demonstrate confidence, win respect and trust w/o seeking popularity. • Be enthusiastic, inspire and energize people. • Empower, delegate authority be open to new ideas. • Communicate openly and honestly give clear guidelines. • Be willing to solve problems, LISTEN with support & understanding. • Use the team approach facilitate cooperation involve everyone. • Don’t micromanage, avoid close supervision don’t over-boss.

26. The “10” Rules to Success • #2Define shared values and let values rule. • Play up the soft stuff “the companies values and culture”. • Don’t focus on the numbers, numbers aren’t the vision they are the product. • Focus on team building through values: ideas, excite others. • Live values • Emphasize your company’s value and culture. • Part your company with those who don’t live the values of the company. • Most employees are knowledge workers who you are and what you are about. The want to know they are a good fit. • Values define what is and isn’t acceptable they become your code of behavior.

27. The “10” Rules to Success • #3 Build and synergize corporate capabilities . • Private Victory--Be proactive, begin with the End in Mind put 1st thing 1st • Public Victory– a) Think win-win 3 specific traits:: Integrity, Maturity and Clear Mentality. b) Seek first to understand then to be understood. • Private Failure- a) Be reactive doubt yourself and blame, b) Work without any clear end in mind. c) Do urgent itmes first. • Public Failure—a) Think win/lose, b) Seek first to be misunderstood, c) If you can’t win compromise. • Staying down—Fear change and put off improvement.

29. The “10” Rules to Success • #4 Focus and care about your customer • Create a customer oriented business model. • Stay close to your customer base. • Listen to your customers. • Partner with your customers. • Create superior customer value.

31. The “10” Rules to Success • #5 Create a winning organization • Cultivate leaders using the 4 “E’s” ofleadership. • Energy—Leaders with tremendous energy • Energize—recruit those who energize teams not intimidate. • Edge—someone with a competitive edge and a will to win. • Execution—those with a track record of getting results. • BY DOING THE ABOVE YOU WILL AVOID • The trap of building bureaucracy • Elminates boundaries between customers/employees • Proper values will be driven on with.

33. The “10” Rules to Success #6 Reinvent your business continually 1) Work on your business-- business owners spent too much time working for their business than on it to make it better and more efficient. 2) Set stretch goals--Stretch targets energize by reaching for what appears to be the impossible, we often actually do the impossible; and even when we don't quite make it, we inevitably wind up doing much better than we would have done." Search for new opportunities—be clear and focused on your search strategies. If you have no idea what you are searching for you will wander around aimlessly. Facilitate cross-pollination of ideas—by incorporating a wide variety/range of styles, skills and perspectives to inspire and develop winning routines. Make constant brainstorming a religion—this is effective mostly because it keeps us from staying with or acquiring “fixed” ideas.

35. The “10” Rules to Success #7 Surprise markets and competitors by introducing disruptive products 1) Encourage creativity– encourage personal and entreprenuerial creativity. Radical Idea generation—you have to develop a new idea and sometimes that will happen with out-there ideas or innovation involved. Challenge assumptions—are the everyday things that you normally and have began to take for granted. Radical innovation—just as a radical idea to have an new or innovative thought or creation is the crux of all successful businesses. Experimentation/Freedom to fail—you have to allow yourself and employees to fail now and then to reap large rewards.

36. The “10” Rules to Success #8 LIVE SPEED 1) Fast Company– make fast, immediate decisions. Make fast decisions—decision must be made in minutes not in days or weeks. Decisions should also be made face to face not memo to memo. Simplify everything—the simpler you make something or creativity you allow makes for more efficient work and use of time. If you want people to feel they make a difference give them some rope. Eliminate bureaucracy—too much organizational structure equals stagnant ways and loss of creativity. If there are so many people to get a decision answered from leads to loss of productivity and innovative ideas. Pursue opportunities– allow yourself to seek and find opportunities through change. Leaders seize opportunities, managers avert threats.

37. The “10” Rules to Success #9 Institutionalize Innovation 1) Culture supporting innovation – work amongst the many to create new ideas and opportunity is a healthy business environment. 2) Innovation processes—good innovative processes uses both new and old theories and accomplishments. The process of innovation is a rythmic search of selection, exploration and synthesis. 3) Metrics—measure the progress to take a corrective action and accelerate the pace of ideas through to implementation. 4) Cross functional teams—when you bring ideas from different areas, arenas and with diversity together you have unique solutions out of these sessions. Increases the sources of competitive advantage. 5) Strategic alignment– the cost and time required to produce and created a new product or so great that it is imperative to have a solid strategic alignment.

39. The “10” Rules to Success #10 Make Business Fun 1) Passion – the power of passion is unlimited in its place and importance in the business. Successful people win because they love what they do. Fun—must be a huge investment in your business strategy. No one should do a job they don’t enjoy. On the other side if you are jacked to get up in the morning you will perform your duties remarkably. Less Formal—You must realize now how important it is to maintain the kind of corporate informality that encourages a training class to comfortably challenge the boss's pet ideas. 4) Creative chaos environment—Establishing a creative chaos environment to inspire creativity and can trigger accidental discoveries. Encourage improvisation and wild play. Find the right balance between order and chaos.

41. Review “10” Rules Believe in your vision and your business. Define shared values and let values rule. Build and synergize corporate capabilities. Focus on and care about your customer. Create a winning organizations Reinvent your business continually. Be a Market leader introduce disruptive products. Live speed Institutionalize innovation Make business fun!!!!!!!!!!!