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INTRODUCTION TO BUSINESS – KEY TERMS
CHAPTER 1: OVERVIEW OF BUSINESS
1. The definition of Business Business is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs. The organized effort of individuals o Material resources include the raw materials used in manufacturing processes as well as buildings and machinery. o Human resources are the people who furnish their labor to the business in return for wages. o The financial resource is the money required to pay employees, purchase materials, and generally keep the business operating. o Information is the resource that tells the managers of the business how effectively the other three resources are being combined and used. Profit is what remains after all business expenses have been deducted from sales revenue. A negative profit, which results when a firm’s expenses are greater than its sales revenue, is called a loss. A business is a particular organization, such as a Cinemark Theatre or a Cracker Barrel Old Country Store. To be successful, a business must perform three activities. It must be organized, it must satisfy needs, and it must earn a profit. 2. Types of business Service businesses produce services, such as haircuts, legal advice, or tax preparation. Manufacturing (sản xuất) businesses process various materials into tangible goods. Marketing intermediaries/Retailers buy products from manufacturers and then resell them to consumers in their retail stores. E-business can be defined as the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs **through the facilities available on the Internet.
- Basic economic indicators Economic indicators Explanation**
Gross domestic product (GDP) The total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period— usually a one-year period The unemployment rate The percentage of a nation’s labor force unemployed at any time. Inflation rate An economic statistic that tracks the increase in prices of goods and services The consumer price index (CPI) Chỉ số giá tiêu dùng A monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area The producer price index (PPI) An index that measures prices that producers receive for their finished goods Balance of trade The total value of a nation’s exports minus the total value of its imports over a specific period of time. (tổng giá trị hàng xuất – tổng giá trị hàng nhập ) Consumer confidence index Niềm tin tiêu dùng A measure of how optimistic or pessimistic consumers are about the nation’s economy. This measure is usually reported on a monthly basis. National income The total income earned by various segments of the population, including employees, self- employed individuals, corporations, and other types of income. Prime interest rate Lãi suất cơ bản The lowest interest rate that banks charge their most credit-worthy customers.
4. The Business Cycle The business cycle is the recurrence of periods of growth and recession in a nation’s economic activity. The business cycle consists of four phases: the peak (or prosperity), recession, the trough, and recovery (or expansion). During the peak period (or prosperity), the economy is at its highest point, the unemployment is low and Total income is relatively high. The recession (suy thoái) is defined as two or more consecutive three- month periods of decline in a country’s GDP. Depression is a severe recession that lasts longer than a typical recession and has a larger decline in business activity when
workers, values and attitudes of “significant others” (spouses, friends, and relatives), and the use of the Internet. Opportunity refers to the amount of freedom an organization affords an employee to behave unethically if he or she makes that choice. c. Encouraging Ethical Behavior Government’s Role: The government can encourage ethical behavior in business by enacting more stringent (nghiêm khắc) regulations, such as the landmark Sarbanes-Oxley Act of 2002 providing sweeping new legal protection for those who report corporate misconduct. Trade Associations’ Role (hiệp hội thương mại) : Trade associations can and often do provide ethical guidelines for their members by exerting pressure (gây áp lực) on members to stop engaging in questionable business practices that may harm all firms in the industry. Individual Companies’ Role : o A code of ethics (bộ quy tắc đạo đức) is a written guide to acceptable and ethical behavior as defined by an organization; it outlines uniform policies, standards, and punishments for violations. o Whistle-blowing (tố cáo) is informing the press (thông báo cho báo chí) or government officials about unethical practices within an organization. o Guidelines for Making Ethical Decisions: Listen and learn Recognize the problem or decision-making opportunity that confronts your company, team, or unit. Don’t argue, criticize, or defend yourself—keep listening and reviewing until you are sure that you understand others Identify the ethical issues Examine how co-workers and consumers are affected by the situation or decision at hand. Examine how you feel about the situation, and attempt to understand the viewpoint of those involved in the decision or in the consequences of the decision Create and analyze options Try to put aside strong feelings such as anger or a desire for power and prestige and come up with as many alternatives as possible before developing an analysis.
Ask everyone involved for ideas about which options offer the best long-term results for you and the company. Then decide which option will increase your self-respect even if, in the long run, things don’t work out the way you hope they will Identify the best option from your point of view Consider it and test it against some established criteria, such as respect, understanding, caring, fairness, honesty, and openness Explain your decision and resolve any differences that arise This may require neutral arbitration from a trusted manager or taking “time out” to reconsider, consult, or exchange written proposals before a decision is reached
6. Social responsibility Social responsibility is the recognition that business activities have an impact on society and the consideration of that impact in business decision making. Corporate citizenship is adopting a strategic approach to fulfilling economic, ethical, environmental, and social responsibilities. This requires balancing the needs, desires, and demands of a diverse group of stakeholders. Stakeholders (các bên liên quan) is used to describe all the different people or groups of people who are affected by an organization’s policies, decisions, and activities. Stakeholders can include investors, employees, customers, regulators, competitors, neighborhoods and communities, and social activists. a. Two Views of Social Responsibility Economic model of social responsibility is the view that society will benefit most when business is left alone (tự do) to produce and market profitable products that society needs Socioeconomic model (mô hình kinh tế xã hội) of social responsibility is the concept that business should emphasize (nhấn mạnh) not only profits but also the impact of its decisions on society b. Public Responsibilities of Business (Trách nhiệm công cộng của công ty) Consumerism (chủ nghĩa tiêu dùng) consists of all activities undertaken to protect the rights of consumers
Pollution is the contamination of water, air, or land through the actions of people in an industrialized society. Effects of Environmental Legislation (tác động của luật môi trường) Business Response to Environmental Concerns o Recycling involves converting used materials into new products or components for new products in order to prevent their unnecessary disposal. o Green marketing is the process of creating, making, delivering, and promoting products that are environmentally safe. Implementing a Program of Social Responsibility (thực hiện các chương trình trách nhiệm xã hội) o Commitment (cam kết) of Top Executives o Planning o Appointment of a Director o A social audit is a comprehensive report of what an organization has done and is doing with regard to social issues that affect it.
7. International Business International business encompasses all business activities that involve exchanges across national boundaries. (trao đổi xuyên biên giới) a. The Basis for International Business (nền tảng) Absolute and Comparative Advantage o An absolute advantage (lợi thế tuyệt đối ) is the ability to produce a specific product more efficiently than any other nation. o A comparative advantage (lợi thế cạnh tranh) is the ability to produce a specific product more efficiently than any other product. Exporting and Importing o Exporting is selling and shipping raw materials or products to other nations. o Importing is purchasing raw materials or products in other nations and bringing them into one’s own country. o A nation’s balance of trade is the total value of its exports minus the total value of its imports over some period of time. o A trade deficit is a negative balance of trade
o A nation's balance of payments is the total flow of money into a country minus the total flow of money out of that country over some period of time. (tiền vô – tiền ra) b. Methods of Entering International Business Licensing is a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.
Exporting to International Markets
o A letter of credit issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary Thư tín dụng do ngân hàng phát hành o A bill of lading document issued by a transport carrier to an exporter to prove that merchandise has been shipped Chứng từ vận đơn – công ty vận tải cấp o A draft issued by the exporter’s bank, ordering the importer’s bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer’s bank Hối phiếu – ngân hàng của bên xuất khẩu Joint venture (liên doanh) : a partnership formed to achieve a specific goal or to operate for a specific period of time. Totally owned facilities are a company’s own production and marketing facilities in one or more foreign nations. A strategic alliance (liên minh chiến lược) is a partnership formed to create competitive advantage on a worldwide basis. A trading company provides a link between buyers and sellers in different countries. Countertrade (thương mại đối lưu) is essentially an international barter transaction (giao dịch trao đổi hàng quốc tế) in which goods and services are exchanged for different goods and services. A multinational enterprise (doanh nghiệp đa quốc gia) is a firm that operates on a worldwide scale without ties to any specific nation or region. c. Barries to international trade Tariffs
