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BA 101 Tom Durant Week 1 notes

by: Kristen

BA 101 Tom Durant Week 1 notes BA 101

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About this Document

Notes to go over Chapter 1 of the textbook. Basically an Introduction to Business
Intro to Business
Tom Durant
Class Notes
Economics, Of, business
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This 5 page Class Notes was uploaded by Kristen on Tuesday October 18, 2016. The Class Notes belongs to BA 101 at University of Oregon taught by Tom Durant in Fall 2016. Since its upload, it has received 4 views.

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Date Created: 10/18/16
Two Market Segments ● Graph of chip efficiency ● X-axis size from small to large ● Y-axis performance from slow to fast ● The larger the chip is the slower the performance ● The smaller the chip is the faster the performance ● This is a perceptual map Functional Areas of Business ● Research and development ● Production ● Marketing and sales ● Finance and accounting ○ All four of these things take money to do! Basic Economic Concepts Economics: ​The study of distributing resources for the production of goods and services within a social system Resources/Factors of Production:​ Raw materials, tools, machinery, capital ($) and people Demand, Supply, and Price: ​The principle elements of economics Economic Systems: ​Command​ ​(communism, socialism), free market, and mixed Command economies: ​The government controls what goods/services are produced, their quantity, and prices Free market system (aka private enterprise or capitalist)​: What goods & services are produced, their quantities and prices are based upon consumers (demand) and supply (producers). Government’s role: encourage free and fair competition between private producers Relationship between demand, supply, and price ● Graph ● X-axis price ● Y-axis quantity ● As price decreases, quantity increases ○ That is the relationship of price and quantity which explains the demand ● The supply is then increasing ● When these two lines (demand and supply) intersect, there is an equilibrium point Wealth of Nations Invisible hand: ​An economic principle holding that the greatest benefit to a society is brought about by individuals acting freely in a competitive marketplace in the pursuit of their own self-interest​. If each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that ​are beneficial to all the individual members of a community **The invisible hand keeps us from abuse** Individual Self-interest Promotes: ​competition, innovation (product and process), greater value (the worth, importance, or usefulness of something to somebody) Benefits: All members of the community​, not just each individual ○ More products (more choices) ○ New products (additional wealth) ○ Lower prices Yields: ​Efficient allocation of resources especially through the division of labor (​specialization of tasks matched to each individual’s skills​) Free Market Requirements ● Private property ○ If you don’t own your property, you don’t have an incentive to use that property for your own benefit ● Freedom of choice ○ You are more likely to work hard, be creative, and compete fairly with others if you have the freedom to work (or not), to acquire wealth, and to acquire/own property…among other things ● Fair competition ○ Government’s role is to ensure that rules are established to prevent others from interfering with another’s self interest ● Right to keep profits ○ If I don’t benefit from my work, I lack incentive The Private Enterprise System Review Adam Smith, the father of modern economics, used the following terms: ● Self interest:​ Smith’s underlying premise is that people are generally self-interested ● Invisible hand:​ The unseen force that drive market economies, where each participant pursuing his/her self-interest theoretically benefits all participants (buyers, sellers, the community) ○ For example: Society benefits by people getting an education is because they are more employable and can take advantage of those higher level jobs. ● Free market requirements (4 of them): ​the right to own property, freedom to choose what to buy and sell, fair competition, and the right to keep profits ○ We define people who agree upon a group of values and norms (goes along with fair competition Markets: Creating Wealth and Making Transactions ● Market definition:​ A group of people who have similar needs, similar buying characteristics, and the ability to purchase ● Markets are: ○ Specialized (the degree to which activities are broadly or narrowly defined) ○ Complex (a complex set of activities by mmy entities to get the product to the consumer) ○ Uncertain: markets are not easily predictable ○ Risky: the chance of something going wrong ● Consumers will make an exchange or transaction only when they are better off (wealth) ● As part of these exchanges or transactions competition between suppliers result in: ○ Pressure for lower prices ○ Pressure for newer/better products ○ Pressure for more efficient ways to do things To manage the economic part of your life, including wealth… ● You have to understand: How the system works (basic principles) ● And be an informed ○ Citizen ○ Consumer ○ Employee ○ Business Owner ■ All of these are stakeholders Management Process To deal with uncertainty and risk in complex and specialized competitive markets, Managers perform four functions ● Planning ○ The process of defining intended future courses of action aimed at achieving specific goal(s) or higher level objective(s) within a specific timeframe. ■ Involves: ● Assessing future conditions and circumstances ● Setting goals based on that assessment ● Making decisions about: ○ Work to be done ○ By whom ○ When ○ Resources requirements ○ Different types of plans ■ Strategic: Define the markets/products necessary to realize the company’s vision and objectives relative to competitors ● Purpose statement: A statement regarding the purpose of the organization (aka “vision statement”) ● Strategic objective: Higher level statements of how the vision/purpose will be realized (flows from the purpose statement) ○ Sr. Managers hold responsibility ○ Is 3-5 years out ■ Tactical: Specify how a company will use resources, budgets, and people to accomplish goals related to its strategic objectives ● Tactical goals: Specific statements of what will be done, in what timeframe, to achieve a specific end result (flows from higher level objectives) ○ Middle managers ○ 1-3 years ■ Operational: Day-to-day plans for producing and delivering products and services ● Actions: Who, what, when, and how the goals will be accomplished ○ 1st line managers ○ 6 months to 1 year ● Organizing (process and structure) ○ Organizational process: The collection of activities that transform inputs into outputs that customers value. ○ Organizational structure: The vertical and horizontal configuration of departments, authority, and jobs within a company. ● Leading/Directing (operating) ○ Communicating a vision ○ Inspiring/motivating ○ Point out/prescribe a course of action ● Controlling ○ Regulating the work of those whom a manager is responsible; including: ■ Setting standards of performance ■ Monitoring ongoing (real-time) performance toward goal achievement ■ Taking corrective action when needed Business Functions (Primary): ● Research and development – ​Design products/services that meet customers’ needs ● Marketing/sales ​- Know your customers, determine how to best serve them, and get them the product ● Production ​- Build quality products at lowest possible cost ● Finance ​- Arrange for the tools and money necessary to meet the goals of the company ● Accounting ​– Track, summarize, and analyze a firm’s financial position Asset (In accounting terms) ● Asset​: Items (tangible and intangible) that have value (probable future economic benefits). ○ In an economic sense, your ​knowledge, skills, and abilities​ are assets ○ In your career, you will take your ​knowledge, skills, and abilities​ to the market (that is specialized, complex and uncertain) and hope to trade on them.


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