ACTIVITY 1

1. What are the benefits of businesses? Can a business negatively affect society? Give one example
of a business that is benefiting society and one example of a negative effect.

The benefits of a business are that it can create jobs and production that can positively impact
the country’s economy. The benefit is that it contributes to the quality of life for people and
breads innovations that can lead to the creation and growth of new businesses. Business can also
negatively affect society. One example of this would be the gas business. This is benefiting
society in the way that most of society's home and automation systems run on gas. The negative
effect of this business is the environmental harm that comes with cultivating and disturbing gas
for different nations and countries

2. What are the factors of production? Is one factor more important than the others? If so, which
one? Why?

The factors of production are labor, capital, physical resources, and entrepreneurs. Ido does
not believe that one factor is more important than the other. I believe that each factor acts to
balance out the other. My reasoning for this conclusion is that to have growth in physical
resources, there must be upgrowth in capital, labor, and entrepreneurs. The factors of production
are an engine that uses one factor to drive the other

3. What is a demand curve? A supply curve? How are they related?

A demand curve shows the number of products that are demanded at a certain price, while a
supply curve shows the amount of product that will be supplied from the demand. They are
related in the way that when the demand of a supply matches the quantities supplied. This can be
tracked by using graphs to show the movements of supply and demand. When this supply and
demand intersect they create a market price(or equilibrium price) which will positively impact the
economy.

4. Why is inflation both good and bad? How does the government try to control demand and supply
curves?

Inflation can be both good and bad in the way that, at a slow and steady rate, inflation can create
job opportunities and increase the country's economic output. It can create more business
demands, which can lead to the growth of an old and new businesses. On the other side of that
inflation, can be bad, in the way that with too many businesses competing against each other the
prices index for products can go up and unnecessarily so. This in turn can cause the demand for
products to go down or stay stagnant. This would be a bad thing because then the additional
money that is made from the growth of the old and new businesses isn’t being disturbed evenly,
which can decrease the purchasing power of many people, which can result in a decrease of
productivity physical labor, or resources. The government tries to combat this by using two sets
of policies; the fiscal- which manages the collection and spending of the nation's revenues. And
the monetary policies, which focus on controlling the nation's money supply to manage the
economic system. Together the two policies makeup and the stabilization policy which
 governments use to smooth out the in fluctuations of output and unemployment stabilizes
inflation.
Activity 2

1. What factors determine an individual’s ethics? For you, which factor has been most significant?

The factors that determine individual ethics are utility, rights, justice, and caring. The utility is
understanding that everyone should receive fair benefits. Rights are the rights of everyone
involved in the ethical decision, and also help in determining an individual's ethics. Human
capital is the most important factor of production because it puts together land, labor, and
physical Capital and produces an output either to use for self-consumption or to sell in the
market. It includes the skilled and unskilled workforce of a nation.

2. When making decisions, who are the stakeholders that a business should consider?

When making decisions the stakeholders that a business should consider are the investors, the
local communities, their suppliers, their customers, and their employees. Considering that these
five key factors are the engine that runs your business any decisions should be made with these
stakeholders’ best interests in mind.

3. What are the major areas of social responsibility with which businesses should be concerned?

The four major areas, in which businesses have responsibilities to the general public are
publichealth issues, protecting the environment, developing the quality of the workforce, and
corporate philanthropy.

4. What are the four basic approaches to social responsibility?

Obstructive- A company that takes an obstructive stance toward social responsibility attempts to
defend its economic priorities by blocking any attempts to point out the company's lack of social
responsibility.
Defensive- In most cases, companies that take a defensive stance towards social responsibility are
not particularly responsible. These companies may consider themselves neutral, and they make
profits a more important motive than performing actions in a socially responsible way.
Accommodating- An accommodating stance signifies that a company believes social
responsibility is important and perhaps as important as making a profit.
Proactive- Like an accommodating company, a proactive company makes social responsibility a
priority, even if doing so cuts into its profits. Instead of reacting to criticism, a proactive company
attempts to remain ahead of the curve when it comes to social responsibility.

5. How does government shape the social responsibility of organizations?

A government is responsible for creating and enforcing the rules of society, defense, foreign
affairs, the economy, and public services. While the responsibilities of all governments are
similar, those duties are executed in different ways depending on the form of government
Activity 3
1. Why are small businesses important to the economy?

Job Creations, Innovation, and Contributions to Big Business are the three major reasons
small business is important to the economy, especially since most employees are
employed by a small business.

2. Which industries are easiest for a small business to enter? Which are the hardest? Why?

Services, retailing, construction, wholesaling, finance and insurance, manufacturing, and

transportation. Generally, the more resources that are required, the harder a business is to start
and the less likely it is that small firms dominate an industry. In my opinion, I believe the food
industry would be very easy to get started by opening a business. A small family-run kitchen with
less than a hundred, employees’ homemade recipes, and freshly made daily. The hardest
industries to get started with would be any type of alcoholic beverage business. There are so
many types of beer and mixed drinks that bringing out a new flavor would be difficult to get
people to try the new kind. They are so used to their usual kind of drink that starting to drink a
new beverage would have to be marketed and advertised more than expected to create income for
the business.

3. What are the primary reasons for new business failure and success?

Managerial incompetence or inexperience, Neglect, Weak control systems, and Insufficient

capital are the four major reasons for Failure. Hard work, drive, and dedication, Market demand
for the products or services being provided, Managerial competence, and Luck are the major
reasons a business is successful.

4. What are the basic forms of noncorporate business ownership? What are the key advantages and
disadvantages of each?

Sole Proprietorships:
• ADVANTAGES: Sole proprietors answer to no one but themselves. Sole proprietorships
are also easy to form. Sometimes, you can go into business simply by putting a sign on
the door. The simplicity of legal setup procedures makes this form appealing to self-
starters and independent spirits, as do low start-up costs.
• DISADVANTAGES: A major drawback is unlimited liability, and lack of continuity; a
sole proprietorship legally dissolves when the owner dies.

Partnerships:
• ADVANTAGES: the ability to grow by adding new talent and money. They can also
invite new partners to join by investing money. Like a sole proprietorship, a partnership
can be organized by meeting only a few legal requirements. Even so, all partnerships
 must begin with an agreement of some kind. In all but two states, the Revised Uniform
Limited Partnership act requires the filing of specific information about the business and
its partners.
• DISADVANTAGES: For general partnerships as for sole proprietorships, unlimited
liability is the greatest drawback. Each partner may be liable for all debts incurred by the
partnership. If any partner incurs a business debt, all partners may be liable, even if some
of them did not know about or agree to the new debt. Partnerships also share with sole
proprietorships the potential lack of continuity. When one partner dies or leaves, the
original partnership dissolves, even if one or more of the other partners want it to
continue. A related disadvantage is the difficulty in transferring ownership. No partner
may sell out without the consent of the others. A partner who wants to retire or to transfer
interest to a son or daughter must have the other Partner’s consent.

Cooperatives:
• ADVANTAGES: Cooperatives combine the freedom of sole proprietorships with the
financial power of corporations. They give members greater production power, greater
marketing power, or both.
• DISADVANTAGES: On the other hand, they are limited to serving the specific needs of
their members.

Activity 4
1. What are the advantages and disadvantages of globalization?

Some of the advantages of globalization are that it offers citizens in a country to have a higher
standard of living and improves business profitability. Another is that it creates new and
innovative technologies to communicate and travel internationally faster and cheaper for
commerce. The disadvantage of globalization, however, is the exploitations that can happen to
countries, citizens, and resources by businesses and countries to stay competitive with each other.

2. What are the three possible levels of involvement in international business? Give examples of
each.

• Exporters and Importers; winery, and coca cola

• Multinational firms; Honda, and Nestlé
• International firms; Nutella

3. What are the elements of national competitive advantage? Give a current, real-world example of
each condition.

• Factors conditions – labor, capital, entrepreneurs, physical resources, and information

resources
➢ Japan has an abundance of natural resources
• Demand conditions – reflect a large domestic consumer base that promotes strong
demand for innovative products.
 ➢ Japan has a strong domestic demand for automobiles
• Related and supporting industries – include strong local and regional suppliers or
industrial customers.
➢ Japanese carmakers have well-oiled supplier networks
• Strategies, structures, and rivalries – refer to firms and industries that stress cost
reduction, product quality, higher productivity, and innovative products.
➢ Japanese car companies such as Toyota and Honda are successful in foreign
markets.

4. Describe the five international organizational structures.

▪ An Independent Agent is a foreign individual or organization that agrees to

represent an exporter’s interests.
▪ Licensing Arrangements is a contract under which choose foreign individuals
or organizations to manufacture or market their products in another country.
▪ Branch Office is a foreign office set up by an international or multinational firm.
▪ Strategic Alliances arrangement in which a company finds a foreign partner to
contribute approximately half of the resources needed to establish and operate a
new business in the partner’s country.
▪ Foreign Direct Investment is an arrangement in which a firm buys or establishes
tangible assets in another country