LAP 20 Economics LAP 20 Describe the types of businesses that operate in our society. Explain how business serves society. Business and Society

Describe the types of businesses that operate in our society.

 Business is an integral part of society and our daily lives.  Businesses rely on customers: To make money and stay in business For “word-of-mouth” communication  Customers rely on businesses: To purchase the products they want and need For the other ways business benefits society

 Three broad categories that cover all types of businesses: Producers Trade industries Service businesses

 People who make or provide goods and services  Raw-goods producers: Provide goods in their natural states Examples: Farms Mines Fisheries  Are the foundation upon which all other businesses depend

Shape or form materials so they will be useful to consumers Sand becomes glass. Examples: Cotton becomes clothing. Wood becomes paper.  Manufacturers:

Construct roads, bridges, schools, etc.  Builders:

Two main types: Retailers —sell to ultimate consumers Flower and Garden Center Wholesalers —traditionally, sell to retailers or other businesses Move goods from producers to consumers or industrial users

Trade industries can differ based on a number of factors:  Size  Kinds and variety of products sold  Ownership  Amount of service  Prices  Existence of premises Big Lots discount store touts “ brand names at close-out prices. ” Bloomingdale ' s: higher priced, high-fashion department store

Retailing may take place: In a store Over the phone In a customer ' s home By mail By vending machine On street corners In another person ' s home Online

Perform intangible activities that satisfy the needs and wants of consumers and industrial users Classifications:

Housing Household operations Recreation Intangible activities classifications Hotels

Personal care Medical and other health care Intangible activities classifications Beauty salons Photo studios Dentists Optometrists

Private education Business services Intangible activities classifications Driving lessons Golf lessons BookkeepersLawyers

Insurance and financial Transportation Communications Intangible activities classifications InsuranceTax advisors Car rental Passenger service Broadcast Cellular service

Explain how business serves society.

 Businesses ’ duty to contribute to the well-being of society  Offer quality products at competitive prices  Meet the needs of consumers  Minimize costs and expenses  Demonstrated in two ways: 1. Maximizing profits

2. Contributing to public interests  Supporting environmental efforts  Participating in advisory councils  Financially supporting art, education, research, etc. Examples:

 Businesses are responsible to:  Production  Employment Product users—need safe, quality products The community  Taxes  Pollution

 Employees Safe working environment Job satisfaction  The company itself—maximizing profits P R O F I T S

 How do they demonstrate social responsibility?  How has your community benefited? List examples of producers, trade industries, and service businesses in your community.

 Businesses may contribute to public interests that employees find controversial.  They may feel that their employers’ time or money is going to support or oppose sensitive issues.  They may disagree with their companies’ stance on the issue.  What do you think?  Should a company’s owners have sole discretion on public contributions, or do employees ’ opinions count?

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