Motivations of Business Chapter 4

What Motivates Business? Private Enterprise System- An economic system in which most resources are privately owned and decisions about production are made by individuals and groups rather than by the government. –U.S. economic system –Also called a market economy –Features of private enterprise system: Freedom to buy Freedom to produce and sell Freedom to choose a job

What Motivates Business? Private Enterprise System –Motivations- Reason for acting or taking action Creation of business Motivated workforce Satisfying Wants and Needs –Wants and needs of buyers Buyers consist of: –Consumers –Businesses –Gov’t

What Motivates Business? Satisfying Wants and Needs –When consumers wants and needs change, businesses are motivated to change with them. Health and fitness –Low carb foods, diets, ect Public and Private Sectors –Private –Public

What Motivates Business? The Role of Competition –Competition-the contest between businesses to win customers Competition is a direct response to consumers wants and needs –Competition helps the consumer Efficiency & Quality Differentiated products Price

What Motivates Business? The Role of Competition –New business in the community What is the product/service? Existing competition? What kinds of consumers are you trying to reach? Good location? Someone from the group will need to speak on behalf of the group

What Motivates Business? Profit as Motivation –Profit-the amount of money left over after a business has paid for the cost of producing its goods or services –Taking the risk Chief risk is failure –Pricing –Development of new products –Profit leads to efficiency –Facilities and machines –Source of income

What Motivates Business? Profit as Motivation –Making a profit: Ross and Monica need to raise $100 for Perfect North’s ski lessons. They plan to make and sell giant cookies in the cafeteria. They spend $22 on ingredients and price each cookie at 75 cents. How many do they need to sell to make a $100 profit? (122/.75 = 163)

What Motivates Business? Wants and Needs Profit Competition

Who Benefits From Business? Business Owners –Income and chance to grow –Sense of satisfaction from “running the show” –Being your own boss –Benefit from providing a product or service Employees –Earn wages –Making choices –Training and skills –Other benefits

Who Benefits From Business? Government –Businesses pay taxes to all levels of gov’t –Community facilities Schools- train new workers Roads- good roads makes doing business easier Police- protect business owners and citizens –If businesses did not pay taxes, individual consumers would have to pay more School taxes

Who Benefits From Business? General Society –Social responsibility- The idea that businesses act in a responsible and fair way toward their employees and society as a whole Provides jobs, produce G&S consumers want, pay taxes Treatment of employees –Early 20 th century and today

Who Benefits From Business? General Society –Social responsibilities of business Employee relations Involvement in local issues and programs –Community involvement increases profits b/c they are seen in a positive light Environmental protection –Reduce amount of packaging, recycle, and reduce pollutions Green Products-items produced with less negative impact on the environment than competing products

Employability: Completing Self-Directed Tasks Plan of Action pg –Self-Directed Task- work not directly supervised by a superior –A plan of action is the starting point for organizing tasks not supervised by a teacher or employer.