Lesson 1

• Traditionally, the primarily the role of a business is to create wealth for its stakeholders.
• Stakeholders pertain to the shareholders, employees, customers, and society.
• Throughout human history, people have traded and exchanged goods and services to fulfill their basic needs (air, food, water, clothing, shelter). In modern times, these needs have expanded (education, safety, transportation, medicine).
• Entrepreneur was used to describe a person who undertakes and manages a business by taking a financial risk.
• Division of Labor is the separation of tasks, which allows an individual to be an expert in one thing in order to improve efficiency of society.
• Division of Labor also increases productivity of the organization and the individual worker.
• Entrepreneurs pay taxes to the government then uses these to pay for the services people need, such as health care, education, and recreational facilities.
• Business Organizations is a “group of individuals systematically united for the accomplishment of a common purpose or undertaking for profit in any of the several ways allowed and regulated by law” (Torres, 2008).
• Business organizations also provide Employment. The wages that employees receive are used to purchase other goods and services.
• Profits from the organizations are used to compensate stockholders. A percentage of the income is paid as taxes to the government.