Chapter 1 :The context of Business
II. Productivity and the Business Cycle
1. Understanding Economic Systems
31. Introduction
EXPLORING BUSINESS CAREERS
Team Rubicon: Disaster Relief and a Sense of Purpose
Accounting for a substantial amount of economic activity in the United States, not-for-profits
are an undeniable force in the business world, even though their focus on goals other than
profit falls outside the traditional model of a for-profit business. But it is this shift away from
a focus on profit that allows them to pursue missions of social improvement and contributions
to society as a whole. To be truly effective in a not-for-profit organization, a person must
share the organization's vision.
The vision for Team Rubicon was shaped by its cofounders, Jake Wood and William
McNulty, who saw the devastation caused by the Haiti earthquake in 2010 and sprang into
action. Both marines, Wood and McNulty knew they could do something to help in this
devastating and chaotic situation. Within 24 hours, they enlisted the help of six other military
veterans and first responders, gathered donations and supplies from friends and family, and
made their way to Haiti to help with disaster relief, and Team Rubicon was born.
The organization gets its name from the Rubicon, a river in northern Italy that Julius Caesar
and his troops crossed on their epic march to Rome, with the river marking the point of no
return. The name underscores the cofounders' experiences during the Haitian disaster, where
despite advice from government officials and other aid organizations not to proceed, their
small team crossed into Haiti from the Dominican Republic carrying crucial gear and medical
supplies to thousands of earthquake victims.
Seven years later, Team Rubicon's mission is twofold: to pair the skills and experiences of
military veterans with first responders to hit the ground running in any type of disaster and to
provide a sense of community and accomplishment to veterans who have served their country
proudly but may be struggling as a result of their war experiences.
According to the organization's mission statement, Team Rubicon seeks to provide veterans
three things they sometimes lose after leaving the military: a purpose, gained through disaster
relief; a sense of community, built by serving with others; and a feeling of self-worth from
recognizing the impact one individual can make when dealing with natural disasters.
Headquartered in the Los Angeles area, Team Rubicon is staffed by more than 60 employees
who work in 10 regions around the country, along with more than 40,000 volunteers ready to
deploy within 24 hours. Similar to company operations in for-profit organizations, staff
positions at Team Rubicon include regional administrators; field operations (including
membership and training); marketing, communications, and social media; fundraising and
partnership development; finance and accounting; and people operations.
,Team Rubicon's staff members bring professional and/or military experience to their daily
jobs, but they all share the organization's vision. Many staff members started as volunteers for
Team Rubicon while working in for-profit careers, while others took advantage of the
organization's strong internship program to become familiar with its mission and focus on
disaster relief.
In 2016, Team Rubicon trained 8,000 military veterans and first responders in disaster relief
and responded to 46 disasters, which required more than 85,000 volunteer hours. In addition
to donations from individuals and corporations, Team Rubicon relies on its partnerships with
other organizations, such as Southwest Airlines, which supplies hundreds of free plane tickets
each year to fly volunteers to disaster sites.
Team Rubicon actively engages its nationwide community at every level of the organization,
from volunteer to board member, and every step of its operation: from training to planning to
implementation to seeking donations and volunteers to help with any type of disaster relief.
Over the past several years, Team Rubicon has been recognized as one of the top nonprofits to
work for by The NonProfit Times, based on employee surveys and business partners' input
about the organization's work environment.
The not-for-profit world may not be for everyone, but if its growth is any indication within the
overall economy, it does appeal to many. With a resolve to assist those in need, including both
disaster victims and returning military personnel, Team Rubicon offers opportunities for those
interested in nonprofit careers as well as those passionate about helping others.
This module provides the basic structures upon which the business world is built: how it is
organized, what outside forces influence it, and where it is heading. It also explores how the
world's economies and governments shape economic activity. Each day in the United States,
thousands of new businesses are born. Only a rare few will become the next Apple, Google,
or Amazon. Unfortunately, many others will never see their first anniversary. The survivors
are those that understand that change is the one constant in the business environment. Those
organizations pay attention to the business environment in which they operate and the trends
that affect all businesses and then successfully adapt to those trends. In this module, we will
meet many businesses, both large and small, profit and not-for-profit, that prosper because
they track trends and use them to identify potential opportunities. This ability to manage
change is a critical factor in separating the success stories from the tales of business failure.
We begin our study of business by introducing you to the primary functions of a business, the
relationship between risk and profits, and the importance of not-for-profit organizations. We'll
also examine the major components of the business environment and how changing
demographic, social, political and legal, and competitive factors affect all business
organizations. Next, we'll explore how economies provide jobs for workers and also compete
with other businesses to create and deliver products to consumers. You will also learn how
governments attempt to influence economic activity through policies such as lowering or
raising taxes. Next, we discuss how supply and demand determine prices for goods and
services. Finally, we conclude by examining key trends in the business environment,
economic systems, and the competitive environment.
32. The Nature of Business
-How do businesses and not-for-profit organizations help create our standard of living?
, Take a moment to think about the many different types of businesses you come into contact
with on a typical day. As you drive to class, you may stop at a gas station that is part of a
major national oil company and grab lunch from a fast food chain such as Taco Bell or
McDonald's or the neighborhood pizza place. Need more cash? You can do your banking on a
smartphone or other device via mobile apps. You don't even have to visit the store anymore:
online shopping brings the stores to you, offering everything from clothes to food, furniture,
and concert tickets.
A business is an organization that strives for a profit by providing goods and services desired
by its customers. Businesses meet the needs of consumers by providing medical care, autos,
and countless other goods and services. Goods are tangible items manufactured by
businesses, such as laptops. Services are intangible offerings of businesses that can't be held,
touched, or stored. Physicians, lawyers, hairstylists, car washes, and airlines all provide
services. Businesses also serve other organizations, such as hospitals, retailers, and
governments, by providing machinery, goods for resale, computers, and thousands of other
items.
Thus, businesses create the goods and services that are the basis of our standard of living.
The standard of living of any country is measured by the output of goods and services people
can buy with the money they have. The United States has one of the highest standards of
living in the world. Although several countries, such as Switzerland and Germany, have
higher average wages than the United States, their standards of living aren't higher, because
prices are so much higher. As a result, the same amount of money buys less in those
countries. For example, in the United States, we can buy an Extra Value Meal at McDonald's
for less than $5, while in another country, a similar meal might cost as much as $10.
Businesses play a key role in determining our quality of life by providing jobs and goods and
services to society. Quality of life refers to the general level of human happiness based on
such things as life expectancy, educational standards, health, sanitation, and leisure time.
Building a high quality of life is a combined effort of businesses, government, and not-for-
profit organizations. In 2017, Vienna, Austria, ranked highest in quality of life, followed by
Zurich, Switzerland; Auckland, New Zealand; and Munich, Germany. It may come as a
surprise that not one of the world's top cities is in the United States: seven of the top 10
locations are in western Europe, two are in Australia/New Zealand, and one is in Canada. At
the other end of the scale, Baghdad, Iraq, is the city scoring the lowest on the annual survey.
Creating a quality of life is not without risks, however. Risk is the potential to lose time and
money or otherwise not be able to accomplish an organization’s goals. Without enough blood
donors, for example, the American Red Cross faces the risk of not meeting the demand for
blood by victims of disaster. Businesses such as Microsoft face the risk of falling short of
their revenue and profit goals. Revenue is the money a company receives by providing
services or selling goods to customers. Costs are expenses for rent, salaries, supplies,
transportation, and many other items that a company incurs from creating and selling goods
and services. For example, some of the costs incurred by Microsoft in developing its software
include expenses for salaries, facilities, and advertising. If Microsoft has money left over after
it pays all costs, it has a profit. A company whose costs are greater than revenues shows a
loss.
When a company such as Microsoft uses its resources intelligently, it can often increase sales,
hold costs down, and earn a profit. Not all companies earn profits, but that is the risk of being
in business. In U.S. business today, there is generally a direct relationship between risks and
II. Productivity and the Business Cycle
1. Understanding Economic Systems
31. Introduction
EXPLORING BUSINESS CAREERS
Team Rubicon: Disaster Relief and a Sense of Purpose
Accounting for a substantial amount of economic activity in the United States, not-for-profits
are an undeniable force in the business world, even though their focus on goals other than
profit falls outside the traditional model of a for-profit business. But it is this shift away from
a focus on profit that allows them to pursue missions of social improvement and contributions
to society as a whole. To be truly effective in a not-for-profit organization, a person must
share the organization's vision.
The vision for Team Rubicon was shaped by its cofounders, Jake Wood and William
McNulty, who saw the devastation caused by the Haiti earthquake in 2010 and sprang into
action. Both marines, Wood and McNulty knew they could do something to help in this
devastating and chaotic situation. Within 24 hours, they enlisted the help of six other military
veterans and first responders, gathered donations and supplies from friends and family, and
made their way to Haiti to help with disaster relief, and Team Rubicon was born.
The organization gets its name from the Rubicon, a river in northern Italy that Julius Caesar
and his troops crossed on their epic march to Rome, with the river marking the point of no
return. The name underscores the cofounders' experiences during the Haitian disaster, where
despite advice from government officials and other aid organizations not to proceed, their
small team crossed into Haiti from the Dominican Republic carrying crucial gear and medical
supplies to thousands of earthquake victims.
Seven years later, Team Rubicon's mission is twofold: to pair the skills and experiences of
military veterans with first responders to hit the ground running in any type of disaster and to
provide a sense of community and accomplishment to veterans who have served their country
proudly but may be struggling as a result of their war experiences.
According to the organization's mission statement, Team Rubicon seeks to provide veterans
three things they sometimes lose after leaving the military: a purpose, gained through disaster
relief; a sense of community, built by serving with others; and a feeling of self-worth from
recognizing the impact one individual can make when dealing with natural disasters.
Headquartered in the Los Angeles area, Team Rubicon is staffed by more than 60 employees
who work in 10 regions around the country, along with more than 40,000 volunteers ready to
deploy within 24 hours. Similar to company operations in for-profit organizations, staff
positions at Team Rubicon include regional administrators; field operations (including
membership and training); marketing, communications, and social media; fundraising and
partnership development; finance and accounting; and people operations.
,Team Rubicon's staff members bring professional and/or military experience to their daily
jobs, but they all share the organization's vision. Many staff members started as volunteers for
Team Rubicon while working in for-profit careers, while others took advantage of the
organization's strong internship program to become familiar with its mission and focus on
disaster relief.
In 2016, Team Rubicon trained 8,000 military veterans and first responders in disaster relief
and responded to 46 disasters, which required more than 85,000 volunteer hours. In addition
to donations from individuals and corporations, Team Rubicon relies on its partnerships with
other organizations, such as Southwest Airlines, which supplies hundreds of free plane tickets
each year to fly volunteers to disaster sites.
Team Rubicon actively engages its nationwide community at every level of the organization,
from volunteer to board member, and every step of its operation: from training to planning to
implementation to seeking donations and volunteers to help with any type of disaster relief.
Over the past several years, Team Rubicon has been recognized as one of the top nonprofits to
work for by The NonProfit Times, based on employee surveys and business partners' input
about the organization's work environment.
The not-for-profit world may not be for everyone, but if its growth is any indication within the
overall economy, it does appeal to many. With a resolve to assist those in need, including both
disaster victims and returning military personnel, Team Rubicon offers opportunities for those
interested in nonprofit careers as well as those passionate about helping others.
This module provides the basic structures upon which the business world is built: how it is
organized, what outside forces influence it, and where it is heading. It also explores how the
world's economies and governments shape economic activity. Each day in the United States,
thousands of new businesses are born. Only a rare few will become the next Apple, Google,
or Amazon. Unfortunately, many others will never see their first anniversary. The survivors
are those that understand that change is the one constant in the business environment. Those
organizations pay attention to the business environment in which they operate and the trends
that affect all businesses and then successfully adapt to those trends. In this module, we will
meet many businesses, both large and small, profit and not-for-profit, that prosper because
they track trends and use them to identify potential opportunities. This ability to manage
change is a critical factor in separating the success stories from the tales of business failure.
We begin our study of business by introducing you to the primary functions of a business, the
relationship between risk and profits, and the importance of not-for-profit organizations. We'll
also examine the major components of the business environment and how changing
demographic, social, political and legal, and competitive factors affect all business
organizations. Next, we'll explore how economies provide jobs for workers and also compete
with other businesses to create and deliver products to consumers. You will also learn how
governments attempt to influence economic activity through policies such as lowering or
raising taxes. Next, we discuss how supply and demand determine prices for goods and
services. Finally, we conclude by examining key trends in the business environment,
economic systems, and the competitive environment.
32. The Nature of Business
-How do businesses and not-for-profit organizations help create our standard of living?
, Take a moment to think about the many different types of businesses you come into contact
with on a typical day. As you drive to class, you may stop at a gas station that is part of a
major national oil company and grab lunch from a fast food chain such as Taco Bell or
McDonald's or the neighborhood pizza place. Need more cash? You can do your banking on a
smartphone or other device via mobile apps. You don't even have to visit the store anymore:
online shopping brings the stores to you, offering everything from clothes to food, furniture,
and concert tickets.
A business is an organization that strives for a profit by providing goods and services desired
by its customers. Businesses meet the needs of consumers by providing medical care, autos,
and countless other goods and services. Goods are tangible items manufactured by
businesses, such as laptops. Services are intangible offerings of businesses that can't be held,
touched, or stored. Physicians, lawyers, hairstylists, car washes, and airlines all provide
services. Businesses also serve other organizations, such as hospitals, retailers, and
governments, by providing machinery, goods for resale, computers, and thousands of other
items.
Thus, businesses create the goods and services that are the basis of our standard of living.
The standard of living of any country is measured by the output of goods and services people
can buy with the money they have. The United States has one of the highest standards of
living in the world. Although several countries, such as Switzerland and Germany, have
higher average wages than the United States, their standards of living aren't higher, because
prices are so much higher. As a result, the same amount of money buys less in those
countries. For example, in the United States, we can buy an Extra Value Meal at McDonald's
for less than $5, while in another country, a similar meal might cost as much as $10.
Businesses play a key role in determining our quality of life by providing jobs and goods and
services to society. Quality of life refers to the general level of human happiness based on
such things as life expectancy, educational standards, health, sanitation, and leisure time.
Building a high quality of life is a combined effort of businesses, government, and not-for-
profit organizations. In 2017, Vienna, Austria, ranked highest in quality of life, followed by
Zurich, Switzerland; Auckland, New Zealand; and Munich, Germany. It may come as a
surprise that not one of the world's top cities is in the United States: seven of the top 10
locations are in western Europe, two are in Australia/New Zealand, and one is in Canada. At
the other end of the scale, Baghdad, Iraq, is the city scoring the lowest on the annual survey.
Creating a quality of life is not without risks, however. Risk is the potential to lose time and
money or otherwise not be able to accomplish an organization’s goals. Without enough blood
donors, for example, the American Red Cross faces the risk of not meeting the demand for
blood by victims of disaster. Businesses such as Microsoft face the risk of falling short of
their revenue and profit goals. Revenue is the money a company receives by providing
services or selling goods to customers. Costs are expenses for rent, salaries, supplies,
transportation, and many other items that a company incurs from creating and selling goods
and services. For example, some of the costs incurred by Microsoft in developing its software
include expenses for salaries, facilities, and advertising. If Microsoft has money left over after
it pays all costs, it has a profit. A company whose costs are greater than revenues shows a
loss.
When a company such as Microsoft uses its resources intelligently, it can often increase sales,
hold costs down, and earn a profit. Not all companies earn profits, but that is the risk of being
in business. In U.S. business today, there is generally a direct relationship between risks and
