BUS101: Introduction to Business
Study guide and Definitions
Unit 1: The Context of Business
1.1 Business Basics
Section 1: The Goals of a Business
The primary purpose of a business is to maximize profits for its owners or stakeholders
while maintaining corporate social responsibility
Learning Objective
● Differentiate among potential goals of a business
Key Points
● Economic value added suggests that a principal challenge for a business is
balancing the interests of parties affected by the business, interests that are
sometimes in conflict with one another.
● Alternate definitions state that a business' principal purpose is to serve the
interests of a larger group of stakeholders, including employees, customers, and
even society as a whole.
● Many observers hold that concepts such as economic value added are useful in
balancing profit-making objectives with other ends.
● Social progress is an emerging theme for businesses. It is integral for
businesses to maintain high levels of social responsibility.
Terms
● Stakeholder
- A person or organization with a legitimate interest in a given situation, action, or
enterprise.
● Corporation
- A group of individuals, created by law or under authority of law, having a
continuous existence independent of the existence of its members, and powers
and liabilities distinct from those of its members.
● Corporate Social Responsibility (CSR)
- A company’s sense of responsibility towards the community and environment
(both ecological and social) in which it operates. Companies express this
citizenship (1) through their waste and pollution reduction processes, (2) by
contributing educational and social programs and (3) by earning adequate
returns on the employed resources.
Study guide and Definitions
Unit 1: The Context of Business
1.1 Business Basics
Section 1: The Goals of a Business
The primary purpose of a business is to maximize profits for its owners or stakeholders
while maintaining corporate social responsibility
Learning Objective
● Differentiate among potential goals of a business
Key Points
● Economic value added suggests that a principal challenge for a business is
balancing the interests of parties affected by the business, interests that are
sometimes in conflict with one another.
● Alternate definitions state that a business' principal purpose is to serve the
interests of a larger group of stakeholders, including employees, customers, and
even society as a whole.
● Many observers hold that concepts such as economic value added are useful in
balancing profit-making objectives with other ends.
● Social progress is an emerging theme for businesses. It is integral for
businesses to maintain high levels of social responsibility.
Terms
● Stakeholder
- A person or organization with a legitimate interest in a given situation, action, or
enterprise.
● Corporation
- A group of individuals, created by law or under authority of law, having a
continuous existence independent of the existence of its members, and powers
and liabilities distinct from those of its members.
● Corporate Social Responsibility (CSR)
- A company’s sense of responsibility towards the community and environment
(both ecological and social) in which it operates. Companies express this
citizenship (1) through their waste and pollution reduction processes, (2) by
contributing educational and social programs and (3) by earning adequate
returns on the employed resources.
