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Overview Whether you work for someone else, own your own business, or seek employment, you probably have questions about business. What must a company do to make a profit and stay in business? What are the main functions or activities of a business? How does a business keep its employees happy and productive, and how can an employee help the company make a profit? This course presents basic information about the main functions of a business. Gaining knowledge about business functions will enable you to discuss the primary goals and functions of a business. This course includes eight lessons. Lesson 1 discusses basic types and functions of businesses. Lessons 2 and 3 explore the management and human resources (HR) functions. Lessons 4, 5, and 6 examine the functions of production and operations, inventory and purchasing, and accounting. Finally, Lessons 7 and 8 describe the marketing and sales function and the customer service function. Overview i This course includes special features. Each lesson contains both a practice case study and an assignment case study, giving you the opportunity to apply business concepts to realistic scenarios. Moreover, the lessons and case studies feature examples from various types of businesses. These types include manufacturing, service, distributors and retailers, financial services, utilities, real estate, and transportation. This course uses examples of U.S. businesses. Business laws and practices are different throughout the world. If you live outside the United States, check business laws and practices in your country. If you have questions about doing this research, talk to your instructor. Also note that this course does not discuss nonprofit organizations in detail. The emphasis is on for-profit businesses. The section reviews in each lesson are for your personal development only. Do not send your responses to your Hadley instructor. Rather, check your comprehension by comparing your answers with those provided. You can always contact your instructor, however, to clarify concepts. Overview ii You are required to submit eight assignments, one at the end of each lesson. These assignments enable your instructor to measure your understanding of the material presented in the lessons. Refer to the "Getting Started" instructions for information about submitting assignments. If you are ready to explore the fundamentals of business, begin Lesson 1: What Is a Business? Overview iii Overview iv Lesson 1: What Is a Business? A business is an organization that exists for the purpose of making a profit by selling products or services to customers. Owners take a risk by investing time, money, and energy into the business. By taking this risk, they hope to make money. Businesses range from one-person consulting practices, to restaurants and retail shops, to midsize and large corporations. Knowing basic information about how businesses work is helpful for both employment and career advancement. This lesson describes the primary forms of ownership. It then gives examples of different types of businesses and lists the main functions of a business. Finally, it shows how to apply business concepts to a real-life scenario. Learning basic information about businesses will enable you to discuss the primary goals and functions of a business. Objectives After completing this lesson, you will be able to a. identify forms of ownership b. list types of businesses Lesson 1: What Is a Business? 1 c. name functions of businesses d. apply business concepts to a real-life scenario Forms of Ownership You're probably familiar with a wide variety of businesses, from the one-person repair shop to the partners at your doctor's office. From large department stores to computer companies to credit unions, various businesses provide you with goods and services. They may also provide employment opportunities. Four standard types of ownership exist: sole proprietorship, partnership, corporation, and cooperative. These four types vary greatly, and each has advantages and disadvantages. In addition, nonprofit organizations exist, although they use their profit to maintain their services. Sole Proprietorship A business owned by one person is a sole proprietorship. Dentists, lawyers, consultants, shop owners, and many others choose this type of ownership. The owner may operate the business by him- or herself or employ others. Lesson 1: What Is a Business? 2 The sole proprietor can own and run the business in his or her own name, such as Adam Smith, Plumber. The proprietor can also name the business Reliable Plumbing. This type of name is known as a "doing business as" (DBA). A sole proprietor has total and unlimited personal liability for the business's debts. In other words, the owner is financially responsible for everything that happens in the business. If you are a sole proprietor, the law considers you and your business as one legal identity. If you are a sole proprietor, business accounts are considered the same as personal accounts for the purposes of taxes and liability. The first advantage of this setup is that business owners avoid a double tax. They pay only personal taxes. They do not file a separate business tax return. The second advantage is that they may deduct business losses from their personal tax return. One major advantage of being a sole proprietor is that you do not have to register the business with the state and pay a large fee. The business may need some kind of local license or permit, however. The major disadvantage is that you are personally liable, or responsible, for all the debts. Lesson 1: What Is a Business? 3 For example, a plumber who accidentally floods a customer's basement is personally liable for the damages caused by the flood. Partnership A business owned by two or more people who have the common goal of making a profit is a partnership. They become partners to increase efficiency or to combine resources and expertise. As with a sole proprietorship, the owners do not have separate legal identities from the business. Partners may own and run the business in their own names: Lopez and Malek's Diner. Or they may use a DBA name such as Village Restaurant. The major advantage and disadvantage of a partnership are like that of the sole proprietorship. The major advantage is that the partners do not have to register with the state and pay a large fee. The major disadvantage is that the partners are personally liable for debts, including lawsuits and insurance claims. Two different types of partnership exist, the limited partnership and the general partnership. Lesson 1: What Is a Business? 4 Limited Partnership In a limited partnership, the partners are responsible only for their specific individual contributions to the business. For example, suppose Frank Caruso invests $50,000 as a limited partner in a candy business. If the business ends up losing a million dollars, the most Frank can lose is $50,000. General Partnership In a general partnership, the partners put everything on their personal tax returns. They are equally responsible for debts and losses, no matter how much they individually invest, or pay into the business. Think of the example of the candy business. If Frank was a general partner and the business lost a million dollars, Frank might lose half a million dollars, even though he invested just $50,000! Corporation A business that has a separate legal identity from its owners is a corporation. In other words, suppose Mystery Books is run by a corporation, and Jane Perez is one of the owners. Now suppose that Bridget Green sues Mystery Books because she suffered such terror after Lesson 1: What Is a Business? 5 reading a book she bought there. If Bridget Green wins her case, she may get money from the actual corporation, but Jane Perez's personal bank account would remain safe. Corporations have their own names. For example, the Hudson Bay Company, established in 1670, is the oldest commercial corporation in North America and one of the oldest in the world. Note that even if a corporation has the name of its owner, it has a separate legal identity. For example, consider the example of Mystery Books. Even if the store were called Jane Perez Books, it still would have a legal identity separate from Jane Perez. Most corporations register as either stock or nonstock companies. Shareholders are people who invest in the corporation by buying stock, or part of what the business is worth. Shareholders elect people who run the corporation. A corporation is managed by a board of directors. All corporations, whether stock or nonstock, hire managerial staff to operate the business. Nonstock companies do not have shareholders; they have members with voting rights. Lesson 1: What Is a Business? 6 A corporation owns and runs the business as a separate entity from its owners or shareholders. With only a few exceptions, none of the shareholders in a corporation are obligated for the debts of the corporation. Creditors can look to only the corporation's assets for payment. Assets are the net worth of a company, including its capital, inventory, and cash. The main disadvantage of a corporation, however, is that both the corporation itself and its shareholders are taxed. In addition, it is more difficult to set up a corporation, and owners pay legal and licensing fees. Cooperative A cooperative, or co-op, is a business owned by multiple people. Often, its customers own and run the business, and membership gives them decision-making authority over the business. Unlike a partnership, members do not have total and unlimited personal liability for the debts incurred by the business. They have the same type of debt protection found in corporations. Co-ops, unlike most businesses, look for price savings rather than profit. Many types of co-ops exist in health care, insurance, food stores, and credit unions. Their goal Lesson 1: What Is a Business? 7 is to provide members with quality goods and services at the lowest costs. On the other hand, the majority of businesses are for-profit ones and sell goods at the highest price that the customers are willing to pay. Most co-ops follow a set of principles that often include voluntary and open membership democratic member control the promotion of education among the members Nonprofit Organizations According to the Society of Nonprofit Organizations, "The difference between nonprofit and for-profit organizations is that nonprofits use their profits to advance their programs, while for-profits distribute their profits to their owners or stockholders." The society categorizes nonprofit organizations as trade associations, charitable organizations, social clubs, government groups, and political groups. Nonprofit organizations use many of the principles outlined in this course for their own purposes. Lesson 1: What Is a Business? 8 Section Review Select the best item to answer each of the following questions. 1. For what purpose does a business exist? a. to sell products or services to customers to make a profit b. to buy products and services from customers c. to make laws The correct answer is (a). The purpose of a business is to sell products or services to customers to make a profit. 2. How many owners are in a sole proprietorship? a. one b. only two c. unlimited The correct answer is (a). A sole proprietorship is a business owned by one person. 3. What is the major advantage of a partnership? a. The partners have involved stockholders. b. The partners do not have to register with the state and pay a large fee. Lesson 1: What Is a Business? 9 c. The partners are not personally liable for any debts. The correct answer is (b). The major advantage of a partnership is that the partners do not have to register with the state and pay a large fee. 4. What type of ownership usually has stockholders? a. cooperative b. partnership c. corporation The correct answer is (c). A corporation usually has stockholders who invest by buying stock. 5. What form of business looks for price savings rather than profit? a. cooperative b. sole proprietorship c. corporation The correct answer is (a). A cooperative, or co-op, is a form of business that looks for price savings rather than profit. Lesson 1: What Is a Business? 10 6. How does a nonprofit organization differ from a business? a. A nonprofit does not need money to operate. b. A nonprofit distributes profits to stockholders. c. A nonprofit uses profits to advance programs. The correct answer is (c). A nonprofit organization differs from a business in that it uses its profits to advance its programs. Four main types of business ownership exist: sole proprietorship, partnership, corporation, and cooperative. Some business organizations are nonprofit. The next time you work with a business, use this information to identify which type it is. Types of Businesses The easiest way to classify businesses is by how they generate revenue, or gain income, and make a profit. Most businesses fall into the following eight types: manufacturing service providers distributors and retailers agriculture and mining Lesson 1: What Is a Business? 11 financial services utilities real estate transportation These types of business vary greatly, and each has a unique structure and purpose. You can start to understand them by looking at examples of each type. Note that many additional types of small businesses prosper, or succeed, by providing goods and services to these major industries. Manufacturers Businesses that produce products from raw materials or by assembling parts are manufacturers. These companies make physical goods such as cars or machines. Some large companies, like John Deere, make farm equipment. Other midsize companies manufacture pharmaceuticals, or medicine; electronics; steel; plastics; food; beverages; and so on. Access Tech Creations (ATC) is a midsize company that manufactures access technology for computer systems. Some small manufacturers create new technologies or make parts. Lesson 1: What Is a Business? 12 Service Providers Businesses that offer intangible goods or services are service providers. They make a profit by charging for labor or other services to governments, other businesses, and consumers. For example, a consultant, interior designer, or information technology vendor may charge for services by the hour or a fixed price. Hotel and hospitality workers provide lodging and service. Restaurants are considered service providers because they serve customers, even though food is a tangible good. Restaurants are unique in that they blend manufacturing and service. For example, the Business Enterprise Program (BEP) trains and licenses legally blind individuals to manage cafeterias and snack bars in government buildings. This program was established in 1937 by the Randolph-Sheppard Act. These cafeteria managers and their staff are service providers, even though they provide food, which is an actual product. Distributors and Retailers Companies that make a profit by distributing and selling items are known as distributors and retailers. The distributor is the middleman between the manufacturer Lesson 1: What Is a Business? 13 and retail stores. The distributor receives goods directly from the manufacturer, storing items in warehouses. The distributor then sells the goods to various retail stores. Most stores and catalog companies are retailers or distributors. An online bookstore such as Amazon.com is a distributor. The corner bookstore is a retailer. Retailers get items from the distributors and then resell them to the consumers. Retailers can be large or small. Some like J.C. Penney are huge, with stores nationwide. Others, like the corner mom-and-pop grocery store, are small. For example, J.C. Penney purchases thousands of dresses that they put on sale at their stores. The owners of the small grocery store may purchase about a hundred loaves of bread that they sell to neighborhood customers. A franchise is a special kind of retail business. One example is Supercuts, which has haircutting salons in many cities across the United States. A franchise acquires a trademark and uses a proven way of doing business to make a profit. Each store has its own owner, and this owner pays a fee and percentage of sales to the franchisor. In this case, the owner would pay Regis Lesson 1: What Is a Business? 14 Corporation, the company that owns the Supercuts franchise. Last, some businesses make money by selling intellectual property, or intangible goods. Movie studios and book publishers fall into that category. They sell the ideas of writers and other artists to the public. Agriculture and Mining Businesses that produce raw material are in the agriculture and mining category. Agricultural businesses grow the crops and process the cattle. Mining companies extract ore, coal, gold, silver, diamonds, nickel, salt, tin, uranium, and other metals. Agriculture still has some independent farmers working the land, but large corporations now own many farms in the United States. Also, big businesses conduct mining because of the amount of capital needed to dig in a mine. Financial Services Businesses such as banks and other companies that make a profit by helping others invest and manage money are in the financial services category. A bank issues money, receives deposits, lends money, processes Lesson 1: What Is a Business? 15 transactions, creates credit, and provides many other financial services. In recent years, the finance industry has created other companies that provide services for a fee. These financial service providers include credit card companies, insurance carriers, and stockbrokers. Utilities Companies that provide public services such as gas, electricity, telephone, water, and sewage treatment are utilities. Local governments often regulate utilities to make sure they are competent and ethical. That is, it is important that utilities provide their services properly, safely, satisfactorily, and honestly. Utilities employ electrical, mechanical, civil, manufacturing, and industrial engineers. They also may hire software engineers, power linemen, trade apprentices, and trade support staff. Real Estate Businesses that make money by selling, renting, and developing properties, homes, and buildings are in the real estate category. Some companies appraise property; that is, they determine the value of property. Others serve as brokers, helping buyers and sellers come to an agreement. Some real estate businesses develop new Lesson 1: What Is a Business? 16 buildings, and others act as landlords to renters. Some even help people relocate from one part of the country to another. People who legally represent a buyer or a seller in a real estate transaction need a license. They are called real estate agents. If they join a national association, they are known as realtors. Lesson 1: What Is a Business? 17 Transportation These businesses transport goods and individuals from one location to another. They generate profit on the transportation cost. The transportation can occur on the road, air, water, or rail. Companies such as United Parcel Service (UPS) and FedEx transport items. Greyhound, Amtrak, Delta, and American Airlines transport people and goods. Section Review Indicate whether the following statements are true or false. If the statement is false, reword it to make it true. 1. Service providers make products from raw materials or by assembling parts. False. Service providers offer intangible goods or services. Manufacturers make products from raw materials or by assembling parts. 2. A franchise is a special kind of retail business. Lesson 1: What Is a Business? 18 True 3. Agriculture and mining businesses produce raw materials. True 4. Financial services companies provide public services such as gas and electricity. False. Financial services make a profit by helping others invest and manage money. Utilities are companies that provide public services such as gas and electricity. 5. UPS, FedEx, Greyhound, and Amtrak are real estate businesses. False. UPS, FedEx, Greyhound, and Amtrak are transportation businesses because they deliver goods or individuals from one place to another. Real estate businesses sell, rent, and develop properties, homes, and buildings. Eight main types of businesses exist. They are manufacturing, service providers, distributors and retailers, Lesson 1: What Is a Business? 19 agriculture and mining, financial services, utilities, real estate, and transportation. If you work for a business, determine which type it is. Functions of Businesses People organize their businesses in a variety of ways. A typical business has seven major areas, or functions: management human resources (HR) production and operations inventory and purchasing accounting marketing and sales customer service The word function means an activity or duty. A function is sometimes handled by a department or area, as sometimes a whole group of people are responsible for one function. For example, a large company may have one department that handles marketing and sales. Sometimes, however, one person performs many functions. For example, a huge company like Payless ShoeSource has separate departments for each function. Johnny's Shoe Repair Store near the mall, however, is a Lesson 1: What Is a Business? 20 one-person business. Johnny may perform all the business functions himself or hire others to do them. This section gives brief definitions of the different business functions. Each function is explained in more detail in subsequent lessons. Management The top level of leadership within a business is management, which is responsible for the success or failure of the business. Managers direct and control a group of one or more people toward accomplishing a goal. They ensure that people accomplish business goals to achieve their company's mission and vision. They make sure that employees work effectively to meet their customers' needs. Managers often decide who to hire, how to use financial or other resources, and how to use technology. Management may decide to open new locations and hire dozens of people. Or management may decide to lay off employees because automation, where machines and computers replace human labor, or other companies can do tasks more efficiently. Lesson 1: What Is a Business? 21 Big businesses often have many levels of management, from executives to middle managers to supervisors. The executives are people at the top level of management. The middle managers are in charge of the supervisors, and the supervisors manage the workers. Midsize businesses have fewer managers, and small businesses may have only one or two. Human Resources The function responsible for the hiring and firing of employees is human resources (HR). People in HR control compensation and payroll, and they manage employee benefits. They make sure that everyone follows labor laws and regulations. They mediate disputes and provide training and development. In a small business, the HR person may perform other tasks, too. A big business may have one HR person per hundred employees. This ratio is a best practice recommended by the Society of Human Resource Management. If a business opens a new location and hires additional employees or if it lays people off, HR organizes the staffing and other changes. Lesson 1: What Is a Business? 22 Production and Operations The function that makes the business's product or delivers the business's service is production and operations. This function figures out how to get the products to the customers. It is also responsible for providing customers with services. In manufacturing, production and operations may use raw materials to make products. Distributors may use production and operations to figure out how to get the products to market. Retailers like Sears or Walgreens use production and operations to strategically determine where to put the products in the store. Transportation companies such as UPS and FedEx may use their production and operations function to figure out delivery routes. A large production and operations area may even have subdivisions. For example, this function may employ information technology staff to run the computers. They may hire people in product management to emphasize quality. They may even have a research and development department that invents new products. A financial services organization such as an insurance company may employ efficiency experts called business analysts. These experts create workflows and standard Lesson 1: What Is a Business? 23 operating procedures (SOPs). A workflow shows the rate at which the company, specific departments, or specific employees should complete certain tasks. An SOP shows the way a task is generally to be done and includes definite steps. If a business opens a new location, production and operations makes sure all the work gets done. This function also determines if new computers or other technology is needed. Inventory and Purchasing The function of inventory and purchasing takes care of the stock, or merchandise and supplies. The purchasing part is responsible for buying the materials and services necessary to run the business. They generate purchase orders and receive bills. The inventory people keep track of the company's assets. They make sure that the right products go to the correct customers, reordering when necessary. They fill orders, and carefully manage the shipping of merchandise and supplies. Lesson 1: What Is a Business? 24 When a business opens a new location, the inventory and purchasing function does not get involved right away. But later, they may remove or replenish inventory. Accounting The accounting function is responsible for financial reporting. Employees who handle this function keep track of the capital and invest it to make more money. They may pay the bills with a system called accounts payable. They create invoices and charge the customers, collecting money with a system called accounts receivable. They keep track of all transactions with a system known as the general ledger. In big businesses, they work with a finance department that often invests their business capital. In addition, they pay the taxes. This function generates many reports that tell management how well the company is performing. Lesson 6 discusses these reports in more detail. Accounting may also employ internal or external auditors who double-check the accounting books at least once a year. The auditors make sure that Lesson 1: What Is a Business? 25 no one is breaking the law. Accounting and financial reports may persuade management to open a new location and hire additional employees. Or these reports may convince management that it is necessary to lay off people. The accounting function also approves the purchase of new computers or software to replace people or to fill a new office. Marketing and Sales The function of marketing and sales is to promote and sell products and services to the customers. The marketing people are responsible for an overall marketing plan that includes advertising and a brand name. They employ communications and public relations people who give information to employees and the public. The sales section actually sells the products. Salespeople manage relationships with the customers and keep the customers satisfied. A salesperson can be someone who sells raw steel to other businesses or someone who sells a car to a person. A salesperson can also be a person who runs a cleaning service, a clerk at a drugstore, or a waiter at a restaurant. Salespeople bring in the money that makes a business successful. Lesson 1: What Is a Business? 26 When a business makes strategic changes, such as introducing new products or hiring talented staff, marketing and sales shares information with the affected employees and the public. Marketing and sales may promote this change as a way to control costs to the customer base. Customer Service The customer service function involves the behavior and practices of a company's employees before, during, and after the sale of the product. Customer service is a series of activities designed to make the customer happy. Its importance varies by company and by situation. For example, an expert customer may not need a lot of help before purchasing a product. A new customer, however, may ask for detailed explanations and a significant amount of assistance. Friendly workers enable a retail store or a restaurant to help the customer. A smile in the voice of an employee answering the phone is also part of good customer service. In addition, companies use great service to continue relations after the sale is complete. Sometimes, an employee follows up with a customer to make sure that Lesson 1: What Is a Business? 27 everything is all right. Other times, employees apologize and fix mistakes. Customer service is all about communicating with the customer. It is great when an employee really listens to the customer and really cares about the person. The phone or computer system can enable companies to make transactions fast and easy for their customers. If the business is on the Internet, over the telephone, or in a catalog, the employees may take care of customers even from a significant distance. Sometimes, the best customer service occurs when an employee fixes a problem for a customer. Some businesses have customer service departments. These departments specialize in helping the customer on the phone, with email, or from behind a counter at a store. Section Review For each of the following definitions, give the correct business function. 1. the series of activities designed to make the customer happy customer service Lesson 1: What Is a Business? 28 2. the top level of leadership within a business management 3. the function responsible for the hiring and firing of employees HR 4. the function responsible for financial reporting accounting 5. the function that makes the business's product or delivers its service production and operations 6. the function that takes care of the stock on the shelf inventory and purchasing 7. the function that sells the products and services to the customers marketing and sales Every business has seven major functions. These are management, HR, production and operations, inventory Lesson 1: What Is a Business? 29 and purchasing, accounting, marketing and sales, and customer service. The next time you interact with a company employee, identify the function of that person. Applying Business Concepts to a Real-Life Scenario Whether you run your own business or work for someone else, it is important to know the forms of ownership and the types and functions of a business. This helps you make good business decisions. Information from the previous sections can help you recognize business concepts in everyday life. Read the following case study. A question concerning the case study follows in the section review. Case Study Who: Mutual Insurance Where: Chicago, Illinois What: Large property/casualty insurance company implementing change For more than five decades, Mutual Insurance has been an AA-rated provider of property, liability, casualty, and workers' compensation insurance. The AA rating means Lesson 1: What Is a Business? 30 that this company has a solid reputation in the insurance industry. Mutual Insurance's upper management has authorized the purchase of a new management information software (MIS) system. The MIS system allows line managers and their staff to enter business results directly into a computer system. A line manager is someone who supervises employees who are not managers themselves. Upper management supported the MIS implementation and gauged results over a 12-month period. They concluded that Mutual's middle management was no longer needed. Middle management people were directors who managed line managers. The computer software now automatically monitored results, which was the main function of the directors. Moreover, the task of managing the line managers has also been eliminated. The HR department has helped the line managers restructure their departments into work teams. These teams operate as independent entities, and they report their results directly to the vice president at the upper management level. Lesson 1: What Is a Business? 31 Section Review Answer the following questions concerning the previous case study. Then compare your answer to the suggested answer. What functions at Mutual Insurance will be involved in the automation and personnel change? Briefly state what each function might do. What functions might not be involved? Why? Suggested Answer Most of Mutual Insurance's functions may become involved in this project: Management will document the strategy and assign people to run this project. Accounting together with the production and operations function will coordinate the purchase of the software. The information technology section of production and operations will be especially involved. HR will organize the downsizing. Marketing and sales will promote this change as a way to control costs to the customer base. The communications and public relations section of Lesson 1: What Is a Business? 32 marketing and sales will share information with affected employees and the public. The following functions may not be directly involved: The inventory and purchasing function does not get involved right away, although it may remove or refill inventory after the change takes place. Customer service is an overall process of keeping the customer happy. The customer will not be directly affected by this downsizing. This section presented a case study for which you identified basic business functions. The next time you consider a real-life work situation, try to recognize the business concepts involved. Summary This lesson identified the primary forms of ownership. It then listed the different types of businesses and the main functions of a business. Finally, it demonstrated how to recognize business functions. Lesson 1: What Is a Business? 33 Assignment 1 For general information on completing assignments, refer to the "Getting Started" instructions. Then start this assignment by giving your full name, address, and phone number. Also list the name of this course, Assignment 1, your instructor's name, and the date. Be sure to include the question number along with each answer. This assignment is worth 100 points. Part A Multiple Choice Select the best item to answer each of the following questions. (60 points total, 6 points each) 1. Which of the following is true if you are a sole proprietor? a. You are not liable for any debts. b. You are personally liable for all the debts. c. You pay personal and business taxes. Assignment 1 35 2. What is the main difference between limited and general partnerships? a. responsibilities for debts and losses b. number of owners c. requirement to register with the state 3. What is the main similarity between corporations and cooperatives? a. debt protection b. profit driven c. keeping prices low 4. What type of business offers intangible goods and services? a. manufacturers b. agriculture and mining c. service providers 5. What type of business makes a profit by distributing and selling items? a. distributors and retailers b. financial services c. utilities Assignment 1 36 6. What type of business helps others invest and manage money? a. distributors and retailers b. utilities c. financial services 7. In what kind of business do bus drivers and pilots work? a. real estate b. distributors and retailers c. transportation 8. What refers to the top level of leadership within a business? a. production and operations b. management c. inventory and purchasing 9. What is a series of activities designed to make the customer happy? a. inventory and purchasing b. HR c. customer service Assignment 1 37 10. Which business function is responsible for reordering products? a. accounting b. inventory and purchasing c. marketing and sales Part B Short Answer Read the following case study and then answer the question. Note that many good answers are possible. (40 points total) Case Study Who: Mutual Insurance Where: Chicago, Illinois What: Large company implements change by opening an office in a different country. For over five decades, Mutual Insurance has been an AArated provider of property, liability, casualty, and workers' compensation insurance. Its upper management has decided to open a new sales office in China. Assignment 1 38 The vice president of international sales considers the following factors: language and culture differences communication issues with time differences staffing in a foreign country cost of office rent computer connections cost and storage of materials and supplies differences in accounting guidelines in China advertising and networking in China 11. What functions at Mutual Insurance will be involved in opening a new office? Give one example of what each function might do. Once you have completed this assignment, send it to your instructor. Then return to this course to begin Lesson 2: Management. Assignment 1 39 Assignment 1 40 Assignment 1 41