Free Practice Test: DSST Introduction to Business

This section encompasses all the basic business concepts that a businessperson should know in order to be able to start an organized and successful business.
The first thing you will need to know is how the businesses are structured, i.e. the Forms of Business Ownership, such as Sole Proprietorship when there is no legal separation between the owner and the business, or partnerships such as General Partnership, when both risks and benefits of the business are shared among the owners, or Limited Partnership, the case when one person owns the company and is responsible for the liabilities, and there are limited partners with limited involvement. If you just do a little bit of research, you will find many more types of businesses and interesting stories of how to structure the business to be most efficient.
Next topic to be discussed is Government and Businesses, elaborating more on how the government can put constraints on businesses through taxes, laws or other regulatory methods and how it can help businesses grow, like in case of subsidies. Trade barriers should also be considered.
Another interesting topic is Economics of Business, which will discuss how markets influence each other (demand and supply, price takers and price makers) and how to find the equilibrium, what an opportunity cost and a tradeoff are, and the relationships of the businesses with the resources that are needed to produce goods and services: labor, capital and natural resources. The economic systems such as Capitalism, Socialism, & Communism will also be discussed.

Now that you know all the external factors of the business environment, it is time to define all the internal functions of a business.
Whatever happens in a business, there are some certain people who are responsible for what is happening in the organization. Yes, you are right! I’m talking about managers. Strategic management is the key for business to succeed. In this section, the concentration will be on understanding the fundamental management concepts.
The way the businesses define themselves in the market is due to the outstanding work done by the marketing team. Although many people confuse marketing with ads only, in this section, you will learn that marketing is much more than just promoting the business. The basics of marketing – the marketing mix or 4Ps (promotion, price, placement, product) will be discussed.
Interesting to know: Promoting a product/service does not only limit to creating and promoting ads. Uber was so successful not because of massive marketing campaigns but because of word-of-mouth. Uber offers free rides for its customers if they promote the services of Uber to their friends by providing referral codes.
Well, it’s not a secret that, in order to operate, a business needs funding. Financing, be it equity or debt financing, is for finding funds for business activities, purchases or investments. Banking terminology and functions are also essential parts of the finance.
Naturally, accounting is strongly interconnected with finance and is considered to be an essential function in a business. It should be conducted ethically, be it financial or managerial accounting. The fundamental concepts such as income statement, balance sheet, statement of cash flows, revenues, assets, liabilities, equity, dividends, and retained earnings should be emphasized.
Supply chain, inputs, processes, operations, and outputs are the part of the business called Production and Operations. Here also, you will learn to differentiate productivity, effectiveness, efficiency.
Interesting to know: One of the best interpretations of efficient production is Apple buying its iPad retina display manufactured by Samsung!
As everyone all around the world is talking – the 21st century is a century of technological revolution! And they are right. Technology is helping businesses to grow faster, automate a lot of processes, operate efficiently and cut costs. The study of the role of technology is covered in Management Information Systems.
Even if you have a brilliant idea for your startup, you will not be able to succeed if you do not have a right skilled team for your business. Concepts like recruitment, labor unions, job design, employee performance appraisal, employee retention, training and development, salaries and wages along with non-tangible rewards should be taken into account as being part of Human Resource Management.
Interesting to know: Employee rotation is always a refreshing process for employees. Moreover, it can be beneficial and informative, especially if a CEO wants to change his/her job and understand what and how others do. For example, employees of Amazon.com together with the CEO spend two days every two years working at the customer service desk. This is done to show all workers the customer service process.
Besides everything mentioned above, there is one more crucial thing in developing a business – the feature of being innovative! Innovation not only leads to great ideas, but it brings a lot of risks to start something totally new. Basically, that’s what Entrepreneurship is all about – being innovative, carrying risk and finding investors (VCs or angels) who will bear or share the risk with you and even guide you throughout the operations. Risk management and insurance should also be considered.

Part of understanding how and who businesses target and how this technological revolution affects today’s businesses.
The first topic is on Role of technology and e-commerce. We would define e-commerce along with its types (such as B2B, B2C, B2G, etc.), e-business and overall communication through internet.
Business ethics and social responsibility – business ethics, code of ethics, values, morals, fraud, harassment, discrimination, and social responsibility of a business should be discussed.
It’s not surprising that everything is leading to globalization and that affects the businesses the most. In global business environment, the topics will include globalization, economies of scale, outsourcing, tax and interest rates, trade barriers, worldwide supply and demand.