American Business

Merit Badge Workbook

This workbook can help you but you still need to read the merit badge pamphlet.
This Workbook can help you organize your thoughts as you prepare to meet with your merit badge counselor.
You still must satisfy your counselor that you can demonstrate each skill and have learned the information.
You should use the work space provided for each requirement to keep track of which requirements have been completed,
and to make notes for discussing the item with your counselor, not for providing full and complete answers.
If a requirement says that you must take an action using words such as "discuss", "show",
"tell", "explain", "demonstrate", "identify", etc, that is what you must do.
Merit Badge Counselors may not require the use of this or any similar workbooks.
No one may add or subtract from the official requirements found in Scouts BSA Requirements (Pub. 33216 – SKU 653801).
The requirements were last issued or revised in 2019 • This workbook was updated in June 2020.

Scout’s Name:__________________________________________ Unit: __________________________________________

Counselor’s Name: ____________________ Phone No.: _______________________ Email: _________________________

http://www.USScouts.Org • http://www.MeritBadge.Org
Please submit errors, omissions, comments or suggestions about this workbook to: Workbooks@USScouts.Org
Comments or suggestions for changes to the requirements for the merit badge should be sent to: Merit.Badge@Scouting.Org

1. Do the following:
a. Explain four features of the free enterprise system in the United States.
Feature 1 Individual Freedom and Opportunity
Benefits Equal opportunity does have a legitimate meaning: equal political freedom to create
and choose conditions and circumstances favorable to man's existence. The
concept properly refers to the political freedom to act and express oneself as an
independent individual
Responsibilities

Feature 2 Ownership of Land and Assets (equipment, products & machines)

Benefits Owning the assets used in a business is NOT the same as owning the business.
For example, a landowner who leases land to a farm business, owns the land (an
asset used by the farm business) but does not own the farm business.

Responsibilities

Workbook © Copyright 2020 - U.S. Scouting Service Project, Inc. - All Rights Reserved
Requirements © Copyright, Boy Scouts of America (Used with permission.)
This workbook may be reproduced and used locally by Scouts and Scouters for purposes consistent with the programs of the Boy
Scouts of America (BSA), the World Organization of the Scout Movement (WOSM) or other Scouting and Guiding Organizations.
However it may NOT be used or reproduced for electronic redistribution or for commercial or other non-Scouting purposes without
the express permission of the U. S. Scouting Service Project, Inc. (USSSP).
American Business Scout's Name: _______________________

Feature 3 Owners and Workers can Pursue their Own Interests & Goals
Benefits It’s common knowledge that helping employees set and reach goals is a critical
part of every manager’s job. Employees want to see how their work contributes to
larger corporate objectives, and setting the right targets makes this connection
explicit for them, and for you, as their manager.
Responsibilities

Feature 4
Benefits

Responsibilities

Describe the difference between freedom and license.

License is a specific permission to do something. Something you do with a license is
permitted, and you would not face legal consequences. Freedom is the option to do
something - but that thing may or may not have other consequences.

For example, you are free to yell fire in a crowded theatre, but it will have consequences.
In the appropriate (open carry) state you have license to carry a firearm, and can expect
no consequences from acting on this license.

Tell how the Scout Oath and Law apply to business and free enterprise.
In Business you must: • Do your best and help people • You must be trustworthy • Help
those who are less fortunate – Charities • To succeed you must be Friendly & Courteous •
Must follow the laws and rules of Business • In business, you must be Thrifty, setting aside
money for emergencies that might arise • You should always Protect and Conserve our
Natural Resources

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American Business Scout's Name: _______________________

b. Describe the Industrial Revolution and tell about the major developments that marked the start of the modern industrial
era in the United States.
The Industrial Revolution, now also known as the First Industrial Revolution, was the
transition to new manufacturing processes in Europe and the United States, in the period
from about 1760 to sometime between 1820 and 1840. This transition included going from
hand production methods to machines, new chemical manufacturing and iron production
processes, the increasing use of steam power and water power, the development of
machine tools and the rise of the mechanized factory system. The Industrial Revolution
also led to an unprecedented rise in the rate of population growth.

Discuss three people who had a great influence on business or industry in the United States and describe what each did.
1. Name Henry Ford
The pioneer of the Model T launched more than just engines, but, through his Model T
assembly line, a more efficient means of working. This approach to production lowered
the cost of materials and the final product, which changed American vehicle
accessibility and the world around him; changing the course of history really does pay.

2. Name Steve Jobs

He didn’t necessarily invent the wheel, but he sure did reinvent it—the computer, that
is—to become more accessible and exciting to the entire world. Steve Jobs, the iconic
face of Apple Inc., is a name known by millions whose technology affects millions
more.

3. Name Walt Disney

By marrying the creative and the corporate, entrepreneur and animator Walt Disney
created the internationally-beloved brand that has captured millions of hearts
worldwide. His work has shown the value of heart and creativity of business. His
storytelling served not only to entertain, but to also develop trust in his brand.

c. Identify and describe to your counselor the five primary areas of business.
1. Human resource management :- Human resource development or personnel
management or manpower management is concerned with obtaining and maintaining
of a satisfactory and satisfied work force i.e., employees. It is a specialized branch of
management concerned with ‘man management’.

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American Business Scout's Name: _________________________

2. Production management :- Production management refers to planning, organization,

direction, coordination and control of the production function in such a way that desired
goods and services could be produced at the right time, in right quantity, and at the
right cost. Some authors treat material, purchase and inventory management as part
of production management.

3. Financial management :- Financial management can be looked upon as the study of

relationship between the raising of funds and the deployment of funds. The subject
matter of financial management is: capital budgeting cost of capital, portfolio
management, dividend policy, short and long term sources of finance.

4. Marketing management :- Philip Kotler views marketing as a social and managerial

process by which individuals and group obtain what they need and want through
creating and exchanging products and values with others. American Marketing
Association defines market•ing management as the “process of planning and
executing the conception, pricing, promotion and distribution of ideas, goods and
services to create exchange that satisfy individual and organizational objectives.”

5. Office management :- Office management can be defined as, “the organization of an

office in order to achieve a specified purpose and to make the best use of the
personnel by using the most appropriate machines and equipment, the best possible
methods of work and by providing the most suitable environment.”

d. Explain the history of labor unions in the United States

The first hundred years of U.S. history saw relatively little in the development of labor
unions. A few were organized in scattered fashion, but many of those simply disbanded
after they had achieved their goals, such as when the printers briefly unionized in New
York City in 1778.1The first successful strike in building trades took place in 1791 when
Philadelphia carpenters campaigned for a 10-hour workday. 2The need for both skilled
and unskilled labor mushroomed during the Industrial Revolution and the Civil War and
the subsequent discontinuation of slavery helped to illustrate the right of workers to
receive a fair wage for their labor.

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American Business Scout's Name: _________________________

and the importance of labor unions and employers working together.

Identify two major labor unions currently in existence.

1. National Education Association.
2. American Federation of State, County and Municipal Employees.
e. Discuss with your counselor how business impacts the local, national, and global economy.
Small businesses contribute to local economies by bringing growth and innovation to the
community in which the business is established. Small businesses also help stimulate
economic growth by providing employment opportunities to people who may not be
employable by larger corporations.
there's a very important role for entrepreneurs to spark economic development by starting
new businesses, making jobs, and conducive to improvement in numerous key goals like
gross domestic product, exports, the standard of living, skills development and community
development.
Opponents of globalization often point to its negative effects on local communities. In a
research initiative focusing on five American communities—Boston, Cleveland, Miami,
Seattle, and the Spartanburg-Greenville region of South Carolina—she found three paths
to success. The greatest assets to any business, she argues, are concepts, competence,
and connections.
2. Do the following:
a. Explain the three basic types of financial statements (income statement, balance sheet, and statement of cash
flows). Discuss with your counselor how each statement can help business leaders make better decisions.
An income statement or profit and loss account is one of the financial statements of a
company and shows the company's revenues and expenses during a particular period. It
indicates how the revenues are transformed into the net income or net profit.

A balance sheet is a financial statement that reports a company's assets, liabilities and
shareholders' equity. The balance sheet is one of the three (income statement and statement
of cash flows being the other two) core financial statements used to evaluate a business.

In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial
statement that shows how changes in balance sheet accounts and income affect cash and cash
equivalents, and breaks the analysis down to operating, investing, and financing activities.

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American Business Scout's Name: _______________________

b. Explain how changes in interest rates, taxes, and government spending affect the flow of money into or out of
business and industry.
Interest Rates

Taxes

Government
Spending

c. Explain how a sole proprietorship or partnership gets its capital.

A sole proprietor can raise capital by taking out loans to support the business. ... The
loan decision will be made based on your personal creditworthiness, not the
creditworthiness of business, and you may be required to pledge personal assets as
collateral.

Other than debt financing, partnerships are often unable to get large chunks of cash.
Although a partnerships can raise capital by selling equity interests, that's very difficult
to do on a large scale because of potential personal liability and the limited resale
market for partnership equity.

Discuss and explain four ways a corporation obtains capital.

1. EARLY STAGE FINANCIAL CAPITAL :- Firms that are just beginning often have an idea or a
prototype for a product or service to sell, but few customers, or even no customers at all, and
thus are not earning profits. Such firms face a difficult problem when it comes to raising
financial capital.
2. PROFITS AS A SOURCE OF FINANCIAL CAPITAL :- If firms are earning profits
(their revenues are greater than costs), they can choose to reinvest some of these
profits in equipment, structures, and research and development.

3. BORROWING: BANKS AND BONDS :- When a firm has a record of at least earning significant
revenues, and better still of earning profits, the firm can make a credible promise to pay interest,
and so it becomes possible for the firm to borrow money. Firms have two main methods of
borrowing: banks and bonds.

4. CORPORATE STOCK AND PUBLIC FIRMS :- A corporation is a business that “incorporates”—that is owned by
shareholders that have limited liability for the debt of the company but share in its profits (and losses). Corporations
may be private or public, and may or may not have stock that is publicly traded. They may raise funds to finance their
operations or new investments by raising capital through the sale of stock or the issuance of bonds.

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American Business Scout's Name: _______________________

d. Name five kinds of insurance useful to business. Describe their purposes.

Type of Insurance Purpose
1. General liability Commercial general liability insurance is a broad type of insurance
insurance. policy which provides liability insurance for general business risks.
Commercial General Liability is the specific name for a policy of this
type in the United States insurance market.

2. Product liability The product liability insurance covers any legal liabilities to third party
insurance. arising out of injury or harm due to a product sold by a business. It
covers the following: Bodily injury, illness or accidental death to a third
party. Accidental damage to third party property.

3. Professional Professional liability insurance (PLI) is insurance that protects

liability insurance. professionals such as accountants, lawyers, and physicians
against negligence and other claims initiated by their clients.

4. Commercial Commercial property insurance protects your company's physical

property assets from fire, explosions, burst pipes, storms, theft and vandalism.
Earthquakes and floods typically aren't covered by commercial property
insurance.
insurance, unless those perils are added to the policy.

5. Home-based A home based business provides opportunity for people to choose their own business,
to work at their own phase and own schedule. Homeowner’s insurance is an insurance
business policy that combines insurance on the home, its contents, and, often, the other personal
insurance. possessions of the homeowner, as well as liability insurance for accidents that may
happen at the home.

3. Do the following:
a. c Explain the place of profit in business.

In ordinary parlance, an office or place of profit means an office or profit or position,

which brings to the person holding it some pecuniary gain or advantage or benefit. It
will be an office or place of profit if it carries some remuneration, pecuniary advantage,
benefit etc. The amount of such profit is immaterial.

b. c Describe to your counselor green marketing and sustainable business practices.

Green marketing refers to the practice of developing and advertising products based on their
real or perceived environmental sustainability. ... When a company's green marketing
activities are not substantiated by significant investments or operational changes, they may
be criticized for false or misleading advertising.
Sustainable business practices are characterized by environmentally-friendly practices
initiated by a company for the purposes of becoming a more sustainable organization. These
companies aim to reduce their environmental footprint through initiatives that cut down on
waste, poor environmental stewardship and unethical environmental practices that offer a
reduced level of sustainability within company practices. Sustainable business practices
differ among industries and are often specific to the company type and the product or service
it produces.

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American Business Scout's Name: _______________________

c. c Explain how ethics plays a role in business decision making.

Ethical decision making attempts to promote the company as a whole, rather than
letting one individual profit from business decisions. Individuals who consistently make
decisions based on their personal benefit may create legal liabilities for a company
that can lead to bankruptcy.

d. c Discuss the differences between operating a brick-and-mortar business versus an online business.
Brick and mortar refers to a physical presence of an organization or business in a
building or other structure. The term brick-and-mortar business is often used to refer
to a company that possesses or leases retail shops, factory production facilities, or
warehouses for its operations.

Online Business or e-business is any kind of business or commercial transaction that

includes sharing information across the internet. Commerce constitutes the exchange
of products and services between businesses, groups and individuals and can be
seen as one of the essential activities of any business.

4. Describe the role of the U.S. Department of Labor.

The United States Department of Labor (DOL) is a cabinet-level department of the U.S.
federal government responsible for occupational safety, wage and hour standards,
unemployment insurance benefits, reemployment services, and some economic statistics;
many U.S. states also have such departments.

Discuss two of the following topics with your counselor:

c a. Fair Labor Standards Act (FLSA)

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American Business Scout's Name: _______________________

c b. Occupational Safety and Health Act (OSHA)

c c. Family and Medical Leave Act (FMLA)

c d. Employee Retirement Income Security Act (ERISA)

5. Choose a business and research how it applies each of the primary areas of business (accounting, finance, economics,
marketing, and management). Share what you have learned with your counselor.

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American Business Scout's Name: ________________________
6. Do ONE of the following:
c a. Choose one of the primary areas of business and identify three career opportunities.
1.
2.
3.
Select one and research the education, training, and experience required for this career.
Career Selected
Education

Training

Experience

Discuss this with your counselor and explain why this interests you.

c b. Select a business leader and interview this individual to learn more about his or her company and career path. Discuss the
role ethics plays in making business decisions. Share what you have learned with your counselor.

When working on merit badges, Scouts and Scouters should be aware of some vital information in the current edition of
the Guide to Advancement (BSA publication 33088).Important excerpts from that publication can be downloaded from
http://usscouts.org/advance/docs/GTA-Excerpts-meritbadges.pdf.
You can download a complete copy of the Guide to Advancement from http://www.scouting.org/filestore/pdf/33088.pdf.

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