This action might not be possible to undo. Are you sure you want to continue?
* * *
Managing Within The Dynamic Business Environment: Taking Risks and Making Profits
McGraw-Hill/Irwin Understanding Business, 8e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
* * * • • • • Business & Entrepreneurship Business Profit Entrepreneur Match Risk With Profit • Revenue • Loss • Standard of Living/Quality of Life • Stakeholders • Nonprofit Organizations 1-3 .
* * * Business & Entrepreneurship • Business is any activity that seeks to provide goods and services to others while operating at a profit. • Entrepreneur is a person who risks time and money to start and manage a business. • In addition. and medical care. 1-4 . • Businesses provide people with the opportunity to become wealthy. • Profit is the is the amount a business earns above and beyond what it spends for salaries and other expenses. housing. businesses provide necessities such as food.
• Businesses are a part of an economic system that helps to CREATE A HIGHER STANDARD OF LIVING and quality of life for everyone. • A Loss occurs when a business’s expenses are more than its revenues • REVENUE – EXPENSES = PROFIT • Entrepreneurs PROVIDE EMPLOYMENT for other people. • They also PAY TAXES that are used for schools. and other facilities. hospitals.* * * Business & Entrepreneurship • Match Risk With Profit • Revenue is the total amount of money a business takes in during a given period by selling goods and services. 1-5 .
health care. a clean natural environment. • QUALITY OF LIFE refers to the general wellbeing of a society in terms of political freedom. 1-6 . and everything else that leads to satisfaction and joy. safety. • Stakeholders are all the people who stand to gain or lose by the policies and activities of a business. education. and people in the local community. suppliers. free time. bankers. environmentalists. employees. and elected leaders.* * * Business & Entrepreneurship • Standard of Living/Quality of Life refers to the amount of goods and services people can buy with the money they have. stockholders. • Stakeholders include customers.
• To stay competitive. security. THE NEEDS OF ALL STAKEHOLDERS. and legal work. 1-7 . • The decision whether to outsource or to insource is based on what is best for all the stakeholders. to outside organizations. as much as possible.* * * Business & Entrepreneurship • The challenge for companies in the 21st century will be to BALANCE. • Many companies have set up design and production facilities known as INSOURCING. • OUTSOURCING assigning various functions. businesses may OUTSOURCE jobs to other countries. • Outsourcing may cause more HARM TO THE COUNTRY than GOOD FOR THE COMPANY. maintenance. such as accounting. production.
charities. • You need the SAME SKILLS to work in nonprofit organizations that you need in business. public schools. and financial management. • SOCIAL ENTREPRENEURS are people who use business principles to start and manage organizations that are not for profit and help countries with their social issues. and social causes—make a major contribution to the welfare of society. 1-8 . • A NONPROFIT ORGANIZATION is an organization whose goals do not include making a personal profit for its owners or organizers. leadership. including information management. marketing.* * * Business & Entrepreneurship • USING BUSINESS PRINCIPLES IN NONPROFIT ORGANIZATIONS • NONPROFIT ORGANIZATIONS—such as government agencies.
* * * Objectives of Business Survival Growth Profit Social Responsibility 1-9 .
. • Service businesses • Generally considered labor-intensive. The malls are a great place to find service businesses.* * * Business Classifications • Goods producing • May be capitalintensive.
• The targeting of changing demographic patterns and lifestyle trends. • Growth of internet.* * Why Growth in Service * • More disposable income. • Needed to support complex goods and new technology. Sector • Companies seeking professional advice to remain competitive. . • Barriers are low to entry for e-commerce. New advertising technology is the big screen customer interactive TV in shopping malls.
tools.g. machines..* * * • The FACTORS OF PRODUCTION are the resources used to create wealth: • LAND (or natural resources) • LABOR (workers) • CAPITAL (e. but not money—money is used to buy factors of production) • ENTREPRENEURSHIP • KNOWLEDGE 1-12 . and buildings.
labor. • Workers in the high-tech industries in California’s Silicon Valley are often called KNOWLEDGE WORKERS. 1-13 . or capital. • What makes rich countries rich is not land. • Entrepreneurship also helps make some states and cities rich while others remain relatively poor.* * * • Some experts believe that the most important factor of production is KNOWLEDGE. it is a combination of ENTREPRENEURSHIP and the effective use of KNOWLEDGE.
they are: •The economic and legal environment •The technological environment •The competitive environment •The social environment •The global business environment Businesses grow and prosper in a healthy environment 1-14 .* * The BUSINESS ENVIRONMENT is the * surrounding factors that either help or hinder the development of business.
* * * Business Environment Global Business Economic & Legal Social Technology Competitive 1-15 .
* * * Economic & Legal Environment $ GOVERNMENTS CAN LESSEN THE RISK of starting a businesses and increasing entrepreneurship and wealth by: $ Minimum taxes and regulations $ Freedom of ownership $ Contract laws $ Tradable currency $ Elimination/minimization of corruption 1-16 .
* * * Technological Environment • Productivity • E-Commerce • Responsiveness to Customer 1-17 .
personal digital assistants. TECHNOLOGY means everything from phones and copiers to computers.* * * HOW TECHNOLOGY BENEFITS WORKERS AND YOU. medical imaging devices. hours worked. •EFFECTIVENESS means producing the desired result. •Farmers use high technology to increase production and profit.g.) •Tools and technology greatly improve productivity. •EFFICIENCY means producing goods and services using the least amount of resources. and various software programs that make business processes more efficient and productive. •PRODUCTIVITY is the amount of output you generate given the amount of input (e. 1-18 .
* * * Competitive Environment • Customer Expectations • Restructure/Empower 1-19 .
1-20 .* * * Competitive Environment • Making quality products is not enough to stay competitive in world markets—now you have to offer QUALITY PRODUCTS and OUTSTANDING SERVICE at competitive prices.
and practices to meet these demands. • Business is becoming CUSTOMERDRIVEN— customers’ wants and needs come first. • Successful companies must LISTEN TO CUSTOMERS to determine their wants and needs and then adjust their products. 1-21 .* * * Competitive Environment • COMPETING BY EXCEEDING CUSTOMER EXPECTATIONS • Customers today want good quality at low prices and great service. policies.
• Monopolistic Competition: Large number of sellers. none can dominate the market. • Monopoly: There is only one produce of a product in a given market. No one group or groups can become large enough to influence prices.* * * Types of Competition • Pure Competition: Multiple buyers and sellers exist. . • Oligopoly: Industry is dominated by only a few producers.
* * * Social Environment • Diversity/Multicultural • Aging/Graying of America • Two-Income Families • Single-Parent Families 1-23 .
S. Equal Employment Opportunity Commission • Sexual Orientation 1-24 .* * * 21st Century Diversity Issues • Race • Gender • Ethnicity • Age • Language • Religion • Disability Source: U.
* * * Global Environment • International Competition and Free Trade • Improvements in Transportation and Communication • War & Terrorism • Global Changes 1-25 .
* * * Trends in Business • Rise of Information & Communication Technology • Globalization • Self-Directed. Empowered Employees • Communication Skills • Doing Business 24/7 • Educated Consumers • Aging Workforce • Decision-Making Skills • Teamwork • Leadership • Continual Learning • Increasing Diversity Source: Keying In.Newsletter of the National Business Education Association. March 2003 1-26 .
Newsletter of the National Business Education Association.0 25. United States United States. Omaha India United Kingdom.5 18. Mexico City 23. NE. CA.0 21. London Mexico Mexico.5 44. March 2003 1-27 . Medina United States United States.0 23. WA.* * * • THE WORLD’S RICHEST PEOPLE Rank Name Age 1 William Gates III 49 2 Warren Buffett 74 3 Lakshmi Mittal 54 4 Carlos Slim Helu 65 5 Prince Alwaleed Bin 6 Ingvar Kamprad 78 7 Paul Allen 52 8 Karl Albrecht 85 9 Lawrence Ellison 60 10 S Robson Walton 61 Worth 46.0 18. AR.8 48 23. Silicon V. Lausanne United States United States. WA.4 18. Bentonville Source: Keying In.7 Saudi Arabia Sweden Switzerland.3 Country of Residence ($billions) Citizenship United States United States. Seattle Germany Mülheim an der Ruhr United States United States.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.