Chapter 1: Business Now: Change is the Only Constant

Which of the following statements represents how consumers and workers react to socially responsible behavior by business?

A large majority of both consumers and workers tend to respond favorably to socially responsible business behavior.

_____ refers to the quality and quantity of products and goods available to a population at a given time.

Standard of living

The Social environment example

Yugo was a car company that decided to sell their product in another country. The problem they had was Yugo meant "doesn't move, or immobile" in that country's language, so no one would have bought a car by that name.

Entrepreneurs

people who risk their time, money and other resources to start a business. We refer to them as risk takers. Ex: Bill Gates and Microsoft, Steve Jobs and Apple, Bill Walton and Wal-Mart Just think about where we would be if these people had not taken the time and energy to start a business. Also, think about how things have changed because of these businesses.

Human resources include the

physical, intellectual, and creative contributions of individuals working within an economy.

Value

the difference between the benefits of a product and the price paid for a product

Competitive Environment

- Competition plays a key role in how businesses operate. Most companies have another company that they compete against. For example, Nike has Reebok, New Balance, Fila, and other companies that they are competing against to sell shoes and other athletic apparel. Companies seek to outperform the competition by making themselves the "best there is" in the market so that customers will choose their products. Value is important as customers must feel that their products are worthwhile. In addition, companies have to keep an eye on the products they sell, new products and innovations, and when to release new products in the market place.

Economic Environment

- Government regulations, free markets, buying and selling goods, decision making, and other decisions are driven by the economic factors surrounding a business. In the U.S., we are a free-market state which means that businesses have the freedom to decide on products of the production, how those products are sold, and other decisions. The government regulates businesses by taxing them and ensuring that they are operating by carrying out their promises. In some countries, they are very limited in terms of what they can do in business.

Things that help me outperform my competition:

1. Better Technology 2. Brand Recognition, Loyalty and Slogan marketing 3. More Educated Employees 4. New Product Innovations

The Five Eras of Business in the U.S.

1. Industrial Revolution 2. Entrepreneurship Era 3. Production Era 4. Marketing Era 5. Relationship Era

What are the four factors of productions?

1. Natural Resources 2. Capital 3. Human Resources 4. Entrepreneurship They are all necessary for an economy to thrive. Entrepreneurship is often seen as being the most important because the vision is what is needed to make things happen. Free enterprise, the process of allowing people to find opportunities, has allowed the US to grow into a great nation.

Industrial Revolution

1700s to mid-1800s, we saw the beginning of manufacturing plants where people were hired to work together to produce products for purchase.

Which of the following would be considered a business, according to the definition in the text?

A Web design company that needs to make changes in staffing and deployment, because of a change in tax law, before it can become profitable.

Business

Any activity that provides goods and services in an effort to earn a profit. Examples: Nike, Home Depot, Dish Network, Cellular South, etc.

Production Era -

Early 1900s - Mass production was the key here using assembly lines and interchangeable parts.

5 types of business environments

Economic Environment Competitive Environment Technological Environment The Social Environment Global Environment

It was during this era that many businesses began to dominate their markets, forcing out competitors, manipulating prices, and exploiting workers, which lead the government to pass laws regulating business.

Entrepreneurship Era

Of the factors of production, which is considered the most important?

Entrepreneurship. Even with limited natural or human resources, or even limited capital, the entrepreneur can create wealth, craft vision, see opportunity, and move forward.

Which of the following best describes the current business environment?

Government spending is of great concern, as well as its accompanying tax burden in a wild economic environment. But technology has not yet found a limit. The entrepreneurial spirit is alive and well in America, though competition has increased exponentially due to international trade agreements.

Capital

Man-made factors of production such as assembly lines, machines, computers, and other sources of technology.

Entrepreneurship Era

Mid 1800s to the end of the 1800s - We began seeing the beginning of empires, large-scale businesses that made large amounts of money

Marketing Era

Mid 1900s, after World War II, The focus moved to consumers. Products were made based upon customer demands.

Relationship Era

Modern day, goal is to create long-term relationships where customers will buy from you time and time again. Instead of trying to make one sale, you try to keep the customer buying your products over time.

Technological Environment

Technology is changing everyday. It seems as though once we buy a cell phone or computer, they have developed a newer, better one that we need to purchase. The internet (world wide web) has changed business in terms of product marketing, distribution and sales. Companies must remain on the forefront of technology in order to be viable and competitive.

Chapter 1: Business Now: Change is the Only Constant (Overview)

The basics of business Entrepreneurs/Entrepreneurship The Five Eras of Business in the U.S. Factors of Production The Business Environment Business Terms

E-Commerce

The buying and selling of goods on the internet

Profit

The money that a business earns from selling goods and services minus expenses, such as the cost of goods and salaries.

Ethics

The principles of right and wrong that guide an individual in making decisions. Some companies fail the test because they misled people. Think about Enron and WorldCom and how many people lost jobs and money because of greed and lies.

Global Environment

The world is getting smaller. Technology has allowed us to operate in countries across the world. As such, businesses must be aware that they are not just operating in the U.S., but they are also competing across the world. Businesses now sell products in many counties, and opportunities for growth are increasing. For example, McDonald's has restaurants in cities across the world, and Starbucks has coffee shops in many countries, not just America. Smart business people pay attention to events that are happening around the world, not just here in America. In addition, free trade and other trade agreements have caused a shift. Many jobs have moved to other countries. If you can Dell for technical support, you are more than likely talking to someone in India. Most of the clothes we wear were not made in America. The world is changing rapidly.

Entrepreneurship

They seek out opportunities and grow them into businesses. They take risks for financial gain down the road. They have the freedom of choice to make decisions as to how to build and grow businesses.

The Social Environment

This environment takes into account the age of the population, the values or beliefs of the people, the traditions and customs of society, and what is acceptable in society. Businesses must understand the societies in which they operate, or they may make bad decisions. In addition, worker attitudes and expectations will influence how businesses make decisions, and ethics are critical to the success of a competition. As a whole, people expect you to do what you say, and some companies have not done that. We live in a diverse society, which means we have multiple races, nationalities, languages, and other factors that influence the decisions we make. In addition, in the US, we are also living in a society that is getting older. Fewer children are being born today, so the population as a whole is getting older. Marketing and business efforts must consider these factors, or their products will not sell.

Loss

When expenses are higher then revenues, the company loses money

World Wide Web

a connection of computers and networks that reaches across the world using text, graphics, sound, flash animations and video. We access the www (world wide web) by using web browser such as Mozilla and Internet Explorer

GATT

an international trade agreement to lower the costs of selling products in various countries.

Free-trade

an agreement between two countries to move, buy and sell goods across borders, allowing for the free movement of products between countries.

A _____ is any activity that provides goods and services in an effort to earn a profit.

business

Natural resources

business inputs that are found in the world in which we live. They are not made with men's hands, they are natural to the environment. They include such things as land, water, wind and mineral deposits. They are refined and process, but not made by man. The value of these resources increase as demand decreases.

Nonprofits

business-like establishments that employ people and produce goods and services with a desire to improve communities rather than making a profit.

Demographics

characteristics of a population such as size, age, race, gender, etc

Entrepreneurs

create benefits for others while seeking profit for themselves.

The stock market, housing foreclosures, and unemployment rates are all part of an organizations's ____ environment.

economic

Entrepreneurs participate in which business environments?

economic, competitive, technological, social, and global

The five key dimensions of the broader business environment include

economic, competitive, technological, social, and global.

Nonprofit organizations are not in the business of

financial gain.

During the production era, companies continued to implement new technologies to streamline production processes. Although there were many changes, the primary focus resulted in

job specialization, efficiencies, and refinement.

As a factor of production, capital would include

machines, tools, buildings, and technology

A type of nonprofit organization would be a

museum

The four major categories of factors of production are

natural resources, capital, human resources, and entrepreneurship.

Nonprofit organizations

seeks to improve the quality of life for people - They are still businesses because they function as a business in every way except they are not focused on gaining profits.

In order to compete effectively, many companies have taken proactive steps to hire and nurture people from a broad range of backgrounds. This is an example of which business environment?

social

All of the following are examples of the five distinct eras of American business history EXCEPT the

technology era.

Human Resources

the physical, intellectual and creative contributions of the folks working within the company. Knowledge has become more important because of changes in technology. People rarely do physical labor (farming, building, etc.), and technology is used. As such, people must have knowledge and skills to work with technology.

Speed-to-Market

the time it takes a company to develop a new product and release it to the marketplace

Entrepreneurship is a growing trend in the U.S. and is likely to grow yet further for all of the following reasons EXCEPT

there is little risk in being an entrepreneur.

symbol for profit

∏ or pi Profit = Revenue - Expenses think about profit like this: Everyone wants a piece of the pie, so profit drives business decisions.