Chapter 1
Managing Within the Dynamic Business Environment
Business & Entrepreneurship
• Business
• Any activity that seeks to provide goods and services to others while operating at a profit
• Profit
• The amount a business earns above and beyond what it spends for salaries and other expenses • P=Revenues-Expenses • P=Sales-Costs
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Business & Entrepreneurship (contd.)
• Revenue
• Total amount of money a business takes in during a given period of time
• Entrepreneur
• Def. 1: a person who risks time and money to start and manage a business • Def. 2 • Def. 3 • An example
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Business & Entrepreneurship (contd.)
• Match Risk With Profit
• or Loss
• Risk
• The chance an entrepreneur takes of losing time and money on a business that may not prove profitable
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Business & Entrepreneurship (contd.)
• Standard of Living
• The amount of goods and services people can buy
• Quality of Life
• The general well-being of a society in terms of political freedom, a clean natural environment, education, health care, safety, free time, and everything else that leads to satisfaction and joy
5/23
Business & Entrepreneurship (contd.)
• Stakeholders
• All the people who stand to gain or lose by the policies and activities of a business
• Outsourcing (Insourcing)
• Assigning various functions to outside organizations
6/23
Stakeholders
7/23
Business & Entrepreneurship (contd.)
• Nonprofit Organizations
• An organization whose goals do not include making a personal profit for its owners or organizers • Government, public schools, charities
• Social Entrepreneurs
8/23
Creating Wealth
• Factors of Production
• The resources used to create wealth
9/23
Factors of Production
10/23
Business Environment
• The surrounding factors that either help or hinder the development of business
11/23
Business Environment (contd.)
12/23
Business Environment (contd.)
• Economic and Legal Environment
• • • • • Minimum taxation and regulation Allow private property Enforce legality Stable currency Minimize corruption
Quiz: Where is USA
13/23
Business Environment (contd.)
• Technological Environment
• Technology
phones, computers, software…
• Productivity
The amount of output you generate given the amount of input (e.g. hours worked.)
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Business Environment (contd.)
• Effectiveness
producing the desired result
• Efficiency
producing goods and services using the least amount of resources
• E-commerce
buying and selling of goods over the Internet B2C B2B
15/23
Business Environment (contd.)
• Competitive Environment
• Responsiveness to Customer
Database
• electronic storage file where information is kept
• Identity Theft
obtaining private information about a person and using that information for illegal purposes 10 million Americans are victims
16/23
Business Environment (contd.)
• Competing by Exceeding Customer Expectations
Customer-driven businesses – listen to the customer
• Competing by Restructuring and Empowerment
Front-line workers must respond quickly to customer requests – and have autonomy
17/23
Types of Businesses
18/23
Business Environment (contd.)
• The Social Environment
• Demography
The statistical study of the human population in regard to its size, density, and other characteristics, such as age, race, gender, and income
• Managing Diversity
Diversity includes many more population groups, including seniors, the disabled, homosexuals, and singles
19/23
Business Environment (contd.)
• Aging/Graying of America
Baby boomers
80% 70% 60% 50% 40% 30% 20% 10% 0% 1920 1940 Under 15 1960 15-64 1980 65+
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2000
Business Environment (contd.)
• Two-Income Families
• Single-Parent Families
Child care benefits
5 4.5 4 3.5 3 Number of Persons in a 2.5 Household 2 1.5 1 0.5 0 1900 1940 1980 2000
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Business Environment (contd.)
• The Global Environment
• International Competition and Free Trade • Improvements in Transportation and Communication – more trade
• War & Terrorism – less trade?
• Global Changes
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Evolution of American Business
• Agricultural/Manufacturing • Service Industries • Future???
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