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Chapter 1

The Framework of
Contemporary
Business

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1 Distinguish between business and

Explain how todays business

workforce is changing.

2 Identify and describe the factors of

Describe how the nature of work

itself is changing.

3 Describe the private enterprise

Identify the skills and attributes

managers need to lead businesses in
the 21st century.

4 Identify the six eras of business, and

Outline the characteristics that make

a company admired by the business
community.

not-for-profit organizations.

production.

system, including basic rights and

entrepreneurship.

explain how the relationship eraincluding alliances, technology, and

environmental concerns-influences
contemporary business.

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Profit-seeking activities and enterprises provide

goods and services necessary to an economic
system.
Profit is the reward for businesspeople who
take the risk involved to offer goods and
services to customers.

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Fact
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Natural Resources
Capital
Human Resources
Entrepreneurship

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Th
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Capitalism
Adam Smith is the father of capitalism.
Economic system determines business
ownership, profits and resources
Rewards firms for their ability to serve the needs
of consumers
Minimized government intervention
Competition is the battle among businesses
for consumer acceptance.

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Private En

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The Ent
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The risk-taker
Fuels the U.S. economy
Provides innovation
Entrepreneurial thinking is important
inside of large firms.

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Six Er
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of US B

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Relationship Management
Activities to build and maintain mutually
beneficial ties with customers and other
parties

Relationship management depends upon

technology.

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A partnership is an
affiliation of two or
more companies that
help each other
achieve common
goals.

A strategic alliance
is a partnership
formed to create
a competitive
advantage for both
parties.

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To
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Wor
Dedicated workers who can foster strong
ties with customers
Capable of high-quality production
Ability to compete in global markets
Technically savvy

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Chan
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Workfo
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By 2030, the number of U.S. workers 65 or older
will reach 72 million.
Many baby boomers are hitting the peak of their
careers while Generation X and Y are launching
their careers.
Technology has intensified the hiring challenge
by requiring workers to have ever more
advanced skills.

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Shrink
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Economists predict the U.S. labor pool could
soon fall short by as many as 10 million people.
The two fastest-growing ethnic populations in
the United States are Hispanics and people of
Asian origin.
Blending individuals of different genders,
ethnic backgrounds, cultures, religions,
ages, and physical and mental abilities.

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Chang
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Out
Outsourcing is using
outside vendors to
produce goods or
fulfill services and
functions that were
previously handled
in-house or in-country.

Offshoring is the
relocation of business
processes to lower
cost locations
overseas.

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and Innovation Through Collaboration

Younger workers are looking to something

other than work-comes-first
Part-time and temporary workers are
growing
Collaboration is replacing working alone
Value risk taking and innovation

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The 21
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Critical-thinking
Creativity
Ability to lead change
Vision

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Critical thinking is the ability to analyze

and assess information to pinpoint
problems or opportunities.
Creativity is the capacity to develop novel
solutions to perceived organizational
problems.

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Ability
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Guide employees and organizations
through changes
Managers must be comfortable with tough
decisions.
Factors that require organizational change
can come from external and internal
sources.

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What
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Solid profits
Stable growth
Safe and challenging work environment
High-quality goods and services
Business ethics and social responsibility