PART ONE:

TODAYS BUSINESS
ENVIRONMENT
Chapter One Starting Out

Chapter Learning Objectives

1-2

Business and Profits: The Basis of Wealth

Business as Benefactor: Payoffs Beyond
Money
Risk, Entrepreneurship and the Factors of
Production: The Creative Fire of Business
The Business Environment: Forces that
Encourage and Discourage
Entrepreneurship
Seven Key Business Rules: The Great
Adventure of Being in Business in the 21st
Century.

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BUSINESS - Definition
1-3

Anorganizationoreconomic
systemwheregoods and servicesare
exchanged for one another or formoney.

It is the activity of making, buying, or

selling goods or providing services in
exchange for money

Business and Profits: The Basis of

Wealth
1-4

Business seeks to make a profit by

selling goods or services to others.
For-Profit & Nonprofit Organizations

For-Profit Organizations are formed to make

money or profits by selling something
Nonprofit Organizations are formed to offer
products or services and their purpose is
not to distribute surplus funds or profits to
owners, but rather to further their goals

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How does a Business Make

Money?
1-5

Selling Goods and Services

Selling the exchange of goods or services

for an agreed sum of money
Goods tangible products
Services intangible products
Profit the amount of money a business
makes after paying all its expenses

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Business as Benefactor
1-6

Top 15 most livable countries.

1. Norway
2. Australia
3. New Zealand
4. United States
5. Ireland
6. Liechtenstein
7. Netherlands
8. Canada
9. Sweden
10. Germany
11. Japan
12. Korea (Republic of)
13. Switzerland
14. France
15. Israel

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Payoffs Beyond
Money
Quality of Life
Raising the
Standard of Living

Benefiting Society
Producing Goods
and Services
Providing Paychecks
and Benefits
Paying Taxes
Donating Funds and
Goods to Charity

Wealth, Entrepreneurship, &

Risk

1-7

How do people make their money?

Most of the wealthy are self-employed

business owners

Entrepreneurship & Risk

Risk is defined as the possibility that the

owner of a business may invest time &
money and the business may fail

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Factors of Production
1-8

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The Business Environment

1-9

Companies operate within the business

environment which consists of economic,
technological, competitive, global and
social forces that will either encourage
or discourage the development of
business.

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Forces in the Business

Environment
1-10

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Seven Key Business Rules for

Success
1-11

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Self-Development Rule #1 Stakeholders

1-12

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Self-Development Rule #2 Uncertainty

1-13

Some Current Conditions of Uncertainty

Economic Changes
Speed of Information
E-Commerce
Climate Change
Terrorism
Computer Security

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Self-Development Rule #3 Competition

1-14

Four Areas of the Competitive

Environment

Being responsive to customers

Making continual improvement in the
quality of your product or service
Finding ways to deliver new or better
products or services
Striving for employee efficiency

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1-15

Self-Development Rules #4 & #5

Globalization & Social
Responsibility

You must deal with an interdependent

global economic system

Globalization is the trend of the world

economy toward becoming a more
interdependent system

You must be ethical and socially

responsible

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Self-Development Rule #6 Diversity

1-16

You must learn to deal with different

kinds of people

Rapidly changing demographics

Need for diversity for business to thrive
Complexity of working in a diverse
environment

The Challenge: To maximize the

contributions of extremely diverse
employees and serve the needs of
extremely diverse customers

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Self-Development Rule #7
1-17

To be successful you should cultivate the

following personal skills:

Ability to perform a specific job

Ability to think analytically
Ability to interact well with people

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Summary

1-18

Business & Profits, The Basis of Wealth

Business as Benefactor: Payoffs beyond
Money
Risk, Entrepreneurship & the Factors of
Production, The Creative Fire of Business
The Business Environment: Forces that
Encourage and Discourage Entrepreneurship
Seven Key Business Rules: The Great
Adventure of being in Business in the 21 st
Century

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

1-19

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall