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PART ONE:

TODAYS BUSINESS
ENVIRONMENT
Chapter One Starting Out

Chapter Learning Objectives


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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.

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

BUSINESS - Definition
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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
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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

How does a Business Make


Money?
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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Business as Benefactor
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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

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

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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Factors of Production
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

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.

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Forces in the Business


Environment
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Seven Key Business Rules for


Success
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Self-Development Rule #1 Stakeholders


1-12

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Self-Development Rule #2 Uncertainty


1-13

Some Current Conditions of Uncertainty

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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Self-Development Rule #3 Competition


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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Self-Development Rule #6 Diversity


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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

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Self-Development Rule #7
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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


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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

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Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall