Copyright © 2002 by Harcourt, Inc. All rights reserved. CHAPTER ONE: The Framework of Contemporary Business

Copyright © 2002 by Harcourt, Inc. All rights reserved. WHAT IS BUSINESS? Business: profit and non-profit seeking activities of those engaged in purchasing or selling goods and services to satisfy society’s needs and wants. Business: profit and non-profit seeking activities of those engaged in purchasing or selling goods and services to satisfy society’s needs and wants. © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. Not-for-Profit Organizations Not-for-profit organizations: businesslike establishments that have primary objectives other than returning profits to their owners Not-for-profit organizations: businesslike establishments that have primary objectives other than returning profits to their owners Are these businesses?? Chicago Bears?? IVCC?? Red Cross?? Are these businesses?? Chicago Bears?? IVCC?? Red Cross?? © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. THE PRIVATE ENTERPRISE SYSTEM Private enterprise system (capitalism): economic system that rewards firms based on how well they match and counter the offerings of competitors to serve the needs and demands of customers Private enterprise system (capitalism): economic system that rewards firms based on how well they match and counter the offerings of competitors to serve the needs and demands of customers © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. Figure 1.4: Basic Rights within a Private Enterprise System Basic Rights within the Private Enterprise System

Copyright © 2002 by Harcourt, Inc. All rights reserved. The Entrepreneurship Alternative Entrepreneur: risk taker in the private enterprise system Entrepreneur: risk taker in the private enterprise system © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Before 1750 Before 1750 Rural and agricultural Rural and agricultural production production

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Industrial Revolution After 1750 After 1750 Factory system mass- produced items using semi-skilled workers Factory system mass- produced items using semi-skilled workers

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Industrial Revolution Industrial Entrepreneurs Late 1800s. Late 1800s. Did much to raise the overall standard Did much to raise the overall standard of living. Eli Whitney, of living. Eli Whitney, Rockefeller, Carnegie Rockefeller, Carnegie

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Industrial Revolution Industrial Entrepreneurs Production Era Early 1900s Early 1900s Attention focused on production. Attention focused on production. Henry Ford: assembly Henry Ford: assembly line. line.

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Marketing Era Marketing Era Industrial Revolution Industrial Entrepreneurs Production Era Post WWII Post WWII Consumer Orientation: marketing used as a process Consumer Orientation: marketing used as a process to determine and satisfy to determine and satisfy consumer needs consumer needs

Copyright © 2002 by Harcourt, Inc. All rights reserved. SIX ERAS IN THE HISTORY OF BUSINESS Colonial Period Marketing Era Marketing Era Industrial Revolution Industrial Entrepreneurs Production Era Driven by advances in technology Driven by advances in technology Businesses form deep, direct links with customers, employees, suppliers, and others Businesses form deep, direct links with customers, employees, suppliers, and others Next era?? Next era?? Relationship Era Relationship Era

Copyright © 2002 by Harcourt, Inc. All rights reserved. Figure 1.5: Growth of the Internet Population Insert figure when art is received

Copyright © 2002 by Harcourt, Inc. All rights reserved. To Get 50 Million Users Radio = 38 Years TV = 17 Years Internet = 3 Years

Copyright © 2002 by Harcourt, Inc. All rights reserved. MANAGING THE TECHNOLOGY REVOLUTION Intranet: closed network system using Internet standards that allow information sharing among employees, divisions, and geographically diverse locations Intranet: closed network system using Internet standards that allow information sharing among employees, divisions, and geographically diverse locations © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. RELATIONSHIP MANAGEMENT Relationship management: collection of activities that build and maintain ongoing, mutually beneficial ties with customers and other parties. Relationship management: collection of activities that build and maintain ongoing, mutually beneficial ties with customers and other parties. © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. Strategic Alliance Strategic alliance: partnership formed to create a competitive advantage for the businesses involved Bradfield’s and UPS © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. COMPETING IN A GLOBAL MARKET Figure 1.6: Top Ten U.S. Trading Partners

Copyright © 2002 by Harcourt, Inc. All rights reserved. Figure 1.7: Top Ten Brands Worldwide

Copyright © 2002 by Harcourt, Inc. All rights reserved. Productivity: Key to Global Competitiveness Total Output (goods or services produced) Productivity Input (human/natural resources, capital) Total Output (goods or services produced) Productivity Input (human/natural resources, capital) =

Copyright © 2002 by Harcourt, Inc. All rights reserved. Figure 1.8: Nations with the Highest Gross Domestic Product * Estimate; may overstate GDP by up to 25 percent

Copyright © 2002 by Harcourt, Inc. All rights reserved. DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCE Preparing for Changes in the Workforce Preparing for Changes in the Workforce Aging of the Population Aging of the Population Baby boomers beginning to retire Baby boomers beginning to retire © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCE Shrinking Labor Pool Shrinking Labor Pool Lowest unemployment rate in 25 years. Since the publication of this book, this is no longer true. The unemployment rate is about 4.5% right now. Lowest unemployment rate in 25 years. Since the publication of this book, this is no longer true. The unemployment rate is about 4.5% right now. © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCE Increasingly Diverse Workforce Increasingly Diverse Workforce © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCE The Changing Nature of Work The Changing Nature of Work Economy base has moved from manufacturing to services Economy base has moved from manufacturing to services Telecommuters becoming more common Telecommuters becoming more common Job flexibility for employees Job flexibility for employees Growth of outsourcing Growth of outsourcing © PhotoDisc

Copyright © 2002 by Harcourt, Inc. All rights reserved. WANTED: A NEW TYPE OF MANAGER Vision: the ability to perceive marketplace needs and what an organization must do to satisfy them Vision: the ability to perceive marketplace needs and what an organization must do to satisfy them Importance of Vision Importance of Vision

Copyright © 2002 by Harcourt, Inc. All rights reserved. WANTED: A NEW TYPE OF MANAGER Critical Thinking: ability to analyze and assess information Critical Thinking: ability to analyze and assess information Creativity: Creativity: Importance of Vision Importance of Vision Critical Thinking and Creativity

Copyright © 2002 by Harcourt, Inc. All rights reserved. WANTED: A NEW TYPE OF MANAGER Must guide employees and organizations through the changes brought about by technology, marketplace demands, and global competition Must guide employees and organizations through the changes brought about by technology, marketplace demands, and global competition Importance of Vision Importance of Vision Ability to Steer Change Critical Thinking and Creativity

Copyright © 2002 by Harcourt, Inc. All rights reserved. WHY STUDY BUSINESS? Businesspeople are catalysts for change, create new opportunities Businesspeople are catalysts for change, create new opportunities Studying business will help prepare you for the future Studying business will help prepare you for the future © PhotoDisc