BUSINESS MANAGEMENT PAVONE 1-2 CHANGES AFFECTING BUSINESS

INNOVATION

Innovation – Something entirely new. Example of innovation would be how clothing was made from natural fibers and can now be made from synthetic fibers. Business operations have been affected by innovation. For instance: Apple Computers building one of first personal computers. Internet has changed the lives of people and businesses.

IMPACT OF GLOBAL COMPETITION ON BUSINESS

Global Competition – Ability of businesses from one country to compete with similar businesses in other countries. America used to be a world leader in producing goods and services for hundreds of years. In recent years, other countries became industrialized and produced similar or better products at lower cost. America currently faces a great deal of competition from foreign businesses. Side Note: Learning a foreign language can provide great career advantages for a person.

FOCUSING ON THE RIGHT THINGS

Effectiveness – Making the right decisions about what products or services to offer customers and the best ways to produce and deliver them. Efficiency – Producing products and services quickly, at low cost, without wasting time and materials. Both of these principles must be achieved in order to be a successful production firm.

ACHIEVING EFFECTIVENESS Domestic Goods – Products made by firms in the United States. Foreign Goods – Products made by firms in other countries. Domestic and foreign goods are constantly in competition. Large businesses spend a great deal of money in testing their products and services, looking for customer preferences and keeping customers satisfied. American companies are seeking ways to keep their customers satisfied with domestic products, while foreign competitors are providing more attractive similar products. American car producers currently use a process called TQM (Total Quality Management) to meet the standards of excellence.

ACHIEVING EFFICIENCY Output – Quantity produced within a given time. Productivity – Producing the largest quantity in the least amount of time by using efficient methods and modern equipment. Efficiency is measured by output. Efficiency can be achieved in three ways: Specialization of effort Better technology and innovation Reorganization of work activities

ACHIEVING EFFICIENCY Work can be more efficiently completed by having workers become specialists, therefore businesses hire or train employees for specialized jobs. Mass production is a manufacturing procedure that helps a product be more efficiently produced; an assembly line is a good example of this.

ACHIEVING EFFICIENCY Advanced technology can also help efficiency, through the use of equipment, manufacturing processes and materials; this also helps products be produced faster, higher quality and at lower cost.

ACHIEVING EFFICIENCY Downsize – Process by which a company would reduce the amount and variety of goods and services produced and the number of employees needed to produce them. Empowerment – Letting workers participate in determining how to perform their work tasks and offer ideas on how to improve the work process of the company. Reorganizing a workplace is a very challenging method to achieve efficiency. Empowering workers leads to better quality of work. Re-engineering is a concept by which work flow is redesigned. By using different methods of increasing efficiency, America is re-establishing itself as a world leader in business.