Chapter 1 Characteristics of Business 1 Chapter 1 Characteristics of Business ©2008 Thomson/South-Western

Chapter 1 Characteristics of Business 2 Lesson 1.1 The Nature of Business Goals Explain the nature of business activities. Describe the general types of businesses.

Chapter 1 Characteristics of Business 3 Business and Profit Business — an organization that produces or distributes a good or service for profit Profit — difference between earned income and costs

Chapter 1 Characteristics of Business 4 THE NATURE OF BUSINESS Business activities – Production – Marketing – Finance Types of businesses – Industrial businesses – business 2 business – Commercial businesses – selling to us Service businesses – not really a product sold

Chapter 1 Characteristics of Business 5 DAILY BUSINESS NEWS MONDAY Anglim Ryan Annun David BeyahTorian BrezaMarissa Cerula Kevin TUESDAY Cifelli John CoonanMary Kate DansburyDaniel DinnenyPatrick DintroneMichael WEDNESDAY DunnKatlin KohutCody KuczinskiMichael MahotierePhilippe MastorisAlexander NugentMarissa

Chapter 1 Characteristics of Business 6 DAILY BUSINESS NEWS THURSDAY Nzimande Zoe O'Keeffe J.P. PernaAnthony PinarligilTyler Rouze Jonathan Santopietro Angela FRIDAY Seaver Robert Steinmetz Andrew Todaro Brandon Vitacolonna Vincent Young Francis

Chapter 1 Characteristics of Business 7 Lesson 1.2 Changes Affecting Business Goals Describe how innovations affect businesses. Identify the impact global competition has had on U.S. businesses. Discuss ways in which businesses can improve their business practices.

Chapter 1 Characteristics of Business 8 Changes Affecting Businesses Innovation Impact of global competition Focusing on the right things effectiveness – Achieving effectiveness — making the right decisions about products or services to offer and the best ways to produce and deliver them – Achieving efficiency — producing products and services quickly, at low cost, without wasting time and materials

Chapter 1 Characteristics of Business 9 Effectiveness and Efficiency

Chapter 1 Characteristics of Business 10 EFFICIENCY Efficiency is achieved in three ways: Specialization of effort “experts doing the job” Better technology and innovation robots and computers, better machinery Reorganization of work activities teams, downsizing, empowerment

Chapter 1 Characteristics of Business 11 GLOBAL COMPETITION For hundreds of years, America lead the way in producing new goods and services. Now more countries are becoming industrialized but Chinese factory wages 64 cents an hour. U.S. factory wages in 2002 was $ foreign countries studied was $14.22 Mexico's factory wages $2.48 Because China's living costs are low, that 64 cents buys as much as $2.96 in the U.S.

Chapter 1 Characteristics of Business 12 Class Assignment Car Production Plant Break up into 3 groups Describe ways an automobile manufacturer can use each method to increase efficiency. Page 10 Group 1: Use Specialization Group 2: Use Technology and innovation Group 3 : Use Reorganization of work – downsizing and empowerment

Chapter 1 Characteristics of Business 13 Class Assignment Car Production Plant Using your method of Efficiency in order to make the Automotive plan more profitable, come up with a plan and present to the automotive workers. 1. Sell them on why this is great for them as workers and increase efficiency. 2. Be prepared to handle objections

Chapter 1 Characteristics of Business 14 Teams Group 1 N. M., S. S., C. N., R. H., J. V., V. S., M. B., F. V., A. R. Group 2 K. C., C. S., R. F., H. K., R. P., A.M. S., M. J., J. McD., A. Ro. Group 3 J. K., D. D., E. McG., K. M., J. C., E. T., P. T., J. Z., J. S.

Chapter 1 Characteristics of Business 15 Lesson 1.3 The Contributions of Business Goals Identify two ways a nation measures its economic growth and prosperity. Describe the benefits of business ownership to the nation and individuals.

Chapter 1 Characteristics of Business 16 The Contributions of Business Business growth and prosperity – Gross domestic product (GDP) — total market value of all goods and services produced in a country in a year – Individual well-being — home ownership, consumer products, self-improvement, savings

Chapter 1 Characteristics of Business 17 Unreported Income Underground Economy Drug money Babysitting Lawn service Part time jobs Counterfeit merchandise 5% - 20%

Chapter 1 Characteristics of Business 18 COUNTRIES WITH LARGEST GDPs

Chapter 1 Characteristics of Business 19 The Contributions of Business a big + Business ownership – Popularity of small businesses – easy, desire to be own boss – Growth of franchise businesses - McDonalds – Risks of ownership 1 out of 4-5 fail in 3 years – Obligations of ownership - community – Intrapreneurship In-company business – Studying business principles and management

Chapter 1 Characteristics of Business 20 INTRAPRENEURSHIP Intrapreneur — an employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service