The Changing Face of Business Chapter 1

Distinguish between business and not- for-profit organizations. Identify and describe the factors of production. Describe the private enterprise system, including basic rights and entrepreneurship. Identify the six eras of business, and explain how the relationship era— including alliances, technology, and environmental concerns—influences contemporary business. 1 Learning Goals Explain how today’s business workforce and the nature of work itself is changing. Identify the skills and attributes managers need to lead businesses in the 21st century. Outline the characteristics that make a company admired by the business community

Profit-seeking activities and enterprises provide goods and services necessary to an economic system. Profit-seeking is the reward for business people who take the risk involved to offer goods and services to customers. See Fortune 500 for a list of major U.S. companies.Fortune What is Business?

Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2011 Table 1. Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2011 All Races Educational Attainment TotalNone High school graduate Some college no degree Associate's degree, occupational Associate's degree, academic Bachelor's degree Master's degree Professional degree Doctoral degree Both Sexes.18 years and over231, ,31645,2459,22711,38441,94316,1542,9933, years and over201, ,91134,2038,55010,49739,28616,0152,9803, to 69 years12,160814,1541, ,8081, to 74 years9,254613,4951, , years and over17, ,5762, , Male.18 years and over112, ,08221,3934,1694,73620,1377,2311,8701, years and over97, ,37016,1373,8614,32119,0177,1811,8621, to 69 years5,600281, to 74 years4,242281, years and over7,239682,2321, Female.18 years and over118, ,23423,8525,0586,64821,8068,9231,1231, to 24 years14,570123,6945, , years and over104, ,54118,0654,6896,17620,2698,8341,1181, to 69 years6,561522,3411, to 74 years5,012322, years and over10, ,3441,

Employment Size of Firms - US l l All firms27,281,452 Nonemployer firms21,351,320 Employer firms5,930,132 Firms with 1 to 4 employees (or with no employees as of Mar 12, 2012) 3,617, % Firms with 5 to 9 employees1,044, %78.61% Firms with 10 to 19 employees633, %89.29% Firms with 20 to 99 employees526, %98.16% Firms with 100 to 499 employees90, %99.69% Firms with 500 employees or more18, % %

Employment Size of Firms – California All firms717,133 Firms with 1 to 4 employees (or with no employees as of Mar 12) 434, %60.6% Firms with 5 to 9 employees123, %77.8% Firms with 10 to 19 employees74, %88.2% Firms with 20 to 99 employees65, %97.4% Firms with 100 to 499 employees13, %99.2% Firms with 500 employees or more5, %100.0%

Factors of Production Natural Resources Capital Human Resources Entrepreneurship Occupational Outlook Handbook

Capitalism Adam Smith is the father of capitalism. “Invisible Hand” Economic system determines business ownership, profits, and resources Rewards firms for their ability to serve the needs of consumers Minimized government intervention Competition is the battle among businesses for consumer acceptance. 8 The Private Enterprise System

Basic Rights in a Private Enterprise System

An Entrepreneur: Is a risk-taker Takes financial, personal, social, and career risks Sees a potentially profitable opportunity Devises a plan to achieve success in the marketplace and earn those profits Fuels the U.S. economy Provides innovation Entrepreneurship Entrepreneurial thinking is important within large firms.

Six Eras in the History of U.S. Business

Relationship Management Activities to build and maintain mutually beneficial ties with customers and other parties Relationship management depends on technology. Managing Relationships through Connections

A partnership is an affiliation of two or more companies that help each other achieve common goals. A strategic alliance is a partnership formed to create a competitive advantage for both parties (see Amazon).Amazon Strategic Alliances and Partnerships

Dedicated workers who can foster strong ties with customers Capable of high-quality production Able to compete in global markets Technically savvy Today’s Business Workforce

By 2030, the number of U.S. workers 65 or older will reach 72 million. Many baby boomers are hitting the peak of their careers, while Generations X and Y are launching their careers. Technology has intensified the hiring challenge by requiring workers to have ever more advanced skills. U.S. Census Bureau Changes in the Workforce: Aging Population

Economists predict the U.S. labor pool could soon fall short by as many as 10 million people. The two fastest-growing ethnic populations in the United States are Hispanics and people of Asian origin. Employee teams with individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities are more effective. Changes in the Workforce: Shrinking Labor Pool/Diversity

Outsourcing is using outside vendors to produce goods or fulfill services and functions that were previously handled in-house or in- country. Offshoring is the relocation of business processes to lower-cost locations overseas. Changes in the Workforce: Outsourcing

Younger workers are looking to something other than work-comes-first Telecommuting and job-sharing Part-time and temporary workers are growing Collaboration is replacing working alone Value risk-taking and innovation Changes in the Workforce: Innovation through Collaboration

Critical-thinking Creativity Ability to lead change Vision The 21 st -Century Manager

Critical thinking is the ability to analyze and assess information to pinpoint problems or opportunities. Creativity is the capacity to develop novel solutions to perceived organizational problems. Critical Thinking and Creativity

Guide employees and organizations through changes Managers must be comfortable with tough decisions. Factors that require organizational change can come from external and internal sources. Ability to Lead Change

Solid profits Stable growth Safe and challenging work environment High-quality goods and services Business ethics and social responsibility Fortune’s list of Most Admired CompaniesMost Admired Companies What Makes a Company Admired?

End of Chapter Video (Click below to start or pause the video) New Harvest Coffee Roasters Brews Up Fresh Business (Length – 6:43)