NICKELS M C HUGH M C HUGH © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved.

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-2 Chapter One Meeting the Challenge of Today’s Dynamic Business Environment

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-3 What Is Business? Activity seeking profit Activity seeking profit Provides goods/services Provides goods/services Satisfy standard of living- quality of life Satisfy standard of living- quality of life Nonprofit organizations Nonprofit organizations

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-4 Objectives of Business Survival Growth Social Responsibility Profit

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-5 Business Environment (Figure 1.2)

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-6 Entrepreneurship vs. Employment Opportunities For Entrepreneurs Opportunities For Entrepreneurs Matching Risk With Profit Matching Risk With Profit Revenue - Expense = Profit(Loss) Revenue - Expense = Profit(Loss) Risk Risk

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-7 Factors of Production Land Labor Capital Entrepreneurship Knowledge

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-8 Government Affects Business By Being:  A Customer  An Overseer and Regulator  A Tax Collector

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-9 Environments of Business Economic Economic Technological Technological Social Social Competitive Competitive Global Global

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Economic Environment $ Freedom of ownership $ Contract laws $ Elimination of corruption $ Tradable currency $ Minimum taxes & regulation

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Technological Environment Internet Internet E-commerce E-commerce Role of Intermediaries ? Role of Intermediaries ? Responsiveness to Customer Responsiveness to Customer Information Management Information Management

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved A Business and Its Stakeholders (Figure 1.4 )

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Average Skill LevelRequired Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Source: Hudson Institute as reported in Arnold Packer, “Retooling the American Worker,” Washington Post Average Skill Level: 3.6 2% 58% 40%

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Current Skill Level Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Average Skill Level: % 70.5% 6.6% 16.1%

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved The 21 st Century Workforce Source: Workforce Magazine, Jan. 1998

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Changing Intermediaries

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Internet Impact Communications Communications Access Access No Borders No Borders

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved E-commerce Explosion Transaction costs Transaction costs Size of purchase per transaction Size of purchase per transaction Integration Integration Flexibility Flexibility Catalog size Catalog size Customer Interaction Customer Interaction

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Competitive Environment Customer Service Customer Service Customer Demands Customer Demands Speed Speed Community/Stakeholder Needs Community/Stakeholder Needs Natural/Ecological Concern Natural/Ecological Concern

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Social Environment Diversity/Multicultural Diversity/Multicultural Aging/Graying of America Aging/Graying of America Two Income Families Two Income Families Single Parent Families Single Parent Families

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved U.S. Population Shifts Source: Census Bureau

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Global Environment Quality Quality Productivity Productivity Changes Changes

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Dealing With A Multicultural Workforce  Show Respect for Culture/Value of Others  Avoid Stereotyping  Include All Workers in Acculturalization  Be Empathetic But Be Yourself  Avoid Imposing Your Culture/Values on Others  Show Respect for Culture/Value of Others  Avoid Stereotyping  Include All Workers in Acculturalization  Be Empathetic But Be Yourself  Avoid Imposing Your Culture/Values on Others

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved World Population Milestones Source:USA Today

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Evolution of American Business Agricultural/Manufacturing Agricultural/Manufacturing Service Industries Service Industries Future??? Future???