1. Chapter 1 Discuss 5-8 Innovations
10/6/2000
Bellwork
Discuss 5-8 Innovations
Objectives
Turn in Class Rules
Bellwork
Review The Nature of Business
Competition Activity
Notes on the Impact of Global Competition
Review Question Answers
1. About 22 million.
2. Production, marketing, and finance.
3. General services and wholesale and retail trade.
4. Service businesses.

2. Compare & Contrast Review
Chapter 1
10/6/2000
Compare & Contrast Review
Good vs. Services
Manufacturing Firms vs. Service Firms
Supply vs. Demand
Industrial Businesses vs. Commercial Businesses
Highly Industrialized Nations vs. Thirds World Nations
Industrial vs. Industry
Good vs. Services
Goods – physical product such as clothes, shoes, tricycles, & tents
Services – intangible products that use mostly labor to satisfy customer needs
Manufacturing Firms vs. Service Firms
Manufacturing Firms – produce goods
Service Firms – provide assistance to satisfy specialized needs through skilled workers
Supply vs. Demand
Supply – the number of similar products that will be offered for sale at a particular time & a particular price
Demand – the number of similar products that will be bought at a given time at a given price
Industrial Businesses vs. Commercial Businesses
Industrial businesses – produce goods used by other businesses or organizations to make things
Commercial businesses – wholesalers, retailers, banks, investment companies and furnishers of services
Highly Industrialized Nations vs. Thirds World Nations
Highly industrialized nations
Have many resources & manufacturing firms (US, Japan, Germany)
Third world countries
Have few manufacturing firms (Peru, Chile, Nigeria, Somalia, etc.)
Industrial vs. Industry
Industrial – an organization that makes something
Industry – all businesses within a category
© SOUTH-WESTERN EDUCATIONAL PUBLISHING

3. Chapter 1
10/6/2000
GLOBAL COMPETITION
Global Competition – the ability of profit-making organizations to compete with businesses in other countries
For years, American businesses have led the way in producing new goods & services for sale around the world
America was filled with factories and workers from other countries arrived by thousands to find jobs
Leaders from foreign countries even came to America to see how our businesses were so successful
Over the last 30 years, other countries have become more industrialized and have learned how to invent & produce
American business leaders soon realized it was time for change
Global competition is the driving force behind the major decisions made by most large companies today
© SOUTH-WESTERN EDUCATIONAL PUBLISHING

4. IMPACT OF GLOBAL COMPETITION
Chapter 1
10/6/2000
IMPACT OF GLOBAL COMPETITION
Focusing on the right things
A balance between effectiveness and efficiency
Achieving effectiveness
Domestic goods vs. Foreign goods
Total Quality Management (TQM)
Achieving efficiency
Output – the quantity produced within a given time
Productivity – producing the largest quantity in the least amount of time
How we compete in a global economy:
Focus is on right things: effectiveness and efficiency.
Effectiveness – making the right decisions about what products or services to offer customers & how to produce and deliver them
Efficiency – producing needed goods or services quickly and at low cost
Achieving effectiveness – making the right decisions & making what customers want
Customers once bought only what was available b/c there was little to choose from
Because of global competition, the choices have increased
Domestic Goods – products made by firms in the US
Foreign Goods – products made by firms in other countries
Have students pair up and list items they have with them that were made in the U.S. and items that were made in other countries and what countries in which they were made.
Firms focus on gathering info from customers, studying their buying habits, testing new products, adding new features
TQM – accomplished by teamwork and continual improvement, from the bottom of the organization to the top
An award given for quality in the U.S. is the Malcolm Baldridge National Quality Award which hundreds of firms apply for and one is awarded per year.
Achieving efficiency
Efficiency is measured by output & Productivity gives it a numeric value
Notice the graph on pg. 9

5. ACHIEVING EFFICIENCY Specialization Technology and innovation
Chapter 1
10/6/2000
ACHIEVING EFFICIENCY
Specialization
Mass Production – assembly lines that produce a large amount of products quickly
Technology and innovation
Reorganization
Downsize – cutting back on goods & services and number of employees
Empowerment – letting workers decide how to perform their work & offering ideas on improvement
Specialization – with many employees in an organization, work can be more efficient with some specialization
Ex. Medical field – would you want heart surgery from a general medical doctor?
How can mass production be a form of specialization?
Each step along the assembly line requires employees to do one task well and quickly
Disadvantage – workers can become bored.
Technology & innovation
Technology – equipment, processes, and materials, etc.
Innovation – improvement or advancement that contributes to satisfying customers
How has technology & innovation improved automobiles?
Reorganization – most difficult way to achieve efficiency;
Downsizing - Typical reaction to cutting back on costs
Later many firms realized their employees were there most valuable resource
Managers decided to empower them
This improved quality and efficiency of workers, fewer managers were needed
Activity – Get 4 pairs of student volunteers.
Explain to the class that our tree drawing factory is not doing very well. We’ve struggled in sales lately and as a manager, I am going to do my best to figure out some way of our factory being more productive
They will all be drawing you as many pictures of a tree as possible (productivity), but trying to be as neat as possible while making all the products look the same (quality)
Group 1 you will tell exactly how to draw the tree, who will be drawing leaves, branches, etc. (specialization – mass production)
Group 2 you will give a set of colored pencils (technology & innovation)
Group 3 you will take away a worker to cut costs (downsizing)
Group 4 you will coach, but allow them to make the final decisions. You will try to encourage and ask for their opinions as much as possible (Empowerment)

6. Chapter 1
10/6/2000
Homework
Read p.4-21
Create two (2) questions from the concepts discussed in Chapter 1.