1. The Dynamic Business Environment: Taking Risks and Making Profits* *
The Dynamic Business Environment: Taking Risks and Making Profits *
CHAPTER 1
Nickels McHugh McHugh * *
1-1

2. Business & Entrepreneurship
Profit
Entrepreneur
Match Risk With Profit
Revenue
Loss
Standard of Living/Quality of Life
Stakeholders
Nonprofit Organizations
A non-profit organization (NPO), also known as a non-business entity, is dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization that uses its surplus revenues to further achieve its ultimate objective, rather than distributing its income to the organization's shareholders, leaders, or members. Non-profits are tax exempt or charitable, meaning they do not pay income tax on the money that they receive for their organization. They can operate in religious, scientific, research, or educational settings.
Examples: Care Bangladesh, BRAC, Caritas etc.

3. Objectives of Business
Survival
Also available on a Transparency Acetate
See Learning Goal 1: Describe the relationship of businesses’ profit to risk assumption and discuss how businesses and nonprofit organizations add to the standard of living and quality of life for all.
Objectives of Business
This slide highlights the four key objectives of business in our free enterprise economy.
a. Net Profit is necessary for companies to grow their business.
b. Starbucks opened its first store in 1971 in Seattle, WA. In May 2006, the store count was 10,801. In 2005, Starbucks had $6.4 billion in revenues, earned $494 million in net profits and employed over 100,000 partners (employees). (Source: starbucks.com.)
c. Going into 2004, Starbucks had received 20 awards from a diverse group of organizations for its philanthropic, community service, and environmental activities. Every year Starbucks also publishes its Corporate Social Responsibility Annual Report (Source: starbucks.com)
c. To survive in a competitive business environment, companies may have to reduce their workforce and/or close plants. In first quarter of 2006, Ford reported a loss of $1.19 billion and announced that it will close 14 plants and cut 30,000 factory jobs in North America. (Source: Reuters via yahoo! News, 4/21/06.)
Social Responsibility
Profit
Growth

4. Creating Wealth: Factors of Production
Land
Labor
Capital
Entrepreneurship
Knowledge
See Learning Goal 2: Explain the importance of entrepreneurship to the wealth of an economy.
See text page: 9

5. Ethics vs. Law
Ethics: Standards of moral behavior, that is accepted by the society as right versus wrong.
Law: Rules that a particular country or community recognizes as regulating the actions by its members and may enforce penalties if broken.

6. Cont.… Ethical and Legal Behaviors
A behavior may be legal but unethical
A behavior may be illegal but ethical.
A behavior may be both legal and ethical.
A behavior may be both illegal and unethical.
Ethical and Legal Behaviors
Making lipsticks with Pig’s fat is legal but unethical.
Selling medicines without prescription is illegal but ethical.

7. Business Environment Also available on a Transparency Acetate
See Learning Goal 3: Examine how the economic environment and taxes affect businesses.
See text page: 11

8. Economic & Legal Environment
Minimum taxes and regulations
Freedom of ownership
Contract laws
Tradable currency
Elimination/minimization of corruption
See Learning Goal 3: Examine how the economic environment and taxes affect businesses.
See text pages: 11-12

9. Corrupt Countries Least Corrupt Canada Luxembourg Netherlands
Most Corrupt
Somalia
North Korea
Afghanistan
As per 2015 Report-
North Korea and Somalia (tied)
Afghanistan.
Sudan.
Also available on a Transparency Acetate
See Learning Goal 3: Examine how the economic environment and taxes affect businesses.
Corrupt Countries
Transparency International conducts and publishes the corruption studies annually.
The most corrupt countries on the list appear to be Asian countries with Bangladesh leading. The least corrupt country is Iceland.
Ask the students what impact does corruption have on business? (Businesses do not flourish and capitalism and economic independence is suppressed creating a very negative business and social environment. Most corrupt countries also tend to be the developing third world countries)
Source: Transparency International, 2005;

10. Technological Environment
Productivity
E-Commerce
Responsiveness to Customer
See Learning Goal 4: Illustrate how the technological environment has affected businesses.
See text page: 12-15

11. Competitive Environment
Customer Expectations
Restructure/Empower
Also available on a Transparency Acetate
See Learning Goal 5: Identify various ways in which businesses can meet and beat competition.
See text pages: 15-16

12. Social Environment Diversity/Multicultural Aging/Graying of America
Two-Income Families
Single-Parent Families
See Learning Goal 6: Demonstrate how the social environment has changed and tell what the reaction of the business community has been.
See text pages: 16-18

13. 21st Century Diversity Issues
Race
Age
Language
Religion
Sexual Orientation
Gender
Ethnicity
See Learning Goal 6: Demonstrate how the social environment has changed and tell what the reaction of the business community has been.
21st Century Diversity Issues
This slide acknowledges the social issues facing American Business in the 21st Century.
Gender is increasingly becoming an influence on business. It’s estimated that 80-85% of all consumer goods are influenced by women. (Source: Business Trends)
Ask the student why it’s important for business to understand these issues? (Understanding these issues can often identify opportunities that have been missed in the past due to lack of knowledge and understanding of diversity.)
Disability
Source: U.S. Equal Employment Opportunity Commission

14. Evolution of American Business
Agricultural/Manufacturing
Service Industries
Future???
See Learning Goal 8: Review how trends from the past are being repeated in the present and what such trends will mean for tomorrow’s college graduate.
See text pages: 20-21

15. Evolution of Bangladeshi Business
Bangladesh followed a socialist economy by nationalizing all industries after its independence in 1971.
It underwent a slow growth of producing experienced entrepreneurs, managers, administrators, engineers, and technicians from than.
External markets for jute had been lost because of the instability of supply and the increasing popularity of synthetic substitutes.
After 1975, Bangladeshi leaders began to turn their attention to developing new industrial capacity and rehabilitating its economy.
In the mid-1980s, there were encouraging signs of progress. Economic policies aimed at encouraging private enterprise and investment, privatizing public industries, reinstating budgetary discipline, and liberalizing the import regime were accelerated.
Many new jobs - mostly for women - have been created by the country's dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s.
Industries which have shown very strong growth since than include the pharmaceutical industry, shipbuilding industry, information technology, leather industry, steel industry, light engineering industry etc.

16. Corporate Social Responsibility
CSR is the Business’s concern for the welfare of the society.
Examples:
Grameenphone is committed to work closely with Bangladesh Government and concerned development agencies to achieve that target, with the aim to raise awareness and advocate for necessary policy reforms on HIV/AIDS through different communication channels.
To develop environment of Bangladesh Dutch-Bangla Bank t has taken tree plantation programs across the country. It also provides a lot of scholarship to underprivileged students for their education. It has given support many students for higher education. It also arranges Olympiad of Mathematics to develop students' mathematical knowledge.
Unilever limited implements many programs on public health. They already have taken initiative for free dental check up. They create consciousness among the rural people about Health by their many activities.

17. 4 Dimensions of CSR
Corporate Philanthropy: The dimensions of social responsibility that includes charitable donations. Ex. Microsoft employees have donated over $1 billion to charitable organizations since 1983.
Corporate Social Initiatives: Enhanced forms of corporate philanthropy directly related to the company’s competencies. Ex. BC Hydro has influenced many of its consumers to reduce their energy consumption through its Power Smart loyalty program.
Corporate Responsibility: The dimension of social responsibility that includes everything from hiring minority workers to making safe (FDA tested) products. Ex. Body Shop Beauty Products.
Corporate Policy: The dimensions of social responsibility that refers to the position a firm takes on social and political issues. Ex. Bayer says, ‘We are committed to integrity in business dealings – no corruption’.
BC Hydro is a Canadian Electricity Utility Company. Byer is a German multinational chemical and pharmaceutical company.