1. Business Organization
Chapter 5
Business Organization

2. 5-1 Business in the U.S. Economy
After finishing this section you will know how to:
Describe the changing status of U.S. employment
Discuss the role of business in the U.S. economy
Describe the three major types of businesses

3. THE CHANGING U.S. JOB MARKET
The beginning of the 21st century saw many new career opportunities along with a decline in manufacturing and agriculture jobs

4. Employment Data
From 1996-to 2006 total employment grew by 14 percent
In 2007 nearly 144 million people held jobs
That number is projected to reach 165 million by 2014 increasing by almost 13 percent

5. Baby Boomers- a large number of people born between 1946 and 1964
They have dominated the labor market since they began working in the 1960s
They will continue to do so until the 2010s when they begin to retire
The average age of U.S. workers in 2020 will be over 50

6. A mini-boom of younger workers will cause the year-old age group to grow faster than the rest of the labor force
Other groups that will go through higher employment growth rates are Asian-, Hispanic-, and African-American workers

7. Currently white non-Hispanic workers make up 70 percent of the labor force
That number will drop to 66 percent by 2014
In the early 1960s, 35 percent of women were working outside the home
The number of working women doubled by 2000
by percent of all jobs will be held by women

8. Pressures on Employees
It was thought at one time that technology would allow people to work fewer hours. That hasn’t occurred.

9. Economic stress has led to downsizing the number of employees
Businesses required employees to take on new tasks and work extra hours
Some full time jobs were changed to part time
Wage rates were decreased
Many people had to find second jobs to meet economic needs

10. Not a permanent employee
Contingent workers- one who has explicit or implicit contract for long-term employment
Not a permanent employee
About 5 percent(6 million people) of the workforce
It is estimated that that number will double in 10 years
Some workers choose this because they:
can’t find other work
like the flexibility of the hours

11. Checkpoint>>
List several groups that will increase as a percentage of the total U.S. workforce in the next decade?

12. BUSINESS AND THE ECONOMY
Businesses make the goods and services you use each day.
In 2002, all businesses world wide produced more than $40 trillion of goods and services
U.S. businesses were responsible for almost 29 percent of that production

13. Size of Businesses Most U.S. businesses are quite small.
Nearly 19.5 million businesses have no employees other than the owner
About 4.5 million companies employ less than 20 people
Just over 26,000 employ people
About 107,000 large businesses employ 100 or more
890 employ more than 10,000 people

14. Roles of Business Provide employment Pay taxes
Make and distribute products and services

15. Impact on a Community When a new business opens, it
pays wages to workers
buys goods and services
money spent can lead to more jobs being created
this leads to more taxes which will go back into providing community services

16. When a large business opens in an area, other businesses will locate there to support them
Small businesses may be started to meet the needs of residents and other businesses

17. Business Activities
Large or small, simple or complex, all businesses complete the following activities:
Generating ideas
Raising capital
Employing and training personnel
Buying goods and services
Marketing goods and services
Maintaining business records

18. Generating ideas A business begins with a new idea.
A business must continue to improve and develop new ideas to remain successful
Many companies use research and development departments to discover new product, service, and operations ideas

19. Raising Capital Businesses need financial resources to operate.
Used to buy buildings, train workers, and complete day-to-day business operations

20. A large amount of capital is needed to start a business
Most comes from owners and loans from financial institutions and investors
A business continues to need money as it develops and grows
That money comes from reinvested profits, bank funding, and investors

21. Employing and Training Personnel
Businesses need human resources.
Businesses have procedures for recruiting, hiring, and training employees
New employees receive training in order to perform their jobs correctly.

22. Buying Goods and Services
Businesses use many of their purchases for their own operations, other purchases are resold.
Manufacturers of cars must buy:
steel, aluminum, and plastics
tires batteries, and airbags

23. A retailer buys an assortment of products to sell to customers.
Must also buy display equipment, computers, and cleaning supplies used to run their business

24. Marketing Goods and Services
Marketing- activities directed at providing the goods and services wanted by a business’s customers
Without marketing, even the best products would remain unsold

25. Maintaining Business Records
All businesses must have some type of record keeping system.
Owners and managers need records to track employee and sales performance to make decisions
Technology is available to make record keeping easy and accurate.

26. Checkpoint>>
What are the six basic activities completed by a business?

27. TYPES OF BUSINESSES
Producers- create the products and services used by individuals and other businesses
Responsible for using resources to make something needed by others

28. Extractors- business that takes resources from nature for direct consumption or developing other products
Examples: pumping oil, mining coal, cutting timber

29. Farmers- cultivate land and use other natural resources to grow crops and raise livestock
Manufacturers- get supplies from other producers and convert them into products
Business activities start with producers

30. Intermediaries- businesses involved in selling the goods and services of producers to consumers or other businesses
There are two common types of intermediaries: wholesalers and retailers
Wholesalers- sell to other businesses, usually in bulk orders
Retailers- sell to consumers

31. Service business- carries out activities that are consumed by its customers
Examples: doctors, lawyers, dentists, baby sitters, painters, or furniture movers
Fastest growing part of the economy
Accounts for more than 60 percent of U.S. employment

32. Checkpoint>>
How does a manufacturer differ from an extractor?

33. 5-1 ASSESSMENT