1. The Dynamic Business Environment
Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson

2. Learning Goals
Describe the relationship of businesses’ profit to risk assumption.
Discuss the importance of stakeholders and non- profit organizations to business activities.
Explain how entrepreneurship is critical to the wealth of an economy, and list the five factors of production that contribute to wealth.
Review the six elements that make up the business environment and explain why the business environment is important to organizations.
Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson

3. Business and Entrepreneurship
Business: an activity that seeks to provide goods and services to others while operating at a profit.
Profit: is the amount of money a business earns above and beyond what it spends on salaries and other expenses.
Entrepreneur: is a person who risks time and money to start and manage a business.
Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson

4. Risk VS Profit
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5. Stakeholders
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6. Stakeholders: Those Who Stand to Lose or Gain
Customers want value
Employees want security
Investors want returns
Suppliers want to be paid
Dealers want support
Financial institutions want returns
Surrounding communities want “equity”
Governments want compliance
Environmentalists want change
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7. Creating Economic Wealth
Five Factors of Production
Land (natural resources)
Labour (workers)
Capital (physical assets not money)
Entrepreneurship
Knowledge
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8. Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson

9. The Business Environment
The Legal and Regulatory Environment
The Economic Environment
The Technological Environment
The Competitive Environment
The Social Environment
The Global Environment
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10. Legal and Regulatory Environment
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11. Legal and Regulatory
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12. Economic Environment
Economic indicators: consumer spending, employment levels and productivity.
Income, expenditures and resources that effect the cost of running a business.
Currency fluctuations that affect imports and exports.
Government regulations and business ownership.
Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson

13. Economic Environment
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14. Technological Environment
Information, technology and productivity
Growth of E-commerce
Business-to-consumer (B2C)
Business-to-business (B2B)
Internet marketing
Databases
Identity theft
Personal Information Protection and Electronic Documents Act (PIPEDA)
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15. Technological Environment
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16. Technological Environment
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17. Technological Environment
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18. Competitive Environment
Components of competition
Competing by exceeding customer expectations
Competing by restructuring and empowerment
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19. Competitive Environment
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20. Competitive Environment
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21. Competitive Environment
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22. Social Environment Demographic changes: Aging population
Managing diversity
Two-income families
Single parents
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23. Social Environment
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24. Global Environment Importance to all other environmental influences
Growth of international competition
Increase of free trade and trade agreements
Importance of innovation
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25. Global Environment
Nickels 6e/Copyright © 2007 McGraw-Hill Ryerson