1. Business Principles and Management
Characteristics of Business
Chapter 1
Mr. Kretschmer
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2. CHARACTERISTICS OF BUSINESS
Chapter 1
10/6/2000
CHARACTERISTICS OF BUSINESS 1
Explain the general types and changing nature of businesses.
Describe how global competition has affected the way American businesses operate.
Show how businesses have grown and improved the economic well-being of people.
Discuss the role and nature of entrepreneurship and the opportunities, problems, and obligations of small businesses.
Summarize the value of plans that allow employees to function like entrepreneurs inside businesses.
Explain the importance of studying business principles and management.
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3. Characteristics of Business
What are some reasons why businesses lay off workers?
Reasons for Hiring
Vs.
Reasons for Layoffs
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4. Characteristics of Business
What does 1,000,000,000,000 represent?
= 8 Trillion Dollars = Total Value of all goods and services produced in the U.S. in a year
Businesses are out to make a profit
If a profit is not made, the business will fail.
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5. NATURE OF BUSINESS
Business — an organization that produces or distributes a good or service for profit
Profit — the difference between earned income and costs
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6. NATURE OF BUSINESS 3 Major Business activities Types of businesses
Production
Marketing
Finance
Types of businesses
Industrial businesses
Commercial businesses
Highly industrialized = U.S. Japan, China, Germany
3rd World Nations = have few manufacturing firms and a population that is poor
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7. Changing Nature of Business
Business has changed!
Do you know some of our local history?
Delaware River, Canal, Gravity Railroad
Horse, steam power, railroad (1869), car, bus, truck, airplanes, ships
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8. Obligations of Business Owners
Business Owners have several obligations:
Customers, workers, management, competitors, investors, and the public
What are some items that you own today that were not made 25 years ago?
Business innovations: Cotton and Wool
30 years ago = Apple Computer
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9. IMPACT OF GLOBAL COMPETITION ON BUSINESS
Focusing on the right things
Achieving effectiveness
Achieving efficiency
Specialization
Technology and innovation
Reorganization – Downsizing – Empowerment = Work and Quality improved
Reengineering – Changing the Workflow
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10. PRODUCTIVITY PER WORKER
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11. BUSINESS GROWTH AND PROSPERITY
Gross domestic product (GDP)
Underground economy and Joint Agreements = Hard to trace
Individual well-being = Luxury Items
Business Growth = People have a strong desire to own their own business.
Small Businesses = Very Large
Subway = Over 13,000 Strong
McDonalds and Holiday Inn = Located Globally
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12. ENTREPRENEURSHIP Popularity of small business Growth of small business
Growth of franchise business
Risks of ownership
Obligations of ownership
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13. INTRAPRENEURSHIP
Intrapreneur — an employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service
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14. BUSINESS GROWTH AND PROSPERITY
Franchises – Employs 8 million people and accounts for half of all retail sales
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15. UNITED STATES GROSS DOMESTIC PRODUCT
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16. INDIVIDUAL WELL-BEING
Percentage of U.S. Households
Owning Selected Items
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17. BUSINESS GROWTH AND PROSPERITY
Risk of Ownerships depends on managerial success
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18. Any Questions
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