1. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-1 Chapter 11 Managing Within The Dynamic Business Environment: Taking Risks and Making Profits 1-1

2. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-2 Objectives of Business Survival Growth Social Responsibility Profit

3. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-3 Creating Wealth: Factors of Production Land Labor Capital Entrepreneurship Knowledge

4. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-4 Business Environment

5. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-5 Economic & Legal Environment $Freedom of ownership $ Contract laws $ Tradable currency $ Elimination of corruption

6. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-6 ProductivityProductivity E-CommerceE-Commerce Responsiveness to CustomerResponsiveness to Customer Technological Environment

7. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-7 Competitive Environment Customer ExpectationsCustomer Expectations SpeedSpeed Restructure/EmpowerRestructure/Empower Concern for Natural EnvironmentConcern for Natural Environment

8. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-8 Bottled Water Sales in Past 10 Years Tripled to $5.7 Billion (Women Majority of Drinkers) Who is Shopping Online? Americans38% French10% Britons25% Spaniards 4% Canadians24% Poles 3% Japanese20% Consumer Trends Source: Business & Economic Review, Jan.-Mar. 2002

9. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-9 Social Environment Diversity/MulticulturalDiversity/Multicultural Aging/Graying of AmericaAging/Graying of America Two-Income FamiliesTwo-Income Families TelecommutingTelecommuting Single-Parent FamiliesSingle-Parent Families

10. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-10 Buying Power of Diverse Groups Women $3,700 Billion Hispanic Americans 550 Billion African Americans 500 Billion Gay Men & Lesbians 450 Billion Asian Americans 254 Billion Native Americans 35 Billion Sources: National Organization on Disability Employability; U.S. Pan Asian American Chamber of Commerce; DiversityInc.com; U.S. Census Bureau

11. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. U.S. Ethnic Composition Source: Census Bureau

12. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-12 21 st Century Diversity Issues Race Gender Ethnicity DisabilityAgeLanguage Religion Sexual Orientation Source: U.S. Equal Employment Opportunity Commission

13. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. The Aging of America Source: Census Bureau

14. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-14 Women In The Workforce Source: CNNMoney, 3/3/03.

15. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-15 Wives Outearn Husbands All Couples* 30.7%All Couples* 30.7% Two-Income Couples 24.1%Two-Income Couples 24.1% *3% Involve Salaries $75,000+ *3% Involve Salaries $75,000+ Source: CNNMoney, 3/3/03.

16. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Where Americans Live Source: Census Bureau

17. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-17 Global Environment QualityQuality ProductivityProductivity War & TerrorismWar & Terrorism Global ChangesGlobal Changes

18. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-18 Disaster Costs September 11, 2001 Attacks $ 70 B Northridge, CA Earthquake 44 B Kobe, Japan Earthquake 100 B The Economic Cost of Disaster Source: Business 2.0, November 2002.

19. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-19 Evolution of American Business Agricultural/ManufacturingAgricultural/Manufacturing Service IndustriesService Industries Future???Future???

20. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-20 Rise of Information & Communication Technology Globalization Doing Business 24/7 Educated Consumers Aging Workforce Increasing Diversity Pyramid vs. Web Trends in Business Source: Keying In- Newsletter of the National Business Education Association, March 2003 Self-Directed, Empowered Employees Communication Skills Decision-Making Skills TeamworkLeadership Continual Learning

21. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-21 Skill Level Required Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Source: Hudson Institute as reported in Arnold Packer, “Retooling the American Worker,” Washington Post Average Skill Level: 3.6 2% 58% 40%

22. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-22 Current Skill Level Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Average Skill Level: 2.6 6.8% 70.5% 6.6% 16.1%