1. Developing a Business Mindset
Chapter 1
Chapter 1: Developing a Business Mindset
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2. Chapter 1 Objectives After studying this chapter, you will be able to:
Explain the concept of adding value in a business and identify the major types of businesses.
List three steps you can take to help you make the leap from consumer to business professional.
Discuss the five major environments in which every business operates.
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3. Chapter 1 Objectives Cont.
Explain the purpose of the six major functional areas in a business enterprise.
Summarize seven of the most important business professions.
Identify seven components of professionalism.
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4. What is a business?
Any profit-seeking organization that provides goods and services designed to satisfy customers’ needs
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5. Adding Value to Satisfy Customers
Revenue: Money a company brings in through the sale of goods and services.
Business model: A concise description of how a business intends to generate revenue.
Profit: Money left over after all the costs involved in doing business have been deducted from revenue.
Competitive advantage: Some aspect of a product or company that makes it more appealing to its target customers.
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6. Not-for-profit Organizations
Organizations that provide goods and services without having a profit motive; also called nonprofit organizations
Examples include museums and charities.
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7. Goods Producing Business
Types of Businesses
Goods Producing Business
Service Business
Labor Intensive
Companies that create value by performing activities that deliver some benefit to customers
Capital Intensive
Companies that create value by making “things,” most of which are tangible
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8. Risk and Reward

9. Risk and Reward

10. Barrier to Entry
Any resource or capability a company must have before it can start competing in a given market
Some of the Barrier to Entry
The capital needed to compete
Government testing and approval
Tightly controlled markets
Strict licensing procedures
Limited supplies of raw materials
The need for highly skilled employees

11. The Business Mindset
Business mindset: A view of business that considers the myriad decisions that must be made and the many problems that must be overcome before companies can deliver the products that satisfy customer needs
Making the Leap from Buyer to Seller
Develop a business mindset.
Appreciate the role of business in society.
Use this course to jumpstart your career.
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12. The Business Mindset

13. Positive and Negative Effects of Business

14. Using This Course to Jump-start Your Career
Develop a fundamental business vocabulary
Introduce to a variety of jobs in business fields (accounting, economics, human resources, management, finance, and marketing)

15. The Multiple Environments of Business

16. Recognizing the Multiple Environments of Business
Social environment
Trends and forces in society at large
Stakeholders
Internal and external groups affected by a company’s decisions and activities
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17. Recognizing the Multiple Environments of Business
Technological environment
Forces resulting from the practical application of science to innovations, products, and processes
Disruptive technologies
Those that fundamentally change the nature of an industry
Can be powerful enough to create or destroy entire companies.

18. Recognizing the Multiple Environments of Business
Economic environment
The conditions and forces that affect the cost and availability of goods, services, and labor and thereby shape the behavior of buyers and sellers
Legal and regulatory environment
Laws and regulations at local, state, national, and even international levels

19. Recognizing the Multiple Environments of Business
Market environment
A company’s target customers, the buying influences that shape the behavior of those customers, and competitors that market similar products to those customers

20. Major Functional Areas in a Business Enterprise

21. Major Functional Areas in a Business Enterprise
Research and development (R&D)
Functional area responsible for conceiving and designing new products
Information technology (IT)
Systems that promote communication and information usage through the company or that allow companies to offer new services to their customers
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22. Major Functional Areas in a Business Enterprise
Manufacturing, production, or operations
An area where the company makes whatever it makes (for goods-producing businesses) or does whatever it does (for service businesses)
Purchasing, logistics, facilities management

23. Major Functional Areas in a Business Enterprise
Marketing
Charged with identifying opportunities in the marketplace
Working with R&D to develop the products to address those opportunities
Creating branding and advertising strategies to communicate with potential customers, and setting prices

24. Major Functional Areas in a Business Enterprise
Finance and accounting
Responsible for virtually every aspect of a firm’s finances
Ensuring that the company has the funds it needs to operate
Monitoring and controlling how those funds are spent
Drafting reports for company management and outside audiences such as investors and government regulators

25. Major Functional Areas in a Business Enterprise
Human resources (HR)
Responsible for recruiting, hiring, developing, and supporting employees
Business Services
Exist to help companies with specific needs in law, banking, real estate, and other areas

26. Exploring Careers in Business
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27. Exploring Careers in Business
Operation manager manages the people and processes involved in creating goods and services. Human resource specialist plans and directs human resource activities including recruiting, training and development, compensation and benefits, employee and labor relations, and health and safety.

28. Exploring Careers in Business
Information technology manager designs, implements, and maintains systems that help deliver the right information at the right time to the right people in the organization. Marketing specialist works in branding strategy, electronic commerce, advertising, public relations, creative communication, or interpersonal relations. Sales professional is responsible for building relationships with customers and helping them make purchase decisions.

29. Exploring Careers in Business
Accountant collects, analyzes, and reports on financial matters—such as analyzing budgets, assessing the manufacturing costs of new products, and preparing state and federal tax returns. They also perform audits to verify financial reports or find ways to lower costs.
Financial manager plans for the company’s financial needs, invests funds, and raises capital.

30. Elements of Professionalism

31. Being a Team Player
Professionals know that they are contributors to a larger cause
Great team players know how to make those around them more effective
Being a team player also means showing loyalty to your organization and protecting your employer’s reputation

32. Communicating Effectively
Listen actively
Provide practical information
Give facts rather than vague impressions
Don’t present opinions as facts
Present information in a concise and efficient manner
Clarify expectations and responsibilities
Offer compelling, persuasive arguments, and recommendations

33. Maintaining a Confident, Positive Outlook
Successful people are optimistic
Successful people buckle-down and get the job done despite obstacles
Energy, either positive or negative, is contagious
One negative personality can make an office miserable

34. Applying What You’ve Learned
Explain the concept of adding value in a business and identify the major types of businesses
List three steps you can take to help make the leap from consumer to business professional
Discuss the five major environments in which every business operates
Explain the purpose of the six major functional areas in a business enterprise
Summarize seven of the most important business professions
Identify seven components of professionalism

35. Input-transformation-output Relationships for Typical Systems
Inputs
Transformation Components
Transformation Function
Typical Desired Output
Hospital
Patients, medical supplies
MDs, nurses, equipment
Health care
Healthy individuals
Restaurant
Hungry customers, food
Chef, waitress, environment
Well-prepared & well-served food
Satisfied customers
Automobile Factory
Sheet steel, engine parts
Tools, equipment, workers
Fabrication & assembly of cars
High-quality cars
College or University
High School graduates, books
Teachers, classrooms
Impart knowledge & skills
Educated individuals
Department Store
Shoppers, stock of goods
Displays, sales clerks
Attract customers, promote products, fill orders
Sales to satisfied customers