1. NICKELS M C HUGH M C HUGH © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved.

2. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-2 Chapter One Meeting the Challenge of Today’s Dynamic Business Environment

3. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-3 What Is Business? Activity seeking profit Activity seeking profit Provides goods/services Provides goods/services Satisfy standard of living- quality of life Satisfy standard of living- quality of life Nonprofit organizations Nonprofit organizations

4. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-4 Objectives of Business Survival Growth Social Responsibility Profit

5. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-5 Business Environment (Figure 1.2)

6. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-6 Entrepreneurship vs. Employment Opportunities For Entrepreneurs Opportunities For Entrepreneurs Matching Risk With Profit Matching Risk With Profit Revenue - Expense = Profit(Loss) Revenue - Expense = Profit(Loss) Risk Risk

7. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-7 Factors of Production Land Labor Capital Entrepreneurship Knowledge

8. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-8 Government Affects Business By Being:  A Customer  An Overseer and Regulator  A Tax Collector

9. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-9 Environments of Business Economic Economic Technological Technological Social Social Competitive Competitive Global Global

10. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-10 Economic Environment $ Freedom of ownership $ Contract laws $ Elimination of corruption $ Tradable currency $ Minimum taxes & regulation

11. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-11 Technological Environment Internet Internet E-commerce E-commerce Role of Intermediaries ? Role of Intermediaries ? Responsiveness to Customer Responsiveness to Customer Information Management Information Management

12. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-12 A Business and Its Stakeholders (Figure 1.4 )

13. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-13 Average Skill LevelRequired 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%

14. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-14 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%

15. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-15 The 21 st Century Workforce Source: Workforce Magazine, Jan. 1998

16. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-16 Changing Intermediaries

17. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-17 Internet Impact Communications Communications Access Access No Borders No Borders

18. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-18 E-commerce Explosion Transaction costs Transaction costs Size of purchase per transaction Size of purchase per transaction Integration Integration Flexibility Flexibility Catalog size Catalog size Customer Interaction Customer Interaction

19. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-19 Competitive Environment Customer Service Customer Service Customer Demands Customer Demands Speed Speed Community/Stakeholder Needs Community/Stakeholder Needs Natural/Ecological Concern Natural/Ecological Concern

20. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-20 Social Environment Diversity/Multicultural Diversity/Multicultural Aging/Graying of America Aging/Graying of America Two Income Families Two Income Families Single Parent Families Single Parent Families

21. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-21 U.S. Population Shifts Source: Census Bureau

22. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-22 Global Environment Quality Quality Productivity Productivity Changes Changes

23. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-23 Dealing With A Multicultural Workforce  Show Respect for Culture/Value of Others  Avoid Stereotyping  Include All Workers in Acculturalization  Be Empathetic But Be Yourself  Avoid Imposing Your Culture/Values on Others  Show Respect for Culture/Value of Others  Avoid Stereotyping  Include All Workers in Acculturalization  Be Empathetic But Be Yourself  Avoid Imposing Your Culture/Values on Others

24. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-24 World Population Milestones Source:USA Today

25. McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 1-25 Evolution of American Business Agricultural/Manufacturing Agricultural/Manufacturing Service Industries Service Industries Future??? Future???