1. CHAPTER OBJECTIVES © SOUTH-WESTERN EDUCATIONAL PUBLISHING CHARACTERISTICS OF BUSINESS nExplain the general types and changing nature of businesses. nDescribe how global competition has affected the way American businesses operate. nShow how businesses have grown and improved the economic well-being of people. nDiscuss the role and nature of entrepreneurship and the opportunities, problems, and obligations of small businesses. nSummarize the value of plans that allow employees to function like entrepreneurs inside businesses. nExplain the importance of studying business principles and management. 11

2. © SOUTH-WESTERN EDUCATIONAL PUBLISHING NATURE OF BUSINESS Business — an organization that produces or distributes a good or service for profit Profit — the difference between earned income and costs

3. © SOUTH-WESTERN EDUCATIONAL PUBLISHING NATURE OF BUSINESS nBusiness activities nProduction nMarketing nFinance nTypes of businesses nIndustrial businesses nCommercial businesses nChanging nature of business

4. © SOUTH-WESTERN EDUCATIONAL PUBLISHING IMPACT OF GLOBAL COMPETITION ON BUSINESS nFocusing on the right things nAchieving effectiveness nAchieving efficiency nSpecialization nTechnology and innovation nReorganization

5. © SOUTH-WESTERN EDUCATIONAL PUBLISHING PRODUCTIVITY PER WORKER

6. © SOUTH-WESTERN EDUCATIONAL PUBLISHING BUSINESS GROWTH AND PROSPERITY nGross domestic product (GDP) nUnderground economy nIndividual well-being

7. © SOUTH-WESTERN EDUCATIONAL PUBLISHING UNITED STATES GROSS DOMESTIC PRODUCT

8. © SOUTH-WESTERN EDUCATIONAL PUBLISHING INDIVIDUAL WELL-BEING Percentage of U.S. Households Owning Selected Items

9. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ENTREPRENEURSHIP nPopularity of small business nGrowth of small business nGrowth of franchise business nRisks of ownership nObligations of ownership

10. © SOUTH-WESTERN EDUCATIONAL PUBLISHING 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