Learning Goals1 Distinguish between business and not-for- 5 Explain how today’s business profit organizations. workforce and the nature of work itself is changing.2 Identify and describe the factors of production. 6 Identify the skills and attributes managers need to lead businesses Describe the private enterprise system, in the 21st century.3 including basic rights and entrepreneurship. 7 Outline the characteristics that make a company admired by the business Identify the six eras of business, and community.4 explain how the relationship era— including alliances, technology, and environmental concerns—influences contemporary business.
What is Business?Profit-seeking activities and enterprises providegoods and services necessary to an economicsystem.Profit-seeking is the reward for business peoplewho take the risk involved to offer goods andservices to customers.See Fortune 500 for a list of major U.S.companies.
Factors of ProductionNatural ResourcesCapitalHuman ResourcesEntrepreneurshipOccupational Outlook Handbook
The Private Enterprise SystemCapitalism Adam Smith is the father of capitalism. “Invisible Hand”Economic system determines businessownership, profits, and resourcesRewards firms for their ability to serve the needsof consumersMinimized government interventionCompetition is the battle among businesses forconsumer acceptance.
EntrepreneurshipAn Entrepreneur: Entrepreneurial thinking is Is a risk-taker Takes financial, personal, important within large firms. social, and career risks Sees a potentially profitable opportunity Devises a plan to achieve success in the marketplace and earn those profits Fuels the U.S. economy Provides innovation
Managing Relationships throughConnectionsRelationship Management Activities to build and maintain mutually beneficial ties with customers and other partiesRelationship management dependson technology.
Strategic Alliances andPartnershipsA partnership is an affiliation of two ormore companies that help each otherachieve common goals.A strategic alliance is a partnershipformed to create a competitive advantagefor both parties (see Amazon).
Today’s Business WorkforceDedicated workers who can foster strongties with customersCapable of high-quality productionAble to compete in global marketsTechnically savvy
Changes in the Workforce:Aging PopulationBy 2030, the number of U.S. workers 65 orolder will reach 72 million.Many baby boomers are hitting the peak oftheir careers, while Generations X and Y arelaunching their careers.Technology has intensified the hiringchallenge by requiring workers to have evermore advanced skills.U.S. Census Bureau
Changes in the Workforce:Shrinking Labor Pool/DiversityEconomists predict the U.S. labor pool couldsoon fall short by as many as 10 millionpeople.The two fastest-growing ethnic populations inthe United States are Hispanics and people ofAsian origin.Employee teams with individuals of differentgenders, ethnic backgrounds, cultures,religions, ages, and physical and mentalabilities are more effective.
Changes in the Workforce:OutsourcingOutsourcing is using outside vendors toproduce goods or fulfill services and functionsthat were previously handled in-house or in-country.Offshoring is the relocation of businessprocesses to lower-cost locations overseas.
Changes in the Workforce:Innovation through CollaborationYounger workers are looking to somethingother than work-comes-firstTelecommuting and job-sharingPart-time and temporary workers are growingCollaboration is replacing working aloneValue risk-taking and innovation
The 21st-Century ManagerCritical-thinkingCreativityAbility to lead changeVision
Critical Thinking and CreativityCritical thinking is the ability to analyze andassess information to pinpoint problems oropportunities.Creativity is the capacity to develop novelsolutions to perceived organizationalproblems.
Ability to Lead ChangeGuide employees and organizations throughchangesManagers must be comfortable with toughdecisions.Factors that require organizational changecan come from external and internal sources.
What Makes a Company Admired?Solid profitsStable growthSafe and challenging work environmentHigh-quality goods and servicesBusiness ethics and social responsibilityFortune’s list of Most Admired Companies
The Future of BusinessNew TechnologiesPopulation Shifts Emerging nationsShrinking Global Barriers Trade, communication, transportation