This document provides an overview of key concepts in business, including: 1) It defines business and identifies the four factors of production. 2) It describes the private enterprise system and entrepreneurship. 3) It outlines six eras of business history and how relationship management influences contemporary business.

1. Chapter 1
The Changing Face
of Business

2. Learning Goals
1 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
3 Describe the private enterprise system, in the 21st century.
including basic rights and
entrepreneurship. 7 Outline the characteristics that make
a company admired by the business
4 Identify the six eras of business, and community.
explain how the relationship era—
including alliances, technology, and
environmental concerns—influences
contemporary business.

3. W is Business?
hat
s Profit-seeking activities and enterprises provide
goods and services necessary to an economic
system.
s Profit-seeking is the reward for business people
who take the risk involved to offer goods and
services to customers.
s See Fortune 500 for a list of major U.S.
companies.

4. Factors of Production
s Natural Resources
s Capital
s Human Resources
s Entrepreneurship
s Occupational Outlook Handbook

5. The Private Enterprise System
s Capitalism
s Adam Smith is the father of capitalism.
s “Invisible Hand”
s Economic system determines business
ownership, profits, and resources
s Rewards firms for their ability to serve the needs
of consumers
s Minimized government intervention
s Competition is the battle among businesses for
consumer acceptance.

6. Basic Rights in a Private Enterprise
System

7. Entrepreneurship
An Entrepreneur:
Entrepreneurial thinking is
s Is a risk-taker
s Takes financial, personal, important within large firms.
social, and career risks
s Sees a potentially profitable
opportunity
s Devises a plan to achieve
success in the marketplace
and earn those profits
s Fuels the U.S. economy
s Provides innovation

8. Six Eras in the History of U.S. Business

9. Managing Relationships through
Connections
s Relationship Management
s Activities to build and maintain mutually
beneficial ties with customers and other parties
s Relationship management depends
on technology.

10. Strategic Alliances and Partnerships
s A partnership is an affiliation of two or
more companies that help each other
achieve common goals.
s A strategic alliance is a partnership
formed to create a competitive advantage
for both parties (see Amazon).

11. Today’s Business Workforce
s Dedicated workers who can foster strong
ties with customers
s Capable of high-quality production
s Able to compete in global markets
s Technically savvy

12. Changes in the W orkforce:
Aging Population
s By 2030, the number of U.S. workers 65 or
older will reach 72 million.
s Many baby boomers are hitting the peak of
their careers, while Generations X and Y are
launching their careers.
s Technology has intensified the hiring
challenge by requiring workers to have ever
more advanced skills.
s U.S. Census Bureau

13. Changes in the W orkforce:
Shrinking Labor Pool/Diversity
s Economists predict the U.S. labor pool could
soon fall short by as many as 10 million
people.
s The two fastest-growing ethnic populations in
the United States are Hispanics and people of
Asian origin.
s Employee teams with individuals of different
genders, ethnic backgrounds, cultures,
religions, ages, and physical and mental
abilities are more effective.

14. Changes in the Workforce:
Outsourcing
s Outsourcing is using outside vendors to
produce goods or fulfill services and functions
that were previously handled in-house or in-
country.
s Offshoring is the relocation of business
processes to lower-cost locations overseas.

15. Changes in the W orkforce:
Innovation through Collaboration
s Younger workers are looking to something
other than work-comes-first
s Telecommuting and job-sharing
s Part-time and temporary workers are growing
s Collaboration is replacing working alone
s Value risk-taking and innovation

16. The 21st-Century Manager
s Critical-thinking
s Creativity
s Ability to lead change
s Vision

17. Critical Thinking and Creativity
s Critical thinking is the ability to analyze and
assess information to pinpoint problems or
opportunities.
s Creativity is the capacity to develop novel
solutions to perceived organizational
problems.

18. Ability to Lead Change
s Guide employees and organizations through
changes
s Managers must be comfortable with tough
decisions.
s Factors that require organizational change
can come from external and internal sources.

19. W Makes a Company Admired?
hat
s Solid profits
s Stable growth
s Safe and challenging work environment
s High-quality goods and services
s Business ethics and social responsibility
s Fortune’s list of Most Admired Companies

20. The Future of Business
s New Technologies
s Population Shifts
s Emerging nations
s Shrinking Global Barriers
s Trade, communication, transportation