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Copyright © 2002 by Harcourt, Inc. All rights reserved.
CONTEMPORARY CONTEMPORARY BUSINESSBUSINESS
1010THTH EDITION EDITION
Text by Profs. Gene Boone & David KurtzText by Profs. Gene Boone & David KurtzMultimedia Presentation byMultimedia Presentation byProf. Milton PressleyProf. Milton PressleyThe University of New OrleansThe University of New Orleans
Copyright © 2002 by Harcourt, Inc.All rights reserved. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777.
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CHAPTER ONECHAPTER ONE
BUSINESS: BLENDING PEOPLE, BUSINESS: BLENDING PEOPLE, TECHNOLOGY AND ETHICAL TECHNOLOGY AND ETHICAL
BEHAVIORBEHAVIOR
Text by Profs. Gene Boone & David KurtzText by Profs. Gene Boone & David KurtzMultimedia Presentation byMultimedia Presentation byProf. Milton PressleyProf. Milton PressleyThe University of New OrleansThe University of New Orleans
[email protected]@uno.edu
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WHAT IS BUSINESSWHAT IS BUSINESSWHAT IS BUSINESSWHAT IS BUSINESS
• Business:Business: profit seeking activities profit seeking activities of those engaged in purchasing or of those engaged in purchasing or selling goods and services to satisfy selling goods and services to satisfy society’s needs and wantssociety’s needs and wants
• Profits: Profits: financial rewards received financial rewards received by a businessperson for taking the by a businessperson for taking the risks involved in creating and risks involved in creating and marketing want-satisfying goods marketing want-satisfying goods and servicesand services
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Not-for-Profit OrganizationsNot-for-Profit OrganizationsNot-for-Profit OrganizationsNot-for-Profit Organizations
• Not-for-profit organizations:Not-for-profit organizations: businesslike establishments that businesslike establishments that have primary objectives other than have primary objectives other than returning profits to their ownersreturning profits to their owners
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THE PRIVATE ENTERPRISE THE PRIVATE ENTERPRISE SYSTEMSYSTEMTHE PRIVATE ENTERPRISE THE PRIVATE ENTERPRISE SYSTEMSYSTEM• Private enterprise system Private enterprise system
(capitalism):(capitalism): economic economic system that rewards firms system that rewards firms based on how well they match based on how well they match and counter the offerings of and counter the offerings of competitors to serve the needs competitors to serve the needs and demands of customersand demands of customers
• Competition: Competition: battle among battle among businesses vying for consumer businesses vying for consumer acceptanceacceptance © PhotoDisc
© PhotoDisc
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Figure 1.4: Basic Rights within a Private Enterprise System
Basic Rights within the Private Basic Rights within the Private Enterprise SystemEnterprise SystemBasic Rights within the Private Basic Rights within the Private Enterprise SystemEnterprise System
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Factors of ProductionFactors of ProductionFactors of ProductionFactors of Production
• Factors of production:Factors of production: basic basic inputs into the private enterprise inputs into the private enterprise system, including natural resources, system, including natural resources, human resources, capital and human resources, capital and entrepreneurshipentrepreneurship
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Factors of ProductionFactors of ProductionFactors of ProductionFactors of Production
• Natural Resources:Natural Resources: productive productive inputs that are useful in their natural inputs that are useful in their natural statesstates
• Capital:Capital: includes technology, tools, includes technology, tools, information and physical facilitiesinformation and physical facilities
• Human Resources: Human Resources: anyone who anyone who worksworks
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Factors of ProductionFactors of ProductionFactors of ProductionFactors of Production
• Entrepreneurship:Entrepreneurship: willingness to willingness to take risks to create and operate a take risks to create and operate a businessbusiness
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MANAGING THE TECHNOLOGY MANAGING THE TECHNOLOGY REVOLUTIONREVOLUTIONMANAGING THE TECHNOLOGY MANAGING THE TECHNOLOGY REVOLUTIONREVOLUTION
• Internet: Internet: worldwide network of worldwide network of interconnected computers that, within interconnected computers that, within limits, lets anyone with access to a limits, lets anyone with access to a personal computer send and receive personal computer send and receive images and data anywhereimages and data anywhere
• World Wide Web (Web):World Wide Web (Web): interlinked interlinked collection of graphically rich information collection of graphically rich information sources within the larger Internet.sources within the larger Internet.
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Figure 1.5: Growth of the Internet Population
Insert figure when art is received
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MANAGING THE TECHNOLOGY MANAGING THE TECHNOLOGY REVOLUTIONREVOLUTIONMANAGING THE TECHNOLOGY MANAGING THE TECHNOLOGY REVOLUTIONREVOLUTION
• Intranet:Intranet: closed network system closed network system using Internet standards that allow using Internet standards that allow information sharing among information sharing among employees, divisions, and employees, divisions, and geographically diverse locationsgeographically diverse locations
• Extranets: Extranets: secure networks secure networks accessible from outside only by accessible from outside only by designated partiesdesignated parties
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SIX ERAS IN THE HISTORY OF BUSINESSSIX ERAS IN THE HISTORY OF BUSINESSSIX ERAS IN THE HISTORY OF BUSINESSSIX ERAS IN THE HISTORY OF BUSINESS
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period
MarketingEra
MarketingEra
Industrial Revolution
Industrial Revolution
Industrial Entrepreneurs
Industrial Entrepreneurs
ProductionEra
ProductionEra
• Driven by advances inDriven by advances in technology technology • Businesses form deep,Businesses form deep, direct links with customers, direct links with customers, employees, suppliers, employees, suppliers, and others and others
RelationshipEra
RelationshipEra
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FROM TRANSACTION MANAGEMENT FROM TRANSACTION MANAGEMENT TO RELATIONSHIP MANAGEMENTTO RELATIONSHIP MANAGEMENTFROM TRANSACTION MANAGEMENT FROM TRANSACTION MANAGEMENT TO RELATIONSHIP MANAGEMENTTO RELATIONSHIP MANAGEMENT
• Transaction management:Transaction management: building and promoting products in building and promoting products in hopes of covering costs and earning hopes of covering costs and earning acceptable profits acceptable profits
• Relationship management:Relationship management: collection of activities that build collection of activities that build and maintain ongoing, mutually and maintain ongoing, mutually beneficial ties with customers and beneficial ties with customers and other parties.other parties.
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Strategic Alliances and Strategic Alliances and PartnershipsPartnershipsStrategic Alliances and Strategic Alliances and PartnershipsPartnerships
• Partnership: an affiliation of two or more companies with the shared goal of assisting each other in the achievement of common goals
• Strategic alliance: partnership formed to create a competitive advantage for the businesses involved
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CREATING VALUE THROUGH QUALITY CREATING VALUE THROUGH QUALITY AND CUSTOMER SATISFACTIONAND CUSTOMER SATISFACTIONCREATING VALUE THROUGH QUALITY CREATING VALUE THROUGH QUALITY AND CUSTOMER SATISFACTIONAND CUSTOMER SATISFACTION
• Value: Value: customer’s perception customer’s perception of the balance between the of the balance between the positive traits of a good or positive traits of a good or service and its priceservice and its price
• Customer satisfaction: Customer satisfaction: the the ability of a good or service to ability of a good or service to meet or exceed buyer needs and meet or exceed buyer needs and expectationsexpectations
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Visa Attempts to Add Value by Promoting Visa Attempts to Add Value by Promoting the Fact That Unlike American Express, the Fact That Unlike American Express,
It’s Accepted “Everywhere.”It’s Accepted “Everywhere.”
VisaVisa
““The Burro”The Burro”
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COMPETING IN A GLOBAL MARKETCOMPETING IN A GLOBAL MARKETCOMPETING IN A GLOBAL MARKETCOMPETING IN A GLOBAL MARKET
Figure 1.6: Top Ten U.S. Trading Partners
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Productivity: Key to Global Productivity: Key to Global CompetitivenessCompetitivenessProductivity: Key to Global Productivity: Key to Global CompetitivenessCompetitiveness
TotalTotal Output (goods or services produced) Output (goods or services produced)ProductivityProductivity Input (human/natural resources, capital) Input (human/natural resources, capital)
=
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Figure 1.8: Nations with the Highest Gross Domestic Product
*Estimate; may overstate GDP by up to 25 percent
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DEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCEDEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCE
• Preparing for Changes in the Preparing for Changes in the WorkforceWorkforce• Aging of the PopulationAging of the Population
• Baby boomers beginning to retireBaby boomers beginning to retire• Decline in the number of available Decline in the number of available
workersworkers
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Figure 1.9: PaineWebber: Serving the Needs of an Aging WorkforceFigure 1.9: PaineWebber: Serving the Needs of an Aging Workforce
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DEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCEDEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCE
• Shrinking Labor PoolShrinking Labor Pool• Lowest unemployment rate Lowest unemployment rate
in 25 yearsin 25 years• Limited supply of skilled Limited supply of skilled
employees looking for jobsemployees looking for jobs
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DEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCEDEVELOPING AND SUSTAINING A DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEWORLD-CLASS WORKFORCE
• Increasingly Diverse WorkforceIncreasingly Diverse Workforce• By 2005, ethnic minorities will be By 2005, ethnic minorities will be
28% of the U.S. population28% of the U.S. population• By 2050, almost 50% of Americans By 2050, almost 50% of Americans
will belong to ethnic groupswill belong to ethnic groups• Diversity will allow us to compete Diversity will allow us to compete
and win locally and globallyand win locally and globally© PhotoDisc
© PhotoDisc
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Reaping the Benefits of DiversityReaping the Benefits of DiversityReaping the Benefits of DiversityReaping the Benefits of Diversity• Diverse employees contribute Diverse employees contribute
unique perspectives, skills, and unique perspectives, skills, and experiencesexperiences
• Such diversity can enrich a firm’s Such diversity can enrich a firm’s chances of successchances of success• Tasks performed more effectivelyTasks performed more effectively• Better solutions to problemsBetter solutions to problems• Can improve understanding of Can improve understanding of
customer needscustomer needs• Can improve relationships with Can improve relationships with
customer groupscustomer groups© PhotoDisc
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DEVELOPING AND SUSTAINING DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEA WORLD-CLASS WORKFORCEDEVELOPING AND SUSTAINING DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEA WORLD-CLASS WORKFORCE
• The Changing Nature of WorkThe Changing Nature of Work• Economy base has moved from Economy base has moved from
manufacturing to servicesmanufacturing to services• Telecommuters becoming more Telecommuters becoming more
commoncommon• Job flexibility for employeesJob flexibility for employees• Growth of outsourcing Growth of outsourcing
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WHY STUDY BUSINESS?WHY STUDY BUSINESS?WHY STUDY BUSINESS?WHY STUDY BUSINESS?
• Increased Mobility of WorkersIncreased Mobility of Workers• Few employees stay with one Few employees stay with one
companycompany• Many employees choose Many employees choose
nontraditional work nontraditional work arrangements such as:arrangements such as:
• Self-employmentSelf-employment• Working for temporary help Working for temporary help
agenciesagencies
• Increased challenge to retain Increased challenge to retain talented employeestalented employees
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DEVELOPING AND SUSTAINING DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEA WORLD-CLASS WORKFORCEDEVELOPING AND SUSTAINING DEVELOPING AND SUSTAINING A WORLD-CLASS WORKFORCEA WORLD-CLASS WORKFORCE
• The New Employer-Employee The New Employer-Employee PartnershipPartnership• Employees can not expect long-Employees can not expect long-
term employmentterm employment• Employers thus can not expect Employers thus can not expect
corresponding loyaltycorresponding loyalty• Employers trying to build a new Employers trying to build a new
kind of relationship: an kind of relationship: an employer-employee partnershipemployer-employee partnership
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WANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGERWANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGER
• Vision:Vision: the ability to the ability to perceive marketplace perceive marketplace needs and what an needs and what an organization must do organization must do to satisfy themto satisfy them
Importanceof Vision
Importanceof Vision
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WANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGERWANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGER
• Critical Thinking:Critical Thinking: ability to analyze and ability to analyze and assess information in assess information in order to pinpoint problems order to pinpoint problems or opportunitiesor opportunities
• Creativity: Creativity: capacity to capacity to develop novel solutions to develop novel solutions to perceived organizational perceived organizational problems – to see better problems – to see better and different ways of and different ways of doing businessdoing business
Importanceof Vision
Importanceof Vision
Critical Thinkingand Creativity
Critical Thinkingand Creativity
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WANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGERWANTED: A NEW TYPE OF WANTED: A NEW TYPE OF MANAGERMANAGER
• Must guide employees Must guide employees and organizations and organizations through the changes through the changes brought about by brought about by technology, technology, marketplace demands, marketplace demands, and global and global competitioncompetition
Importanceof Vision
Importanceof Vision
Ability toSteer Change
Ability toSteer Change
Critical Thinkingand Creativity
Critical Thinkingand Creativity
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MANAGING ETHICS AND SOCIAL MANAGING ETHICS AND SOCIAL RESPONSIBILITYRESPONSIBILITYMANAGING ETHICS AND SOCIAL MANAGING ETHICS AND SOCIAL RESPONSIBILITYRESPONSIBILITY
• Business Ethics: Business Ethics: standards of standards of conduct and moral values involving conduct and moral values involving right and wrong actions arising in right and wrong actions arising in the work environmentthe work environment
• Social Responsibility: Social Responsibility: management philosophy that management philosophy that highlights the social and economic highlights the social and economic effects of managerial decisions effects of managerial decisions
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Figure 1.2: The Figure 1.2: The Corporate Corporate Angel Network: Angel Network: A Not-for-Profit A Not-for-Profit OrganizationOrganization
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Advertisement for a Advertisement for a Not-for-Profit OrganizationNot-for-Profit Organization
WorldWorldWildlifeWildlife
FundFund
““Nothing Can Nothing Can Replace Life”Replace Life”
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African Wildlife African Wildlife FoundationFoundationA Not-for-Profit A Not-for-Profit OrganizationOrganization
African Wildlife African Wildlife FoundationFoundationA Not-for-Profit A Not-for-Profit OrganizationOrganization
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Figure 1.3: Human Figure 1.3: Human Resources: Critical Resources: Critical Factor of ProductionFactor of Production
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U.S. NavyU.S. NavyAdvertising for Advertising for Human ResourcesHuman Resources
U.S. NavyU.S. NavyAdvertising for Advertising for Human ResourcesHuman Resources
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The Entrepreneurship The Entrepreneurship AlternativeAlternativeThe Entrepreneurship The Entrepreneurship AlternativeAlternative
• Entrepreneur:Entrepreneur: risk taker in the risk taker in the private enterprise private enterprise systemsystem
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period • Before 1750Before 1750
• Colonial society Colonial society emphasized rural emphasized rural and agricultural and agricultural productionproduction
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period
Industrial Revolution
Industrial Revolution
• After 1750After 1750• Factory system mass-Factory system mass- produced items using produced items using semi-skilled workers semi-skilled workers
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period
Industrial Revolution
Industrial Revolution
Industrial Entrepreneurs
Industrial Entrepreneurs
• EntrepreneurshipEntrepreneurship increased during the increased during the late 1800s. late 1800s. • Did much to raise Did much to raise the overall standard the overall standard of living.of living.
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period
Industrial Revolution
Industrial Revolution
Industrial Entrepreneurs
Industrial Entrepreneurs
ProductionEra
ProductionEra
• Early 1900sEarly 1900s• Attention focused Attention focused on activities involved on activities involved in producing in producing manufactured goods manufactured goods
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SIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESSSIX ERAS IN THE HISTORY OF SIX ERAS IN THE HISTORY OF BUSINESSBUSINESS
Colonial Period
Colonial Period
MarketingEra
MarketingEra
Industrial Revolution
Industrial Revolution
Industrial Entrepreneurs
Industrial Entrepreneurs
ProductionEra
ProductionEra
• Post WWII Post WWII • Consumer Orientation:Consumer Orientation: marketing used as a process marketing used as a process to determine and satisfyto determine and satisfy consumer needsconsumer needs• Branding: Branding: creating an creating an identity in consumers’ minds identity in consumers’ minds
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AereoMexicoAereoMexicoThe Delta, The Delta, AereoMexico AereoMexico Airlines Alliance: Airlines Alliance: Developing Developing Relationships for Relationships for Mutually Beneficial Mutually Beneficial ReturnsReturns
AereoMexicoAereoMexicoThe Delta, The Delta, AereoMexico AereoMexico Airlines Alliance: Airlines Alliance: Developing Developing Relationships for Relationships for Mutually Beneficial Mutually Beneficial ReturnsReturns
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Freeinternet.Com: A Firm Helping toFreeinternet.Com: A Firm Helping to Provide Greater Access to the Provide Greater Access to the
Internet and WWW Internet and WWW
Freeinternet.comFreeinternet.com
““Grandma”Grandma”
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Bristol-Myers Bristol-Myers Squibb CompanySquibb CompanyAdvertising the Advertising the Value of Three of Value of Three of Its Cancer Drugs Its Cancer Drugs for Customer for Customer Lance ArmstrongLance Armstrong
Bristol-Myers Bristol-Myers Squibb CompanySquibb CompanyAdvertising the Advertising the Value of Three of Value of Three of Its Cancer Drugs Its Cancer Drugs for Customer for Customer Lance ArmstrongLance Armstrong
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Coca-ColaCoca-ColaReaping the Reaping the Benefits of Benefits of DiversityDiversity
Coca-ColaCoca-ColaReaping the Reaping the Benefits of Benefits of DiversityDiversity
Recommended Recommended WWW SiteWWW Site
Recommended Recommended WWW SiteWWW Site
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Figure 1.10: Figure 1.10: Communicating Communicating 3M’s Creativity3M’s Creativity
Figure 1.10: Figure 1.10: Communicating Communicating 3M’s Creativity3M’s Creativity
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Communicating Pfizer Communicating Pfizer Pharmaceutical’s CreativityPharmaceutical’s Creativity
PfizerPfizer
““Life is Life is Our Life’s Work”Our Life’s Work”
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Figure 1.11: Polo Figure 1.11: Polo Ralph Lauren: Doing Ralph Lauren: Doing Well by Doing GoodWell by Doing Good
Figure 1.11: Polo Figure 1.11: Polo Ralph Lauren: Doing Ralph Lauren: Doing Well by Doing GoodWell by Doing Good
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The Lorillard The Lorillard Tobacco Company Tobacco Company Displaying Social Displaying Social Responsibility Responsibility Through Its Youth Through Its Youth Smoking Prevention Smoking Prevention ProgramProgram
The Lorillard The Lorillard Tobacco Company Tobacco Company Displaying Social Displaying Social Responsibility Responsibility Through Its Youth Through Its Youth Smoking Prevention Smoking Prevention ProgramProgram
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Photo CreditsPhoto Credits
• ZEDCOR, Inc. www.arttoday.com• Micrografx Graphics Suite• PhotoDisc
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BaliBuys.comBaliBuys.comA Business A Business Engaged in Selling Engaged in Selling Goods on the Goods on the Internet to Satisfy Internet to Satisfy Society’s Needs Society’s Needs and Wants Offering and Wants Offering GoodsGoods
BaliBuys.comBaliBuys.comA Business A Business Engaged in Selling Engaged in Selling Goods on the Goods on the Internet to Satisfy Internet to Satisfy Society’s Needs Society’s Needs and Wants Offering and Wants Offering GoodsGoods
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Figure 1.1 Figure 1.1 Technology: Technology: Transforming the Transforming the Way People Way People CommunicateCommunicate
Figure 1.1 Figure 1.1 Technology: Technology: Transforming the Transforming the Way People Way People CommunicateCommunicate