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1-11-1

McGraw-Hill/IrwinUnderstanding Business, 8e 2008 The McGraw-Hill Co!anies, Inc", #ll $ight

Nickels McHugh McHughNickels McHugh McHugh

**

1

CHA

PTER*

* *

ManagingManaging

Within TheWithin The

DynamicDynamicBusinessBusiness

EnvironmentEnvironment

Taking RisksTaking Risksan! Makingan! Making

Pro"itsPro"its

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1-2

#$%ectives o" Business

#$%ectives o" Business

&urvival&urvival

'ro(th'ro(th &ocial&ocialRes)onsi$ilityRes)onsi$ilityPro"itPro"it

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1-3

Creating WealthCreating Wealth

actors o" Pro!uctionactors o" Pro!uction

+an!+an!

+a$or+a$or

Ca)italCa)ital

Entre)reneurshi)Entre)reneurshi)

,no(le!ge,no(le!ge

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1-4

Business EnvironmentBusiness Environment

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1-5

Economic -Economic -

+egal Environment+e

gal Environment$ Minimum ta.es an! regulationsMinimum ta.es an! regulations

$ ree!om o" o(nershi)ree!om o" o(nershi)

$ Contract la(sContract la(s

$ Tra!a$le currencyTra!a$le currency

$ Elimination/minimi0ation o"Elimination/minimi0ation o"

corru)tioncorru)tion

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1-6

Corru)t CountriesCorr

u)t Countries

+east Corru)t+east Corru

)t

1212 3celan!3celan!

4242 inlan!inlan!

5252 Ne( 6ealan!Ne( 6ealan!

Most Corru)tMost Corru

)t

1212 Bangla!eshBangla!esh

4242 Cha!Cha!

5252 HaitiHaiti

Source: Transparency International, 2005; !transparency!or"

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1-#

Pro!uctivityPro!uctivity

E7CommerceE7Commerce

Res)onsivenessRes)onsivenessto Customerto Customer

Technological EnvironmentTechnological Environment

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1-

3!entity The"t3!entity The"t

Total num$er o" i!entity the"tTotal num$er o" i!entity the"t

victims in 4889 : 499;9

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1-/

3D The"t>Protective &te)s3D The"t>Protective &te)s

??ocus on the chea) an! easy (ayocus on the chea) an! easy (ayto kee) an eye on your accounts@to kee) an eye on your accounts@

ree Cre!it Re)ortsree Cre!it Re)orts

'uar! our Num$er'uar! our Num$er

&hre!&hre!

Bug CongressBug Congress To )ass ultimate )rotection A cre!itTo )ass ultimate )rotection A cre!it

"ree0e anytime you (ant one2"ree0e anytime you (ant one2

Source: oney, u"ust 2005

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1-10

Com)etitive EnvironmentCom)etitive Environment

CustomerCustomerE.)ectationsE.)ectations

Restructure/Em)o(erRestructure/Em)o(er

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1-11

2&2 Bottle! Water &ales in Past 192&2 Bottle! Water &ales in Past 19

ears 3ncrease! more than "our7"ol!ears 3ncrease! more than "our7"ol!

to 2 Billionto 2 Billion

rom #cto$er 488= to &e)tem$errom #cto$er 488= to &e)tem$er

4889; to) $ottle (ater "lavors (ere4889; to) $ottle (ater "lavors (ere

Blen!; +emon; +ime; an! A))leBlen!; +emon; +ime; an! A))le

Consumer Tren!sConsumer Tren!s

Source: usiness cono)ic eie, an!-ar! 2002; eera"e ar7etin" orporation, 8ottle%ater!or", 2004 stats;9ro%uctscan nline; %ata)onitor!co), oe)8er /, 2005

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1-12

&ocial Environment&ocial Environment

Diversity/MulticulturalDiversity/Multicultural

Aging/'raying o"Aging/'raying o"

AmericaAmerica T(o73ncome amiliesT(o73ncome amilies

&ingle7Parent amilies&ingle7Parent amilies

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1-13

2&2 Househol! &i0e2&2 Househol! &i0e

Source:

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1-14

Buying Po(er o"Buying Po(er o"

Diverse 'rou)sDiverse 'rou)s

Sources: ational r"ani=ation on +isa8ility )ploya8ility; rot&, 2005!

WomenWomen 5;F88 Billion 5;F88 Billion

A"rican AmericansA"rican Americans F

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1-15

4141ststCenturyCenturyDiversity 3ssuesDiversity 3ssues

RaceRace

'en!er'en!erEthnicityEthnicity

Disa$ilityDisa$ility

AgeAge

+anguage+anguageReligionReligion

&e.ual&e.ual

Source:

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1-16

3mmigration3mmigration

3n 4889; roughly 59 million immigrants3n 4889; roughly 59 million immigrantslive! in the 2&2 as com)are! to lesslive! in the 2&2 as com)are! to lessthan 49 million 18 years ago2than 49 million 18 years ago2

Accor!ing to a Novem$er 4889 )oll;Accor!ing to a Novem$er 4889 )oll;

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#l!er Americans Working#l!er Americans Working

Source:

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1-1

Americans +iving +ongerAmericans +iving +onger

2&2 li"e e.)ectancy rises to a2&2 li"e e.)ectancy rises to arecor! high FF2 yearsrecor! high FF2 years

The num$er o" !eaths !ro))e!The num$er o" !eaths !ro))e!

$y 98;888 in 488= "rom 4885;$y 98;888 in 488= "rom 4885;the stee)est !ecline since 15the stee)est !ecline since 15

By 4889; a$out one in eightBy 4889; a$out one in eight

Americans (ill $e

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1-1/

E.ur$sE.ur$s

'ro(th o" #uter &u$ur$s'ro(th o" #uter &u$ur$s

Northeasterners are moving south an!Northeasterners are moving south an!

(est; an! (est coast resi!ents are(est; an! (est coast resi!ents are

moving inlan!2moving inlan!2

The states that gaine! the mostThe states that gaine! the most

resi!ents lori!a; Ari0ona; Neva!aresi!ents lori!a; Ari0ona; Neva!a

The states that lost the most resi!entsThe states that lost the most resi!entsNe( ork; Cali"ornia; 3llinoisNe( ork; Cali"ornia; 3llinois

Source: u)8erlan% Ti)es-es, pril 21, 2006;

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1-20

'lo$al Environment'lo$al Environment

3nternational Com)etition an! ree Tra!e3nternational Com)etition an! ree Tra!e

3m)rovements in Trans)ortation3m)rovements in Trans)ortation

an! Communicationan! Communication

War - TerrorismWar - Terrorism

'lo$al Changes'lo$al Changes

*

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1-21

DisasterDisaster CostsCosts

Hurricane ,atrina : 4889 Gestimate 488 BHurricane ,atrina : 4889 Gestimate 488 B

,o$e; Ia)an EarthJuake 77 19 188 B,o$e; Ia)an EarthJuake 77 19 188 B

&e)tem$er 11; 4881 Attacks F8 B&e)tem$er 11; 4881 Attacks F8 B

Northri!ge; CA EarthJuake : 1= == BNorthri!ge; CA EarthJuake : 1= == B

Hurricane An!re( : 14Hurricane An!re( : 14 59 B 59 B

The EconomicThe EconomicCost o" DisasterCost o" Disaster

Source: usiness 2!0 , oe)8er 2002; S!co), Septe)8er 10, 2005!

*

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1-22

1K1K

Does 'lo$al E.)erienceDoes 'lo$al E.)erienceHel) our CareerLHel) our CareerL

48K48K

9

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1-23

Evolution o"Evolution o"American BusinessAmerican Business

Agricultural/Manu"acturingAgricultural/Manu"acturing

&ervice 3n!ustries&ervice 3n!ustries

utureLLLutureLLL

*

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1-24

Rise o" 3n"ormation -Rise o" 3n"ormation -

CommunicationCommunication

TechnologyTechnology

'lo$ali0ation'lo$ali0ation Doing Business 4=/FDoing Business 4=/F

E!ucate! ConsumersE!ucate! Consumers

Aging Work"orceAging Work"orce

3ncreasing Diversity3ncreasing Diversity

Pyrami! vs2 We$Pyrami! vs2 We$

Tren!s in BusinessTren!s in Business

Source: Aeyin" In- esletter o' t&e ational usiness %ucation ssociation, arc& 2003

&el"7Directe!;&el"7Directe!;

Em)o(ere!Em)o(ere!

Em)loyeesEm)loyees

Communication &killsCommunication &kills

Decision7Making &killsDecision7Making &kills

Team(orkTeam(ork

+ea!ershi)+ea!ershi)

Continual +earningContinual +earning