76
Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Embed Size (px)

Citation preview

Page 1: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Chapter 1 - Business and Its EnvironmentBusiness Management Class- Mr. SherpinskyCouncil Rock School District

Page 2: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Business Production Marketing Finance Industrial businesses Commercial

businesses Service businesses Industry

Page 3: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

The Nature of Business

Page 4: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

An organization that produces or distributes a good or service for profit is a business.

All businesses engage in 3 Major Activities:

1. Production (Manufacturing)2. Marketing (Sales)3. Finance (Money)

Page 5: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Production: involves a company making a product or providing a service for the customer.

What do they provide? What types of companies?

Manufacturing companies

Service companies

Goods: Tangible, made and stored prior to use

Services: Intangible, labor intensive, can’t be made prior to need

Page 6: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Marketing: deals with how goods or services that are exchanged between producers and consumers. That’s everything from

purchasing the right raw materials to the actual shipping to wholesaler or retailer markets.

Page 7: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Finance – deals with all money matters related to running a business. That could include things like…

– Investments– Purchase of raw materials– Purchase of equipment to

produce– Cost analysis and

comparisonsWhat are some other things that involve money in a business?

Page 8: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Two Major Kinds of BusinessesTwo Major Kinds of Businesses INDUSTRIAL▪ Industrial firms- produce goods that are

used by other businesses or organizations to make things.

COMMERCIAL▪ Commercial firms-firms engaged in

marketing, (wholesalers and retailers), in finance, (banks and investments companies), and in providing services (medical offices, fitness centers, and hotels).

Page 9: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Businesses that produce goods.

(Tangible) (Examples): automobile,

television m, clothing and shoes Mills

Page 10: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 11: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Provide assistance to Provide assistance to supply a need to a supply a need to a customercustomer

Intangible Can NOT be produced prior to

need (Examples): doctors, lawyers, travel

agents, plumbers, government agencies, etc…

Today service firms far exceed the number of manufacturing firms.

Page 12: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Can you name some local manufacturing and service

companies?

Page 13: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Supply and DemandSupply and Demand Supply-the number of

similar products that will be offered for sale at a particular time and at a particular price.

Demand-refers to the number of similar products that will be bought at a given time at a given price

Page 14: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

How does supply and demand effect pricing?

Why is it so important to businesses?

Page 15: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

CHECKPOINT CHECKPOINT 1.11.1

CRITICAL CRITICAL THINKING 1.1THINKING 1.1

Page 16: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Service firm-provides intangible products/ assistance to satisfy specialized needs through skilled workers

Industrial firm- produce goods that are used by other businesses or organizations to make things.

Commercial firm-firms engaged in marketing, finance, and furnishing services.

Page 17: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Industry-refers to all businesses within a specific category (auto, medical, music, publishing, advertising)

Page 18: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Industry is the term often used to refer to all businesses within a category, i.e., music industry (instruments, songs, singers) publishing industry (books, magazines,

newspapers) Government industry (fire, police, state, federal,

etc.) Page 6 shows growth in employment in industries/

businesses.

Which has had the most growth?

Page 19: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Go to the BLS.gov website

Research employment growth in major industries Which service industries

are projected to have the greatest growth from 2008-2018?

Name top 4!

Page 20: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 21: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

1.2

Goals:Goals:1)Describe how innovations affect businesses2)Identify the impact global competition has had on U.S. businesses3)Discuss ways in which businesses can improve their business practices.

Page 22: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Innovation Global competition Effectiveness Efficiency Domestic goods Foreign goods Output Productivity Downsize Empowerment

Page 23: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

What is Innovation? Steve Jobs: Innovation

Page 24: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Innovation is something entirely new.

For example: Natural fibers like cotton and wool Chemical develops led to synthetic fibers

like rayon, nylon, and polyester

Can also affect business operations Computers used in design and

manufacturing Internet changed relationships,

information▪ Small versus Large has now been equalized

Page 25: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Using the Internet Find an example of

eight (8) products or services that used innovation to revolutionize what they offer…

Be ready to share Be ready to share with the class!!!with the class!!!

Page 26: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Third World Nation-countries that have few manufacturing firms and a population that is generally poor and uneducated to a large degree.

Domestic goods-products made by firms in the United States.

Foreign goods-products made by firms in other countries.

Page 27: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

What is meant by Global competition?

What is an example of a company falling behind?

The ability of profit-making organizations toCompete with other businesses in

other countries.

The United States automobile manufacturersis an example of an industry that fell behind.

How and Why?

Page 28: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

the driving force behind the major decisions madeby most large companies today. Ability of businessesfrom one country to compete with businesses fromanother country

Page 29: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

•NICs are countries whose economies have not yet reached first world status but have outpaced their developing counterparts.

•NICs are nations undergoing rapid economic growth (usually export-oriented).

•In many NICs, social upheaval can occur as primarily rural, agricultural populations migrate to the cities, where the growth of manufacturing concerns can draw many thousands of laborers.

Page 30: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

First World CountriesSecond World CountriesThird World Countries

Page 31: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Where Do Your Customers Come

From?

Page 32: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Web Quest- Research one of the major retailers you know.

(Wal-Mart, Target, or (Wal-Mart, Target, or Sears)Sears)

Answer these questions:1.What percentage of goods do

they sell come from outside the United States?

2.Name 8 countries they buy from?

3.Give examples of what types of products they buy from each country

Page 33: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

1. Effective2. Efficient

To Compete and Survive!To Compete and Survive!

What does that mean andWhat does that mean andhow does it occur?how does it occur?

Page 34: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Occurs when an organization makes the right decisions

in deciding 33 things: 1) What products or services

to offer to customers.2) How to produce the

products3) How to deliver them to the

consumers

Page 35: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Occurs when an organization produces needed goods or services Expected Quality Expected Quality ANDAND

Quickly ANDQuickly AND At a low cost, At a low cost, without wasting time without wasting time or materialsor materials

Page 36: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 37: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Which of the following actions represents effectiveness and which represents efficiency?? Survey people to see what they like in a

product ? New equipment was installed to produce

more items in less time ? A new product is produced by a robot

based on customers’ answers to 5 questions

Page 38: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Which of the following actions represents effectiveness and which represents efficiency. Survey people to see what they like in a

product (Effectiveness) New equipment was installed to produce more

items in less time (Efficiency) A new product is produced by a robot based on

customers’ answers to 5 questions (Efficiency and Effectiveness).

Page 39: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Companies MUST BE efficientExtent of efficiency is measured by output or amount produced within a given time.Productivity refers to producing largest quantity in least amount of time by using efficient methods an modern equipment.

Workers are more productive when they Workers are more productive when they areare▪ Well equipped▪ Well trained▪ Well managed

Page 40: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

10

10

8

8

10

10

12

10

12

12

10

12

16

14

16

14

10

10

10

8

10

10

10

12

15

12

15

16

16

18

18

20

15

10

20

Page 41: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Why is Quality is important to customers

Why is Quality important to retailers

TQM is a commitment to excellence Baldridge National Quality

Award (National honor given annually by federal agency)

Japan’s Quality Award Program is the Deming Award

Recipient of these prestigious awards always show increase in sales.

Page 42: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

1. Specialization 2. Technology and

Innovation3. Reorganization

Page 43: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Employees are training for specific types of jobs rather than general training Example: General mechanic or workers that

specialize in transmission repair, body repair, engine repair, etc.

Specialization builds experts in their field Improves quality and increases amount produced.

Specialization improves efficiency. Effectiveness improved by mass production,

assembly line production, up-to-date equipment…robots

Page 44: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Effectiveness can be improved though advanced technology…equipment, process, & materials. United States improves efficiency by

encouraging invention and innovative ideas from their workers.

Page 45: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Most difficult way to increase efficiency

Old way to increase efficiency in the US: downsize (layoff workers) and cut back on goods and service offered.

Rethink organizationa)Redesign the workflowb)Recognize employees c)EMPOWER the entire team showed

improvement in production, quality, morale, and profits.

Reorganizing made US competitive in global market.

Page 46: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

CHECKPOINT CHECKPOINT 1.21.2

CRITICAL CRITICAL THINKING 1.2THINKING 1.2

Page 47: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Lisa Gansky - TED January 2011

Page 48: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Consumer Reports magazine rates consumer products, including cars.

For many years, the annual car ratings listed foreign cars as superior to domestic ones.

BUT DOES QUALITY REALLY BUT DOES QUALITY REALLY MATTER?MATTER?

Page 49: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Focus attention on customers’ needs.

Provide excellent customer service.

Offer high-quality goods and services.

Page 50: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Growth and Prosperity

Page 51: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

The total market value of all goods and services produced in a country in a year.

Gross Domestic Product

Page 52: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Gross Domestic Product (GDP)

Underground economy

Entrepreneur Franchise Franchisor Franchisee Intrapreneur

Page 53: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Overall, the United States is a prosperous nation

Around the world, people admire and envy this country’s economic strength.

P. 15

What about worldwide?

Page 54: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 55: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Gross Domestic Product (GDP) – total market value of all goods produced and services provided in a country in a year.

Individual well-being -2nd measure of a nation’s wealth.

Page 56: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Small businesses are part of the “Entrepreneurship movement” Someone who starts, manages,

owns, and assumes the risk of a business…

Part-time, full-time, with little or no money

Located at home or at a business location

Page 57: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Is the Majority of business in the United States

Employers of more than half of all workers

Firms with 1 to 4 employees 3,617,764Firms with 5 to 9 employees 1,044,065Firms with 10 to 19 employees 633,141Firms with 20 to 99 employees 526,307Firms with 100 to 499 employees 90,386Firms with 500 employees or more 18,469Firms with 500 to 749 employees 6,060Firms with 750 to 999 employees 3,038Firms with 1,000 to 1,499 employees 3,044Firms with 1,500 to 1,999 employees 1,533Firms with 2,000 to 2,499 employees 904Firms with 2,500 to 4,999 employees 1,934Firms with 5,000 employees or more 1,956Firms with 5,000 to 9,999 employees 975Firms with 10,000 employees or more 981

Page 58: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Operated by one or few individuals

Few produce goods Employ fewer than 100 people Over 98% of all business Over half of US workers are

employed by businesses with fewer than 500 employees.

Owners usually highly skilled in one or more areas

Many earn less than $250,000 a year in revenue

Page 59: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

What is a franchise? Legal agreement in which an individual

purchases the right to sell a company’s product or service under the company’s name or trademark

Examples? Franchisor: the parent company

(provider)Franchisee: the distributor of

product or services

Page 60: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 61: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 62: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 63: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Positive Parent company

provides the product or service

Provides special training

Greater chance of survival

Benefit from corporate name and advertising

Negative Start up fee Must adhere to their

rules and contract Chance of fraud

Page 64: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Find Ten (10) examples of franchises in Newtown PA 18940

Report their HQ Address

Page 65: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Greatly depends on manager effectiveness

Entrepreneur assumes the risk of success or failure

3 out of 5 fails within 3 years

Economic & financial reason for failure

To customers To workers To management To competitors To investors To the public

(Touching Lives)

RISK OBLIGATIONS

Page 66: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

64%

24%

6%

4% 1% 1%

Business Failure ReasonsEconomic Causes

Finance Causes

Disaster and Fraud

Neglect Causes

Strategy Causes

Experience Causes

Economic: Economic: Industry Weakness, Low Profits, Low SalesFinance; Finance; Heavy expenses, Burdensome debtsDisaster: Disaster: Hurricanes, floods, theftNeglect?: Neglect?: conflicts, family problems, and poor work habitsStrategyStrategy: Overexpansion, difficulty collecting from customersExperience: Experience: inadequate planning and inexperience

Page 67: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Intrapreneurship versus Entrepreneurship

Company gives employee the freedom and funds to develop new products, processes, or services.

What do You Think? Employees benefits how? Employer benefits how? Consumers benefits how? Examples where used?

Page 68: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Companies have begun offering employees the opportunity to buy into the company. This is called a _____________________________(ESPO)

Employee Stock Ownership Plan

Employees buy shares of stock in the company which benefits the company $$$ and increased productivity.

Employees benefits by becoming more motivated which increases productivity.

Work hard and better.

Page 69: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Why do so many people start businesses, yet so many of the businesses

ultimately fail?

Businesses are easy to start but hard to operate and manage successfully

Page 70: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

What is the main difference What is the main difference between an entrepreneur and an between an entrepreneur and an

intrapreneur?intrapreneur?

Page 71: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

CHECKPOINT CHECKPOINT 1.31.3

CRITICAL CRITICAL THINKING 1.3THINKING 1.3

Page 72: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Underground EconomyUnderground Economy: Economic items or dollars not reported in GDP numbers. Illegal Activities Counterfeit Products Under the table employees

Estimated at 5% of the GDP Estimated at 5% of the GDP number during a bad economy number during a bad economy and as much as 20% during a and as much as 20% during a boom!boom!

Page 73: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 74: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District

Go to my faculty Webpage:Answer the Net BookMark

question on page 20 in textbook:

Complete the Crossword Puzzle

Take the Practice Test Print out Print out allall three (3) three (3)

assignments: Analysis, assignments: Analysis, Puzzle and Test and turn Puzzle and Test and turn them in for credit.them in for credit.

Page 75: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District
Page 76: Chapter 1 - Business and Its Environment Business Management Class- Mr. Sherpinsky Council Rock School District