Better Business. Mary Anne Poatsy Kendall Martin PEARSON EDUCATIONAL INTERNATIONAL

Transcription

1 Better Business Mary Anne Poatsy Kendall Martin PEARSON EDUCATIONAL INTERNATIONAL

2 ^Contents Visual Walk-Through xx Prologue P-l PART 1 Looking at the Business Environment 2 Economics and Banking Economics Basics Economics Defined 31 Different Types of Economic Systems 32 Business and Economics "fl Business Basics 2 The Business Landscape 3-5 Benefits of Businesses 3 Goods and Services 4 The Factors of Production 5 Common Business Challenges and Opportunities 6-14 Competition 6 BizChaf: Apple: Taking a Bite Out of Microsoft? 7 Social Environment 8 Globalization 10 Technological Changes 11 Types of Businesses Local and Regional Businesses 15 National Businesses 16 Multinational (International) Businesses 17 TOP 10: Forbes'Top 10 Small National Companies of Types of Business Ownership Sole Proprietorship 19 Partnership 20 Corporation 20 ON TARGET: Nantucket Nectars: Tom and Tom Partnership 20 Limited Liability Company 21 The Players in Business Ownership 21 Taking Business Personally Chapter Summary 24 Key Terms 25 Self-Test Team Time 28 Ethics and Corporate Social Responsibility 29 Web Exercises 29 Determining Price: Supply and Demand Supply 36 Demand 37 Factors That Determine Price 37 Factors That Shift Supply 38 Factors That Affect Demand 39 ON TAKGET: Nintendo Wii 41 Degrees of Competition Monopoly 42 Oligopoly 43 Monopolistic Competition 43 Perfect Competition 44 Economic Indicators The Gross Domestic Product 45 TOP 10: Countries by GDP, Consumer and Producer Price Indexes 46 BizChat: How Much Money Do You Need to Get By? 47 The Unemployment Rate 48 Productivity 49 TOP 5: Countries by Productivity, Government and the Economy Economic Policies 50 Fiscal Policy 51 Monetary Policy 51 Open Market Operations 53 The Discount Rate 54 Reserve Requirements 54 Chapter Summary 56 Key Terms 57 Self-Test Team Time 60 Ethics and Corporate Social Responsibility 61 Web Exercises 61

3 VI CONTENTS Ethics in Business 62 ~ Ethics: The Basics Ethics Defined 63 Systems of Ethical Conduct 63 Personal Ethics 64 BizChaf: Can Living Ethically Make You Happy? 66 Personal Ethics Meets Business Ethics You as a Person and as an Employee 67 Identifying a Company's Ethics 69 Corporate Social Responsibility The Five Pillars of CSR 7l' The Conflict of CSR in the Business Environment 73 The Benefits of CSR 74 Measuring CSR 74 TOP 10: Fortune's Most Admired Companies, The Challenges of CSR 75 The Effects of CSR on Society 76 The Effects of Individuals on CSR 77 Dangers of a Weak Ethical Focus Legal Regulations and Legal Compliance 79 Recovering from Weak Ethical Conduct 80 Business Opportunities Created by Ethical Needs Creating New Markets with an Ethical Focus 82 Businesses Going Green 83 TOP 10: "Greenest" Companies in the World 83 How Businesses Develop an Ethical Environment Ethical Focus from the Start 85 ONI TARGET: Playing the Ethics Game 86 Ethical Focus Every Day 87 Chapter Summary 88 Key Terms 89 Self-Test Team Time 92 Ethics and Corporate Social Responsibility 93 Web Exercises 93 Reasons for the Rise in Globalization 98 Global Business Trends 99 TOP 10: Multinational Corporations in the World in International Trade Comparative Advantage 100 National Competitiveness 101 The Benefits and Costs of International Trade 102 Trade Barriers and Protectionism Free Trade 103 Types of Trade Barriers 103 Protectionist Trade Barriers: Winners and Losers 104 International Organizations Promoting Free Trade 106 Regional Free Trade Agreements 107 Conducting Business Internationally Three Strategies of International Business 110 Entering Foreign Markets 111 International Business: Economic Factors and Challenges The Role of Exchange Rates 115 BizChaf: Which Is Better A Strong Dollar or a Weak Dollar? 116 The Impact of a Changing Exchange Rate on a Nation 117 Other Economic Challenges to Conducting International Business 118 International Business: Sociocultural, Political, Legal, and Ethical Challenges Sociocultural Challenges 119 OFF THE MARK: International Business Blunders 120 Political Challenges 121 Legal Challenges 122 Ethical Challenges 123 Chapter Summary Key Terms 125 Self-Test Team Time 128 ( Ethics and Corporate Social Responsibility 129 Web Exercises 129 CHAPTTIiR 4 Business in a Global Economy 94 International Business: What's It All About? Globalization 96 mini E-Commerce 1 Special Issues in 130

4 VII PART 2 Starting and Structuring a Business 132 Small Business and the Entrepreneur 132 Entrepreneurs and the American Dream The Traits of Successful Entrepreneurs 133 Types of Entrepreneurs 136 What It Takes to Be an Entrepreneur 136 ON TARGET: Facebook 137 Small Business: The Mainstream of the American Economy Small Business and the Economy 138 Small Business and the Workforce 140 The Impact of Technology on Small Businesses 141 Reasons for Starting a Small Business 141 OFF THE MARK: ismell 141 Small Business Structures 142 TOP 10: Places to Live and Launch a Small Business, Buying Franchises and Existing Businesses Franchising Basics 143 Pros and Cons of Franchising 144 Franchising Considerations 145 Buying an Existing Business 146 BizChat: What's in a Name? 148 The Risks of Small Businesses and Where to Get Help Why So Many Small Businesses Fail 149 Getting Help 152 Financing Considerations Cash and Credit 154 Bank and Other Loans 154 Venture Capital and Other Forms of Financing 155 f Chapter Summary 156 Key Terms 157 Self-Test Team Time 160 Ethics and Corporate Social Responsibility 161 Web Exercises 161 <s> Forms of Business Ownership 162 Sole Proprietorships Starting a Sole Proprietorship 164 Advantages and Disadvantages 164 Partnerships Advantages and Disadvantages 166 BizChat: How Do You Find the Right Business Partner? 167 Elements of a Partnership Agreement 167 Types of Partnerships 169 Corporations Advantages of Incorporation 171 Structure of a Corporation 173 TOP 10: U.S. Public Corporations by Profit in Disadvantages of Incorporation 174 S Corporation 175 Limited-Liability Company 176 Alternative Business Arrangements Not-for-Profit Corporations 180 Cooperatives 181 Business Combinations and Corporate Restructuring Mergers and Acquisitions 182 ON TARGET: BP Buys Amoco 184 Chapter Summary Key Terms 187 Self-Test Team Time 190 Ethics and Corporate Social Responsibility 191 Web Exercises 191 mini IMlAPTli 2 Constructing an Effective Business Plan 192

5 VIII CONTENTS PART 3 Managing a Business and Employees Business Management and Organization 194 The Foundations of Management Business Management 195 The Skills of Successful Managers 195 The Functions of Management: Planning, Strategic Management, and Organizing Planning and Strategic Management 199 Organizing 204 The Functions of Management: Leading and Controlling Leading 208 TOP 10: Companies for Cultivating Leadership Skills, BizChaf: Do Successful Managers Need to Be Effective? 210 Controlling 212 ON TAUGHT: Sausage Solution 213 Chapter Summary Key Terms 217 Self-Test Team Time 220 Ethics and Corporate Social Responsibility 221 Web Exercises 221 Motivation, Leadership, and Teamwork 222 Motivation: The Basics Personal Motivation 223 Motivation in the Workplace 224 Theories of Motivation 225 Motivation: Business Applications Applying Motivational Theories 227 k Evolution of Motivational Theories in Business 230 TOP 10: Fortune's Top 10 Companies to Work For, Leadership Leadership in Business 232 Personality Traits 234 BizChat: Do You Have to Be Tall to Be a Leader? 236 Teamwork The Advantages of Teams in the Workplace 237 OFF THE MARK: Barry Bonds, Team Player: A Miss! 239 Best Practices for Teams 240 Your Role on a Team 242 Chapter Summary Key Terms 245 Self-Test Team Time 248 Ethics and Corporate Social Responsibility 249 Web Exercises 249 f Human Resource Management 250 Human Resource Management Manpower Planning and Recruiting 251 BizChot: What Is Recruiting 2.0? 254 Hiring 255 TOP 10: Fortune's Top 10 Most Diverse Companies to Work For 256 Training and Evaluating Employees Training Methods and Requirements 257 Performance Appraisals and Alternatives 260 Compensating, Scheduling, Promoting, and Terminating Employees Compensation Strategies 262 Benefits 263 Alternative Scheduling Arrangements 264 Temporary and Contingent Workers 265 Promotions and Transfers 266 Terminating Employees 267 Managing Workplace Diversity Managing Workforce Diversity 268 Impact of Diversity 269 OFF THE MARK: One Diversity Training Does Not Fit All 270 Labor and Union Issues Organized Labor 271 Collective Bargaining 272 The State of Labor Unions 273 Chapter Summary Key Terms 275 Self-Test Team Time 278 Ethics and Corporate Social Responsibility 279 Web Exercises 279

6 IX Business Technology 280 Information Technology Basics IT Professionals and the IT Organization 281 TOP 10: Questions to Ask Before Adopting a New Piece of Technology 282 Information Systems 283 Computer Systems in Business Hardware 286 Software 288 Networks 290 The Benefits and Challenges of Technology IT Benefits and Challenges for Employees 292 OFF THE MARK: Hewlett-Packard Spying Scandal 293 IT Benefits and Challenges for Management 294 BizChat: How a Simple Mistake Can Lead to a Major Data Breach 294 The Global Impact of Business Technology Off-shoring 296 The International Business Environment 297 Technology Creates a Global Village 299 Chapter Summary Key Terms 301 Self-Test Team Time 304 Ethics and Corporate Social Responsibility 305 Web Exercises 305 1"fl Production and Operations Management 306 The Production Process and Technological Influences The Production Process 307 TOP 10: Countries with the Largest Car Production, Technological Influences on the Production ^Process 310 BizChat: Technology: Too Much of a Good Thing? 311 Facility Location Transportation Factors 313 Human Factors 315 Physical Factors 317 Production Management Determining Facility Layout 318 Working with Suppliers 319 Maintaining Inventory Control 321 Controlling the Production Process 322 Quality Control Product Inspection 324 ISO Standards 325 ON TAKGIT: Six Sigma Takes Organizations to the Top 325 PERT and Gantt Charts 326 Chapter Summary 328 Key Terms 329 Self-Test Team Time 332 Ethics and Corporate Social Responsibility 333 Web Exercises 333 mini CMPTm 3 Business Communications PART 4 Principles of Marketing 336 H2 Marketing and Consumer Behavior 336 Marketing Fundamentals The Evolution of Marketing 337 Nontraditional Marketing 340 How Marketing Benefits Stakeholders 340 Criticisms of Marketing 342 Marketing Tactics Marketing Strategy: The 4 Ps of Marketing 343 BizChat: Is There a Fifth P? 344 The Marketing Process 346 The Marketing Environment The Competitive Environment 348 The Economic Environment 349 The Technological Environment 349 OFF THE MARK: Would You Buy Dog Food Online? The Tale of Pets.com 350 The Sociocultural Environment 350

7 The Political, Legal, and Regulatory Environments 350 TOP 10: Corporate Contributors to Political Parties 351 Marketing Research and Planning The Marketing Research Process 352 The Marketing Plan 353 Target Markets 355 Consumer Behavior Consumer Markets 358 Business-to-Business (B2B) Markets 360 Chapter Summary Key Terms 363 Self-Test Team Time 366 Ethics and Corporate Social Responsibility 367 Web Exercises 367 CHAPTER "03 Product Development and Pricing Strategies 368. Developing Goods and Services The Total Product Offer 369 Product Differentiation 370 Product Lines and the Product Mix 371 Consumer and Business-to-Business Products 372 Branding Branding Benefits 375 Brand Loyalty and Brand Equity 376 Branding Strategies 377 TOP 10: Characteristics of a Good Brand Name 377 iizchat: Who's Behind Those Catchy Slogans? 378 The Packaging 379 ON TAKGIT AMD OFF THE MARK: Q-tips Brand Cotton Swabs 380 The Importance of Labels 381 New Product Development and the Marketing Mix New Product Development 382 Product Life Cycle 383 Pricing Goods and Services Product Pricing and Pricing Objectives 386 Pricing Strategies 387 Adjusting Prices and Price Perceptions 390 Chapter Summary Key Terms 393 Self-Test Team Time 396 Ethics and Corporate Social Responsibility 397 Web Exercises 397 Distribution Promotion and 398 Promotion and the Promotional Mix Promotion 399 Integrated Marketing Communication 401 Promotional Techniques: Advertising and Public Relations Advertising 402 Types of Advertising 403 ON TARGET: Dove Ads Break the Model Mold 404 Types of Advertising Media 404 Advertising Trends 406 BizChat: Brand Name Movie Fame 407 Public Relations 407 Promotional Techniques: Personal Selling and Sales Promotion Personal Selling 410 Sales Promotion 413 Advantages and Disadvantages of the Promotional Mix 416 Distribution: The Basics Marketing Intermediaries and Distribution Channels 417 Types of Distribution Channels 418 Methods of Distribution Wholesaling 420 Agents/Brokers 422 Retailing 422 Physical Distribution 425 Warehousing and Inventory Control 426 Benefits and Costs of Transportation Modes 426 Chapter Summary Key Terms 429 Self-Test Team Time 432 Ethics and Corporate Social Responsibility 433 Web Exercises 433

8 XI mini t Finding a Job PART 5 Principles of Finance 436 Hi Financing and Tracking Business Operations 436 Financial Management The Financial Manager 437 Planning for Financial Needs 438 Addressing the Budget 440 Financial Needs Financing Short-Term Business Needs 442 Financing Long-Term Business Needs 444 Accounting Functions Accounting Fundamentals 447 OFF THE MARK: How's This for an Accounting Goof? 448 Types of Accounting 448 Accounting Standards and Processes 450 BizChat: Fraudulent Bigwigs Face Hard Time 450 Financial Statements The Balance Sheet 453 Income Statements 459 TOP 10: Most Profitable Companies of Statement of Cash Flows 462 Chapter Summary 464 Key Terms 465 Self-Test Team Time 468 Ethics and Corporate Social Responsibility 469 Web Exercises 469 Securities and Investments 470 Choosing between Debt and Equity Financing with Bonds (Debt) 471 Financing with Stock (Equity) 473 Primary Security Markets 474 Investment Fundamentals The Risks and Rewards of Investing 476 BizChat: I Can't Lose Money by Saving, Right? 477 Investment Risk 477 TOP 10: Most Significant U.S. Stock Market Crashes 478 Investing in Stocks Types of Stocks 480 OFF THE MARK: The Domestic Diva's Insider Trading Scandal 484 Changing Stock Prices 484 Investing in Bonds Different Types of Bonds 487 Investing in Mutual Funds and Other Opportunities Mutual Funds 490 Other Investment Opportunities 493 Chapter Summary Key Terms 495 Self-Test Team Time 498 Ethics and Corporate Social Responsibility 499 Web Exercises 499 mini Personal Finance Answers: 503 Glindex: 504 Reference Notes: 523 Sources: 535 Credits: 537