CHAPTER 1 CHARACTERISTICS OF BUSINESS

Transcription

1 CHAPTER 1 CHARACTERISTICS OF BUSINESS STUDENT NAME: MOD. DATE GIVEN: DATE DUE: OBJECTIVES OF CHAPTER 1:. Explain the general types and changing nature of businesses, how global competition has affected the way American businesses operate and how businesses have grown and improved the economic well-being of people. NBEA STANDARDS: I. Management Functions: Analyze the management functions and their implementation and integration within the business environment. II. Management Theories: Analyze management theories and their application within the business environment. III. Business Organization: Analyze the organization of a business. Business Organization Needs & Wants Goods Services The operation of an organization that satisfies human needs and wants by providing goods and services for the purpose of making a profit. Defined: Defined: Needs Example: Wants Example: Defined Tangible or Intangible? Defined Tangible or Intangible? WANT & NEED QUIZ: 1. Goods and services that are necessary for living such as food, clothing, shelter, medical care are NEEDS WANTS ADVERTISING 2. Goods and services that are not necessary for living such as games, and entertainment are NEEDS WANTS ADVERTISING 3. Many times people think they need things that they in fact want due to the power of 4. A time when there are not enough goods and services to meet people's needs is 5. This is an important part of economics that helps ensure people's needs and wants are met Earned Income (SALES REVENUE). Costs (akacost of Goods Sold Gross Profit Net Profit 1

2 YOU PURCHASE 100 $5.00 PER T-SHIRT FROM HOOVER DESIGN YOU SELL YOUR T-SHIRTS AT $10.00 PER T-SHIRT YOU OWE $15.00 IN ADVERTISING; $30 IN SALARIES TO WORKERS. HOW MUCH DO YOU OWE HOOVER DESIGN? (COST OF GOODS SOLD) HOW MUCH WILL YOU MAKE FROM THE SALE OF YOUR T-SHIRTS? (EARNED INCOME or REVENUE FROM SALE OF PRODUCT) WHAT IS YOUR GROSS PROFIT? (REVENUE - COST OF GOODS SOLD) TOTAL OF YOUR EXPENSES? HAVE YOU MADE A NET PROFIT OR A NET LOSS? HOW MUCH? TWO TYPES OF BUSINESSES: 1)Industrial Produce that are used by businesses or organizations to make things. Do Industrial businesses sell directly to consumers? Examples: 2)Commercial Do Commercial businesses sell directly to consumers? Examples: Business is dynamic and changing. To stay in business, must meet. 1)Production 2)Marketing Four P S of marketing 3)Finance Three major activities of a business: Making a product or providing a service: a) firms that produce. b) firms provide specialized assistance through use of workers (aka Service firms manufacturing firms. What percent of all companies are small businesses? How goods and services are between and.,,, matters related to a business. 2

3 Changing Nature of Business 1) Business is and constantly. 2) To stay in business, must meet Five ways businesses can and have changed to stay in business during this recessions: 1) 2) 3) 4) 5) Global competition Protectionism Tariffs: Subsidies Quotas WTO MFN Effectiveness Efficiency Ability of organizations to with other businesses in other through freedom of. Global Competition - the driving force behind made by most large companies today. What do quotas prevent? TWO THINGS NECESSARY TO COMPETE: requires: 1) 2) WHICH IS EFFECTIVE---WHICH IS EFFICIENT Your new Toyota Prius that gets 50 miles to the gallon effective or efficient Your new Toyota Prius does not have the horsepower to pull your campus not effective or not efficient Your meetings are well run and you are organized. effective or efficient You meetyour quota and lead your team to define and execute a project. effective or efficient Can you be effective and not efficient? Can you be efficient and not effective? TQM ACHIEVING EFFECTIVENESS 1)Requires and 2) commitment to accomplished by,, and continual THREE PRESTIGIOUS AWARDS FOR QUALITY IMPROVEMENT 1) 2) 3

4 Output Productivity Increase efficiency Downsize- Empowerment - GDP Underground Economy Individual Well-) Being Entrepreneur Small Business 3) Everyone is responsible for the finished product. ACHIEVING EFFICIENCY or produced in. (one method of achieving efficiency) (OUTPUT/INPUT) - measurement of output (second method for achieving efficiency---aka output per hour) Four employees to change one light bulb-- efficiency or lack of efficiency a) ; b) ; c) Reorganization can be accomplished by: 1) goods and services provided. firm size & number of employees. aka: / (reorganization method) 2) letting workers how to their work, and on how to work processes. Can a company become more efficient and effective during a recession? TWO MEASURES OF A NATION S WEALTH 1) GDP stands for - total market value of all produced and provided in a country in year. that being recorded in GDP. What is the difference between GDP and GNP? GDP is measure of goods and serviced produced GNP is measure of goods and services produced by residents of country 2) condition of. What effect has the recession had on your family s well being? One who,, and a business. Success depends on and out of every businesses fail within years. WHO IS THE ENTREPRENEUR? Any business that is operated by employee or up to employees. of all businesses in U.S. classified as small businesses (aka ) generated accounts for of GDP; close within first years; mostly / businesses; earn less than in yearly revenue; over total number of workers in this country are employed by businesses with fewer than employees. Franchise legal agreement between a and to sell a product/service under conditions. Franchisor Franchisee business. Franchisee pays initial fee to franchisor of 3-9%. 4

5 Gets help in. Key is. Success rate is very high--only 5-10% fail. Why do you think franchise success rate is so high yet only half of all small businesses close within the first five years? COST TO YOU TO OWN A FRANCHISE: Royalties and fees DISADVANTAGES/ADVANTAGES OF FRANCHISE OWNERSHIP Disadvantages:1) Can be to implement; required to follow operating manuals limiting ; must be good at following directions to maintain and level of already established. Advantages: 1) Success likely because proven ; Bankers believe franchise chain as lower risk of ; Corporate and recognized; Extensive and provided; If products/services advertised at local and national level by main franchise company, individual franchisees don t. ONLY OF FRANCHISES FAIL. Risk Of Ownership Ownership Obligations Intrapreneurship ESOP a) from other businesses; b) increases; c) changes; d) competition from products; e) Changes in conditions; f) profits; g) Loss of business through events. All business owners have an obligation to their customers, workers, management, competitors, investors, and to the public to treat people. within a.. Do you want to know what entrepreneurs really do? They cold call. They clean bathrooms and mop floors. They make copies and fix computer problems. They answer phones. They fill out paperwork. They work weekends, and holidays. They have to, because their employees just want to work 40 hours and leave, and they can t afford to hire any more help. BECAUSE 4 If cleaning bathrooms and mopping floors is the best thing for the business, there is nothing in the world they d rather be doing. ---Donald Trump 5