The Changing Face of Business

http://www.wileybusinessupdates.com

Chapter

1

Distinguish between business and not-for-profit organizations.

Identify and describe the factors of production.

Describe the private enterprise system, including basic rights and entrepreneurship.

Identify the six eras of business, and explain how the relationship era—including alliances, technology, and environmental concerns—influences contemporary business.

1

Learning Goals

Explain how today’s business workforce and the nature of work itself is changing.

Identify the skills and attributes managers need to lead businesses in the 21st century.

Outline the characteristics that make a company admired by the business community.

2

3

4

5

6

7

Profit-seeking activities and enterprises provide goods and services necessary to an economic system.

Profit-seeking is the reward for business people who take the risk involved to offer goods and services to customers.

See Fortune 500 for a list of major U.S. companies.

3

What is Business?

Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2011

Table 1. Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2011All Races Educational Attainment

Total NoneHigh school

graduateSome college

no degree

Associate's degree,

occupational

Associate's degree,

academicBachelor's

degreeMaster's degree

Professional degree

Doctoral degree

Both Sexes                    

.18 years and over 231,194 914 70,316 45,245 9,227 11,384 41,943 16,154 2,993 3,079

.25 years and over 201,543 857 61,911 34,203 8,550 10,497 39,286 16,015 2,980 3,062

..65 to 69 years 12,160 81 4,154 1,903 401 489 1,808 1,180 206 316

..70 to 74 years 9,254 61 3,495 1,369 280 324 1,222 610 162 165

..75 years and over 17,764 191 6,576 2,615 448 444 1,978 912 256 266Male                    .18 years and over 112,301 425 35,082 21,393 4,169 4,736 20,137 7,231 1,870 1,916

.25 years and over 97,220 380 30,370 16,137 3,861 4,321 19,017 7,181 1,862 1,911

..65 to 69 years 5,600 28 1,813 800 185 210 909 536 156 227

..70 to 74 years 4,242 28 1,387 644 116 130 623 352 117 130

..75 years and over 7,239 68 2,232 1,089 160 163 984 483 202 211Female                    

.18 years and over 118,893 489 35,234 23,852 5,058 6,648 21,806 8,923 1,123 1,163

..18 to 24 years 14,570 12 3,694 5,786 369 472 1,537 89 5 11

.25 years and over 104,323 477 31,541 18,065 4,689 6,176 20,269 8,834 1,118 1,151

..65 to 69 years 6,561 52 2,341 1,103 217 279 899 644 49 88

..70 to 74 years 5,012 32 2,108 725 164 194 599 258 45 36

..75 years and over 10,525 123 4,344 1,526 287 281 994 429 54 56

http://www.census.gov/hhes/socdemo/education/data/cps/2011/tables.html

Employment Size of Firms - UShttp://www.census.gov/econ/smallbus.html

All firms 27,281,452

Nonemployer firms 21,351,320

Employer firms 5,930,132

Firms with 1 to 4 employees (or with no employees as of Mar 12, 2012)

3,617,764 61.01% 61.01%

Firms with 5 to 9 employees 1,044,065 17.61% 78.61%

Firms with 10 to 19 employees 633,141 10.68% 89.29%

Firms with 20 to 99 employees 526,307 8.88% 98.16%

Firms with 100 to 499 employees 90,386 1.52% 99.69%

Firms with 500 employees or more 18,469 0.31% 100.00%

Employment Size of Firms – Californiahttp://www.census.gov/epcd/susb/latest/ca/CA--.HTM

All firms 717,133Firms with 1 to 4 employees (or with no employees as of Mar 12)

434,46660.58% 60.6%

Firms with 5 to 9 employees 123,34517.20% 77.8%

Firms with 10 to 19 employees 74,97210.45% 88.2%

Firms with 20 to 99 employees 65,362 9.11% 97.4%

Firms with 100 to 499 employees 13,168 1.84% 99.2%Firms with 500 employees or more 5,820 0.81% 100.0%

Factors of Production

Natural Resources Capital Human Resources Entrepreneurship

Occupational Outlook Handbook

Capitalism Adam Smith is the father of capitalism. “Invisible Hand”

Economic system determines business ownership, profits, and resources

Rewards firms for their ability to serve the needs of consumers

Minimized government intervention Competition is the battle among businesses

for consumer acceptance. 8

The Private Enterprise System

Basic Rights in a Private Enterprise System

An Entrepreneur: Is a risk-taker

Takes financial, personal, social, and career risks

Sees a potentially profitable opportunity

Devises a plan to achieve success in the marketplace and earn those profits

Fuels the U.S. economy Provides innovation

Entrepreneurship

Entrepreneurial thinking is

important within large

firms.

Six Eras in the History of U.S. Business

Relationship Management Activities to build and maintain mutually

beneficial ties with customers and other parties

Relationship management depends on technology.

Managing Relationships through Connections

A partnership is an affiliation of two or more companies that help each other achieve common goals.

A strategic alliance is a partnership formed to create a competitive advantage for both parties (see Amazon).

Strategic Alliances and Partnerships

Dedicated workers who can foster strong ties with customers

Capable of high-quality production Able to compete in global markets Technically savvy

Today’s Business Workforce

By 2030, the number of U.S. workers 65 or older will reach 72 million.

Many baby boomers are hitting the peak of their careers, while Generations X and Y are launching their careers.

Technology has intensified the hiring challenge by requiring workers to have ever more advanced skills.

U.S. Census Bureau

Changes in the Workforce: Aging Population

Economists predict the U.S. labor pool could soon fall short by as many as 10 million people.

The two fastest-growing ethnic populations in the United States are Hispanics and people of Asian origin.

Employee teams with individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities are more effective.

Changes in the Workforce: Shrinking Labor Pool/Diversity

Outsourcing is using outside vendors to produce goods or fulfill services and functions that were previously handled in-house or in-country.

Offshoring is the relocation of business processes to lower-cost locations overseas.

Changes in the Workforce: Outsourcing

Younger workers are looking to something other than work-comes-first

Telecommuting and job-sharing Part-time and temporary workers are

growing Collaboration is replacing working alone Value risk-taking and innovation

Changes in the Workforce: Innovation through Collaboration

Critical-thinking

Creativity

Ability to lead change

Vision

The 21st-Century Manager

Critical thinking is the ability to analyze and assess information to pinpoint problems or opportunities.

Creativity is the capacity to develop novel solutions to perceived organizational problems.

Critical Thinking and Creativity

Guide employees and organizations through changes

Managers must be comfortable with tough decisions.

Factors that require organizational change can come from external and internal sources.

Ability to Lead Change

Solid profits Stable growth Safe and challenging work environment High-quality goods and services Business ethics and social responsibility

Fortune’s list of Most Admired Companies

What Makes a Company Admired?

End of Chapter Video (Click below to start or pause the video)

New Harvest Coffee Roasters Brews Up Fresh Business (Length – 6:43)