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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)