The Dynamic Business
Environment
Other Teaching Tools 1.3
Video Notes 1.4
Brief Chapter Outline and Learning Goals 1.5
Lecture Outline and Lecture Notes 1.7
Career and Study Skills Notes 1.24
Career Development: Understanding Career Planning 1.24
study skills: Study Skills Are a Learned Behavior 1.25
Lecture Links 1.26
lecture link 1-1 The World’s Richest People 1.26
lecture link 1-2 Milestones in Business 1.27
LectURE LINK 1-3 The Language of Business 1.27
LectURE LINK 1-4 America Loves Its Pets 1.28
Bonus Internet Exercises 1.29
Bonus INternet Exercise 1-1 Trends in Population 1.29
Bonus INternet Exercise 1-2 Opportunities in Entrepreneurship 1.30
Bonus INternet Exercise 1-3 Researching Philanthropy 1.32
Bonus INternet Exercise 1-4 Social Entrepreneurship 1.33
Critical Thinking Exercises 1.34
critical thinking exercise 1-1 How Much Profit? 1.34
Critical thinking Exercise 1-2 Job and Career vs. Owning 1.36
a Business
Bonus Cases 1.37
Bonus case 1-1 Dual-Career Planning 1.37
Bonus case 1-2 Dealing with Changing Family Structures 1.39
Bonus case 1-3 The World’s Largest Charity 1.41
Bonus case 1-4 Cirque du Soleil: No Clowning Around (Video Case) 1.43
Other Teaching Tools
For a description of each of these valuable teaching tools, please see the Preface in this manual.
Student Learning Tools
Student Online Learning Center (OLC) www.mhhe.com/diasbusiness
Student Study Guide
Spanish Translation Glossary (OLC)
Spanish Translation Quizzes (OLC)
Instructor Teaching Tools
Annotated Instructor’s Resource Manual
IRCD (Instructor’s Resource Manual, Test Bank, PowerPoints, EZtest)
Asset Map
Online Learning Center (OLC) www.mhhe.com/diasbusiness
PageOut
PowerPoint Presentations (on IRCD and OLC)
Test Bank
Business Videos on DVD
Enhanced Cartridge option
Spanish Translation Glossary (OLC)
video NOTES
Twenty videos are available, geared to individual chapter topics. The teaching notes for these videos are also included in the Video Notes section of this Instructor’s Resource Manual, beginning on page V.1.
VIDEO 1. “Cirque du Soleil: No Clowning Around”
This video features Cirque du Soleil, a unique and successful circus. Topics covered include Cirque du Soleil’s mission, competitive advantages, relationships with stakeholders, and the importance of technology to its productions.
(Bonus Case 1-4, “Cirque du Soleil: No Clowning Around,” on page 1.43 of this manual relates to this video.)
BRIEF CHAPTER OUTLINE AND LEARNING GOALS
CHAPTER 1
The Dynamic Business Environment
I. the importance of studying business
Learning objective 1
Understand the importance of studying business.
II. DEFINING BUSINESS
A. Profit, Revenue, Loss, and Risk and Reward
B. Stakeholders and Shareholders
III. THE EVOLUTION OF AMERICAN BUSINESS
Learning objective 2
Explain the evolution of American business.
A. Progress in the Agricultural and Manufacturing Industries
B. Progress in Service Industries
C. Your Future in Business
IV. THE five parts of the BUSINESS ENVIRONMENT
Learning objective 3
Describe the five elements of the business environment.
A. The Economic and Legal Environment
1. What Can Government Do?
B. The Technological Environment
1. Increased Productivity
2. Making Buying and Selling Easier
3. Responsiveness to Customers
C. The Competitive Environment
1. Customer-Driven Organizations
2. Employee Empowerment
D. The Social Environment
1. Diversity
2. Aging Consumers
3. Dual Incomes
4. Single Parents
5. Marriage
E. The Global Environment
V. Your Future in business
Learning objective 4
Understand your options in the world of business in the future.
A. Entrepreneurship vs. Working for Others
1. Working for Other Businesses
2. Entrepreneurial Challenge
3. Creation of Wealth
B. Working for a Nonprofit Organization or a Government Agency
VI. SUMMARY
lecture OUTLINE AND LECTURE NOTES
CHAPTER OPENING PROFILE
Central Bark (Text pages 2-3)
The opening profile focuses on Central Bark, a small doggie day care and grooming business. Owner Curt Greenberg purchased the business after a career as a middle-school teacher. Central Bark is affected by all the business environments—economic and legal, technical, competitive, social, and global. This profile provides an opportunity to introduce the basic business principles and concepts, such as profit, risk, stakeholders and entrepreneurship.
Lecture outline lecture notes /I. THE IMPORTANCE OF STUDYING BUSINESS
Learning objective 1
Understand the importance of studying business. (Text page 4)
A. Each of us is affected by business daily.
B. A Business is an individual or organization that seeks to provide goods and services to others while operating at a profit. / PowerPoint 1-1
Chapter Title
(Refers to text page 2)
PowerPoint 1-2
Learning Objectives
(Refers to text page 3)
PowerPoint 1-3
The Importance of
Studying Business
(Refers to text pages 4-6)
II. defining business
A. Businesses provide people with the opportunity to become wealthy.
1. Examples: Sam Walton (Wal-Mart) and Bill Gates (Microsoft)
2. An entrepreneur is a person who owns and operates his or her own business.
B. Profit, Revenue, Loss, and Risk and Reward
1. PROFIT is the amount a business earns above and beyond what it spends for salaries and other expenses.
2. Starting a business involves risk-taking, a critical element for improving the standard of living.
3. Standard of living is a grade or level of subsistence (basic needs) and comfort in everyday life enjoyed by a community, class, or individual.
4. Risk is exposure to the chance of a financial or time loss due to something that is not successful.
a. The more risks you take, the higher the rewards may be.
b. As a potential business owner, you should do research to find the right balance between risk and profit.
5. An entrepreneur must calculate the risks and the potential rewards, or the gratification as a result of some action, for a venture.
C. Stakeholders and Shareholders
1. STAKEHOLDERS are all the people who stand to gain or lose by the policies and activities of a business.
a. Stakeholders include customers, employees, stockholders, suppliers, bankers, and people in the local community, environmentalists, and elected leaders.
b. The challenge for companies in the 21st century is to balance, as much as possible, the needs of all stakeholders.
c. To stay competitive, firms may outsource jobs to other countries.
d. However, outsourcing may cause more harm to the country than good for the company.
2. A shareholder, in contrast, is a person who actually owns stock in a company.
3. Businesses try to satisfy the needs of the stakeholders, including its shareholders.
Self check Questions (Text page 8)
1. Define business and explain why the study of business is important. Define risk. Are you willing to take risks in order to own your own business? Why or why not?
2. How are revenue and profit different? Are they related to each other also?
3. How are stakeholders and shareholders different? The same? / critical thinking
exercise 1-1
How Much Profit?
Profit is the amount a business earns above and beyond what it spends for salaries and other expenses. Students often have a very inaccurate idea of how much profit businesses actually make. This exercise leads students to find this actual profit percentage. (See complete exercise on page 1.34 of this manual.)
Lecture link 1-1
The World’s Richest
People
These are the world’s 20 richest people—their wealth, age, country of residence, and country of citizenship. (See complete lecture link on page 1.26 of this manual.)
TEXT REFERENCE
Real World Business Apps (Box in text on page 5)
Rochelle Johnson, the owner of a small marketing company, and her employee John discuss the importance of keeping stakeholders in mind when making business decisions. This box introduces the concept of multiple stakeholders and the importance of balancing the needs of all of them.
PowerPoint 1-4
Defining Business
(Refers to text pages 6-8)
TEXT Figure 1.1
A Business and Its
Stakeholders (Text page 7)
TEXT REFERENCE
Thinking Critically
All Hail the Entrepreneur
(Box in text on pages 7-8)
Roughly 45 million Americans run their own business. The entrepreneurship happening today is different from what came before. Big companies are adapting and new entrepreneurial enterprises are filling unmet needs.
III. the evolution of american
business
Learning objective 2
Explain the evolution of American business. (Text pages 9-11)
A. Progress in the Agricultural and Manufacturing Industries
1. The use of technology allowed the agricultural industry to become so productive that the number of farmers dropped from about a third of the population to less than 2%.
a. Agriculture is still a major industry in the U.S., but fewer and larger farms have replaced millions of small farms.
b. Many farmers lost their jobs and went to work in factories.
2. Technology made manufacturing more productive and workers again lost their jobs.
3. However, new jobs were created in other industries.
4. The challenge managers face today is balancing profit with the good of the employees and society.
B. Progress in Service Industries
1. Many workers who lost their manufacturing jobs found jobs in service industries.
2. SERVICES are intangible products (i.e., products that can’t be held in your hand,) such as education, health care, insurance, recreation, and travel and tourism.
a. Since the mid-1980s, the service sector has generated almost all of our economy’s increases in employment.
b. Service-sector growth has slowed, but is still the largest growth area.
3. There are more high-paying jobs in the service sector than in the goods-producing sector.
Self-Check Questions (Text page 13)
1. What do you think is the biggest change that has occurred in business discussed in this section?
2. In what area of the service industry would you be most interested in working? Why? / lecture link 1-2
Milestones in Business
Some important dates in the history of business. (See complete lecture link on page 1.27 of this manual.)
TEXT REFERENCE
Career Development:
Understanding Career Planning
(Box in text on page 11)
Career planning is the process by which an individual develops objectives for the future and acquires the necessary resources and takes appropriate steps to achieve the desired career outcome. The key is to start planning now. An additional exercise and discussion is available in this chapter on page 1.24 of this manual.
PowerPoint 1-5
Evolution of American Business (Refers to text pages 9-11)
TEXT Figure 1.2
What Is the Service Sector? (Text page 12)
IV. THE FIVE PARTS OF THE BUSINESS ENVIRONMENT
Learning objective 3
Describe the five elements of the business environment. (Text pages 13-29)
A. The business environment is the surrounding factors that either help or hinder the development of business; they are:
1. the economic and legal environment
2. the technological environment
3. the competitive environment
4. the social environment
5. the global business environment
Businesspeople must be aware of all the environments in which they operate.
B. The Economic and Legal Environment
1. If people feel that the risk is acceptable, they are willing to take the risk of starting businesses
a. Part of entrepreneurs’ risk involves the setup of the economic system and how government works with or against businesses.
b. Governments can lessen the risk of starting a businesses and increasing entrepreneurship and wealth.
2. Entrepreneurs seek an acceptable return on investment (roi), the money gained from taking a business venture risk.
a. RETURN ON INVESTMENT (ROI), is the money gained from taking a business venture risk; in addition to money, investment of time is also an important consideration.
b. If the investment of time and money becomes too high, the ROI may no longer be worth the risk.
c. States and cities with high taxes drive entrepreneurs out, while low-tax governments attract them.
d. Some tax laws also help small businesses.
3. What can government do?
a. Governments can lessen the risks by passing laws that let businesspeople write contracts that are enforceable in court.
b. The uniform commercial code (ucc) is a comprehensive set of commercial laws, adopted by every state in the United States, which covers sales laws and other commercial laws.
c. Government can also establish a currency that’s tradable in world markets.
d. A tradable currency is money that is allowed to be exchanged for another country’s money.
e. Governments can help minimize corruption in businesses and in their own ranks.
4. Corrupt and illegal activities—such as Enron, WorldCom, and Tyco—negatively affect the business community and the economy.
a. Other forms of corruption can affect small businesses, such as employees stealing money or giving free merchandise to friends.
b. According to Bloomberg Personal Finance, “one of the greatest threats to the U.S. economy … is the wholesale undermining of investor confidence in the stock market as a result of corporate deceptions.”
c. Such scandals emphasize the need for laws restraining people from committing unethical acts.
5. A board of directors is a group that oversees the activities of a corporation.
a. A board of directors generally represents a mix—a small number of company executives and a greater number of outsiders.
b. The Hewlett-Packard scandal involved the chairman of the board of directors, who allegedly used unconventional methods to spy on board members.
6. The capitalist system relies heavily on honesty, integrity, and high ethical standards.
7. In a capitalist system companies and businesses are owned by citizens instead of government.
C. The Technological Environment
1. Few technical changes have had a more lasting impact on businesses than information technology.
2. The Internet is a major force in business today.
3. Increased productivity
a. Technology means everything that makes business processes more efficient and productive.
b. Effectiveness is producing the desired results.
c. Efficiency is the ability to produce using the least amount of resources.
d. A resource is something used in the production of goods.
e. PRODUCTIVITY is the amount of output you generate given the amount of input (e.g. hours worked.)
f. Tools and technology have greatly improved productivity.
g. Example: CAD, CAM and AI are used to automate manufacturing plants.
h. Farmers use high technology to increase production and profit.
i. Access to technology is one reason U.S. workers are more productive than those in other countries.
4. Making buying and selling easier
a. E-COMMERCE is business conducted electronically over the Internet.