1Chapter 1
Characteristics of Business
Chapter 1 Characteristics of Business
©2008 Thomson/South-Western
2Chapter 1
Characteristics of Business
Lesson 1.1 The Nature of Business
Goals Explain the nature of business activities. Describe the general types of businesses.
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Characteristics of Business
Business and Profit
Business — an organization that produces or distributes a good or service for profit
Profit — difference between earned income and costs
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Characteristics of Business
THE NATURE OF BUSINESS
Business activities– Production– Marketing– Finance
Types of businesses– Industrial businesses – business 2 business– Commercial businesses – selling to us
Service businesses – not really a product sold
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Characteristics of Business
DAILY BUSINESS NEWS
MONDAYAnglim RyanAnnun DavidBeyah TorianBreza MarissaCerula Kevin
TUESDAYCifelli JohnCoonan Mary KateDansbury DanielDinneny PatrickDintrone Michael
WEDNESDAYDunn KatlinKohut CodyKuczinski MichaelMahotiere PhilippeMastoris AlexanderNugent Marissa
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Characteristics of Business
DAILY BUSINESS NEWS
THURSDAYNzimande ZoeO'Keeffe J.P.Perna AnthonyPinarligil TylerRouze Jonathan Santopietro Angela
FRIDAYSeaver RobertSteinmetz AndrewTodaro BrandonVitacolonna VincentYoung Francis
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Characteristics of Business
Lesson 1.2 Changes Affecting Business
Goals Describe how innovations affect businesses. Identify the impact global competition has
had on U.S. businesses. Discuss ways in which businesses can
improve their business practices.
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Characteristics of Business
Changes Affecting Businesses
Innovation Impact of global competition Focusing on the right things
– Achieving effectiveness — making the right decisions about products or services to offer and the best ways to produce and deliver them
– Achieving efficiency — producing products and services quickly, at low cost, without wasting time and materials
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Characteristics of Business
Effectiveness and Efficiency
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Characteristics of Business
EFFICIENCY
Efficiency is achieved in three ways: Specialization of effort “experts doing the
job” Better technology and innovation robots and
computers, better machinery Reorganization of work activities teams,
downsizing, empowerment
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Characteristics of Business
GLOBAL COMPETITION
For hundreds of years, America lead the way in producing new goods and services.
Now more countries are becoming industrialized but Chinese factory wages 64 cents an hour. U.S. factory wages in 2002 was $21.11 30 foreign countries studied was $14.22 Mexico's factory wages $2.48 Because China's living costs are low, that 64 cents
buys as much as $2.96 in the U.S.
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Characteristics of Business
Class Assignment Car Production Plant
Break up into 3 groups Describe ways an automobile manufacturer can use each method to increase efficiency. Page 10
Group 1: Use Specialization Group 2: Use Technology and innovation Group 3 : Use Reorganization of work –
downsizing and empowerment
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Characteristics of Business
Class Assignment Car Production Plant
Using your method of Efficiency in order to make the Automotive plan more profitable, come up with a plan and present to the automotive workers.
1. Sell them on why this is great for them as workers and increase efficiency.
2. Be prepared to handle objections
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Characteristics of Business
Teams
Group 1 N. M., S. S., C. N., R. H., J. V.,
V. S., M. B., F. V., A. R.
Group 2 K. C., C. S., R. F., H. K., R. P.,
A.M. S., M. J., J. McD., A. Ro.
Group 3 J. K., D. D., E. McG., K. M., J. C.,
E. T., P. T., J. Z., J. S.
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Characteristics of Business
Lesson 1.3 The Contributions of Business
Goals Identify two ways a nation measures its
economic growth and prosperity. Describe the benefits of business
ownership to the nation and individuals.
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Characteristics of Business
The Contributions of Business
Business growth and prosperity– Gross domestic product (GDP)
— total market value of all goods and services produced in a country in a year
– Individual well-being — home ownership, consumer products, self-improvement, savings
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Characteristics of Business
Unreported Income
Underground Economy
Drug money Babysitting Lawn service Part time jobs Counterfeit
merchandise 5% - 20%
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Characteristics of Business
COUNTRIES WITH LARGEST GDPs
0
2
4
6
8
10
12
14
Italy
France UK
Ger
man
yIn
dia
Japa
n
China
EUU.S
.
GDP in trillions
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Characteristics of Business
The Contributions of Businessa big +
Business ownership– Popularity of small businesses – easy,
desire to be own boss– Growth of franchise businesses -
McDonalds– Risks of ownership 1 out of 4-5 fail in 3
years– Obligations of ownership - community– Intrapreneurship In-company business– Studying business principles and
management
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Characteristics of Business
INTRAPRENEURSHIP
Intrapreneur — an employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service
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