The Changing Face of Business Business – all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.

Welcome to BA 1200

The Changing Face of Business

Chapter 1

Business – all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.

Tangible goods (product) / Intangible goods (services)Profits – rewards for business people who take the

risks involved to offer goods and services to customers.Not-for-Profit Organization – business like

establishments that have primary objectives other than returning profits to their owners.

Place service over profit Private – museums, libraries, trade associations etcPublic – government agencies, political parties, labor unions

What is business?What do businesses offer?

Natural Resources – production inputs that are useful in their natural state, i.e. land, building sites, forests, minerals.

Capital – technology, tools, information, physical facilities. (invest capital)

Human Resources – Human Capital Entrepreneurship – willingness to take

risks to create and operate a business.

Factors of Production(Natural Resources, Capital, Human Resources, Entrepreneurship)

Factor of Production Corresponding Factor Payment

Natural Resources Rent

Capital Interest

Human Resources Wages

Entrepreneurship Profit

Minimizes government interference in economic activity ……. i.e. Capitalism!

Competition – battle among businesses for consumer acceptance

Competitive Differentiation – the unique combination of organizational abilities, products, and approaches that sets a company apart form competitors in the minds of consumers.Changing marketplace, consumer preferences,

differentiation of goods and services

Private Enterprise SystemAn economic system that rewards firms for their ability to identify and serve the needs and demands of customers.

Private Property – sell & buy both tangible and intangible objectsProfits – right to earn $Freedom of Choice – choose your own employmentCompetition – fair competition by allowing

government passed laws to eliminate “cut throat competition”

Basic Rights

* person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business

*creates jobs, provides innovation, drives competition

*helped create new industries, develop successful new business methods, improved US standings in global competition

Entrepreneurship

Era

•Clainolo Era – Primarily Agricultural (prior to 1776)

•Industrial Revolution – Mass Production by semiskilled workers, aided b y machines (1760 – 1850)

Era

•Industrial Entrepreneurs – Advances in technology and increased demand for manufactured goods, leading to enormous entrepreneurial opportunities (late 1800’s)

•Production – Emphasis on producing more goods faster, leading to production innovation such as assembly lines (through 1920’s)

Era

•Marketing – Consumer orientation, seeking to understand and satisfy needs and preferences of customer groups (since 1950’s)

•Relationship – Benefits derived from deep ongoing links with individual customers, employees, suppliers and other businesses (began 1990’s)

Six Eras In Business History

Relationship Management – collection of activities that build and maintain ongoing, mutually beneficial ties between a business and its customers and other parties-Gathering knowledge of customer needs and

preferences and applying that understanding to get as close to the customer as possible

Today contact management systems, sales systems, (technology had advanced this practice)

Relationship Management

Partnership – an affiliation of two or more companies that help each other achieve common goals

Strategic Alliance – a partnership formed to create a competitive advantage for the businesses involvedExample – EBay – online business teams up

with stores to sell extra merchandise

Strategic Alliances and Partnerships

Why do businesses utilize the green advantage?

Green Advantage

Aging Population

Shrinking labor Pool

Increasing Diverse

Workforce

Outsourcing

Employer /Employee Partnership

OutsourcingOff shoring

Near shoring

“The most important thing

any company can do is hire the smartest

people possible and then give

them the resources to

transform their ideas into

reality” – Bill Gates -

Changes in the Workforce

Vision – the ability to perceive marketplace needs and what an organization must do to satisfy them.

Critical Thinking – ability to analyze and assess information to pinpoint problems or opportunities

Creativity – the capacity to develop novel solutions to perceived organizational problems

Business Ethics – standards of conduct and moral values involving decisions made in the work environment

Social responsibility – mgmt philosophy that include contributing resources to the community preserving the natural environment, and developing or participating in nonprofit programs designed to promote the well-being of the general public

Change is Good

What makes a good company ?

What Makes a Company Ethical?