Transcript Characteristics of Business

Business Principles and
Management
Characteristics of Business
Chapter 1
Mr. Kretschmer
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CHAPTER
CHARACTERISTICS
OF BUSINESS
1
OBJECTIVES
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Explain the general types and changing nature of
businesses.
Describe how global competition has affected the way
American businesses operate.
Show how businesses have grown and improved the
economic well-being of people.
Discuss the role and nature of entrepreneurship and the
opportunities, problems, and obligations of small
businesses.
Summarize the value of plans that allow employees to
function like entrepreneurs inside businesses.
Explain the importance of studying business principles and
management.
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Characteristics of Business
What are some reasons why
businesses lay off workers?
Reasons for Hiring
Vs.
Reasons for Layoffs
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Characteristics of Business
What does 1,000,000,000,000 represent?
= 8 Trillion Dollars = Total Value of all
goods and services produced in the
U.S. in a year
Businesses are out to make a profit
If a profit is not made, the business will
fail.
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NATURE
OF BUSINESS
Business — an organization that
produces or distributes a good or service
for profit
Profit — the difference between earned
income and costs
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NATURE
OF BUSINESS
 3 Major Business activities
 Production
 Marketing
 Finance
 Types of businesses
 Industrial businesses
 Commercial businesses
Highly industrialized = U.S. Japan, China, Germany
3rd World Nations = have few manufacturing firms and a
population that is poor
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Changing Nature of Business
Business has changed!
Do you know some of our local history?
Delaware River, Canal, Gravity Railroad
Horse, steam power, railroad (1869), car,
bus, truck, airplanes, ships
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Obligations of Business Owners
Business Owners have several
obligations:
Customers, workers, management,
competitors, investors, and the public
What are some items that you own today
that were not made 25 years ago?
Business innovations: Cotton and Wool
30 years ago = Apple Computer
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IMPACT OF GLOBAL
COMPETITION ON BUSINESS
 Focusing on the right things
 Achieving effectiveness
 Achieving efficiency
 Specialization
 Technology and innovation
 Reorganization – Downsizing – Empowerment =
Work and Quality improved
 Reengineering – Changing the Workflow
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Output per Hour
PRODUCTIVITY
PER WORKER
120
105
90
75
60
45
30
15
0
1980
USA
France
1985
Germany
1990
Japan
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Canada
1996
England
BUSINESS GROWTH
AND PROSPERITY
 Gross domestic product (GDP)
 Underground economy and Joint
Agreements = Hard to trace
 Individual well-being = Luxury Items
 Business Growth = People have a strong
desire to own their own business.
 Small Businesses = Very Large
 Subway = Over 13,000 Strong
 McDonalds and Holiday Inn = Located Globally
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ENTREPRENEURSHIP
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Popularity of small business
Growth of small business
Growth of franchise business
Risks of ownership
Obligations of ownership
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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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BUSINESS GROWTH
AND PROSPERITY
Franchises – Employs 8 million people and
accounts for half of all retail sales
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UNITED STATES
GROSS DOMESTIC PRODUCT
Trillions of Dollars
10
8
6
4
5.8
6.3
7.1
7.8
8.8
4.7
2
0
1987
1990
1992
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1994
1996
1998
INDIVIDUAL WELL-BEING
Percentage of U.S. Households
Owning Selected Items
35.0%
Personal Computers
58.4%
Answering Machines
61.4%
Cordless Phones
77.4%
Clothes Washers
83.0%
Microwave Ovens
Color Televisions
99.8%
Refrigerators
99.9%
0%
20%
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40%
60%
80%
100%
BUSINESS GROWTH
AND PROSPERITY
Risk of Ownerships depends on
managerial success
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Any Questions
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