Chapter 1
The Changing Face
of Business
What is Business?
Business: All profit-seeking activities and
enterprises that provide goods and services
necessary to an economic system
Profits: Rewards for businesspeople who take the
risks involved to offer goods and services to
customers
Not-for-Profit Organization
Business establishments that have primary
objectives other than returning profits to their
owners.
Factors of Production
Natural resources
Capital
Human resources
Entrepreneurship
• Natural Resources: All production inputs that are useful in their natural
states, including agricultural land, building sites , forest and mineral
deposits.
• Capital: Including technology, tools, information and physical facilities
• Human Resource: Including anyone one who works, including both the
physical labor and the intellectual inputs contributed by workers.
• Entrepreneurship: willingness to take risk to create and operate a
business
The Private Enterprise System
Capitalism
Adam Smith known as father of capitalism
“invisible hand”
Economic system determines business ownership,
profits, and resources
Firms rewarded for their ability to serve the needs of
consumers
Minimizes government intervention
Competition: The battle among businesses for
consumer acceptance
Basic Rights within a Private
Enterprise System
FIGURE 1.1
Basic Rights within
a Private Enterprise
System
The Entrepreneurship Alternative
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 economy
Provides innovation
Seven Eras in the History of Business
The Colonial Period
Primarily agricultural; prior to 1776
The Industrial Revolution
Mass production by semiskilled workers, aided by machines; 1760-1850
The Age of Industrial Entrepreneurs
Advances in technology and increased demand for manufactured goods,
leading to enormous entrepreneurial opportunities; late 1800s
The Production Era
Emphasis on producing more goods faster, leading to production innovations
such as assembly lines; through the 1920s
The Marketing Era
Consumer orientation, seeking to understand and satisfy needs and
preferences of customer groups; since 1950s
The Relationship Era
Benefits derived from deep, ongoing links with individual customers,
employees, suppliers, and other businesses; began in 1990s
The Social Era
Businesses interact, connect, communicate, share, and exchange information
in virtual communities and networks around the world; since 2000s
Managing Relationships through
Technology
Relationship Management
The collection of activities that build and
maintain ongoing, mutually beneficial ties with
customers and others
Strategic Alliances
A partnership is 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
involved.
Green Advantage to build relationship
Today’s Business Workforce
Need reliable workers dedicated to promoting
strong ties with customers and partners
Capable of efficient, high-quality production
Able to compete in global markets
Technically savvy and innovative
Changes in the Workforce
The Aging Population/Shrinking Labour Pool
Many baby boomers are hitting the peak of their
careers, while Generations X and Y are launching
or in middle of their careers
More generations mixing in the workplace than
ever before
Technology has strengthened the hiring challenge
by requiring workers to have ever-more advanced
skills
Changes in the Workforce (cont’d)
Increasingly Diverse Workforce
Two-thirds of Canada’s population growth is due
to international immigration, particularly from
Asia
Employee teams with individuals of different
genders, ethnic backgrounds, cultures, religions,
ages, and physical and mental abilities are more
effective
Changes in the Workforce-Outsourcing
Outsourcing is using
outside vendors to Offshoring is the
produce goods or relocation of business
fulfill services and processes to lower
functions that were cost locations
previously handled overseas.
in-house.
The Twenty-First-Century Manager
Vision
Critical thinking and creativity
Ability to lead change
Vision
Vision is the ability to perceive marketplace needs
and what an organization must do to satisfy them
Today’s companies look for managers who are
intelligent, highly motivated people with the
ability to create and sustain a vision for the
organization
Critical Thinking and Creativity
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
Ability to Lead Change
Guide employees and organizations through
changes
Managers must be comfortable with tough
decisions in fluctuating conditions
Factors that require organizational change can
come from external and internal sources
What Makes a Company Admired?
Solid profits
Stable growth
Safe and challenging work environment
High-quality goods and services
Business ethics and social responsibility