Introduction To Business

Introduction to Business
Dr. Amr El-Baradie
Course Objectives
Managing within the Dynamic Business
Environment
How Economics Affects the Business
Competing in Global Markets
Choosing a Form of Business Ownership
Management, Leadership, and Employee
Empowerment
Motivating Employees and Building SelfManaged Teams
Marketing: Building Customer Relationships
Introduction to Business - Chapter
1
Course Evaluation
50% - Final Exam.
20% - Midterm Exam.
15% - Course Work (Assignments
Reports Presentations Quizzes
.etc.)
5% - Participation in class.
10% - Tutorials Attendance and
Participation.
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Text Book
Understanding Business
8th Edition
Nickels McHugh McHugh

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Chapter 1
Managing Within The
Dynamic Business
Environment: Taking Risks
and Making Profits
Learning Objectives
BUSINESS AND
ENTREPRENEURSHIP: REVENUES,
PROFITS, AND LOSSES
ENTREPRENEURSHIP VERSUS
WORKING FOR OTHERS
THE BUSINESS ENVIRONMENT

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BASIC CONCEPTS
A BUSINESS is any activity that seeks to
provide goods and services to others
while operating at a profit.
PROFIT is the amount a business earns
above and beyond what it spends for
salaries and other expenses.
An ENTREPRENEUR is a person who
risks time and money to start and
manage a business.
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Matching Risk with Profits

REVENUE is the total amount of
money a business takes in during a
given period by selling goods and
services.
REVENUE EXPENSES = PROFIT
A LOSS occurs when a businesss
expenses are more than its revenues.

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Matching Risk with Profits

RISK is the chance an entrepreneur
takes of losing time and money on a
business that may not prove profitable.
The more risks you take, the higher
the rewards may be.
As a potential business owner, you
should do research to find the right
balance between risk and profit.
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Standard of Living and Quality

of Life
Entrepreneurs PROVIDE
EMPLOYMENT for other people.
They also PAY TAXES that are used for
schools, hospitals, and other facilities.
Businesses are a part of an economic
system that helps to CREATE A
HIGHER STANDARD OF LIVING and
quality of life for everyone.
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Standard of Living and Quality

of Life
The term STANDARD OF LIVING refers to
the amount of goods and services people
can buy with the money they have.
QUALITY OF LIFE refers to the general
well-being of a society in terms of
political freedom, a clean natural
environment, education, health care,
safety, free time, and everything else that
leads to satisfaction and joy.
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Business Stakeholders
STAKEHOLDERS are all the people
who stand to gain or lose by the
policies and activities of a business.
Stakeholders include customers,
employees, stockholders, suppliers,
bankers, and people in the local
community, environmentalists, and
elected leaders.
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The challenge for companies in the 21 st
century will be to BALANCE, as much as
possible, THE NEEDS OF ALL
STAKEHOLDERS.
To stay competitive, businesses may
OUTSOURCE jobs to other countries.
OUTSOURCING assigning various functions,
such as accounting, production, security,
maintenance, and legal work, to outside
organizations.
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Outsourcing may cause more HARM TO
THE COUNTRY than GOOD FOR THE
COMPANY.
Many companies have set up design and
production facilities here in the United
States, a practice known as INSOURCING.

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The decision whether to outsource or to
insource is based on what is best for all
the stakeholders.

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Business Principles and

Non-Profit Organizations
A NONPROFIT ORGANIZATION is an
organization whose goals do not
include making a personal profit for its
owners or organizers.
SOCIAL ENTREPRENEURS are people
who use business principles to start
and manage organizations that are not
for profit and help countries with their
social issues.
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You need the SAME SKILLS to work in
nonprofit organizations that you need
in business, including information
management, leadership, marketing,
and financial management.
Businesses, nonprofit organizations,
and volunteer groups often strive to
ACCOMPLISH THE SAME OBJECTIVES.
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To accomplish these objectives,
business must REMAIN COMPETITIVE
with the best businesses in the rest of
the world.

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Two Ways to Succeed in

Business
One way is to RISE UP THROUGH THE
RANKS of a large company.
The more risky path is to START
YOUR OWN BUSINESS, as Michele
Hoskins did.

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The Five Production Factors

LAND (or natural resources)
LABOR (workers)
CAPITAL (e.g., machines, tools, and
buildings; but not moneymoney is
used to buy factors of production)
ENTREPRENEURSHIP
KNOWLEDGE
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The Five Production Factors

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The Business Environment

The BUSINESS ENVIRONMENT is the
surrounding factors that either help or
hinder the development of business;
they are:
The
The
The
The
The
economic and legal environment

technological environment
competitive environment
social environment
global business environment
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The Economic Environment

People are willing to take the risk of
starting businesses if they feel that
the risk is acceptable.

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The Economic Environment

GOVERNMENTS CAN LESSEN THE RISK of
starting a businesses and increasing
entrepreneurship and wealth by:
Keeping TAXES AND REGULATIONS to a minimum.
Allowing PRIVATE OWNERSHIP of business.
Passing LAWS that enable businesspeople to write
contracts that are enforceable in court.
Establish a CURRENCY that is tradable in world
markets.
MINIMIZE CORRUPTION in business and
government.
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The Technological
Environment
TECHNOLOGY means everything from
phones and copiers to computers,
medical imaging devices, personal
digital assistants, and various
software programs that make
business processes more efficient and
productive.

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The Technological
Environment
EFFECTIVENESS means producing the
desired result.
EFFICIENCY means producing goods and
services using the least amount of resources.
PRODUCTIVITY is the amount of output you
generate given the amount of input (e.g.
hours worked.)
Tools and technology greatly improve
productivity.
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The Technological
Environment
E-COMMERCE is buying and selling of
goods over the Internet.
There are two types of e-commerce
transactions: BUSINESS-TO-CONSUMER
(B2C) and BUSINESS-TO-BUSINESS
(B2B).
B2B (BUSINESS-TO-BUSINESS) ECOMMERCE consists of selling goods and
services from one business to another.
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The Technological
Environment
After initial growth and success, many
B2C Internet companies failed.
Traditional businesses need to learn
how to deal with competition from
B2B and B2C firms.

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The Technological
Environment
Using TECHNOLOGY to be responsive
to customers:
The businesses that are most responsive
to customer wants and needs will
succeed.
Businesses can use technology, such as
UPC codes on products, to become more
responsive.

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The Technological
Environment
Using TECHNOLOGY to be responsive to
customers:
A DATABASE is an electronic storage file
where information is kept; one use of
databases is to store vast amounts of
information about consumers.
Databases let businesses tailor products
and marketing to customers.
Databases also allow stores carry fewer
items and less inventory.
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The Technological
Environment
Using TECHNOLOGY to be responsive to
customers:
However, gathering personal information
about people has led to IDENTIFY THEFT,
obtaining private information about a
person and using that information for illegal
purposes.
The federal Trade Commission estimates
that about 10 million Americans are
VICTIMS OF IDENTIFY THEFT EACH YEAR.
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The Competitive
Environment
Making quality products is not enough
to stay competitive in world markets
now you have to offer QUALITY
PRODUCTS and OUTSTANDING
SERVICE at competitive prices.

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The Competitive
Environment
Competing by EXCEEDING CUSTOMER
EXPECTATIONS:
Customers today want good quality at low prices
and great service.
Business is becoming CUSTOMER-DRIVEN
customers wants and needs come first.
Successful companies must LISTEN TO
CUSTOMERS to determine their wants and
needs and then adjust their products, policies,
and practices to meet these demands.
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The Competitive
Environment
Competing by RESTRUCTURING AND
EMPOWERMENT:
To meet the needs of customers, firms
must enable their front-line workers to
RESPOND QUICKLY TO CUSTOMER
REQUESTS.
EMPOWERMENT is giving frontline workers
the responsibility, authority, and freedom
to respond quickly to customer requests.
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The Competitive
Environment
Competing by RESTRUCTURING AND
EMPOWERMENT:
To implement EMPOWERMENT,
businesses must train front-line people to
make decisions.
It sometimes takes years to restructure
an organization to empower its members.

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The Social Environment

DEMOGRAPHY is the statistical study
of the human population in regard to
its size, density, and other
characteristics, such as age, race,
gender, and income.

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The Social Environment

MANAGING DIVERSITY
Today diversity includes many more population
groups, including seniors, the disabled,
homosexuals, singles, and the devout.
Companies have responded to the increase in
customer diversity by hiring a MORE DIVERSE
WORKFORCE.
The number of legal and illegal IMMIGRANTS
has had a dramatic impact on cities and
businesses.
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The Global Environment

Two important environmental changes
in recent years have been the GROWTH
OF INTERNATIONAL COMPETITION and
the INCREASE OF FREE TRADE among
nations.
Improvements in transportation and
communication have led to more trade.
World trade (GLOBALIZATION) has greatly
improved living standards around the world.
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The Global Environment

How GLOBAL CHANGES affect you:
Expanding global commerce will lead to
many CAREER OPPORTUNITIES for
American college graduates.
Students must PREPARE themselves to
compete in changing global
environments.

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Assignment 1
Critical Thinking Questions Page 25.
Case 1: kayak.com

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Introduction To Business

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Introduction to Business

Dr. Amr El-Baradie

Introduction to Business - Chapter

Introduction to Business - Chapter

Matching Risk with Profits

Introduction to Business - Chapter

Matching Risk with Profits

Standard of Living and Quality

Standard of Living and Quality

Introduction to Business - Chapter

Introduction to Business - Chapter

Introduction to Business - Chapter

Business Principles and

Business Principles and

Business Principles and

Introduction to Business - Chapter

Two Ways to Succeed in

Introduction to Business - Chapter

The Five Production Factors

The Five Production Factors

Introduction to Business - Chapter

The Business Environment

economic and legal environment

Introduction to Business - Chapter

The Economic Environment

Introduction to Business - Chapter

The Economic Environment

Introduction to Business - Chapter

Introduction to Business - Chapter

Introduction to Business - Chapter

Introduction to Business - Chapter

Introduction to Business - Chapter

The Social Environment

Introduction to Business - Chapter

The Social Environment

The Global Environment

The Global Environment

Introduction to Business - Chapter

Introduction to Business - Chapter

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