Nickels Mc GrawHillIrwin Understanding Business 8 e Mc

* * * Nickels Mc. Graw-Hill/Irwin Understanding Business, 8 e * Mc. Hugh Managing Within The Dynamic Business Environment: Taking Risks and Making Profits * CHAPTER ** 1 1 - © 2008 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

* * * Business & Entrepreneurship • Business • Profit • Entrepreneur • Match Risk With Profit • Revenue • Loss • Standard of Living/Quality • • of Life Stakeholders Nonprofit Organizations 2

* * * Objectives of Business Survival Growth Profit Social Responsibility 3

* * * Creating Wealth: Factors of Production • Land • Labor • Capital • Entrepreneurship • Knowledge

* * * Business Environment

* * * Economic & Legal Environment $ Minimum taxes and regulations $ Freedom of ownership $ Contract laws $ Tradable currency $ Elimination/minimization of corruption 6

* * * Government Takeover • Crude oil price per barrel: 2000 Mid $20 range 2006 Mid $70 range • Russia, Venezuela, and Bolivia have asserted greater state control over its oil or natural gas assets • Which country will be next? Source: wtrg. com; Cumberland Times-News, May 3, 2006

* * * Corrupt Countries Least Corrupt 1. Iceland 2. Finland 3. New Zealand Most Corrupt 1. Bangladesh 2. Chad 3. Haiti Source: Transparency International, 2005; www. transparency. org 8

* * * Technological Environment • Productivity • E-Commerce • Responsiveness to Customer 9

* * * Identity Theft • • Total number of identity theft victims in 2005 – 255, 565 Top four ways how victims information was misused: 1. Credit card fraud 2. Phone/utilities fraud 3. Bank fraud 4. Employment-related fraud Source: Identity Theft: Victim Complaint Data, 2005, Federal Trade Commission; www. consumer. gov/idtheft

* * * ID Theft—Protective Steps • “Focus on the cheap and easy way to keep an eye on your accounts” • Free Credit Reports • Guard Your Number • Shred • Bug Congress § To pass ultimate protection: A credit freeze anytime you want one. Source: Money, August 2005

* * * Competitive Environment • Customer Expectations • Restructure/Empower 12

* * * Consumer Trends • U. S. Bottled Water Sales in Past 15 Years Increased more than fourfold to $9. 8 Billion • From October 2004 to September 2005, top bottle water flavors were: Blend, Lemon, Lime, and Apple Source: Business & Economic Review, Jan. -Mar. 2002; Beverage Marketing Corporation, bottledwater. org, 2004 stats; Productscan Online; datamonitor. com, November 9, 2005

* * * Social Environment • Diversity/Multicultural • Aging/Graying of America • Two-Income Families • Single-Parent Families 14

* * * U. S. Household Size Source: U. S. Census Bureau

* * * Buying Power of Diverse Groups • • • Women $3, 700 Billion African Americans 761 Billion Hispanic Americans 686 Billion Gay Men & Lesbians 610 Billion Asian Americans 397 Billion Native Americans 51 Billion Sources: National Organization on Disability Employability; U. S. Pan Asian American Chamber of Commerce; Diversity. Inc. com; U. S. Census Bureau; The Augusta Chronicle, October 22, 2005; Selig Center for Economic Growth, 2005.

* * * 21 st Century Diversity Issues • Race • Age • Gender • Language • Ethnicity • Religion • Disability • Sexual Source: U. S. Equal Employment Opportunity Commission Orientation

* * * Immigration • In 2005, roughly 35 million immigrants lived in the U. S. as compared to less than 25 million 10 years ago. • According to a November 2005 poll, 60 percent of Americans favor a barrier built along the US-Mexico Border. • About 49 percent believe that a child born to an illegal alien in the U. S. should be granted a US citizenship Source: Center for Immigration Studies; Rasmussen. Reports. com 18

* * * Older Americans Working Source: USA Today 19

* * * Americans Living Longer • U. S. life expectancy rises to a record high 77. 9 years • The number of deaths dropped by 50, 000 in 2004 from 2003, the steepest decline since 1938 • By 2005, about one in eight Americans will be 65 or older. By 2025, it will be nearly one in five. Source: Investor’s Business Daily, December 8, 2003; Cumberland Times-News, April 20, 2006; U. S. Centers for Disease Control and Prevention; U. S. Census 20

* * * Exurbs: Growth of Outer Suburbs • Northeasterners are moving south and west, and west coast residents are moving inland. • The states that gained the most residents: Florida, Arizona, Nevada • The states that lost the most residents: New York, California, Illinois Source: Cumberland Times-News, April 21, 2006; U. S. Census Bureau

* * * Global Environment • International Competition and Free Trade • Improvements in Transportation Communication • War & Terrorism • Global Changes and

* * * The Economic Cost of Disaster Costs Hurricane Katrina – 2005 (estimate)$ 200 B Kobe, Japan Earthquake -- 1995 100 B September 11, 2001 Attacks 70 B Northridge, CA Earthquake – 1994 44 B Hurricane Andrew – 1992 35 B Source: Business 2. 0 , November 2002; MSNBC. com, September 10, 2005. 23

* * * Does Global Experience Help Your Career? No Response 5% 19% Unnecessary Somewhat 20% 56% Very Helpful Source: USA Today 24

* * * Evolution of American Business • Agricultural/Manufacturing • Service Industries • Future? ? ? 25

* * * Trends in Business • • Rise of Information & Communication Technology • Globalization • • • Doing Business 24/7 Educated Consumers Aging Workforce Increasing Diversity Pyramid vs. Web Self-Directed, Empowered Employees Source: Keying In- Newsletter of the National Business Education Association , March 2003 Communication Skills Decision-Making Skills Teamwork Leadership Continual Learning

* * * Leveraging Diverse Workforce • According to the Society for Human Resources’ survey, about 70 percent of the respondents actively leverage workforce diversity through: • Ensuring leadership development programs reach • • • all employees (40%) Meeting the needs of diverse customers (39%) Integrating diversity into the organization’s business strategy (35%) Increasing innovation by tapping employees of all backgrounds (34%) Source: SHRM Weekly Survey, August 3, 2004

* * * Skill Level Required 58% Average Skill Level: 3. 6 40% 2% Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Source: Hudson Institute as reported in Arnold Packer, “Retooling the American Worker, ” Washington Post 28

* * * Current Skill Level 70. 5% Average Skill Level: 2. 6 16. 1% 6. 6% 6. 8% Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 29