developing a business mindset

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Developing a Business Mindset

Chapter 1

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Chapter 1 ObjectivesAfter studying this chapter, you will be able to:

• Explain the concept of adding value in a business and identify the major types of businesses.

• List three steps you can take to help you make the leap from consumer to business professional.

• Discuss the five major environments in which every business operates.

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Chapter 1 Objectives Cont.

• Explain the purpose of the six major functional areas in a business enterprise.

• Summarize seven of the most important business professions.

• Identify seven components of professionalism.

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What is a business?

• Any profit-seeking organization that provides goods and services designed to satisfy customers’ needs

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Adding Value to Satisfy Customers

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Revenue: Money a company brings in through the sale of goods and services.

Business model: A concise description of how a business intends to generate revenue.

Profit: Money left over after all the costs involved in doing business have been deducted from revenue.

Competitive advantage: Some aspect of a product or company that makes it more appealing to its

target customers.

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Not-for-profit Organizations

• Organizations that provide goods and services without having a profit motive; also called nonprofit organizations

• Examples include museums and charities.

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Types of BusinessesGoods Producing

Business

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Capital IntensiveCompanies that create value by making “things,” most of which are tangible

Labor IntensiveCompanies that create value by performing activities that deliver some benefit to customers

Service Business

Risk and Reward

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Risk and Reward

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Barrier to EntryAny resource or capability a company must have before it

can start competing in a given market

Some of the Barrier to Entry

•The capital needed to compete

•Government testing and approval

•Tightly controlled markets

•Strict licensing procedures

•Limited supplies of raw materials

•The need for highly skilled employees

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The Business Mindset

Business mindset: A view of business that considers the myriad decisions that must be made and the many problems that must be overcome before companies can deliver the products that satisfy customer needs

Making the Leap from Buyer to Seller•Develop a business mindset.

•Appreciate the role of business in society.

•Use this course to jumpstart your career.

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The Business Mindset

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Positive and Negative Effects of Business

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Using This Course to Jump-start Your Career

• Develop a fundamental business

vocabulary

• Introduce to a variety of jobs in business

fields (accounting, economics, human

resources, management, finance, and

marketing)

The Multiple Environments of Business

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Recognizing the Multiple Environments of Business

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• Social environment Trends and forces in society at large

Stakeholders

Internal and external groups affected by a company’s decisions and activities

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• Technological environment Forces resulting from the practical application

of science to innovations, products, and processes

Disruptive technologies► Those that fundamentally change the nature

of an industry► Can be powerful enough to create or destroy

entire companies.

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• Economic environment The conditions and forces that affect the cost

and availability of goods, services, and labor and thereby shape the behavior of buyers and sellers

• Legal and regulatory environment Laws and regulations at local, state, national,

and even international levels

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• Market environment A company’s target customers, the buying

influences that shape the behavior of those customers, and competitors that market similar products to those customers

Major Functional Areas in a Business Enterprise

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• Research and development (R&D)Functional area responsible for conceiving and designing new products

• Information technology (IT)Systems that promote communication and information usage through the company or that allow companies to offer new services to their customers


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• Manufacturing, production, or operations An area where the company makes whatever it

makes (for goods-producing businesses) or does whatever it does (for service businesses)

Purchasing, logistics, facilities management


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• Marketing Charged with identifying opportunities in the

marketplace Working with R&D to develop the products to

address those opportunities Creating branding and advertising strategies

to communicate with potential customers, and setting prices


• Finance and accounting Responsible for virtually every aspect of a firm’s

finances

Ensuring that the company has the funds it needs to operate

Monitoring and controlling how those funds are spent

Drafting reports for company management and outside audiences such as investors and government regulators

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• Human resources (HR) Responsible for recruiting, hiring, developing, and supporting employees

• Business ServicesExist to help companies with specific needs in law, banking, real estate, and other areas

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Exploring Careers in Business

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Operation manager manages the people and processes involved in creating goods and services.

Human resource specialist plans and directs human resource activities including recruiting, training and development, compensation and benefits, employee and labor relations, and health and safety.

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Information technology manager designs, implements, and maintains systems that help deliver the right information at the right time to the right people in the organization.

Marketing specialist works in branding strategy, electronic commerce, advertising, public relations, creative communication, or interpersonal relations.

Sales professional is responsible for building relationships with customers and helping them make purchase decisions.

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Accountant collects, analyzes, and reports on financial matters—such as analyzing budgets, assessing the manufacturing costs of new products, and preparing state and federal tax returns. They also perform audits to verify financial reports or find ways to lower costs.

Financial manager plans for the company’s financial needs, invests funds, and raises capital.

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Elements of Professionalism

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Being a Team Player

• Professionals know that they are contributors to a larger cause

• Great team players know how to make those around them more effective

• Being a team player also means showing loyalty to your organization and protecting your employer’s reputation

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Communicating Effectively

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• Listen actively• Provide practical information• Give facts rather than vague impressions• Don’t present opinions as facts• Present information in a concise and efficient

manner• Clarify expectations and responsibilities• Offer compelling, persuasive arguments, and

recommendations

Maintaining a Confident, Positive Outlook

• Successful people are optimistic

• Successful people buckle-down and get the job done despite obstacles

• Energy, either positive or negative, is contagious

• One negative personality can make an office miserable

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Applying What You’ve Learned

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• Explain the concept of adding value in a business and identify the major types of businesses

• List three steps you can take to help make the leap from consumer to business professional

• Discuss the five major environments in which every business operates

• Explain the purpose of the six major functional areas in a business enterprise

• Summarize seven of the most important business professions

• Identify seven components of professionalism

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Input-transformation-output Relationships for Typical Systems

Department Store

Shoppers, stock of goods

Displays, sales clerks

Attract customers, promote products,

fill orders

Sales to satisfied customers

College or University

High School graduates, books

Teachers, classrooms

Impart knowledge & skills

Educated individuals

Automobile Factory

Sheet steel, engine parts

Tools, equipment, workers

Fabrication & assembly of cars High-quality cars

Restaurant Hungry customers, food

Chef, waitress, environment

Well-prepared & well-served food

Satisfied customers

Hospital Patients, medical supplies

MDs, nurses, equipment Health care Healthy

individuals

Typical Desired Output

Transformation Function

Transformation Components

InputsSystem

developing a business mindset

Documents

view of business

business model

business professional

business enterprise

business mindsetchapter

role of business

business fields accounting

important business professions