Chapter Notes: 1,2,4 & 5
Chapter Notes: 1,2,4 & 5 BUS 100
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BUS 100 Chapter 1 Business Now Change Is the Only Constant gm quot quotIt is not the strongest of the species that survive nor the most intelligent but the one most responsible to changequot Charles Darwin Value the relationship between the price of a good or a service and the bene ts that it offers to customers Social media has a huge role in the business and environment m 11a Business basics amp Key de nitions Business any organization or activity that provides goods and services in an effort to earn a pro t Revenue aka Pro t a nancial reward that comes from starting and running a business or money that a business earns in sales When they bring in less man that What covers expenses it s a loss Example opening a lemonade stand in the middle of the park You buy all the lemons sugar cups sign table chair etc you make a huge amount of pro t from thirsty kids But whatever you made minus what you spent is considered the pro t The money loss into building what you were trying to sell Statistics more than 85 of these new rms start with fewer than ve employees but eventually provide a total of more than a million jobs per year 3 Entrepreneurs people who risk their time money and other resources to start and manage a business gt Some college students start off with an entrepreneurial mindset but are discourages by the economy gt Entrepreneurs wealth causes a ripple effect that bene ts many others around like construction companies to build your building government collecting taxes advertisers that may be on your website and most importantly your team of employees Statistics new companies bring in 10 of all new jobs in any year 12 The History of Business Putting it All in Contrast gt Industrial rev new tech leads to speedy industrialization from mid 1700s mid 18005 gt Entrepreneurship era entrepreneurs in the 1800s began building empires Which then raised standard of living Standard of living the quality and quantity of goods and services available to a population gt Production era jobs were specialized productivity increased it lowered costs amp prices Historical Fact Henry Ford started the assembly line gt Marketing era to differ themselves from others they developed brands and unique identities so that consumers knew the difference between products gt Relationship era aimed to build long term relationships with customers The key was technology websites digital resources to reach out to customers and use their data to serve them better 13 Non Pro ts and the Economy The Business of Doing Good Non pro ts are business like establishments that employ people and produce goods and services with the fundamental goals of contributing to the community rather than nancial gain Non pro t employs about 1 and 10 paid workers in the construction industry 14 Factors of Production four fundamental resources to achieve their objectives 1 Natural resources things in their natural state land fresh water wind and mineral deposits They must be extracted puri ed harnessed people can t create them 2 Capital machines tools buildings information and technology What businesses need to create their goods services 3 Human resources physical intellectual creative contributions of everyone who works within an economy 4 Entrepreneurship people who risk the launching of operating their own businesss 15 Business Environment context for success business environment business operates 5 components economic competitive tech social global environment Low federal tax is one government policy that supports business corruption a loss affects the economic environment low level of corruption reduces the risks of running a business 15b The Competitive Environment Companies focus on customer satisfaction their goal to develop long term mutually bene cial relationships with customers m current customersgt loyal advocatesgt vocal promoters results they ll get those new customers more effectively than any discount program Example Amazon Coca Cola Northwestern Mutual Measure of value is the size of the gap between products bene ts and price A product has value when its bene ts to the customer are equal to or greater the price that the customer pays Customers aren t always delighted if the product is 99 cents of cheap quality they could buy the product else where Quality Quantity leading edge rms offer products just when the market embraces them EX Apple they control 70 of digital music player market with their iPod touch and Nanos N 7 quot r quot i u gr 3 39 if 39 21quot 39 5quot a 15b The Competitive Environment getting current customers to buy more of your product is a lot less expensive than convincing potential customers to try your product for the rst time Companies such as Amazon Coca Cola and Northwestern Mutual life insurance lead their industries in customer satisfaction The best measure of value is the size of the gap between product bene ts and price The key to value is quality and virtually all successful rms offer topquality products relative to their direct competitors Leading Edge VS Bleeding Edge Speedtomarket the rate at which a rm transforms concept into actual products 15d The Technological Environment business technology any tools like computers telecommunications and other digital products ecommerce online sales allow businesses to tap into a worldwide community of potential customers eBay amazon Craigslist etc o a 15e The Social Environment demographics measurable characteristics of a population gender traits population size and density race and age 15f The Global Environment free trade an international economic and political movement designed to help goods and services ow more freely across international boundaries NAFTA North American Free Trade Agreement This has lowered prices and increased quality of many products and competition is global discussed more in depth in Chapter 3 General Agreement on Tariffs and Trade GATT an international trade agreement that has taken bold steps to lower tariffs and promote free trade Which is signed by 125 countries As a result of this agreement goods move more freely than ever across the international boundaries BUS 100 Ch 2 Unemployment In ation GDP Growth In class lecture notes 1 Unemployment 16 and over not working or seeking work percent of people in the labor force who don t have jobs U l lEl l olo39iilrnont Halo flE Aonod W k Unolrnploylmont u m m Em Halo Total Labor Workforce Real Life Today 2015 unemployment rate 51 2 In ation measuring changes in the cost of living 3 GDP value of output of goods and services produced a year Fact Government can change the quantity of money Too much money in ation asset bubbles Too little money economic slowdown Goldilocks policy not too hot not too cold Kelly Williams BUSN Book notes Ch2 Economics The Framework for Business 21 Economics Navigating a Crisis Economy a nancial and social system of how resources ow through society from productions to distribution to consumption Economics the study of the choices that people companies and governments make in allocating society s resources Macroeconomics the study of a country s overall economic dynamics such as the employment rate the GDP and taxation policies Microeconomics focuses on smaller economic units such as individual consumers families and individual businesses I Im FAME 21a Global economic Crisis How Did This Happen Real life 19905 America enjoyed unprecedented growth Unemployment was low productivity was high in ation was low and real standard of living for the average American rose signi cantly Economy grew more than 24 trillion jump of 33 in just 5 years To avert recession by increasing the money supply and encouraging investments the FDR lowered the interest rates from 65 in mid 20005 to 125 by the end of 2002 Subprime mortgage loans loans to borrowers with low credit scores high debt to income ratios or other signs of reduced ability to repay the money they borrow They were attractive to lenders because of the higher return growth in housing prices and it seemed relatively low risk 22 Managing the Economy Through Fiscal and Monetary Policy 22a Fiscal Policy Fiscal Policy refers to government efforts to in uence the economy through taxation and spending decisions that are designed to encourage growth boost employment and curb in ation Debt Ceiling Fiscal Cliff Debt ceiling is the maximum amount Congress lets the government borrow lts supposed to limit the amount the government can borrow The congress has raised the debt ceiling 74 times since 1962 Budget surplus Overage that occurs when revenue is higher than expenses over a given period of time Budget de cit shortfall that occurs when expenses are higher than revenue over a given period of time Federal debt the sum of all the money that the federal government has borrowed over the years and not yet repaid 22c Monetary Policy refers to actions that shape the economy by in uencing interest rates and the supply of money Federal Reserve essentially the central bank of the US manages US monetary policy The FED is headed by seven members of a Board of Governors Commercial banks privately owned nancial institutions that accept demand deposits and make loans and provide other services for the public Money supply the total amount of money within the overall economy Money anything generally accepted as a medium of exchange a measure of value or a means of payment M1 all currency paper bills and metal coins plus checking accounts and traveler s checks M2 All of M1 plus most savings accounts money market accounts and certi cates of deposit low risk saving vehicles with a xed term typically less than one year When the economy contracts the Fed typically increases the money supply If less cash is available interest rates will rise If more cash is available interest rates rates usually drops encouraging businesses to expand and consumers to spend Open market operations involve buying and selling government securities which include treasury bonds notes and bills How do they work When the economy is weak the FED buys government securities on the open market When the FED pays the sellers of these securities money previously held by the FED is put into circulation When in ation becomes a concern the FED sells securities Buyers of securities write checks to the Fed to pay for securities Buyers of securities write checks to the Fed to pay for securities they bought the fed withdraws these funds from banks Discount rate interest rate that the Fed reduces the discount rate banks can obtain funds at a lower cost and use these funds to make more loans to their own customers Reserve Requirement Changes a rule set by the Fed which speci es the minimum amount of reserves or funds a bank must hold expressed as a percentage of the bank s deposits If the fed increases the reserve requirement banks must hold more funds meaning they will have fewer funds to make loans available The US economy is 70 based on consumer spendingquot Time Magazine 23 Capitalism The Free Market System economic system structure for allocating limited resources FDIC Federal Deposit Insurance Corporation a federal agency that insures deposits in banks and thrift institutions for up to 250000 per customer per bank Capitalism private enterprise or free market system 23a The Fundamental Rights of Capitalism 1 The right to own a business and keep after taX pro ts 2 The right to private property 3 The right to free choice 4 The right to fair competition 23b Four Degrees of Competition 0 Pure many competitors selling identical products 0 Monopolistic many competitors selling different products 0 Oligopoly only handful of competitors selling products that can be similar or different Monopoly a single producer dominating the industry Socialism 07 Ca pitaliom Too haoo llon loo rs you give ho quotwon i onoto yourfnootl 9 3 EL E35 WU 53 one to your r39lilohost llfrliE d 39 23c Supply amp Demand Fundamental Principles of a Free Market natural monopoly one company as the supplier of a product because the nature of that product makes a single supplier more ef cient than multiple competing ones Supply quantity of products that producers are willing to offer for sale at different market prices Supply curve graphed relationship between price and quantity from a supplier standpoint Demand refers to the quantity of products that consumers are willing to buy at different market prices Demand curve graphed relationship between price and quantity from a customer demand standpoint Equilibrium price price associated with the point at which the quantity demanded of a product equals the quantity supplied 1 Suppl Pri CE 24 Planned Economies Socialism and Communism Quan tity 24a Socialism economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare 24b Communism economic and political system that calls for public ownership of virtually all enterprises under the direction of a strong central government 25 Mixed Economies The Story of the Future mixed economies economies that embody elements of both planned and market based economic systems Privatization government owned business 26 Evaluating Economic Performance What s Working 26a Gross Domestic Product GDP the total value of all nal goods and services produced within a nation s physical boundaries over a given period of time 26b Employment Level unemployment rate the percentage of people in the labor force over age 16 who do not have jobs and are actively seeking employment Business cycle the periodic contraction and expansion that occur over time in virtually every economy Contraction A period of economic downturn marked by rising unemployment and fall Recession an economic downturn marked by a decrease in the GDP for two consecutive quarters Depression an especially deep and longlasting recession 26c The Business Cycle Contraction period of economic downturn marked by rising unemployment Recession when GDP decreases for two consecutive quarters Depression especially deep and long lasting recession Recovery period of rising economic growth and increasing employment following a contraction Expansion a period of robust economic growth and high employment 26d Price Levels In ation prices on average are rising Disin ation a period of showing average price increases across the economy Hyperin ation when average prices increase more than 50 per month De ation a period of falling average prices across the economy Consumer price index CPI a measure of in ation that evaluates the change in the weightedaverage price of goods and services that the average consumer buys each month Producer price index PPI a measure of in ation that evaluates the change over time in the weighted average wholesale prices Productivity basic relationship between the 26e Productivity refers to the relationship between the goods and services that an economy produces and the resources needed to produce them Bus 100 Chapter 4 Ethics and Social Responsibility A Close Relationship Social responsibility is the obligation of a business to contribute to society Ethics a set of beliefs about right and wrong good and bad 41a De ning Ethics Murkier Than You39d Think Ethics sets of beliefs about right and wrong good and bad People come from such diverse backgrounds that establishing broad agreements on speci c ethical standards can be daunting Legal Ethical Matrix Legal amp unethical promoting highcalorie low nutrient foods with inadequate info about the risks Legal amp Ethical producing highquality products Illegal amp Unethical Embezzing money Illegal and Ethical Providing rockbottom prices only to distributors in underserved areas 41b Universal Ethical Standards A Reasonable Goal or Wishful Thinking Universa ethical standards apply to everyone across a broad spectrum of s ua ons Universal Ethical Standards Trustworthiness Be honest Don t deceive cheat or steal Do what say you39ll do Respect Treat others how you39d like to be treated Be considerate Be tolerant of differences Responsibility Persevere Be self controlled and self disciplined Be accountable for your choices Fairness Provided equal opportunity Be open minded Be accountable for your choices Ca ng Be kind Be compassionate Express gratitude Citizenship Contribute to the community protect the environment Cooperate whenever feasible 42 Business Ethics Not an Oxymoron Business ethics the application of right and wrong good and bad in a business setting The most challenging decisions in business seem to arise when values are in con ict when whatever you do will have negative consequences forcing you to choose among bad options Ethical dilemmas differ from ethical lapses which involve clear misconduct 43 Ethics Multiple Touch points 43a Ethics and the Individual the Power of One Ethical choices begin with your ethical individuals personal needs family culture and religion all in uence your value system Key principles of most decision guides Do you fully understand each dimension of the problem Who would bene t Who would suffer Are the alternative solutions legal Are they fair Does your decision make your comfy or leaves a gut feel Could you defend your decision on the nightly TV news Have you considered and reconsidered your responses to each queonn 43b Ethics and the Organization It Takes a Village quot CEOs in particular must communicate their personal commitment to high ethical standards and consistently drive the message down to employees through their actionsquot 43c Creating and Maintaining an Ethical Organization The ethics resource center says a good culture has ethicrelated actions at all levels of the business organization company etc ERC says the senior management commitment to ethics can cause employees to be more fully engaged Code of ethics formal written document that de nes the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations 1 Get executive buy in and commitment to follow through Top managers need to communicate even over communicate 2 Establish expectations for ethical behavior at all levels of the organization from the CEO to the nighttime cleaning crew Make sure outside parties such as supplies distributors customers understand the standards 3 Integrate ethics into mandatory staff training New employee orientation to on going training ethics must play a role 4 Ensure that your ethics code is both global and local in scope Employees in every country should understand general principles and applications Translate into as many languages as necessary 5 Build and maintain a clear reporting structure for ethical concerns and violations The structure should allow employees to seek anonymous guidance for ethical concerns 6 Establish protection for whistle blowers people who report illegal or unethical behavior 7 Enforce codes of ethics When people violate ethical norms companies must respond immediately and when ever appropriate publicly to retain employee trust Without enforcement the code of ethics becomes meaningless 44 De ning Social Responsibility Making the World a Better Place Social Responsibility is the obligation of a business to contribute to society Q How can a company balance the need to contribute against the need to boost pro ts especially when the two con ict A Depends on the business39s values mission resources and management philosophy 44a The Stakeholder Approach Responsibility to Whom Stakeholders any groups that have a stake or a personal interest in the performance and actions of an organization Responsibility to Employees Creating Jobs that Work Employers must comply with laws that include equal opportunity workplace safety minimumwage and overtime requirements etc They ensure that hard work commitment and talent pay off Companies are even creating programs that help works that face challenges with raising kids and caring for elderly parents They have onsite day care companysponsored day camp and referral services for elder care Responsibility to Customers Value Honesty and Communication One core responsibility of a business is to deliver consumer value by providing quality products at fair prices Consumerism a widely accepted social movementsuggests that consumer rights should be starting points President Kennedy de ned rights in response to both consumer expectations and legal requirements The Right To Be Safe Businesses are legally responsible for injuries and damages cause by their products even if they have no reason to suspect that their products might cause harm The Right To Be Informed The law requires rms in a range of industries from mutual funds to groceries to pharmaceuticals to provide the public with extensive information Ex FDA Nutrition facts label The Right To Choose Freedom of choice is a fundamental element of the capitalist US economy Consumers choose to purchase the products that best meet their needs The Right to Be Heard Socially responsible companies make it easy for consumers to express legitimate complaints Planned obsolescence the strategy of deliberately designing products to fail in order to shorten the time between purchases This is a violation of social responsibility Responsibility to Investors Fair Stewardship and Full Disclosure Responsibility of business to investors is to make money to create an on going stream of pro ts Companies achieve and maintain long term earnings in the context of responsibility to all stake holders Short term pro ts traded for long term success SarbanesOxley Act federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting rms lt limits con ictof interest issues and require nancial of cers and CEOs to certify the validity of their nancial statements Responsibility to the Community Business and the Greater Good Businesses can contribute to society two main ways philanthropy and responsibility 1 Corporate philanthropy business donations money or items to non pro t groups As all as corps playing their employees to spend time volunteering at an non pro ts Ex Patagonia allows workers after one year of service to apply for two month internships with environmental notfor pro ts while they are still getting paid from Patagonia Causerelated marketing marketing partnerships between businesses and non pro t organizations designed to spike sales for the company and raise money for the non pro t The tax dollars are not deductible for the company but it builds the brand and name for the company and organization 2 Corporate Responsibility business contributions to the community through the actions of the business itself rather than donations of money and time Responsibility to the Environment Most crucial element of responsibility to the community Businesses are a huge consumer of limited resources like timber oil minerals etc The government set a minimum standard for environmental protection at the federal state and local levels Sustainable development doing business to meet the needs of the current generation without harming the ability of future generations to meet their needs Results have been impressive across a range of industries Especially for fast food restaurants using recycled paper products Some companies have started to measure their carbon footprint refers to the amount of harmful greenhouse gases that a r emits throughout its operations both directly and indirectly Green marketing developing and promoting environmentally sound products and practices to fain a competitive edge 45 Ethics and Social Responsibility in the Global Arena A House of Mirrors Globalization has made ethics and social responsibility even more complicated for workers at every level Bribery and corruption are among the most challenging issues faced my companies and individuals that are involved in international business Real Life Walmart was accused of bribing Mexico of cials to speed the development of their stores in Mexico Ralph Lauren Corporation was accused of bribing Argentine customs of cials to allow merchandise into that country The most sociably responsible companies establish codes of conduct for their vendors setting clear policies for human rights wages safety and environmental impact Real Life Levi Strauss was the rst global company to establish a comprehensive code of conduct for its contractors They found at that one of their locations in Bangladesh were hiring children under the age of 14 This violated the company s principles but was tolerated in their country In return Levi agreed to pay for tuition books and uniforms for the children workers who attended school Code of conducts work best with monitoring commitment and enforcement to nding solutions for all that work for the companies 46 Monitoring Ethics and Social Responsibility Who is Minding the Store Social audit a systematic evaluation of how well a rm is meeting its ethics and social responsibility goals BUS 100 Ch5 Communications Creating and Delivering Messages that Matter 51 Excellent Communication Skills Your Invisible Advantage communication the transmission of information between a sender and a recipient effective communication is only when you transmit relevant meaning to your audience it must be dynamic uid and twoway which includes listening Understanding feedback from the audience and responding appropriately from the core of successful business communication quotWhen you come right down to it how many people speak the same language even When they speak the same language Russell Hoban 51a Communication Barriers quotThat39s Not What I Meantquot noise any interference that causes the message you send to be different from the message your audience understands Communication barriers obstacles to effective communication typically de nes in terms of physical language body language cultural perceptual and organizational barriers Forms of Barriers Physical Ranges from a document that looks like a wall a cold room or chairs that force your audience to sit at a lower level than you Language slang regional accents Body Language wrong body language can distract your audience Perceptual how your audience perceives you Organizational unspoken rule that the people at the top of the organization don t talk to the people at the bottom Cultural greeting colleagues eye contact small talk at meetings lunch breaks with each other Intercultural communication will become increasingly pivotal to long term business success 52 Nonverbal Communication Beyond the Words nonverbal communication should be to reinforce the meaning of your message Random facial expressions and disconnected body language arbitrary arm thrusts Eye contact tone of voice facial expressions gestures anol posture Active Listening attentive listening that occurs when the listener focuses his or her complete attention on the speaker 53 Choose the Right Channel A Rich Array of Options Communication channels the various ways in which a message can be sent ranging from one on one in person meetings to internet message bards Memos email texting voicemail telephone con vo videoconferencing in person presentation facetoface meeting 54 Pick the Right Words Is That Car Preloved or just Plain Used Analyze your audience Expectations What kind of language do most people of the organization use Education level of the audience should drive the level of vocab of the message Profession some professions are rife with acronyms 54b Be Concise be clear and concise in business Include all information that your audience might need 54c Avoid Slang unless your audience will understand and it ts the presentation The risk alienates you from your audience 54d Avoid Bias gender age race ethnicity nationality 54e Use the Active Voice Whenever Possible active voice when the subject of your sentence is doing the action described by the verb passive voice when the subject is not doing the action described by the verb 55 Write High Impact Messages Breaking through the Clutter 55a Strike the Right Tone Use common words in most situations 0 Use the active voice quotWe made a mistakequot rather than quotA Mistake was madequot 0 Use personal pronouns Use contractions as often as you would when speaking 55b Don39t Make Grammar Goofs It is OK to end a sentence with a preposition when doing so sounds natural and doesn t have an excessive amount of words o It is OK to begin sentences with quotAndquot or quotButquot o It is OK to split infinitives 55c Use Block Paragraphs 1Use single spacing 2Double space between paragraphs 3Do not indent the rst sentence of paragraphs 55d Use Headings and Bulleted Lists Where Appropriate Headings a heading is not a title Bulleted lists invaluable tool that can be used to engage the readeraudience 56 Create and Deliver Successful Verbal Presentations Hook Em and Reel Em In 56a Opening An interesting or Startling Statistic Audience Involvement A compelling story or anecdote A relevant simile or metaphor Engaging questions U39lbUUNH 56b Body use speci c examples and vivid comparisons that will illustrate points and bring them to life to the audience 56c Close the close of your presentation will summarize all your key points Then circle back to your intro Also sharing a quote or joke relevant to the content 56d Questions Decide whether you will accept questions during or after the presentation 56e Visual Aids Showing works better than simply telling Less is more Don t just read your slides aloud paraphrase Go easy on the special effects Don t let your slides upstage you 56f Google Presentations Easy software to use automatically saves easily accessible anywhere cloud database interactive with other users on group projects ideas conferences 569 Handling Nerves send yourself positive messages and motivation take slow and deep breaths take a sip of water to loosen up pick a friendly face in the audience remind yourself that your audience wants you to succeed 56 Handling Hostility stay calm and professional don t be afraid to pause before you gather your thoughts and answers once you answered the question don t reestablish eye contact use body language to reinforce that you are done interacting with the audience member 56i Incorporating Humor only include if you are positive it is funny and relevant to the topic 56j A Spot on the back wall speaking to the spot rather than directly to your audience 56k Delivery Dynamic Delivery vibrant compelling presentation delivery style that grabs and gold the attention of the audience IN CLASS Lecture Notes What is communication act of transmitting info exchange or info and meaning thru common symbols phenomenon of socially constructing meaning sender message receiver er Creator Unintentional Noise Examples of Communication barriers strong accent closed door technical terms Non verbal eye contact voice tone facial gestures posture Reinforce the meaning of your message Dress for success visible tattoos and piercings may increase your creditability in jobs
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