CHAPTER 1: THE CHANGING FACE OF BUSINESS
Chapter Overview
Business is the nation’s engine for growth. To succeed, business firms must know
what customers want so that they can supply it quickly and efficiently. Firms can lead in
advancing technology and other changes. They have the resources, know-how, and the
financial incentive to bring about innovation.
Businesses require physical inputs as well as the accumulated knowledge and
experience of managers and employees. Yet, they also rely on their ability to change with
the marketplace. Flexibility is a key to long-term success—and to growth.
This Canadian edition explores the strategies that allow companies to grow and
compete in today’s interactive marketplace, along with the skills that you will need to turn
ideas into action for your own success in business. This chapter defines business and its
role in society. It illustrates how the private enterprise system encourages competition
and innovation while preserving business ethics.
,Glossary of Key Terms
Brand: name, term, sign, symbol, design, or some combination that identifies the
products of one firm and differentiates them from competitors’ offerings
,Branding: process of creating an identity in consumers’ minds for a good, service, or
company; a major marketing tool in contemporary business
Business: all profit-seeking activities and enterprises that provide goods and services
necessary to an economic system
Capital: production inputs consisting of technology, tools, information, and physical
facilities
Capitalism: economic system that rewards firms for their ability to perceive and serve
the needs and demands of consumers; also called the private enterprise system
Competition: battle among businesses for consumer acceptance
Competitive differentiation: unique combination of organizational abilities, products,
and approaches that sets a company apart from competitors in the minds of customers
Consumer orientation: business philosophy that focuses first on determining unmet
consumer wants and needs and then designing products to satisfy those needs
Creativity: capacity to develop novel solutions to perceived organizational problems
Critical thinking: ability to analyze and assess information to pinpoint problems or
opportunities
Diversity: blending individuals of different genders, ethnic backgrounds, cultures,
religions, ages, and physical and mental abilities to enhance a firm’s chances of success
, Entrepreneur: person who seeks a profitable opportunity and takes the necessary risks
to set up and operate a business
Entrepreneurship: willingness to take risks to create and operate a business
Factors of production: four basic inputs for effective operation: natural resources,
capital, human resources, and entrepreneurship
Human resources: production inputs consisting of anyone who works, including both
the physical labour and the intellectual inputs contributed by workers
Natural resources: all production inputs that are useful in their natural states, including
agricultural land, building sites, forests, and mineral deposits
Nearshoring: outsourcing production or services to locations near a firm’s home base
Not-for-profit organization: organization that has primary objectives such as public
service rather than returning a profit to its owners
Offshoring: relocation of business processes to lower-cost locations overseas
Outsourcing: using outside vendors to produce goods or fulfill services and functions
that were previously handled in-house or in-country
Private enterprise system: economic system that rewards firms for their ability to identify
and serve the needs and demands of customers
Chapter Overview
Business is the nation’s engine for growth. To succeed, business firms must know
what customers want so that they can supply it quickly and efficiently. Firms can lead in
advancing technology and other changes. They have the resources, know-how, and the
financial incentive to bring about innovation.
Businesses require physical inputs as well as the accumulated knowledge and
experience of managers and employees. Yet, they also rely on their ability to change with
the marketplace. Flexibility is a key to long-term success—and to growth.
This Canadian edition explores the strategies that allow companies to grow and
compete in today’s interactive marketplace, along with the skills that you will need to turn
ideas into action for your own success in business. This chapter defines business and its
role in society. It illustrates how the private enterprise system encourages competition
and innovation while preserving business ethics.
,Glossary of Key Terms
Brand: name, term, sign, symbol, design, or some combination that identifies the
products of one firm and differentiates them from competitors’ offerings
,Branding: process of creating an identity in consumers’ minds for a good, service, or
company; a major marketing tool in contemporary business
Business: all profit-seeking activities and enterprises that provide goods and services
necessary to an economic system
Capital: production inputs consisting of technology, tools, information, and physical
facilities
Capitalism: economic system that rewards firms for their ability to perceive and serve
the needs and demands of consumers; also called the private enterprise system
Competition: battle among businesses for consumer acceptance
Competitive differentiation: unique combination of organizational abilities, products,
and approaches that sets a company apart from competitors in the minds of customers
Consumer orientation: business philosophy that focuses first on determining unmet
consumer wants and needs and then designing products to satisfy those needs
Creativity: capacity to develop novel solutions to perceived organizational problems
Critical thinking: ability to analyze and assess information to pinpoint problems or
opportunities
Diversity: blending individuals of different genders, ethnic backgrounds, cultures,
religions, ages, and physical and mental abilities to enhance a firm’s chances of success
, Entrepreneur: person who seeks a profitable opportunity and takes the necessary risks
to set up and operate a business
Entrepreneurship: willingness to take risks to create and operate a business
Factors of production: four basic inputs for effective operation: natural resources,
capital, human resources, and entrepreneurship
Human resources: production inputs consisting of anyone who works, including both
the physical labour and the intellectual inputs contributed by workers
Natural resources: all production inputs that are useful in their natural states, including
agricultural land, building sites, forests, and mineral deposits
Nearshoring: outsourcing production or services to locations near a firm’s home base
Not-for-profit organization: organization that has primary objectives such as public
service rather than returning a profit to its owners
Offshoring: relocation of business processes to lower-cost locations overseas
Outsourcing: using outside vendors to produce goods or fulfill services and functions
that were previously handled in-house or in-country
Private enterprise system: economic system that rewards firms for their ability to identify
and serve the needs and demands of customers
