Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
Complete Solutions Included ✅
CHAPTER 1
Case Answers Included ✅
THE CHANGING FACE OF BUSINESS
Chapter Overview
To succeed, companies must intuitively understand 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 book 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: a natural force that guides free market capitalism
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
Crowdsourcing: enlisting the collective talent of a number of people to get work done
Diversity: blending individuals of different genders, ethnic backgrounds, cultures, religions, ages, and
physical and mental abilities to enhance a firm’s chances of success
Copyright ©2025
1-1
,Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
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
Good: tangible products that can be physically bought or sold
Labor: includes anyone who works, including both the physical labor and the intellectual inputs
contributed by workers.
Land: is used in the production of a good, and includes all production inputs or natural resources that are
useful in their natural states such as oil, gas, minerals, and timber.
Nearshoring: outsourcing production or services to locations near a firm’s home base.
Not-for-profit organizations: organizations that have primary objectives such as public service rather
than returning a profit to their owners
Offshoring: relocation of business processes to lower-cost locations overseas
Outsourcing: using outside vendors—contracting work out to another party—for the production of goods
or fulfillment of services and functions previously performed in house
Private enterprise system: economic system that rewards companies for their ability to identify and
serve the needs and demands of customers
Private property: most basic freedom under the private enterprise system; the right to own, use, buy,
sell, and bequeath land, buildings, machinery, equipment, patents, individual possessions, and various
intangible kinds of property
Profits: rewards for businesspeople who take the risks involved to offer goods and services to customers
Relationship era: the business era in which companies seek ways to actively nurture customer loyalty by
carefully managing every interaction
Relationship management: collection of activities that build and maintain ongoing, mutually beneficial
ties with customers and other parties
Services: intangible products that provide benefits to others or assistance from others
Social era: a new approach to the way businesses and individuals interact, connect, communicate, share,
and exchange information with each other in virtual communities and networks around the world.
Strategic alliance: partnership formed to create a competitive advantage for the businesses involved; in
international business, a business strategy in which a company finds a partner in the country where it
wants to do business
Transaction management: building and promoting products in the hope that enough customers will buy
them to cover costs and earn profits
Vision: the ability to perceive marketplace needs and what an organization must do to satisfy them
Copyright ©2025
1-2
,Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
Annotated High-Level Lecture Outline
Learning Objective 1:
Define business.
Business consists of all profit-seeking activities that provide goods and services necessary to an
economic system. Not-for-profit organizations are business-like establishments whose primary
objective is public service over profits.
Opening Vignette: Changemaker
Who is Jeff Bezos, and how did he build the Amazon empire from scratch? Before founding
Amazon in 1994, Bezos was much like you — an undergraduate— who went on after college
to work various roles in business before making a bold leap to create something extraordinary.
Founding Amazon, an online bookstore, in his garage, he embarked on a journey that
transformed the way the world shops. Bezos' vision and determination led to the creation of the
world's largest online retailer. He oversaw the development of Amazon's e-commerce platform
as it expanded from books to a vast array of products, Kindle e-readers, and the Amazon Web
Services (AWS) cloud computing division, which has become a cornerstone of the modern
internet. Jeff Bezos is not only a business visionary but also a hands-on leader. With a
workforce spanning hundreds of thousands of employees and annual revenues in the hundreds
of billions, Bezos has helmed Amazon's expansion into multiple industries, including media,
logistics, and cloud services.
WHAT IS BUSINESS?
1. Business
a. The term “business” refers to a broad concept.
b. Business consists of all profit-seeking activities and enterprises that provide
goods and services necessary to an economic system.
i. Businesses produce tangible goods or provide services.
ii. Business drives economics and improves the standard of living.
c. At the heart of every business endeavor is an exchange between a buyer in need
of a good or service and a seller who makes a profit.
d. Profits are rewards for businesspeople who risk blending people, technology,
and information to create and market goods or services.
i. Profits are incentives for people to start companies, grow them, and
provide competitive products.
ii. In accounting, profit is the difference between a firm’s revenues and the
expenses it incurs in generating these revenues.
iii. A company cannot survive without profits.
2. Not-for-Profit Organizations
Copyright ©2025
1-3
, Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
a. Not-for-profit organizations are business-like establishments that have primary
objectives other than profits. A tax law provision granted to not-for-profits by
the Internal Revenue Service is called section 501(c)(3).
b. They place public service over profits but need money to achieve their goals.
i. In the private sector they include museums, libraries, trade associations,
charitable organizations, and religious organizations.
ii. In the public sector, they include government agencies, political parties,
and labor unions.
c. Not-for-profits are a major part of the U.S. economy.
i. More than 1.5 million not-for-profit organizations operate in the United
States, contributing more than $1 trillion in a recent year.
ii. They employ more workers than all federal and state government
agencies combined and have millions of unpaid volunteers.
d. They face many of the same challenges as businesses when it comes to raising
money.
i. Without funds, they cannot provide services.
ii. Some not-for-profits sell merchandise or set up profit-generating arms.
Assessment Check Answers
1.1 What activity lies at the center of every business endeavor?
At the center of every business endeavor is an exchange between a buyer and a seller.
1.2 What is the primary objective of a not-for-profit organization?
Not-for-profit organizations place public service above profits, although they need to raise
money in order to operate and achieve their social goals.
Learning Objective 2:
Identify and describe the factors of production.
The factors of production consist of four basic inputs: land, labor, capital, entrepreneurship, and
knowledge.. Land is used in the production of a good, and it includes all production inputs or
natural resources that are useful in their natural states such as oil, gas, minerals, and timber.
Copyright ©2025
1-4
Complete Solutions Included ✅
CHAPTER 1
Case Answers Included ✅
THE CHANGING FACE OF BUSINESS
Chapter Overview
To succeed, companies must intuitively understand 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 book 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: a natural force that guides free market capitalism
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
Crowdsourcing: enlisting the collective talent of a number of people to get work done
Diversity: blending individuals of different genders, ethnic backgrounds, cultures, religions, ages, and
physical and mental abilities to enhance a firm’s chances of success
Copyright ©2025
1-1
,Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
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
Good: tangible products that can be physically bought or sold
Labor: includes anyone who works, including both the physical labor and the intellectual inputs
contributed by workers.
Land: is used in the production of a good, and includes all production inputs or natural resources that are
useful in their natural states such as oil, gas, minerals, and timber.
Nearshoring: outsourcing production or services to locations near a firm’s home base.
Not-for-profit organizations: organizations that have primary objectives such as public service rather
than returning a profit to their owners
Offshoring: relocation of business processes to lower-cost locations overseas
Outsourcing: using outside vendors—contracting work out to another party—for the production of goods
or fulfillment of services and functions previously performed in house
Private enterprise system: economic system that rewards companies for their ability to identify and
serve the needs and demands of customers
Private property: most basic freedom under the private enterprise system; the right to own, use, buy,
sell, and bequeath land, buildings, machinery, equipment, patents, individual possessions, and various
intangible kinds of property
Profits: rewards for businesspeople who take the risks involved to offer goods and services to customers
Relationship era: the business era in which companies seek ways to actively nurture customer loyalty by
carefully managing every interaction
Relationship management: collection of activities that build and maintain ongoing, mutually beneficial
ties with customers and other parties
Services: intangible products that provide benefits to others or assistance from others
Social era: a new approach to the way businesses and individuals interact, connect, communicate, share,
and exchange information with each other in virtual communities and networks around the world.
Strategic alliance: partnership formed to create a competitive advantage for the businesses involved; in
international business, a business strategy in which a company finds a partner in the country where it
wants to do business
Transaction management: building and promoting products in the hope that enough customers will buy
them to cover costs and earn profits
Vision: the ability to perceive marketplace needs and what an organization must do to satisfy them
Copyright ©2025
1-2
,Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
Annotated High-Level Lecture Outline
Learning Objective 1:
Define business.
Business consists of all profit-seeking activities that provide goods and services necessary to an
economic system. Not-for-profit organizations are business-like establishments whose primary
objective is public service over profits.
Opening Vignette: Changemaker
Who is Jeff Bezos, and how did he build the Amazon empire from scratch? Before founding
Amazon in 1994, Bezos was much like you — an undergraduate— who went on after college
to work various roles in business before making a bold leap to create something extraordinary.
Founding Amazon, an online bookstore, in his garage, he embarked on a journey that
transformed the way the world shops. Bezos' vision and determination led to the creation of the
world's largest online retailer. He oversaw the development of Amazon's e-commerce platform
as it expanded from books to a vast array of products, Kindle e-readers, and the Amazon Web
Services (AWS) cloud computing division, which has become a cornerstone of the modern
internet. Jeff Bezos is not only a business visionary but also a hands-on leader. With a
workforce spanning hundreds of thousands of employees and annual revenues in the hundreds
of billions, Bezos has helmed Amazon's expansion into multiple industries, including media,
logistics, and cloud services.
WHAT IS BUSINESS?
1. Business
a. The term “business” refers to a broad concept.
b. Business consists of all profit-seeking activities and enterprises that provide
goods and services necessary to an economic system.
i. Businesses produce tangible goods or provide services.
ii. Business drives economics and improves the standard of living.
c. At the heart of every business endeavor is an exchange between a buyer in need
of a good or service and a seller who makes a profit.
d. Profits are rewards for businesspeople who risk blending people, technology,
and information to create and market goods or services.
i. Profits are incentives for people to start companies, grow them, and
provide competitive products.
ii. In accounting, profit is the difference between a firm’s revenues and the
expenses it incurs in generating these revenues.
iii. A company cannot survive without profits.
2. Not-for-Profit Organizations
Copyright ©2025
1-3
, Boone I Kurtz I Pfaltzgraf // Contemporary Business // 20th Edition — Instructor’s Manual
a. Not-for-profit organizations are business-like establishments that have primary
objectives other than profits. A tax law provision granted to not-for-profits by
the Internal Revenue Service is called section 501(c)(3).
b. They place public service over profits but need money to achieve their goals.
i. In the private sector they include museums, libraries, trade associations,
charitable organizations, and religious organizations.
ii. In the public sector, they include government agencies, political parties,
and labor unions.
c. Not-for-profits are a major part of the U.S. economy.
i. More than 1.5 million not-for-profit organizations operate in the United
States, contributing more than $1 trillion in a recent year.
ii. They employ more workers than all federal and state government
agencies combined and have millions of unpaid volunteers.
d. They face many of the same challenges as businesses when it comes to raising
money.
i. Without funds, they cannot provide services.
ii. Some not-for-profits sell merchandise or set up profit-generating arms.
Assessment Check Answers
1.1 What activity lies at the center of every business endeavor?
At the center of every business endeavor is an exchange between a buyer and a seller.
1.2 What is the primary objective of a not-for-profit organization?
Not-for-profit organizations place public service above profits, although they need to raise
money in order to operate and achieve their social goals.
Learning Objective 2:
Identify and describe the factors of production.
The factors of production consist of four basic inputs: land, labor, capital, entrepreneurship, and
knowledge.. Land is used in the production of a good, and it includes all production inputs or
natural resources that are useful in their natural states such as oil, gas, minerals, and timber.
Copyright ©2025
1-4
