INSTRUCTOR’S MANUAL
CONTEMPORARY BUSINESS
4TH CANADIAN EDITION
CHAPTER NO. 1: THE CHANGING FACE OF BUSINESS
REVIEW QUESTIONS AND ANSWERS
1. Why is business so important to a country’s economy?
Business provides the bulk of employment opportunities, as well as the products and services
that people need. Business drives the economic pulse of a nation.
LO 1.1 Define business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
2. In what ways are not-for-profit organizations a substantial part of the Canadian economy?
What challenges do not-for-profits face?
Not-for-profit organizations form a large part of the Canadian economy. The not-for-profit
field is an industry just like any other industry: revenues are raised and employees earn incomes
by providing services. Canada has more than 160,000 registered not-for-profit organizations, in
categories ranging from arts and culture to science and technology. Most are local organizations
that provide sports and recreational activities. Not-for-profits receive funding from both
government sources and private sources, including donations. These organizations are commonly
exempt from federal, provincial, and local taxes. Not-for-profits raise more than $112 billion in
revenues and employ more than 2 million people. Approximately one-third of these jobs are in
hospitals, universities, and colleges. About half of all revenue comes from government grants,
mostly provincial. These organizations also receive more than $8 billion in donations from
individuals and require more than 2 billion volunteer hours, the equivalent of more than 1 million
full-time jobs.
Without funding, organizations cannot do research, obtain raw materials, or provide
services. Toronto’s Hospital for Sick Children (SickKids) is one of the world’s top healthcare
institutions for children. It is Canada’s
leading centre dedicated to children’s health by uniting patient care, research, and education and
is one of Canada’s most research-intensive hospitals: its more than 600 staff researchers operate
within a $140 million budget.
LO 1.1 Define business.
LOD: Hard
Bloomcode: Analysis
AACSB: Analytic
3. Identify and describe the four basic inputs that make up factors of production. Give an
example of each factor of production that an auto manufacturer might use.
The four basic inputs are natural resources (steel and other raw materials needed to make a
car), capital (factories, technology), human resources (management, factory workers), and
entrepreneurship (company founder).
,LO 1.2 Identify and describe the factors of production.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
4. What is a private enterprise system? What are the four rights that are critical to the
operation of capitalism? Why would capitalism function poorly in a society that does not
ensure these rights for its citizens?
A private enterprise system is an economic system that rewards firms for their ability to
perceive and serve the needs and demands of consumers. It minimizes government interference in
economic activity.
The rights include: rights to private property, profits, freedom of choice, and competition.
A business would not be able to earn a profit, and individuals would have fewer choices for
employment, purchases, and investments.
LO 1.3 Describe the private enterprise system.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
5. In what ways is entrepreneurship vital to the private enterprise system?
It fuels growth in the economy by encouraging individuals to start businesses and by
keeping pressure on existing businesses to continue to satisfy customers. Of all new businesses
created in Canada, 99 percent are small businesses, defined as privately owned and operated
companies with fewer than 500 employees and total annual revenue between $30,000 and $5
million. Thousands of new businesses start each year. The Canadian economy depends on small
businesses for their growth and strength. Statistics Canada data suggest that 5 percent of all
businesses employ fewer than five employees, and 95 percent employ fewer than 50. The small
business sector creates 80 percent of all new jobs and generates 45 percent of Canada’s economic
output. Thus, Canada’s small businesses are the majority of all Canadian businesses.
LO 1.2 Identify and describe the factors of production.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
6. Identify the seven eras of business in North America. How were businesses changed during
each era?
The seven eras of business in North America are the Colonial period, the Industrial
Revolution, the age of industrial entrepreneurs, the production era, the marketing era, the
relationship era and the social era. The Colonial period was primarily agricultural, so the
economic focus was on rural areas. Manufactured items came from England. The Industrial
Revolution was the beginning of mass production by semi-skilled workers using machines.
Factories were built in cities and railroads were constructed to move goods. The age of industrial
entrepreneurs saw advances in technology and increased demand for manufactured goods, leading
to entrepreneurial opportunities. The production era emphasized producing more goods faster,
leading to production innovations. The marketing era resulted when businesses found they could
no longer automatically sell everything they produced. Competition demanded a new consumer
orientation. In the relationship era, businesses take a longer-term approach to customer
management. They benefit from nurturing relationships with customers, employees, suppliers, and
other businesses. The 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.
LO 1.4 Identify the seven eras in the history of business.
LOD: Hard
Bloomcode: Comprehension
AACSB: Reflective Thinking
7. Describe the focus of the most recent era of business. How is this different from previous
eras?
The social era is different from other eras because it maintains relationships with customers through
multiple media such as blogs, podcasts, Twitter, Facebook, LinkedIn, YouTube and Instagram.
As consumers continue to log fewer hours on computers and more time on mobile devices,
companies have implemented mobile strategies using real-time data and location-based technology
LO 1.4 Identify the seven eras in the history of business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
8. Define partnership and strategic alliance. How might a motorcycle dealer and a local radio
station benefit from an alliance?
A partnership is an affiliation of two or more companies that help each other achieve common
goals. One such form of partnership is a strategic alliance, a partnership formed to create a
competitive advantage for the businesses involved. The radio station might advertise the
motorcycles, while the motorcycle company might fund events for the radio station.
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Application
AACSB: Analytic
9. Identify the major changes in the workforce that will affect the way managers build a
world-class workforce in the 21st century. Why is brainpower so important?
An aging population, a shrinking labour pool, the growing diversity of the workforce, and the
new employer-employee relationships will challenge managers. Managers will need creativity and
vision to stay on top of rapidly changing technology and to manage the complex relationships in
the global business world of the 21st century. The brainpower of the employees plays a vital role
in the firm’s ability to stay on top of new technologies and innovations. A first-class workforce can
be the foundation of a firm’s competitive differentiation, providing important advantages over
competing businesses.
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
, 10. Identify four qualities that the “new” managers of the 21st century must have. Why are
these qualities important in a competitive business environment?
Managers need vision, critical thinking, creativity, and the ability to lead change. Vision gives
businesspeople the ability to perceive marketplace needs and determine what an organization must
do to satisfy them. Critical thinking and creativity enable businesspeople to look at a wide variety
of situations, draw connections between disparate information, and develop future-oriented
solutions. Business owners must be able to guide their employees and organizations through the
changes brought about by technology, marketplace demands, and global competition.
LO 1.6 Identify the skills and attributes needed for today’s manager.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
PROJECTS AND TEAMWORK APPLICATIONS
1. The entrepreneurial spirit fuels growth in the Canadian economy. Choose a company that
interests you—one you have worked for or dealt with as a customer—and read about the
company in the library or visit its Web site. Learn what you can about the company’s
early history: Who founded it and why? Is the founder still with the organization? Do you
think the founder’s original vision is still embraced by the company? If not, how has the
vision changed?
Have students share the information they found on the entrepreneurial company they chose
and its background—its founder, history, and vision. What types of businesses did the class
choose overall? Was there a variety or did students gravitate toward particular industries?
LO 1.6 Identify the skills and attributes needed for today’s manager.
LOD: Medium
Bloomcode: Application
AACSB: Reflective Thinking
2. Brands distinguish one company’s goods or services from its competitors. Each company
you purchase from hopes that you will become loyal to its brand. Some well-known
brands are Tim Hortons, Burger King, Coca-Cola, Hilton, and Old Navy. Choose a type
of good or service you use regularly and identify the major brands associated with it. Are
you loyal to a particular brand? Why or why not?
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Application
AACSB: Reflective Thinking
CONTEMPORARY BUSINESS
4TH CANADIAN EDITION
CHAPTER NO. 1: THE CHANGING FACE OF BUSINESS
REVIEW QUESTIONS AND ANSWERS
1. Why is business so important to a country’s economy?
Business provides the bulk of employment opportunities, as well as the products and services
that people need. Business drives the economic pulse of a nation.
LO 1.1 Define business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
2. In what ways are not-for-profit organizations a substantial part of the Canadian economy?
What challenges do not-for-profits face?
Not-for-profit organizations form a large part of the Canadian economy. The not-for-profit
field is an industry just like any other industry: revenues are raised and employees earn incomes
by providing services. Canada has more than 160,000 registered not-for-profit organizations, in
categories ranging from arts and culture to science and technology. Most are local organizations
that provide sports and recreational activities. Not-for-profits receive funding from both
government sources and private sources, including donations. These organizations are commonly
exempt from federal, provincial, and local taxes. Not-for-profits raise more than $112 billion in
revenues and employ more than 2 million people. Approximately one-third of these jobs are in
hospitals, universities, and colleges. About half of all revenue comes from government grants,
mostly provincial. These organizations also receive more than $8 billion in donations from
individuals and require more than 2 billion volunteer hours, the equivalent of more than 1 million
full-time jobs.
Without funding, organizations cannot do research, obtain raw materials, or provide
services. Toronto’s Hospital for Sick Children (SickKids) is one of the world’s top healthcare
institutions for children. It is Canada’s
leading centre dedicated to children’s health by uniting patient care, research, and education and
is one of Canada’s most research-intensive hospitals: its more than 600 staff researchers operate
within a $140 million budget.
LO 1.1 Define business.
LOD: Hard
Bloomcode: Analysis
AACSB: Analytic
3. Identify and describe the four basic inputs that make up factors of production. Give an
example of each factor of production that an auto manufacturer might use.
The four basic inputs are natural resources (steel and other raw materials needed to make a
car), capital (factories, technology), human resources (management, factory workers), and
entrepreneurship (company founder).
,LO 1.2 Identify and describe the factors of production.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
4. What is a private enterprise system? What are the four rights that are critical to the
operation of capitalism? Why would capitalism function poorly in a society that does not
ensure these rights for its citizens?
A private enterprise system is an economic system that rewards firms for their ability to
perceive and serve the needs and demands of consumers. It minimizes government interference in
economic activity.
The rights include: rights to private property, profits, freedom of choice, and competition.
A business would not be able to earn a profit, and individuals would have fewer choices for
employment, purchases, and investments.
LO 1.3 Describe the private enterprise system.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
5. In what ways is entrepreneurship vital to the private enterprise system?
It fuels growth in the economy by encouraging individuals to start businesses and by
keeping pressure on existing businesses to continue to satisfy customers. Of all new businesses
created in Canada, 99 percent are small businesses, defined as privately owned and operated
companies with fewer than 500 employees and total annual revenue between $30,000 and $5
million. Thousands of new businesses start each year. The Canadian economy depends on small
businesses for their growth and strength. Statistics Canada data suggest that 5 percent of all
businesses employ fewer than five employees, and 95 percent employ fewer than 50. The small
business sector creates 80 percent of all new jobs and generates 45 percent of Canada’s economic
output. Thus, Canada’s small businesses are the majority of all Canadian businesses.
LO 1.2 Identify and describe the factors of production.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
6. Identify the seven eras of business in North America. How were businesses changed during
each era?
The seven eras of business in North America are the Colonial period, the Industrial
Revolution, the age of industrial entrepreneurs, the production era, the marketing era, the
relationship era and the social era. The Colonial period was primarily agricultural, so the
economic focus was on rural areas. Manufactured items came from England. The Industrial
Revolution was the beginning of mass production by semi-skilled workers using machines.
Factories were built in cities and railroads were constructed to move goods. The age of industrial
entrepreneurs saw advances in technology and increased demand for manufactured goods, leading
to entrepreneurial opportunities. The production era emphasized producing more goods faster,
leading to production innovations. The marketing era resulted when businesses found they could
no longer automatically sell everything they produced. Competition demanded a new consumer
orientation. In the relationship era, businesses take a longer-term approach to customer
management. They benefit from nurturing relationships with customers, employees, suppliers, and
other businesses. The 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.
LO 1.4 Identify the seven eras in the history of business.
LOD: Hard
Bloomcode: Comprehension
AACSB: Reflective Thinking
7. Describe the focus of the most recent era of business. How is this different from previous
eras?
The social era is different from other eras because it maintains relationships with customers through
multiple media such as blogs, podcasts, Twitter, Facebook, LinkedIn, YouTube and Instagram.
As consumers continue to log fewer hours on computers and more time on mobile devices,
companies have implemented mobile strategies using real-time data and location-based technology
LO 1.4 Identify the seven eras in the history of business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
8. Define partnership and strategic alliance. How might a motorcycle dealer and a local radio
station benefit from an alliance?
A partnership is an affiliation of two or more companies that help each other achieve common
goals. One such form of partnership is a strategic alliance, a partnership formed to create a
competitive advantage for the businesses involved. The radio station might advertise the
motorcycles, while the motorcycle company might fund events for the radio station.
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Application
AACSB: Analytic
9. Identify the major changes in the workforce that will affect the way managers build a
world-class workforce in the 21st century. Why is brainpower so important?
An aging population, a shrinking labour pool, the growing diversity of the workforce, and the
new employer-employee relationships will challenge managers. Managers will need creativity and
vision to stay on top of rapidly changing technology and to manage the complex relationships in
the global business world of the 21st century. The brainpower of the employees plays a vital role
in the firm’s ability to stay on top of new technologies and innovations. A first-class workforce can
be the foundation of a firm’s competitive differentiation, providing important advantages over
competing businesses.
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
, 10. Identify four qualities that the “new” managers of the 21st century must have. Why are
these qualities important in a competitive business environment?
Managers need vision, critical thinking, creativity, and the ability to lead change. Vision gives
businesspeople the ability to perceive marketplace needs and determine what an organization must
do to satisfy them. Critical thinking and creativity enable businesspeople to look at a wide variety
of situations, draw connections between disparate information, and develop future-oriented
solutions. Business owners must be able to guide their employees and organizations through the
changes brought about by technology, marketplace demands, and global competition.
LO 1.6 Identify the skills and attributes needed for today’s manager.
LOD: Medium
Bloomcode: Comprehension
AACSB: Reflective Thinking
PROJECTS AND TEAMWORK APPLICATIONS
1. The entrepreneurial spirit fuels growth in the Canadian economy. Choose a company that
interests you—one you have worked for or dealt with as a customer—and read about the
company in the library or visit its Web site. Learn what you can about the company’s
early history: Who founded it and why? Is the founder still with the organization? Do you
think the founder’s original vision is still embraced by the company? If not, how has the
vision changed?
Have students share the information they found on the entrepreneurial company they chose
and its background—its founder, history, and vision. What types of businesses did the class
choose overall? Was there a variety or did students gravitate toward particular industries?
LO 1.6 Identify the skills and attributes needed for today’s manager.
LOD: Medium
Bloomcode: Application
AACSB: Reflective Thinking
2. Brands distinguish one company’s goods or services from its competitors. Each company
you purchase from hopes that you will become loyal to its brand. Some well-known
brands are Tim Hortons, Burger King, Coca-Cola, Hilton, and Old Navy. Choose a type
of good or service you use regularly and identify the major brands associated with it. Are
you loyal to a particular brand? Why or why not?
LO 1.5 Explain current workforce trends in business.
LOD: Medium
Bloomcode: Application
AACSB: Reflective Thinking
