@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
CHAPTER 1
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
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
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
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
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
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
Annotated 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 CLASS ACTIVITY: Before you
Pichai, who grew up in Chennai, India, is known for his begin the lecture, it may be
unassuming management style, which has allowed him to interesting to have each
build strong relationships throughout the Google organization. student write down what comes
He is described as humble, smart, and very low key. With to mind when they hear the
training as an engineer and businessperson, Pichai, who is in word “business.” Read (and
his mid- 40s, is uniquely positioned to take the lead in product discuss) aloud in class.
development at Google.
Lecture Enhancer: What skills
and attributes does Sundar
Pichai, CEO of Google,
possess?
WHAT IS BUSINESS? PowerPoint Slide 3
1. Business LECTURE ENHANCER: Since
a. The term “business” refers to a broad concept. businesses provide the bulk of
employment opportunities,
discuss some of the most
common employment
opportunities available to new
graduates today (they include:
healthcare, social services,
and business sectors).
CLASS ACTIVITY: What is
the impact of technology on a
citizen’s standard of living?
b. Business consists of all profit-seeking
activities and enterprises that provide goods
and services necessary to an economic system.
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
i. Businesses produce tangible goods or Class Activity: Discuss the
provide services. impact of technology on a
citizen’s standard of living.
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 PowerPoint Slide 4 and 5
risk blending people, technology, and
information to create and market goods or
services.
i. Profits are incentives for people to start Lecture Enhancer:
companies, grow them, and provide With today’s pervasive media
competitive products. reports on twenty-something
instant billionaires, it’s hard to
ignore the attention being paid
to the powerful forces of
business, entrepreneurship,
profits, and technology.
ii. In accounting, profit is the difference Class Activity:
between a firm’s revenues and the Are all business people driven
expenses it incurs in generating these by profits? Provide examples
revenues. of those in the for-profit arena
iii. A company cannot survive without who may not be entirely driven
profits. by profits. Beyond profits,
what is their responsibility?
2. Not-for-Profit Organizations PowerPoint Slide 6 and 7
a. Not-for-profit organizations are business-like Lecture Enhancer: Name
establishments that have primary objectives examples of private-sector and
other than profits. A tax law provision granted public-sector not-for-profit
to not-for-profits by the Internal Revenue organizations. Does your
Service is called section 501(c)(3). school fall into a private-
sector or public-sector not-for-
profit organization?
b. They place public service over profits but need
money to achieve their goals.
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
CHAPTER 1
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
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
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
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
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
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
Annotated 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 CLASS ACTIVITY: Before you
Pichai, who grew up in Chennai, India, is known for his begin the lecture, it may be
unassuming management style, which has allowed him to interesting to have each
build strong relationships throughout the Google organization. student write down what comes
He is described as humble, smart, and very low key. With to mind when they hear the
training as an engineer and businessperson, Pichai, who is in word “business.” Read (and
his mid- 40s, is uniquely positioned to take the lead in product discuss) aloud in class.
development at Google.
Lecture Enhancer: What skills
and attributes does Sundar
Pichai, CEO of Google,
possess?
WHAT IS BUSINESS? PowerPoint Slide 3
1. Business LECTURE ENHANCER: Since
a. The term “business” refers to a broad concept. businesses provide the bulk of
employment opportunities,
discuss some of the most
common employment
opportunities available to new
graduates today (they include:
healthcare, social services,
and business sectors).
CLASS ACTIVITY: What is
the impact of technology on a
citizen’s standard of living?
b. Business consists of all profit-seeking
activities and enterprises that provide goods
and services necessary to an economic system.
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
,@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
edition Boone,
Instructor’s
Kurtz, & Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Berston Contemporary Business, 18th edition Instructor’s Guide.pdf@@@@@@@@@@@@@@@@@@@
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor?s Guide
Boone, Kurtz, & Berston / Contemporary Business, 18th edition Instructor’s Guide
i. Businesses produce tangible goods or Class Activity: Discuss the
provide services. impact of technology on a
citizen’s standard of living.
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 PowerPoint Slide 4 and 5
risk blending people, technology, and
information to create and market goods or
services.
i. Profits are incentives for people to start Lecture Enhancer:
companies, grow them, and provide With today’s pervasive media
competitive products. reports on twenty-something
instant billionaires, it’s hard to
ignore the attention being paid
to the powerful forces of
business, entrepreneurship,
profits, and technology.
ii. In accounting, profit is the difference Class Activity:
between a firm’s revenues and the Are all business people driven
expenses it incurs in generating these by profits? Provide examples
revenues. of those in the for-profit arena
iii. A company cannot survive without who may not be entirely driven
profits. by profits. Beyond profits,
what is their responsibility?
2. Not-for-Profit Organizations PowerPoint Slide 6 and 7
a. Not-for-profit organizations are business-like Lecture Enhancer: Name
establishments that have primary objectives examples of private-sector and
other than profits. A tax law provision granted public-sector not-for-profit
to not-for-profits by the Internal Revenue organizations. Does your
Service is called section 501(c)(3). school fall into a private-
sector or public-sector not-for-
profit organization?
b. They place public service over profits but need
money to achieve their goals.
@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$@
tz, & Berston
Boone,Contemporary
Kurtz, & Berston
Business,
Contemporary
18th edition
Business,
Instructor’s
18th edition
Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@
Instructor’s Guide.pdfBoone, Kurtz, & Berston Contemporary Bu
