The Changing Face of

Business
CHAPTER - 1
 What is Business?
● Business consists of all profit-seeking activities and
enterprises that provide goods and services necessary to
an economic system.
● Some businesses produce tangible goods, such as
automobiles, smart phones; others provide services such
as insurance, restaurants and so on.
● Business drives the economic pulse of a nation. It
provides the means through which its citizens’ standard
of living improves.
Business Endeavor is an Exchange
Buyer Seller
A buyer recognizes a need The seller participates in
for a good or service and the process in hopes of
trade money with a seller gaining profits.
to obtain that product.
 Profit
● Profit represent rewards earned by businesspeople who
take the risks involved in blending people, technology,
and information to create and market satisfying goods
and services.

● Profits serve as incentives for people to start companies,

grow them, and provide consistently high-quality
competitive goods and services.
 Not-for-Profit Organizations
● These organizations are business-like establishments that
have primary objectives other than returning profits to
their owners.
● These organizations play important roles in society by
placing humanitarian and environmental needs.
● It is important to understand that these need to raise
money so that they can operate and achieve their social
goals.
 Not-for-Profit Organizations
● Non-profits operate both in private and public sectors.
● Private sector non-profits include library, museum, trade
associations and charitable organizations.
● Government agencies, political parties, and labor unions
are part of non-profit public sector.
Factors of Production
An economic system requires certain inputs used in
production of goods and services to make a profit. These
inputs are called factors of production.
Factors of Production
Land is used in the production of a
good and includes all production
1. Land inputs or natural resources that are
useful in their natural states such as
oil, gas, minerals and timber.
Factors of Production
Labor includes anyone who works,
including both the physical labor and
2. Labor
the intellectual inputs contributed by
workers.
Includes technology, tools,
3. Capital
information, and physical facilities.
Is the willingness to take risks to
4. Entrepreneurship
create and operate a business.
 Private Enterprise System
● It is an economic system that rewards companies for their
ability to perceive and serve the needs and demands of
consumers.
● Businesses that are expert at satisfying customers, gain
access to necessary factors of production and earn profit.
● private enterprise system is also known as Capitalism.
● Adam Smith often identified as the father of capitalism.
 Private Enterprise System
● Smith believed that an economy is best regulated by the
“invisible hand’ of competition.
● Competition is a natural force that guides free market
capitalism.
 Private Enterprise System
● Competitive Differentiation
- To compete successfully each company must find a basis
for competitive differentiation.
- Competitive differentiation is a the unique combination
of organizational abilities, products and approaches that sets
a company apart from competitors in the mind of customers.
 Basic Rights in the Private Enterprise System
Right to own, use, Fairness ensured by
buy, sell and rules and laws set in
bequeath most forms public sphere
of property

Owner legally and

ethically entitled to Citizens’ choice in
income in excess of employment,
costs, after taxes purchases and
paid. investments.
 Seven Eras in the History of Business
Era Main Characteristics Time Period
Colonial Primarily agriculture Prior to 1776
Industrial Mass production by semiskilled 1760 - 1850
revolution workers, aided by machines
Industrial Advances in technology and Late 1800
Entrepreneurshi increased demand for manufactured
p goods, leading to enormous
entrepreneurial opportunities

Production Emphasis on producing more goods Through the

faster, leading to production 1920s
innovations such as assembly lines
 Seven Eras in the History of Business
Era Main Characteristics Time Period
Marketing Consumer orientation, Branding; Since 1950s
seeking to understand and satisfy
needs and preferences of customer
groups
Relationship Benefits derived from deep, ongoing Began in
links with individual customers, 1990s
employees, suppliers and other
businesses
Social New ways to connect and interact Since 2000s
with customers using technology
 Current Business Workforce
● A skilled and knowledgeable workforce is an essential
resource for keeping pace with the accelerating rate of
change in today’s business world.
● To retain employees, managers must focus on diversity
and inclusion in workplace policies – particularly in
industries such as technology.
 Current Business Workforce
● Diversity
- It means blending individuals of different genders,
ethnic backgrounds, cultures, religions, ages, and physical
and mental abilities.
- diversity can create more innovative and creative
perspectives.
 Changing Nature of Work
● Outsourcing
- Using outside vendors – contracting work out to another party
– for the production of goods or fulfilment of services.
● Offshoring
○ Relocation of business processes, both production and
services, to lower cost location overseas.
● Nearshoring
○ Outsourcing production and services to locations near a

company’s home base or closer to customers.

 Importance of Critical Thinking
Critical thinking and creativity are essential characteristics of
today’s manager.
● Critical thinking is the ability to analyze and assess
information to pinpoint problems or opportunities.
- The process includes activities such as determining the
authenticity, accuracy and worth of data, information,
knowledge and arguments..
 Importance of Critical Thinking
● Creativity is the capacity to develop novel solutions to
perceived organizational problems
- In business, creativity refers to the ability to see better
and different ways of doing business
The
End!