Business Mindset Chapter 1

Chapter 1: Developing a Business Mindset

• This chapter prepares students for a whirlwind tour of the business world, starting with a brief overview of business operations and advice on transitioning from consumer to business professional.
• A business is any profit-seeking organization that delivers goods and services to meet customer needs.
• Exhibit 1.1 demonstrates value addition in business: a farm turns raw materials into wheat, a mill converts wheat into flour, a bakery transforms flour into bread, and a grocery store makes the bread available to consumers.

Learning Objectives

• Explain the value added in businesses, and identify main types of businesses.
• List three steps to transition from consumer to business professional.
• Outline the five major environments in which businesses operate.
• Describe the six major functional areas in a business enterprise.
• Summarize seven critical business professions.
• Detail seven components of professionalism.

Understanding What Businesses Do

• A business is a profit-driven entity providing goods and services to meet customer demand.

Adding Value: The Business of Business

• Revenue: Funds generated by selling goods or services.
• Business model: A plan to generate revenue.
• Profit: The remainder after deducting business costs from revenue.

Competing to Attract and Satisfy Customers

• Competitive advantage: A product or company feature enhancing customer appeal.

Identifying Major Types of Businesses

• Not-for-profit organizations: Deliver goods and services without profit motives.
• Goods-producing businesses: Create value by producing tangible things.
• Service businesses: Create value through activities benefiting customers.

Risk and Reward

• Healthy relationship: Companies gain from positive outcomes and learn from negative ones.
• Moral hazard: When the rewards or repercussions of a decision belong to someone other than the decision-maker.

Risk and Reward (cont.)

• Goods-producing businesses are often capital-intensive.
• Service businesses tend to be labor-intensive.

Risk and Reward (cont.)

• Barrier to entry: Resource or capability needed before entering a market.

Seeing Business from the Inside Out

• Business mindset: Understanding the various decisions and challenges impacting businesses before product delivery.

The Business Mindset

• This exhibit showcases a comparison between the consumer and manager's perspectives on functions like product, marketing, image, price, availability, and service.

Positive and Negative Effects of Business

• Businesses contribute by offering goods/services, providing employment, and paying taxes, but can also create pollution, create health risks, and disrupt communities.

The Multiple Environments of Business

• Market environment: Target customers, buying influences, and competitors.
• Economic environment: Conditions and forces affecting goods, services, and labor.
• Technological environment: Forces resulting from practical applications of science to innovations, products, and processes.
• Legal and regulatory environment: Laws and regulations at various levels influencing businesses.
• Social environment: Population trends, social values, and societal relationships with businesses.

Recognizing the Multiple Environments of Business

• Social environment: Trends and forces in society.
• Stakeholders: Internal and external groups impacted by business decisions.
• Disruptive technologies: Those that fundamentally change an industry.

Recognizing the Multiple Environments of Business (cont.)

• Economic Environment: Conditions affecting cost/availability of goods/services/labor, influencing buyer/seller behaviour.
• Legal and Regulatory Environment: Laws and regulations from local to international levels.
• Market Environment: Target customers, influencing behaviours, and competitors.

Identifying the Major Functional Areas in a Business Enterprise

• Research and development (R&D): Designs new products.
• Information technology (IT): Supports communication within the company.
• Manufacturing, production, or operations: Creates goods or services for the company.
• Marketing: Identifies market opportunities and crafts branding/advertising/pricing strategies.
• Finance and accounting: Responsible for every aspect of a company's finances.
• Human resources (HR): Recruits and develops staff.
• Business services: Addresses specific company needs (e.g., banking, real estate, law).

Exploring Careers in Business

• List diverse job roles (e.g., Operations Management, HR Specialist, Information Technology Manager, Marketing Specialist, Sales Professional, Accountant, Financial Manager)

Achieving Professionalism

• Professionalism: Performing at a high level and exhibiting purpose and pride.

Major Functional Areas in a Business Enterprise

• A diagram displaying the interrelationship of major business functions: Finance, Production/Operations, R&D, Accounting, Marketing Strategy, Sales, Customer Support, Marketing Research, Product Planning, Human Resources, and Business Services.

Elements of Professionalism

• Be the best: Strive for excellence in all endeavors.
• Be dependable: Keep promises and commitments.
• Be ethical: Make ethically sound decisions.
• Be a team player: Contribute to the team's success.
• Be clear: Communicate effectively with others.
• Be respectful: Act respectfully towards all.

Being a Team Player

• Professionals are contributors to a wider cause.
• To be effective, team members support other team members.
• Professionals show loyalty and uphold a positive corporate image.

Communicating Effectively

• Active listening is crucial.
• Provide clear and practical information.
• Offer facts instead of opinions.
• Conciseness and efficiency are essential in communication.
• Clarify responsibilities and expectations.
• Make arguments that are compelling and persuasive.

Demonstrating Etiquette

• Etiquette includes accepted norms of behavior in various situations.

Maintaining a Confident, Positive Outlook

• Successful people are optimistic and persistent.
• Positive energy is infectious.

Applying What You've Learned

• Topics for review and application in businesses and their operations.