Introduction To Business Spring 2024 PDF

Introduction to Business Spring 2024 Copyright © 2022, 2019, 2016 Pearson Education, Inc. About me: ROGER ROYO Telephone: 010-5691-3393 EMail: [email protected] Nationality: Spanish President at the Spanish Chamber of Commerce in Korea (ESCCK) Assistant Prof...

Introduction to Business Spring 2024 Copyright © 2022, 2019, 2016 Pearson Education, Inc. About me: ROGER ROYO Telephone: 010-5691-3393 EMail: [email protected] Nationality: Spanish President at the Spanish Chamber of Commerce in Korea (ESCCK) Assistant Professor at SolBridge International School of Business Head of the Global Startup Center at SolBridge International School of Business Researcher at Kaist University Advisor for Investment Promotion for Daejeon City Daejeon City Government Copyright © 2022, 2019, 2016 Pearson Education, Inc.  Academia Teaching Entrep, International Business, Tech Management, Finance retc. Ph.D. Candidate at KAIST University What Keeps Me International Business Busy Spain/Europe Representative at KAIST GCC Connecting international partners Things that make me happy and motivated I've been with Research / Startup Understanding the incubator system in Korea. Working in an AI R&D Project between Korea and Spain Collaborating with Born2Global and other startups agencies Copyright © 2022, 2019, 2016 Pearson Education, Inc.  4 207 Copyright © 2022, 2019, 2016 Pearson Education, Inc.  5 Business Essentials 1-1 Thirteenth Edition BOOK Copyright © 2022, 2019, 2016 Pearson Education, Inc. SWOT ANALYSIS Copyright © 2022, 2019, 2016 Pearson Education, Inc.  ROGER’S LESSONS SWOT Very Motivated Not just a Scholar Business Experience Young Very Reachable Nonnative speaker Connecting People No Time Survivor in Korea Evaluation needed Different One space Copyright © 2022, 2019, 2016 Pearson Education, Inc.  8 Business Essentials 1-1 Thirteenth Edition Chapter 1 The Business Environment Copyright © 2022, 2019, 2016 Pearson Education, Inc. What is the most important thing to do here? Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-3 Learning Objectives (1 of 2) 1-1 Define the nature of business, describe the external environments of business, and discuss how these environments affect the success or failure of organizations. 1-2 Describe the different types of global economic systems according to the means by which they control the factors of production. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-4 Learning Objectives (2 of 2) 1-3 Show how markets, demand, and supply affect resource distribution in the United States, identify the elements of private enterprise, and explain the various degrees of competition in the U.S. economic system. 1-4 Explain the importance of the economic environment to business and identify the factors used to evaluate the performance of an economic system. 1-5 Learn about the skills you will gain through this text. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-5 The Concept of Business and Profit Business – organization that provides goods or services to earn profits Profits – difference between a business’s revenues and its expenses Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-6 The External Environment of Business External Environment – everything outside an organization’s boundaries that might affect it Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-7 Dimensions of the External Environment Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-8 The External Environments of Business (1 of 2) Domestic Business Environment - the environment in which a firm conducts operations and derives revenues Global Business Environment - international forces that affect a business and includes international trade agreements, international economic conditions, and political unrest Technological Environment - ways by which firms create value for their constituents Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-9 The External Environments of Business (2 of 2) Political-Legal Environment - the relationship between business and government Sociocultural Environment - includes the customs, mores, values, and demographic characteristics of the society and determines the business standards that a society is likely to value and accept The Economic Environment - includes relevant conditions that exist in the economic system in which a company operates Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-10 Economic Systems Economic system – a nation’s system for allocating its resources among its citizens, both individuals and organizations Copyright © 2022, 2019, 2016 Pearson Education, Inc. Why Korea? Miracle on the Han River Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-11 Factors of Production (1 of 2) Labor (Human Resources) includes the physical and intellectual contributions people make while engaged in economic production and is also called human resources or human capital. Capital is the term used to describe the financial resources needed to operate a business. An Entrepreneur is a person who accepts the risks and opportunities entailed in creating and operating a new business venture. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-12 Factors of Production (2 of 2) Physical resources - tangible things that organizations use to conduct their business and include natural resources and raw materials Information resources - data and other information used by businesses and include market forecasts, the specialized knowledge of people, and economic data Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 1 of 6 Political system refers to the system of government in a nation. Political systems: 1. Collectivism vs. individualism 2. Democratic vs. totalitarian Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 2 of 6 Collectivism and Individualism Collectivism The needs of society as a whole are generally viewed as being more important than individual freedoms Socialism Karl Marx: The few benefit at the expense of the many in a capitalist society where individual freedoms are not restricted Communists vs. social democrats Privatization Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 3 of 6 Collectivism and Individualism continued Individualism An individual should have freedom in his or her economic and political pursuits The interests of the individual should take precedence over the interests of the state Two tenets Guarantee of individual freedom and self-expression Welfare of society best served by letting people pursue their own economic self-interest Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 4 of 6 Democracy and Totalitarianism At different ends of a political dimension Democracy and individualism go hand in hand, as do the communist version of collectivism and totalitarianism, with exceptions Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 5 of 6 Democracy and Totalitarianism continued Democracy Representative democracy Totalitarianism Communist totalitarianism Theocratic totalitarianism Tribal totalitarianism Right-wing totalitarianism Copyright © 2022, 2019, 2016 Pearson Education, Inc. Political Systems 6 of 6 Democracy and Totalitarianism continued Pseudo-democracies Lie between pure democracies and complete totalitarianism systems Authoritarian elements have captured some or much of the machinery of state and use this in an attempt to deny basic political and civil liberties Copyright © 2022, 2019, 2016 Pearson Education, Inc. Economic Systems 1 of 3 a nation’s system for allocating its resources among its citizens, both individuals and organizations Market Economy All productive activities are privately owned Production is determined by supply and demand Government encourages vigorous free and fair competition Copyright © 2022, 2019, 2016 Pearson Education, Inc. Economic Systems 2 of 3 Command Economy Government plans the good and services, quantity and price, then allocates them for “the good of society” All businesses are state owned Historically found in communist economies No incentive for individuals to look for better ways to serve needs Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-15 Economic Systems 3 of 3 Mixed market economy – features characteristics of both command and market economies Privatization – process of converting government enterprises The People’s Republic of China is moving into privately owned towards a mixed market economy companies Copyright © 2022, 2019, 2016 Pearson Education, Inc. An Asian Perspective Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-16 Demand and Supply in a Market Economy Demand – the willingness and ability of buyers to purchase a product (a good or a service) Supply – the willingness and ability of producers to offer a good or service for sale Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-17 Surpluses and Shortages Surplus – a situation in which quantity supplied exceeds quantity demanded Shortage – a situation in which quantity demanded exceeds quantity supplied Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-18 Demand and Supply (1 of 2) Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-19 Demand and Supply (2 of 2) Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-20 Private Enterprise and Competition in a Market Economy (1 of 3) Private property rights – one that allows individuals to pursue their own interests with minimal government restriction – private property rights, freedom of choice, profits, and competition Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-21 Private Enterprise and Competition in a Market Economy (2 of 3) 1. Private enterprise system – ownership of the resources used to create wealth is in the hands of individuals 2. Freedom of choice – you can sell your labor to any employer you choose Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-22 Private Enterprise and Competition in a Market Economy (3 of 3) 3. Profits – the lure of profits leads some people to abandon the security of working for someone else and assume the risks of entrepreneurship 4. Competition – occurs when two or more businesses vie for the same resources or customers Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-23 Degrees of Competition (1 of 5) Table 1.1 Degrees of Competition Perfect Monopolistic Characteristic Competition Competition Oligopoly Monopoly Example Local farmer Stationery store Steel industry Public utility Number of competitors Many Many, but fewer Few None than in perfect competition Ease of entry into Relatively Fairly easy Difficult Regulated by industry easy government Similarity of goods or Identical Similar Can be similar or No directly services offered by different competing competing firms goods or services Level of control over None Some Some Considerable price by individual firms Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-24 Degrees of Competition (2 of 5) For perfect competition to exist, two conditions must prevail: 1. all firms in an industry must be small, and 2. the number of firms in the industry must be large Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-25 Perfect Competition 1. The products of each firm are so similar that buyers view them as identical to those of other firms. 2. Both buyers and sellers know the prices that others are paying and receiving in the marketplace. 3. Because each firm is small, it is easy for firms to enter or leave the market. 4. Going prices are set exclusively by supply and demand and accepted by both sellers and buyers. Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-26 Degrees of Competition (3 of 5) Monopolistic Competition – market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-27 Degrees of Competition (4 of 5) Oligopoly – market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-28 Degrees of Competition (5 of 5) Monopoly – market or industry in which there is only one producer that can therefore set the prices of its products Natural Monopoly – industry in which one company can most efficiently supply all needed goods or services Copyright © 2022, 2019, 2016 Pearson Education, Inc. Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-29 Economic Indicators Economic indicators – statistics that show whether an economic system is strengthening, weakening, or remaining stable – help assess the performance of an economy Copyright © 2022, 2019, 2016 Pearson Education, Inc. Economic Growth, Aggregate Output, and Standard1-30 of Living (1 of 2) Business cycle – the pattern of short-term ups and downs (or expansions and contractions) in an economy Aggregate output – the total quantity of goods and services produced by an economic system during a given period – primary measure of growth in the business cycle Copyright © 2022, 2019, 2016 Pearson Education, Inc. Economic Growth, Aggregate Output, and Standard1-31 of Living (2 of 2) Standard of living – the total quantity and quality of goods and services that they can purchase with the currency used in their economic system Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-32 Gross Domestic Product (1 of 3) Gross domestic product (GDP) – refers to the total value of all goods and services produced within a given period by a national economy through domestic factors of production – measure of aggregate output Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-33 Gross Domestic Product (2 of 3) Table 1.2 U.S. GDP and GDP per Capita 2019 GDP 2019 GDP: Real 2019 GDP per Capita: ($ Trillion) Growth Rate (%) Purchasing Power Parity $18.64 2.9% $57,226 GDP (gross domestic product) Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-34 Gross National Product Gross national product (GNP) – refers to the total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-35 GDP and GDP per Capita Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-36 Gross Domestic Product (3 of 3) Nominal GDP – gross domestic product (GDP) measured in current dollars or with all components valued at current prices Purchasing Power Parity – the principle that exchange rates are set so that the prices of similar products in different countries are about the same Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-37 World Prices of a Big Mac Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-38 Productivity (1 of 2) Productivity – measure of economic growth that compares how much a system produces with the resources needed to produce it Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-39 Productivity (2 of 2) Balance of trade – the economic value of all the products that a country exports minus the economic value of its imported products – Positive or negative balance National Debt – the amount of money the government owes its creditors Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-40 The Balance of Trade Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-41 Economic Stability (1 of 2) Stability – condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate Inflation – occurs when widespread price increases occur throughout an economic system Consumer Price Index (CPI) – a measure of the prices of typical products purchased by consumers living in urban areas Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-42 Economic Stability (2 of 2) Unemployment – the level of joblessness among people actively seeking work in an economic system Recession – a period during which aggregate output, as measured by GDP, declines Depression – a prolonged and deep recession Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-43 Managing the U.S. Economy (1 of 2) Fiscal Policies – policies used by a government regarding how it collects and spends revenue Monetary Policies – policies used by a government to control the size of its money supply Copyright © 2022, 2019, 2016 Pearson Education, Inc.  1-44 Managing the U.S. Economy (2 of 2) Stabilization Policy – government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices Copyright © 2022, 2019, 2016 Pearson Education, Inc. Coronavirus: The Global 1-45 Economic Impact of Disease Copyright © 2022, 2019, 2016 Pearson Education, Inc.