Chapter-01-The-Foundations-of-Business

Chapter01TheFoundationsofBusinessLead-in•ToughjobmarketteachesChina'sgraduatesalessoninlifeLead-in•TaobaoTotalSalesonDouble112013Hit35BillionYuanLead-in•WeChat'slittleredenvelopesarebrilliantmarketingformobileLead-in•RealestatepricesacrossmostofChinahaveincreasedbymorethan50percentLead-in•Migrantworkersprefermega-citiesWhatisBusiness?WhatisBusiness?(Part1)•YouareastudentintheBusinessStudiesFaculty.ThetitleofyourfirstlectureisWhatisbusiness?•ListentoPart1ofthetalk.Whatdoesthelecturersayaboutbusiness?Tickthebestchoice.•A.Thelectureristalkingaboutbusinessinageneralsense.•B.Businessismainlyaboutbuyingthings.•C.Businessismainlyaboutsellingthings.•D.Businessisaboutmorethanbuyingandsellingthings.WhatisBusiness?(Part1)•YouareastudentintheBusinessStudiesFaculty.ThetitleofyourfirstlectureisWhatisbusiness?•ListentoPart1ofthetalk.Whatdoesthelecturersayaboutbusiness?Tickthebestchoice.•A.Thelectureristalkingaboutbusinessinageneralsense.•B.Businessismainlyaboutbuyingthings.•C.Businessismainlyaboutsellingthings.•D.Businessisaboutmorethanbuyingandsellingthings.WhatisBusiness?(Part2)•InPart2ofthetalk,thelecturerdescribesdifferentareasofbusinessmanagement.•1.Howmanydifferentareasdidshedescribe?Whatarethey?•2.Whathappensineacharea?•3.Whatwillthelecturertalkaboutnext?Businessmanagementoperationsresearchanddevelopmentmarketinghumanresourcesfinanceproductionprocessesandmethods,orderingandstoringrawmaterialsconsumerneeds,marketresearch,prices,advertisinghiringandfiring,contracts,promotion,healthandsafety,industrialrelations,equalpayflowofmoney,businessperformancedevelopingnewproductsWhatisBusiness?(Part2)•3.Whatwillthelecturertalkaboutnext?•Thelecturerisnowgoingtoanswerthequestion:‘Whatdoesabusinessdo?’/‘Whataretheactivitiesthatabusinessorganizationengagesin?’WhatisBusiness?(Part3)•InPart3ofthetalk,thelecturermentionsthewordsinput,outputandtransformation.•Whatdothesewordsmeaninthecontextofmanufacturing?•input:elementsatbeginningofaprocess•output:resultsofaprocess•transformation:aprocessinwhichsomethingischangedWhatisBusiness?(Part4)•Inthefinalpartofthetalk,thelecturertalksfurtheraboutinputsandoutputs.ListenandmarkeachwordintheboxIforinputorOforoutput.•bankingcapitalcomputers•furniturelabournewspapers•planningpremises•trainingtransportWhatisBusiness?(Part4)•Inthefinalpartofthetalk,thelecturertalksfurtheraboutinputsandoutputs.ListenandmarkeachwordintheboxIforinputorOforoutput.•bankingOcapitalIcomputersO•furnitureOlabourInewspapersI•planningIpremisesI•trainingItransportOWhatisBusiness?(Part5)•Drawaflowcharttoillustratethebusinessprocess.Writewordsfromthefollowingboxinyourflowchart.Describethebusinessprocessusingyourflowchart.bankingcapitalcomputersfurniturelabournewspapersplanningpremisestransformationinputoutputgoodstrainingtransportservicesInputplanningcapitalpremiseslabourtrainingOutputgoodsfurniturenewspaperscomputersservicesbankingtransporttransformationBakeryOilrefineryTaxiHairdresser•Bakery.•Inputs:flour,yeast,ovens,electricity,baker’sskills,etc.•Output:bread.WhatisBusiness?(Part6)•Oilrefinery.•Inputs:crudeoil,chemicals,machinery,etc.•Output:petrol.WhatisBusiness?(Part6)•Taxi.•Inputs:car,petrol,drivingskillsandknowledge,time,etc.•Output:transport.WhatisBusiness?(Part6)•Hairdresser.•Inputs:hairdressingequipment,shampoo/hairdye,etc.,skillsofhairdresser,workofotherstaff,premises,etc.•Output:haircut/style.WhatisBusiness?(Part6)Business:ADefinition•Businessistheorganizedeffortofindividualstoproduceandsell,foraprofit,thegoodsandservicesthatsatisfysociety’sneeds.•Threeactivities:•Itmustbeorganized,itmustsatisfyneeds,anditmustearnaprofit.1.TheOrganizedEffortofIndividualsBusinessMaterialresourcesHumanresourcesInformationalresourcesFinancialresourcesAbusinessmustcombineallfourresourceseffectivelytobesuccessful.ClassificationofBusinesses•Manufacturingbusinesses•Processvariousmaterials(e.g.,athleticshoes,apparel,equipment)•Servicebusinesses•Produceservices(e.g.,haircuts,legaladvice,taxpreparation)1.TheOrganizedEffortofIndividuals(cont’d)EconomicSectors•theprimarysector:agriculture,andtheextractionofrawmaterialsfromtheearth•thesecondarysector:manufacturingindustry,inwhichrawmaterialsareturnedintofinishedproducts•thetertiaryorservicesector:thecommercialservicesthathelpindustryproduceanddistributegoodstotheirfinalconsumers,aswellasactivitiessuchaseducation,healthcare,leisure,tourism,andsoon.1.TheOrganizedEffortofIndividuals(cont’d)BusinessParticipants1.TheOrganizedEffortofIndividuals(cont’d)OwnersEmployeesCustomers2.SatisfyingNeeds•Peoplebuygoodsandservicesnotjusttoownthem,buttosatisfyparticularneeds•Businessesthatunderstandcustomerneeds,andworktosatisfythoseneeds,areusuallysuccessful3.BusinessProfit•Thisweek,BillyBob’sBarbecuehadsalesof$4,000.Employeeswerepaid$1,000;foodcostswere$1,500,andrentwas$500.Profitfortheweekwas:•A.$1,500•B.$3,000•C.$4,000•D.$1,000•E.$2,0003.BusinessProfit•ProfitiswhatremainsafterallbusinessexpenseshavebeendeductedfromsalesrevenueSalesrevenueExpensesProfit3.BusinessProfit•Thepurposesofprofit–Torewardbusinessownersfo