course has something for everyone, from those who have been in the business world a while to

Business Essentials Twelfth Edition Ronald J. Ebert Ricky W. Griffin Instructor’s Manual for Business Essentials Carol Davis Wright 1 / 4

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Chapter 1: The U.S. Business Environment

Chapter Overview Many students come to an introduction to business class not quite sure what it’s all about. The course has something for everyone, from those who have been in the business world a while to those just getting started. As the book unfolds, you’ll develop an understanding of the foundations of business and will be able to apply what you already know (or what you are starting to learn) about business to many aspects of the course.This first chapter dives right into the world of business, explaining what business is, what its main goals and functions are, and how the external environments of business affect the success

and failure of any organization. The chapter also:

•Defines the nature of U.S. business, describes the external environments of business, and discusses how these environments affect the success or failure of organizations.•Describes global economic systems according to the means by which they control the factors of production.•Shows how markets, demand, and supply affect resource distribution in the United States.•Discusses the elements of private enterprise and the degrees of competition in the U.S.economic system.•Explains the importance of the economic environment to business and identifies the factors used to evaluate the performance of an economic system.Learning Objectives 1.Define the nature of U.S. business, describe the external environments of business, and discuss how these environments affect the success or failure of organizations.

2.Describe the different types of global economic systems according to the means by which they control the factors of production.

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.

4.Explain the importance of the economic environment to business and identify the factors used to evaluate the performance of an economic system. 2 / 4

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LIST OF IN-CLASS ACTIVITIES: INSTRUCTOR’S CHOICE

Activity Description Time Limit

1. Ice-Breaker: What Do You

Know About Business?Students assess their level of knowledge about business and set their own learning goals for the class. 20 min.

2. Small Group Discussion:

Scanning the Environment Students consider how parts of the external environment affect businesses and industries.25 min.

3. Up for Debate: Comparing

Economic Systems Teams of students discuss types of economic systems.30 min. 3 / 4

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CHAPTER OUTLINE

Learning Objective 1-1:

Define the nature of U.S. business, describe the external environments of business and discuss how these environments affect the success or failure of organizations.Business and Profit A business is an organization that provides goods and services to earn profits. Profits are the difference between a business’s revenues and expenses.

1.Consumer Choice and Demand: In a capitalistic system like that of the United States, consumers have freedom of choice. In turn, businesses must take into account consumer demand as shown through wants and needs in their pursuit of profits.

2.Opportunity and Enterprise: Opportunity involves goods or services that consumers need or want, especially if no one else is supplying them or if existing businesses are doing so inefficiently or incompletely.

3.The Benefits of Business: Businesses produce most of the goods and services consumed, employ most working people, create new innovations, and provide opportunities for new businesses to serve as suppliers. Further, businesses contribute to the quality of life and the standard of living in a society. Businesses provide incomes, taxes to support government, support to charities and community leadership.The External Environments of Business The external environment consists of everything outside an organization’s boundaries that might affect it. Managers must understand their environment to understand how to operate and compete within it. Businesses can also influence their environments. Six major dimensions of the

external environment are:

1.Domestic Business Environment. The domestic business environment refers to the environment in which a firm conducts its operations and derives its revenues. It includes customers, suppliers, and competitors.

2.Global Business Environment. The global business environment refers to the inter- national forces that affect a business; various factors including international trade agreements, international economic conditions, and political unrest affect the global environment at both the general and immediate levels. International market opportunities, suppliers, cultures, competitors, and currency values can impact any business.

3.Technological Environment. The technological environment generally includes all the ways by which firms create value for their constituents; technology includes human knowledge, work methods, physical equipment, electronics and telecommunications, and various processing systems used to perform business activities.

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