Chapter 1 - The Changing Face of Business

Question 1

What is a growing economy?

Answer 1

It is one that produces more goods and services over time.

Growing economies are important because they yield more income for business owners, their employees and governments in the form of tax payments

Question 2

Businesses Require (3 basic)

Answer 2

• physical inputs
• Knowledge and experience
• Ability to change and adapt to the times and marketplace

Question 3

Management

Answer 3

Planning and organization of resources

Question 4

Marketing

Answer 4

deals with customers and all efforts at building and maintaining long-term relationships

• Defining and understanding customers and their buying behavior
• Examines the 4 key strategic areas of product, place, promotion and price

Question 5

Business

Answer 5

consists of all profit-seeking activities and enterprises that provide goods and services necessary to and economic system.

Goods and services

Question 6

Profits

Answer 6

Rewards for businesspeople who take the risks involved in offering goods and services to customers.

Central focus for business

Payment motivated people (employers and employees)

Question 7

Not-for profit Organizations

Answer 7

Business-like establishments that have primary goals other than returning profits to their owners

Public service over profits

Raise money to operate

Operate in private and public sectors

Is an industry (revenues are raised and employees earn incomes by providing services)

Typically exempt from taxes

May receive funding from the government and/or the private sectors

Form a large part of Canada’s economy

Question 8

Factor Production

Answer 8

Four basic inputs for effective economic operation

• Natural resources (Rent for land leased for operations)
• Capital (Interest for money used to acquire capital items)
• Human resources (Wages for employees)
• Entrepreneurship (Profit for starting and managing operations)

Question 9

Natural Resources

Answer 9

All production inputs that are useful in their natural states, including agricultural land, building sites, forests and mineral depostes

Question 10

Natural Resources;

Answer 10

All production inputs that are useful in their natural states, including agricultural land, building sites, forests and mineral deposits.

Question 11

Capital

Answer 11

Production inputs consisting of technology, tools, information, and physical facilities

Question 12

Technology

Answer 12

Machinery and Equipment

Helps a company improve its own products (changing with the times)
- Ex. Netflix changing from DVD-by-mail to streaming service

• Helps a company operate more smoothly
  Ex. Tracking deliveries, providing efficient communication, analyzing data

Question 13

Information

Answer 13

important for effective performance of tasks

**To remain competitive, firms must upgrade, maintain and acquire capital

Question 14

Investments

Answer 14

profits that are turned back into the business

Question 15

Human Resources

Answer 15

production inputs consisting of anyone who works, including both the physical labor and the intellectual inputs contributed by workers.

Companies rely on innovation, ideas and physical efforts.

Question 16

Entrepreneurship

Answer 16

the willingness to take risks to create and operate a business.

Question 17

What happens if a business is missing or lacking one of the 4 factors?

Answer 17

Missing or lacking one of the 4 factors makes maintaining a business tricky but not impossible:

Often the business lacking a factor can compensate by paying more for something

Ex. Due to infertile lands/lack of space, using warehouses and more expensive equipment to grow more expensive food for a higher paying clientele.

Question 18

Private Enterprise System (in Canada)

Answer 18

an economic system that rewards firms for their ability to identify and serve the needs and demands of customers.

Minimizes government interference in business activity

the right to own, use, buy, sell, and hand down land, buildings, machinery, equipment, patents, individual possessions, and various intangible kinds of property.
Also guarantees business owners the right to all after-tax profits
Owner is entitled to any profit

Question 19

Capitalism

Answer 19

an economic system that rewards firms for their ability to perceive and serve the needs and demands of consumers; aka the private enterprise system

Question 20

Competition

Answer 20

the battle among businesses for consumer acceptance

Question 21

The invisible hand principle

Answer 21

Smith (the ‘‘invisible hand” principle) thought that competition among firms would lead to consumers receiving the best possible products and prices because less efficient producers would gradually be driven from the marketplace (survival of the fittest much?)

Question 22

Competitive differentiation

Answer 22

the unique combination of organizational abilities, products, and approaches that sets one company apart from its competitors in the minds of customers.

Question 23

What are the basic rights in the Private Enterprise System?

Answer 23

Private Property
Profits
Competition
Freedom of Choice

Question 24

Private Property

Answer 24

most basic freedom under the private enterprise system

Question 25

Freedom of Choice

Answer 25

private enterprise system relies on citizens to choose their own employment, purchases and investments.

Question 26

What laws has the Canadian government passed to prohibit excessively aggressive competitive practices designed to remove competition.

Answer 26

Price discrimination is illegal So is fraud in financial markets and deceptive advertising/packaging

Question 27

Entrepreneur

Answer 27

is a risk taker in the private enterprise system who take existing natural resources, technologies and other factors of production in new ways. Entrepreneurship: Creates jobs Sells products

Question 28

The Colonial Period

Answer 28

Rural and agricultural production Small colonial towns that function as marketplaces for farmers and craftspeople Success depends on outputs of farms (huge impact on economy) Dependence on Europe for manufactured items and financial help Close economic ties of Canada (and USA) with Britain for money needed to develop North American business in exchange for resources; even after the American revolution Hudson's Bay Company (Trade)

Question 29

Industrial Revolution

Answer 29

Began in England around 1750 Businesses moved to a factory system that mass produced items (as opposed to individual skilled workers producing 1 product at a time) Factories made profit from the savings created by large-scale production and increases in machine usage Production improved by specialized labor Due to changes in England, Canada businesses also began a time of rapid industrialization (agriculture became mechanized and factories emerged). New built railroad system provided fast, economical transport, opening up the West

Question 30

The age of industrial entrepreneurs

Answer 30

Industrial revolution increased entrepreneurship in Canada Inventors created new production methods and commercially useful products Ex. Alexander Graham Bell, Alexander Melville Bell and Reverend Thomas Henderson started basic short-distance telephone service between offices and buildings Became Bell Eli Whitney introduced the idea of interchangeable parts, leading to mass production This age advanced the Canadian business system and increase the overall standard of living in Canada

Question 31

Production Era

Answer 31

Demand for manufactured goods increased Business focused on activities needed to produce those goods Work became more specialized, and huge, labor-intensive factories were common in North America Henry Ford started using assembly lines (these became popular later) New managers (people trained in operating companies) were handed over owner responsibilities to further produce even more goods Focus on internal processes instead of external influence (no marketing) Customer wants and needs were not important

Question 32

Marketing Era

Answer 32

Great Depression changed business People's income dropped, businesses could no longer count on selling products in the same quantities Marketing became a focal point, advertising became in important activity Selling meant the same thing as marketing After WWII demand for consumer goods increased Consumers begun buying again, but competition also increased Managers developed consumer orientation Consumer Orientation

Question 33

Consumer oritnetation

Answer 33

a business philosophy that focuses first on consumes' unmet wants and needs, and then designs products to meet those needs Consumer choice skyrocketed Started in the marketing era

Question 34

Branding

Answer 34

process of creating in consumer' minds an identity for a good, service, or company

Question 35

Brand

Answer 35

a name, term, sign, symbol, design or something that identifies the products of one firm and shows how they differ from another Ex. Home Depot has a carefully guarded brand name that stands for excellent customer service, and entrepreneurial spirit, and the desire to give back to the communities where it operates

Question 36

The relationship era

Answer 36

building and promoting in the hopes that enough customers will buy them to cover costs and earn profits. Era firms seek to actively promote customer loyalty by carefully managing every interaction Companies with long-term customers often find they no longer need to offer price discounts to attract new business, new customers are referred by loyal ones. Advantages of maintaining relationships: 1. Less costly than attracting new customers 2. Reduces overall costs 3. Business can improve understanding of what customers want and prefer from the company - Age of connections - Businesses expand beyond national boundaries

Question 37

The Social Era

Answer 37

a new approach to the way business and individuals interact, connect, communicate, share and exchange information in virtual communities. Based on the premise that organization create value through connections with groups or networks of people with similar goals and interests Relationship management; the collection of activities that build and maintain ongoing, mutually beneficial ties with customers and other parties. Businesses use mobile social media application to engage in marketing research, communications, sale promotions, loyalty programs, and other processes.

Question 38

Covid-19

Answer 38

Increase in the rate of adoption of digital technologies by consumers seeking convenience, safety and other benefits. Employees learned to work remotely and communicate digitally Increase in employee empathy for one another Employees grew more concerned with personal and family, wellness, diversity and inclusivity in the workplace environment

Question 39

Growing Partnership and Relationship

Answer 39

Businesses are finding that they must form partnerships with other organizations to take full advantage of available opportunities. Strategic Alliance; A partnership formed to create a competitive advantage for the businesses involved Ex. Pfizer and BioNTech partnership

Question 40

Changes in the workforce

Answer 40

Employers need reliable workers who are dedicated to promoting strong ties with customers and partnerships Workforces need to be capable of efficient, high-quality production to compete in the global market A first-class workforce can be the foundation of a firm's competitive differentiation Ex. MacDonalds ''Clean and Green Business''

Question 41

The aging population

Answer 41

Some economists predict the Canadian Labour force could soon fall short as the baby boomers retire. For those older employees who do retire, employers must look after a variety of retirement planning and disability programs, retraining and insurance benefits. Teenagers are entering the workforce sooner, and some seniors are working longer. Demand for highly-educated employees still falls short of the supply.

Question 42

Diversity

Answer 42

blending individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities. Enhances a firm's chances of success due to varied experiences

Question 43

Outsourcing

Answer 43

is the relocation of business processes to lower-cost locations overseas. China has emerged as a prime location for production and India for services

Question 44

Nearshoring

Answer 44

outsourcing production or services to nations near a firm's home base.

Question 45

Flexibility and Mobility

Answer 45

Millennials prefer flexibility, diversity and inclusion over money and work-comes-first lifestyles. Prefer freelance or flexible-hour/contract employment and work from home options Managers need to present exciting work opportunities, build and earn trust and ensure that all members are acting ethically and contributing their share without the day-to-day supervision.

Question 46

Innovation through collaboration

Answer 46

Today's employees build their own careers however and wherever they can. Firms now recognize the value of partnering with employees to encourage creative thinking and problem solving and to reward risk taking and innovation.

Question 47

What are companies looking for in managers (traits)

Answer 47

Intelligent Highly motivated Create and sustain vision Use critical thinking Creative

Question 48

Vision

Answer 48

the ability to perceive market place needs and what an organization must do to satisfy them

Question 49

Critical thinking

Answer 49

is the ability to analyze and assess information to pinpoint problems or opportunities

Question 50

Creativity

Answer 50

is the capacity to develop novel solutions to perceived organizational problems

Question 51

Successful managers must be aware of both types of factors; internal and external

Answer 51

External; feedback, economic trends, etc. Internal; company goals, employee needs, etc.

Question 52

Business ethic

Answer 52

the standards of conduct and moral values involved in decisions made in the work environment.

Question 53

Social responsibility

Answer 53

is a management philosophy that includes contributing resources to the community, preserving the natural environment and developing or participating in not-for-profit programs.