Solutions
Manual for Contemporary Business Canadian Edition 5th Edition
by Boone; David L, Kurtz, Pfaltzgraf, Khan, Canzer, Harms
ISBN: 9781394328499
Chapter 1: The Changing Face of Business
1 Define business.
Business consists of all profit-seeking activities that provide goods and services necessary to an economic system. Not-for-profit organizations are business-like establishments whose primary objective is public service over profits.
2 Identify and describe the factors of production.
The factors of production consist of four basic inputs: natural resources, capital, human resources, and entrepreneurship. Natural resources include all productive inputs that are useful in their natural states.
Capital includes technology, tools, information, and physical facilities. Human resources include anyone who works for a company. Entrepreneurship is the willingness to take risks to create and operate a business.
3 Describe the private enterprise system.
The private enterprise system is an economic system that rewards companies for their ability to perceive and serve the needs and demands of consumers. Competition in the private enterprise system ensures success for companies that satisfy consumer demands. Citizens in a private enterprise economy enjoy the rights to private property, profits, freedom of choice, and competition. Entrepreneurship drives economic growth.
4 Identify the seven eras in the history of business.
The seven historical eras are the Colonial period, the Industrial Revolution, the age of industrial entrepreneurs, the production era, the marketing era, the relationship era, and the social era. In the Colonial period, businesses were small and rural, emphasizing agricultural production. The Industrial Revolution brought factories and mass production to business. The age of industrial entrepreneurs built on the Industrial Revolution through an expansion in the number and size of companies. The production era focused on the growth of factory operations through assembly lines and other efficient internal processes. During and following the Great Depression, businesses concentrated on finding markets for their products through advertising and selling, giving rise to the marketing era. In the relationship era, businesspeople focused on developing and sustaining long-term relationships with customers and other businesses. In the social era, businesses use technology and relationship management to connect and communicate with consumers and promote innovation. Strategic alliances create a competitive advantage through partnerships. Concern for the environment also helps build strong relationships with customers.
5 Explain current workforce trends in business. The workforce is changing in several significant ways: (1) it is aging and the labor pool is shrinking, and (2) it is becoming increasingly diverse. The nature of work has shifted toward services and a focus on information. More businesses now rely on outsourcing, off shoring, and nearshoring to produce goods or fulfill services and functions that were previously handled inhouse or in-country. In addition, today’s workplaces are becoming increasingly flexible, allowing employees to work from different locations. And companies are fostering innovation through teamwork and collaboration.
6 Identify the skills and attributes needed for today’s manager. For today’s managers, the ability to communicate and strategically apply critical thinking skills and creativity to both challenges and opportunities will be a top priority. Critical-thinking skills and creativity allow managers to pinpoint problems and opportunities and plan novel solutions. Finally, managers are dealing with rapid change, and they need skills to help lead their organizations through shift s in external and internal conditions.
7 Outline the characteristics that make a company admired. A company is usually admired for its solid profits, stable growth, a safe and challenging work environment, high-quality goods and services, and business ethics and social responsibility.
Excel Activity Lesson 01: Formulas and Dates
(Estimated Time: 10 minutes)
TED Talk Marketing Managers are working with potential speakers, and a question came up about how long it takes for a recorded video to be posted online. They have provided you with a spreadsheet that includes 100 of the videos recorded between 2001 and 2017. Using this data, calculate the average, minimum and maximum number of days between the recording and publishing dates.
Detailed Instructions:
1. Download the spreadsheet. TED Talk Activity 1.xlsx.
2. Highlight both the film date and publish date columns. Make sure both are formatted as dates.
3. Write a formula that will calculate the difference in the publish date and the film date.
4. Be sure to format this new column as a number rather than a date.
5. Beneath the newly created data, write a formula that will calculate the average number of days between the publish date and the film date. Be sure to set the number of decimal points to 0.
6. Beneath the average formula, write another formula that will display the minimum number of days between the publish date and the film date.
7. Beneath the minimum formula, write a final formula that will display the maximum number of days between the publish date and the film date.
8. Be sure to label your average, min, and max using the cell directly to the left of each formula so any viewer will know what they are viewing.
Excel Activity 1: MC Questions
1. What is the average (to the hundredth decimal place)?
a. 218.56
b. 216.58
c. 215.86 (correct)
d. 230.7
2. What is the minimum?
a. 1 (correct)
b. 2
c. 10
d. 5
3. What is the maximum?
a. 2307 (correct)
b. 1703
c. 1207
d. 2370
AppendixB,BUSINESSLAW
AppendixOverview
Inthisappendix,weprovideageneraloverviewoflegislationatthefederal,provincial,andlocal levels.Wepointoutthat,althoughbusinessexecutivesmaynotbelegalexperts,theydoneedtobe knowledgeableintheirspecificareaofresponsibility.Somecommonsensealsohelpstoavoid potentiallegalproblems.Thisappendixlooksatthegeneralnatureofbusinesslaw,thecourtsystem, basiclegalconcepts,andthechangingregulatoryenvironmentforbusiness.
LearningObjectives
B.1.Identifythesevenkindsoflawsthatformthecoreofbusinesslawanddescribehowtheyaffect businesses.
AppendixOutline
1. Overview
2. LegalSystemandAdministrativeAgencies
3. TypesofLaw
4. RegulatoryEnvironmentforBusiness
5. TheCoreofBusinessLaw
a. ContractLawandLawofAgency
b. PropertyLawandLawofBailment
6. Trademarks,Patents,andCopyrights
a. LawofTorts
7. BankruptcyLaw
8. TaxLaw
AppendixFigures
FigureB.1FourElementsofanEnforceableContract
FigureB.2ThreeBasicTypesofProperty
LectureIdeas
LectureTopic
AnnotatedLectureNotes
OpeningVignette:
Apple’siPhone–Don’tTouchthePatents!
SmartphoneusersknewrightawaytheyreallylikedtheiPhone.And theiPhonequicklygrabbedabigchunkofthecellphonemarket.The innovativedevicealsoledtoalonglineofimitators.TheiPhonehas manygroundbreakingfeatures.Appleeitheralreadyhasthepatents toprotectthosefeaturesorisintheprocessoffilingthosepatents.A patentgivesaninventorexclusiverightstoaninventionforaperiodof time.
Severalyearsago,AppleappliedforapatentfortheiPhone'smulti‐functiontouchscreen.TheUnitedStatesPatentandTrademarkOffice grantedApplepatentnumber7,479,949.Thispatentcoversthe touchscreenandthetechnologybehindthephone'shardwareand someofitssoftware,includingitsoperatingsystemandsomeofits phoneandcamerafunctions.Butpatentprotectiondoesn'tmean thatAppleisprotectedfromlawsuits.SincetheiPhonewaslaunched, Applehasbeenthetargetofpatentinfringementlawsuitsbyother firms.ThelawsuitsincludeclaimsthatApplecopiedmulti‐touch technology,visual‐voicetechnology,anddigital‐cameraandimaging technology.ThebiggestsuitsofarcamefromNokia,whichwasthen theworld'slargestmanufacturerofmobilephones.Nokiasaidthat Appleinfringedon10ofitspatentsrelatedtowirelesshandsets.But ApplecountersuedNokia,claimingthatNokiainfringedupon13of Apple'spatents.
Dotheselawsuitssoundchildishtotheaverageconsumer?Maybe. Butthetechnologyindustryisverycomplex.Innovationshappenso fastthatitcanbehardtoknowwhocameupwithanideafirst and atwhatstageofdevelopmentanideashouldbeconsidered proprietary,orundertheownershipofitsinventor.Patentstakea longtimetoprocess,andpatentinfringementcasescantakeeven longer.ManyfirmsareturningtotheU.S.InternationalTrade Commissioninsteadofothercourtsandagenciesbecauseitcanmove thesecasesalongmorequickly.Butbecausethesecasesofteninvolve
morethantwocompanies,theycanbecomeatangledwebofsuits andcountersuits.
ApplesuedtheTaiwanesemobilephonemanufacturerHTC,alleging infringementof20ApplepatentsrelatingtotheiPhone,mostly patentsrelatedtoiPhone'sgraphicaluserinterface.Applewas seekingapermanentinjunctionthatwouldbanHTCfromsellingits phonesintheUnitedStates.“Wecansitbyandwatchcompetitors stealourpatentedinventions,orwecandosomethingaboutit,”said SteveJobs,Apple'sco‐founderandCEOatthetime.“Wethink competitionishealthy,butcompetitorsshouldcreatetheirown originaltechnology,notstealours.”
HTCclaimedthatitwascompletelysurprisedbyApple'slawsuit.“HTC isamobile‐technologyinnovatorandpatentholderthathasbeen veryfocusedoverthepast13yearsoncreatingmanyofthemost innovativesmartphones,”saidacompanyspokespersoninresponse tothesuit.“HTCvaluespatentrightsandtheirenforcement,butis alsocommittedtodefendingitsowntechnologyinnovations.” SomebusinesslawexpertsfinditinterestingthatAppledidnotname softwaremakersGoogleorMicrosoftinitslegalactionagainstHTC, whichmadesuchpopularphonesastheNexusOne.TheNexusOne wassoldbyGoogle,andseveralotherphonesnamedinthesuitused Microsoft'sWindowsMobilesoftware.
AndincaseyouthoughtthatthingsweredifferentinCanada,consider thelawsuitBlackBerry(formerlyknownasResearchInMotionorRIM) filedagainstTedLivingstonandhiscompany,KikInteractiveInc. Livingstonwasaccusedofusingproprietarysoftwareknowledge gainedwhilehewasastudentattheUniversityofWaterlooandwhile hewasemployedatRIM.Livingston'scommentonhisblogspoke volumesaboutthehurtfeelingsandassumptionsmadeatone'sown risk:“RIMsuedusyesterday.Acouriercametodropoffapackage.I openedupthelettertoseeastackofpaperswithabiggoldsealon thefirstpage.Plaintiff:ResearchInMotionInc.ThecompanyIworked forasaco‐opstudent.ThecompanyIloved.ThecompanyIthought couldbenefitfromKik'svisionofamobilecommunity.Thecompany thatplacedKikonBlackBerryAppWorldwithoutissue.ThecompanyI sharedourentireplanwitheverystepoftheway,issuingus.I'mnot afraid.I'mnotsurprised.ButIamdisappointed.”
Thesecaseshighlighttheimportanceofeverybusinessperson understandingthebasicsofbusinesslaw.Itdoesn'tmatterwhether youplantomarkethigh‐techdevicessuchassmartphonesorsella simplepairofshoesonline asabusinessperson,youwillneedto knowthelawsthatgovernyourbusinessactivities.
LectureTopic
LearningObjectiveB.1:Identifythesevenkindsoflawsthatformthecoreofbusinesslawand describehowtheyaffectbusinesses.
LegalSystemandAdministrativeAgencies
AnnotatedLectureNotes
Businesslawincludescontractlawandthelawofagency;saleslawandnegotiableinstrumentslaw; propertylawandthelawofbailment;trademark,patent,andcopyrightlaw;tortlaw;bankruptcylaw; andtaxlaw.Contractlawisthelegalfoundationonwhichbusinessdealingsareconducted.A contractisalegallyenforceableagreementbetweentwoormorepartiesregardingaspecifiedactor thing.Contractscanalsocoveranagencyrelationship:whenonepartyappointsanotherparty(an agent)toenterintocontractsontheirbehalf.Saleslawisthelawgoverningthesaleofgoodsor servicesformoneyoroncredit.Negotiableinstrumentslawgovernstheuseofnegotiable instruments:commercialpaperthatistransferrableamongindividualsandbusinesses,suchasa cheque.Propertylawdeterminestherightsofownersofproperty:tangiblepersonalproperty,suchas equipment;intangiblepersonalproperty,suchasmortgages;andrealproperty,orrealestate.The lawofbailmentdealswiththesurrenderofpersonalpropertybyonepersontoanotherwhenthe propertyistobereturnedatalaterdate.Trademarks,patents,andcopyrightsprovidelegal protectionbygivingafirmtheexclusiverighttouseitskeybusinessassets.Thelawoftortsappliesto atort,acivilwronginflictedonanotherpersonoronanotherperson’sproperty,suchaslibel.Inthe eventofbankruptcy legalnon-paymentoffinancialobligations bankruptcylawprotectsboth creditorsanddebtors.Taxlawgovernstheobligationsofbusinessestocollectandpayvariouskinds oftaxestogovernments,suchasincomeandsalestaxes.
THE LEGALSYSTEMANDADMINISTRATIVEAGENCIES
a. Thejudiciary,orcoursesystem,isthebranchof governmentresponsibleforapplyinglawstosettle disagreementsbetweentwoormoreparties.
b. Courtsystemsareorganizedatthefederal,provincial andlocallevelseachwithaspecificjurisdictionor areaofresponsibility.
c. AdministrativeagenciessuchastheCanadianRadio‐televisionandTelecommunicationsCommissionCRTC alsoperformsuchjudicialfunctionsbutareviewedas regulatorybranchesofgovernment.
d. Canada'scourtsystemisdividedbetweenthefederal andprovinciallegislatures. Generally,thefederal governmenthasexclusivepowersoverareasthat concerntheentirecountry,includingcriminallaw, defence,currency,andtelecommunications.The provincesrulemainlyoncivilmatterssuchasproperty law.Theprovincesmayempowermunicipal governmentstopasslocallaws.Boththefederaland provincialcourtshearcivilandcriminalcases.
e. TheSupremeCourtofCanadawillonlyhearlowerlevelappealcourtcasesthatitselects.Basedupon theirperceivedimportancefortheentirecountry.
LectureTopic
TYPESOFLAWS
AnnotatedLectureNotes
a. Lawconsistsofthestandardssetbygovernmentand societyintheformofeitherlegislationorcustom.
Forexamplegenerallythe federalgovernmenthas exclusivepowersoverareas thatconcerntheentire countryincludingcriminal law,defence,currencyand telecommunications. The provincesrulemainlyon civilmattersandmay empowermunicipal governmentstopasslocal laws.
b. Commonlawreferstolawsthatresultfromjudicial decisions,someofwhichcanbetracedtoearly England.
i. Forexample,inmanycountriesandprovinces,an unmarriedcouplewhohaslivedtogetherfora certainperiodoftimeissaidtobelegallymarried bycommonlaw.
c. Statutorylawiswrittenlawandincludesprovincial andfederalconstitutions,legislativeenactments, treatiesofthefederalgovernmentandordinancesof localgovernments.
d. Internationallawincludesnumerousregulationsthat governinternationaltrade,
i. Companiesmustalsobeawareofdomestic lawsoftheirpartnersforexampletrade agreementssuchastheformerNAFTAand rulingsbytheWTO.
e. Businesslawconsistofthosepartsoflawthatmost directlyinfluenceandregulatethemanagementof varioustypesofbusinessactivities.
i. Provincialandlocalstatutesalsodifferinhow widelytheirlawsapply.Somelawsaffectall businessesthatoperateinaprovince.
ii. Oneexampleistheworkers’compensation laws,whichcoverpaymentstoworkersfor workplaceinjuries.Otherprovinciallaws applytoonlycertainfirmsorbusiness activities.Provinceshavespecificlicensing requirementsforbusinessessuchaslawfirms, funeraldirectors,andhairsalons.Manylocal ordinancesdealwithspecificbusiness activities.Localandprovincialregulations oftenguidethesizesandtypesofbusiness signsallowed.Somecommunitieseven restrictthesizesofstores,includingheight andsquarefootage.
LectureTopic RegulatoryEnvironmentforBusiness
a. Government regulation of business in North America has changed over time. Depending on public opinion, the economy, and the political climate, governments swing betweenincreasedregulationandderegulation.
i. Thegoalofbothtypesoflegislationistheprotection ofhealthycompetition.
b. ThefederalCompetitionActguardsagainstmonopolies, price-fixing,andotherlimitationsoncompetition.Theact protectsconsumersbyensuringthattheyhaveachoicein themarketplace.
i. The objectives of the Competition Act are to encourage competition and to prevent monopolies.
ii. The act specifically prohibits any contract or agreementforthepurposeoflimitingtrade.
iii. Price-fixing is an agreement between two or more businesses to set a price for the goods they sell in themarketplace.
iv. A market allocation is an agreement to divide the marketamongpotentialcompetitors
v. A boycott in restraint of trade is an agreement between businesses not to sell or buy from a particularentity.
LectureTopic
TheCoreofBusinessLaw
AnnotatedLectureNotes
THECOREOFBUSINESSLAW
a. Contractlawisthefoundationofbusinessdealings.
i. Acontractisalegallyenforceableagreement betweentwoormorepartiesregardinga specifiedactorthing.
ii. Showsthefourelementsofanenforceable contract:agreement,consideration,legaland seriouspurposeandcapacity.
iii. Breachofcontractisaviolationofavalid contract.
iv. Anagencyrelationshipexistswhenoneparty appointsanothertoenterintocontractswith thirdpartiesontheirbehalf.
v. Saleslawgovernsthesalesofgoodsorservices formoneyoroncredit.
vi. Warranties:Productcancarrytwotypesof warranties:anexpressedandanimpliedone.
An expressed oneisaspecificrepresentation madebythesellerregardingtheproduct.An implied oneislegallyimposedontheseller.
vii. A negotiable instrument iscommercialpaper thatistransferrableamongindividualsand businesses.
FigureB.1
The law specifies that a negotiable instrument must be written and must meet the following conditions:
1.Itmustbesignedbythemakerordrawer.
Mostcommonexampleisa chequebutsometimes draftsandcertificatesof depositsarealsoconsidered negotiableinstruments.
2.Itmustcontainanunconditionalpromiseoranorderto payacertainsumofmoney.
3.Itmustbepayableondemandoratadefinitetime.
4.Itmustbepayabletoorderortothebearer. Cheques and other forms of commercial paper are transferred when the payee signs the back of the instrument,aprocessknownasendorsement.
b. Propertylawisakeyfeatureoftheprivateenterprise system.
i. Propertyissomethingforwhichapersonorfirm hastheunrestrictedrightofpossessionoruse.
ii. Propertycanbedividedintothreebasic categories:tangibleproperty,intangible property,andrealproperty. Thelawofbailmentdealswiththesurrenderof personalpropertybyonepersontoanother whenthepropertyistobereturnedatalater date.
FigureB.2
LectureTopic
Trademarks,Patents,andCopyrights
AnnotatedLectureNotes
a. Trademarks,patents,andcopyrightsprovidelegal protectionbygivingafirmtheexclusiverighttouse itskeybusinessassets.
i. Atrademarkisabrandthathasbeengiven legalprotection.
Bailmentdisagreementsare mostlikelytoarisein businesssettlingsuchas hotels,restaurants,banks andparkinglots. Thelaw focusesontheactual deliveryofanitem.For exampleacaféownerisnot responsibleforastolencoat ifthecustomerhasnotgiven thecoattothecaféforsafe keeping.
CLASSACTIVITY:Discuss withtheclasswhichbrands areamongstthemost recognizedtrademarksin
ii. Patentguaranteesaninventorexclusive rightstoaninventionfor20years.
iii. Acopyrightprotectsofwrittenorprinted materialssuchasbooks,designs,cartoon illustrations,photos,computersoftware, musicandvideos.
b. Atortisacivilwronginflictedonanotherpersonor onanotherperson’sproperty.Tortlawdealswith compensationforinjuredpeoplewhoarethevictims ofnoncriminalwrongs.
i. Atortmaybeintentionaloritmaybecaused bynegligenceorcarelessness.
ii. Unintentional torts resultfromnegligence whichinessenceiscarelessbehaviourthat causesinjurytoanotherperson.
iii. Product liability isanotherareaoftortlaw. Theselawsholdbusinessesliablefor negligenceinthedesign,manufacture,sale oruseofproducts.
theworld. Coca-Colaand McDonaldsaretwoofthe world’smostrecognized trademarks.
LectureTopic
BankruptcyLaw
AnnotatedLectureNotes
a. Bankruptcy,legalnonpaymentoffinancial obligationsisacommonoccurrencein contemporarysociety.
i. Bankruptcyhastwopurposes:toprotect creditorsbyprovidingawaytoobtain
Examplesofintentionaltorts includeassault,slander,libel andfraud.
Abusinesscanbeheldliable forthenegligenceoftheir employeesoragents.
LectureTopic TaxLaw
compensationthroughdebtors’assetsand toprotectdebtorsallowingthemtohavea freshstart.
AnnotatedLectureNotes
a. Tax is an assessment by a government unit. Federal, provincial and local government and special taxing authorities all levy or charge taxes.
i. Governments can charge taxes on the basis of several different terms: income, sales, business receipts, property and assets.
Appendix D, “Personal Financial Planning,” also covers tax law
Notes:_______________________________________________________________________________
ProjectsandTeamworkApplications
1. Consumerprotectionisanideathatstartedintheearly1900sandcontinuestoday. Chooseanindustrythatyouthinkshould orwill bethenextareaofconcernfor consumerprotectionlaw.Forexample,youcouldchoosetravel,organicfoods, healthcare,oranyareathatinterestsyou.Researchtheconsumerprotectionsthat mayalreadybeinplaceinthisindustry.Outlineaplanforfutureprotections.
LO:Identifythesevenkindsoflawsthatformthecoreofbusinesslawanddescribe howtheyaffectbusinesses.
DIFFICULTY:Hard
Bloomcode:Synthesis
AACSB:ReflectiveThinking
2. Tobeeffective,lawsmustbepracticalandenforceable;theymustalsobeupdated periodicallytoreflectchangesinsocietalviewsandvalues.Goonlineandresearch yourhomecommunity.Canyoufindanyoutdated,unenforceable,orstrangelaws thataffectbusinesses?Presenttheselawsinclassanddiscusshowtheycouldbe revisedsothattheyactuallywork.
LO:Identifythesevenkindsoflawsthatformthecoreofbusinesslawanddescribe howtheyaffectbusinesses.
DIFFICULTY:Med
Bloomcode:Analysis
AACSB:Analytic
3. Thebusinessworldisfilledwithtortcases,andmanyinvolveproductliability.Oneof themostfamouscasesisthecustomerwhosuedMcDonald’sbecauseshespilleda cupofitshotcoffeeinherlap,sufferingburnsandscalding.Ajuryawardedher$2.7 millionindamages,anamountthatajudgelaterreducedtolessthan$500,000.On yourownorwithaclassmate,goonlinetoresearchotherfamousproductliability cases.Chooseacaseandlearnasmuchasyoucanaboutit,includingtheeffectofthe case’soutcomeonthefirmorfirmsinvolved.Presentyourfindingsinclass.
LO:Identifythesevenkindsoflawsthatformthecoreofbusinesslawanddescribe howtheyaffectbusinesses.
DIFFICULTY:Med
Bloomcode:Comprehension
AACSB:Analytic