Type:
Solution Manual
Resource:
Business Essentials
Edition:
8th Edition
Author(s):
Ronald J. Ebert Ricky W. Griffin
SAMPLE SYLLABUS BUSINESS PLAN PROJECT OUTLINE PART 1 THE CONTEMPORARY BUSINESS ENVIRONMENT This part of the business plan asks students to come up with a “great idea” for a business, creating an identity and forming a concrete notion of what the business will do. The first part of the plan also asks students to identify the type of ownership the business will take and briefly looks at who the firm’s ideal customers are. This part of the plan also looks at how the business will interact with the community and demonstrate social responsibility, and includes a perspective on the impact of global business. Suggested 12-week quarter due date: End of week four Suggested 16-week semester due date: End of week five PART 2 THE BUSINESS OF MANAGING This part of the business plan asks students to think about goals of their business, some internal and external factors the affecting the business, as well as the organizational structure of the business. As part of the assignment, students will perform a basic SWOT analysis for their business and create an organizational chart to show the framework of the business. Students will also explain the role of each employee, and how each relates to the others. Finally, students are asked to examine various factors relating to operating their business. Suggested 12-week quarter due date: Suggested 16 week semester due date: PART 3
End of week six End of week seven
PEOPLE AND ORGANIZATIONS
This part of the business plan asks students to think about their employees, the jobs they will be performing, and the ways in which they can lead and motivate them. Students take the different job titles they created in the organizational chart in Part 2 and give thought to the skills that employees will need to bring to the job before they begin. They also consider the training they’ll need to provide employees after they are hired, as well as how they’ll compensate their employees. Part 3 of the business plan also asks students to consider how they’ll lead employees and keep them happy and motivated. Suggested 12-week quarter:
End of week seven
Suggested 16-week semester due date:
End of week eight
PART 4
PRINCIPLES OF MARKETING
This part of the business plan asks students to think about marketing’s “Four Ps”— product, price, place (distribution), and promotion—and how they apply to their business. Students will list features and benefits as well as the points of difference for
their product or service. After describing the product, the student must connect those described features and benefits to a targeted buyer. Once the targeted buyer has been named, students will describe advertising and promotional efforts to get the buyer’s attention. Suggested 12-week quarter due date:
End of week nine
Suggested 16-week semester due date:
End of week ten
PART 5 MANAGING INFORMATION This part of the business plan asks students to think about their business in terms of IT needs and costs. Students are also asked to complete a balance sheet and income statement for their businesses. Suggested 12-week quarter due date:
End of week ten
Suggested 16-week semester due date:
End of week twelve
PART 6 FINANCIAL ISSUES This part of the business plan asks students to consider how they’ll finance their business as well as create an executive summary for their plan. Suggested 12-week quarter due date:
End of week eleven
Suggested 16-week semester due date:
End of week fourteen
RESOURCES FOR CHAPTER 1: THE U.S. BUSINESS ENVIRONMENT The following resources are available for this chapter:
Instructor Resources Location: Instructor’s Resource Download Center (IRC); IRC on DVD (DVD); MyBizLab; Print (P) NOTE: To access mybizlab, please: (1) log on to your course, (2) select Course Content, (3) then go to Content by Chapter/ Instructor Resources (or Student Resources, if you choose). You may also select Content by Category, which lists all of the content we have available for the textbook.
Resource
Location
Instructor’s Manual • Chapter Overview • List of In-Class Activities to Accompany This Chapter • List of Homework Assignments to Accompany This Chapter • Teaching Notes and Suggestions • In-Class Activities • Answers to End of Chapter Exercises • Answers to Additional Activities on MyBizLab o In-Class Self-Check o Building Your Business Skills o Exercising Your Ethics o Video Case
www.mybizlab.com; DVD Page 1-1 Page 1-2 Page 1-2 Pages 1-3 to 1-13 Pages 1-14 to 1-21 Pages 1-22 to 1-23
Test Bank (and TestGen) PowerPoint Presentation CRS PowerPoints Video Clip: Helping Business Do Business. The US Department of Commerce Business Plan Files WebLinks for this Chapter Image Library
www.mybizlab.com; IRC; DVD www.mybizlab.com; IRC; DVD www.mybizlab.com; IRC; DVD www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com; DVD
Page 1-24 Page 1- 24 Page 1-24 and 1-25 Page 1-25 and 1-26
Student Resources Location: MyBizLab, Print (P); MP3 (M)
Resource
Location
Study Guide Chapter Summary and Chapter Objectives Pre-Test Post-Test Student PowerPoints (and Audio/Narrated PowerPoints) WebLinks Video Library: includes selection of videos pertinent to the chapter End of Chapter Exercises eBook Business Plan Files Flashcards
www.mybizlab.com; P www.mybizlab.com; M www.mybizlab.com; M www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com www.mybizlab.com
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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: • 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 A. Define the nature of U.S. business and identify its main goals and functions. B. Describe the external environments of business and discuss how these environments affect the success or failure of any organization. C. Describe the different types of global economic systems according to the means by which they control the factors of production. D. Show how markets, demand, and supply affect resource distribution in the United States. E. Identify the elements of private enterprise and explain the various degrees of competition in the U.S. economic system. F. Explain the importance of the economic environment to business and identify the factors used to evaluate the performance of an economic system.
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LIST OF IN-CLASS ASSIGNMENTS: AUTHOR’S CHOICE Time Limit
Instructor’s Edition Page Reference
20 min.
1-3, 1-14
25 min.
1-4, 1-15
Teams of students discuss types of economic systems.
30 min.
1-6, 1-16
Students read a supplemental case study and discuss how it applies to chapter concepts.
30 min.
1-8, 1-17, 1-18
Video show the work of the US Department of Commerce in helping businesses grow
Run time: 10:31 min. Question time: 30 min.
1-13, 1-25, 1-26
45 min.
1-9, 1-19
30 min.
1-10, 1-20, 1-21
Activity
Description
1. Ice-Breaker: What Do You Know About Business? 2. Small-Group Discussion: Scanning the Environment 3. Up for Debate: Comparing Economic Systems 4. Supplemental Case Study Discussion: Flying into Trouble- The OneWorld Alliance and Antitrust Laws
Students assess their level of knowledge about business and set their own learning goals for the class. Students consider how parts of the external environment affect businesses and industries.
Video Case: Helping Business Do Business. The US Department of Commerce 5. Up for Debate: Is Competition Good? 6. Business Accountability Handout Discussion: The Geography of Jobs Additional videos on this topic at: www.mybizlab.com/
Teams of students discuss competition and the role it plays in our economic system. This activity asks students to read a supplemental article and ponder whether outsourcing is a detriment to social responsibility. Viewing the Environment: MTV Europe
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LIST OF HOMEWORK ASSIGNMENTS: AUTHOR’S CHOICE At-Home Activity
Description
Deliverable
Completion Time
Instructor’s Edition Page Reference
Application Exercise 9: Visit a Shopping Mall
Students visit a shopping mall and determine the degree of competition stores face in their immediate environment.
A brief paper detailing their responses to the activity.
1 to 1.5 hours
1-10, 1-23
Application Exercise 10: Interview a Manager
Students interview a business owner or senior manager, find out how demand and supply affect the business, determine which essential factors of production are most important, and judge the impact of economic indicators on the business.
A brief paper detailing the outcome of the interview.
1 to 2 hours
1-13, 1-23
TEACHING NOTES AND SUGGESTIONS Section 1: Key Learning Objective A: Define the nature of U.S. business and identify its main goals and functions. The Concept of Business and the Concept of 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 in their pursuit of profits. 2. Opportunity and Enterprise: Unmet consumer demands provide promising opportunities for potential business success. 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.
Use In-Class Activity 1: Ice Breaker Time Limit 20 minutes 1-4
Section 2: Key Learning Objective B Describe the external environments of business and discuss how these environments affect the success or failure of any organization. The External Environments of Business The external environment consists of everything outside an organization’s boundaries that might affect it. Economists examine six major dimensions of the external environment. 1. Domestic Business Environment. The domestic business environment refers to the environment in which a firm conducts its operations and derives its revenues. 2. Global Business Environment. The global business environment refers to the international forces that affect a business; various factors affect the global environment at both the general and immediate levels. 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. 4. Political-Legal Environment. The political-legal environment reflects the relationship between business and government, usually in the form of government regulation of business. 5. Sociocultural Environment. The sociocultural environment includes the customs, mores, values, and demographic characteristics of the society in which an organization functions. 6. Economic Environment. The economic environment refers to relevant conditions that exist in the economic system in which a company operates. Use In-Class Activity 2: Small Group Discussion – Scanning the Environment Time Limit 25 minutes
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Section 3: Key Learning Objective C: Describe the different types of global economic systems according to the means by which they control the factors of production. Economic Systems An economic system is a nation’s system for allocating its resources among its individual citizens and organizations. A. Factors of Production A basic difference between economic systems is the way in which they manage their resources, known as factors of production. Economists focus on five factors of production: 1. Labor: The human resource element in businesses, labor includes the physical and intellectual contributions people make while engaged in economic production. 2. Capital: The financial resources needed to operate an enterprise are known as capital. 3. Entrepreneurs: An entrepreneur is an individual who accepts the risks and opportunities entailed by creating and operating a new business. 4. Physical Resources: The tangible things that organizations use to conduct their business are physical resources. 5. Information Resources: Businesses rely on information resources, such as market forecasts, the specialized knowledge of people, and economic data. KEY TEACHING TIPS •
The most important factors of production are entrepreneurial skills and informational resources. The more a country can create an environment that promotes entrepreneurship and harnesses knowledge and information, the better of it will be.
•
Remind students that inputs used to produce outputs are also called factors of production; they include physical resources, labor, capital, entrepreneurship, and information resources.
QUICK QUESTIONS •
What are the factors of production used to produce orange juice?
•
Entrepreneurship involves tremendous risk-taking and is a welcome ingredient in a freemarket system. What characteristics of our free-market system encourage risk taking?
B. Types of Economic System Economic systems vary, depending on how the factors of production are managed. 1. Planned Economies: These systems rely on partial or total government control 1-6
of all or most of the factors of production and allocation decisions. With communism— as currently operating in North Korea— all sources of production are owned and operated by the government. 2. Market Economies. Producers and consumers control production and allocation decisions through supply and demand. The political basis of a market economy is capitalism, which allows the private ownership of the factors of production and encourages entrepreneurship by offering profits as incentives. 3. Mixed Market Economies: This type of economy features characteristics of both planned and market economies; many countries are moving from planned systems to mixed market systems through privatization, which involves the transformation of government-controlled businesses into privately owned enterprises. In the partially planned system called socialism, the government owns and operates selected major industries. The U.S. Government’s bailout of U.S. banks and other financial institutions in 2009 involved the government taking an ownership to keep tabs on how tax dollars (used to bailout the banks and financial institutions) were being used. Critics of government intervention were quick to label the bailout as a move towards socialism. KEY TEACHING TIPS •
Remind students that a government’s level of control distinguishes capitalism from socialism. If you have foreign students in your class, you may want them to say a bit about the economic system in their native country.
•
Make sure students understand that a mixed market economy is characterized by government ownership of major industries working alongside privately owned industries that smooth out fluctuations in output and unemployment and to stabilize prices.
•
Remind students that an economic system is defined by how it allocates factors of production. In a planned economy, the government owns and controls these factors; in a market economy, producers/consumers buy and sell what they choose.
•
Make sure students understand that a mixed market economy is characterized by government ownership of major industries working alongside privately owned industries
•
Ask students to give their opinions about the government bailout of banks and financial institutions. In addition, you could ask students to research and report on any new stories concerning the bailout that appear in publications such as The Wall Street Journal. It is never too early to get students to regularly read the business news!.
Use In-Class Activity 3: Class Discussion – Up for Debate – Comparing Economic Systems Time Limit 30 Minutes
1-7
QUICK QUESTIONS •
Give an example of a country with a planned economy.
•
What makes this economy planned? Give an example of a country with a market economy.
•
How is the economic system different in this country?
•
In retrospect do you think the government bailout of banks and financial institutions was a wise move? Why or Why not?
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Section 4: Key Learning Objective D Show how markets, demand, and supply affect resource distribution in the United States. The Economics of Market Systems Market systems allow businesses the flexibility to decide what to produce, how much to produce, and what price to charge; customers are a driving force in market systems since they decide what to buy and at what price. Demand and supply are the predominant forces that guide decisions about what to buy and what to sell. A. Demand and Supply in a Market Economy Billions of exchanges take place every day between businesses and individuals; between businesses; and among individuals, businesses, and governments. Exchanges conducted in one area often affect exchanges elsewhere. 1. The Laws of Demand and Supply: Demand is the willingness and ability of buyers to purchase a product; supply is the willingness and ability of producers to offer a good or service for sale. The law of demand states that buyers will purchase more of a product as its price drops; the law of supply states that producers will offer more of a product for sale as its price increases. a. The Demand and Supply Schedule: The demand and supply schedule indicates how much of a product will be sold at various prices. Generally speaking, the more consumers are willing to pay for a good, the more producers are likely to divert resources to make more of the good. Conversely, as the price at which consumers are willing to pay for a produce falls, production becomes less profitable and producers cut back on production to divert resources to more profitable areas. b. Demand and Supply Curves: A demand curve shows how many products will be demanded at different prices; a supply curve shows how many products will be supplied at various prices. The point at which the curves intersect is the market price (or equilibrium price). c. Surpluses and Shortages: With a surplus, the quantity supplied exceeds the quantity demanded; quantity demanded exceeds quantity supplied with a shortage. Use In-Class Activity 4: Supplemental Case Study - Flying into Trouble- The OneWorld Alliance and Antitrust Laws - Time Limit 30 minutes QUICK QUESTION What is equilibrium price? What happens if incomes rise and demand increases? What happens if producers have a surplus and supply increases?
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Section 5: Key Learning Objective E Identify the elements of private enterprise and explain the various degrees of competition in the U.S. economic system. Private Enterprise and Competition in a Market Economy: Individuals pursue their own interests with minimal government restriction in a private enterprise system; such a system requires: • private property rights – the ability of individuals to own factors of production, • freedom of choice – the ability to chose where to work and what to buy, • profits - the ability to take risk to earn profit, and • competition – the ability to compete for customers and scarce resources. Competition occurs when two or more businesses vie for the same resources or customers. 1. Degrees of Competition. Economists have identified four degrees of competition in a private enterprise system: a. Perfect Competition. Many small firms exist in an industry; no single firm is powerful enough to influence price. b. Monopolistic Competition. Few sellers, but many buyers exist, so buyers focus on numerous differentiation strategies, such as brand names, design, and advertising. c. Oligopoly. An industry has only a handful of sellers; market entry is difficult because large capital investment is needed. d. Monopoly. An industry or market has only one producer; that producer enjoys complete control over price. KEY TEACHING TIPS •
Remind students that perfect competition is characterized by (a) many buyers, (b) many sellers, and (c) buyers and sellers who accept a going price.
•
Remind students that monopolistic competition is characterized by (a) many buyers, (b) many sellers, and (c) products that are differentiated.
•
Reinforce that oligopoly is characterized by (a) many buyers, (b) few sellers, (c) products that are quite similar, and (d) a change in price by one seller often meaning a change in price by all sellers.
•
Remind students that a monopoly is characterized by (a) many buyers, (b) only one seller, and (c) prices being set by the one seller.
Use In-Class Activity 5: Up For Debate – Is Competition Good? Time Limit 45 minutes
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Use In-Class Activity 6: Business Accountability Handout Discussion – The Geography of Jobs Time Limit 30 Minutes QUICK QUESTIONS •
Which level of competition best describes the market in each of the following scenarios? o your local Pizza Hut (monopolistic competition) o a local farmer selling apples for applesauce (perfect competition) o cell phone service (oligopoly) o Gap jeans (monopolistic competition)
HOMEWORK Visit a Shopping Mall! Now is a good time to assign Application Exercise 9 from the end-of-chapter materials as homework. This assignment asks students to visit a local shopping mall and determine the degree of competition stores in the mall face in their immediate environment. For the complete assignment instructions, see Page 19 of the textbook. At-Home Completion Time: 1 to 1.5 hours
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Section 6: Key Learning Objective F Explain the importance of the economic environment to business and identify the factors used to evaluate the performance of an economic system. Economic Indicators A. Economic Indicators These statistics show whether an economic system is strengthening, weakening, or remaining stable. 1. Economic Growth, Aggregate Output, and Standard of Living. Aggregate output is the total quantity of goods and services produced by an economic system during a given period. Simply put, an increase in aggregate output is growth. Standard of living refers to the total quantity and quality of goods and services that can be purchased with the currency used in an economic system; standard of living increases when the quantity of goods and services increases, and the economic system provides more of the goods and services people want. The business cycle is the pattern of short-term expansions and contractions in an economy and one important use of economic measures is to help governments and businesses understand where in the business cycle they currently are. 2. Gross Domestic Product (GDP). The GDP is the total value of all goods and services produced within a given period through domestic factors of production; GDP is a measurement of aggregate output. 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. a. Real Growth Rate: Real growth depends on output increasing at a faster rate than population; the real growth rate of the U.S. economic system seems quite healthy and the U.S. standard of living should be increasing. b. GDP per Capita: GDP per capita means GDP per person. GDP divided by total population = GDP per capita. c. Real GDP: Real GDP means that GDP has been adjusted to account for changes in currency values and price changes. d. Purchasing Power Parity: Purchasing power parity is the principle that exchange rates are set so that the prices of similar products in different countries are about the same. 3. Productivity: Productivity compares how much a system produces with the resources needed to produce it; increases in productivity yield increases in the standard of living. a. Balance of Trade: A country’s balance of trade is the economic value of all the products that it exports minus the economic value of its imported products. A 1-12