Type:
Solution Manual
Resource:
Business in Action
Edition:
2nd Edition
Author(s):
Courtland L. Bovee John V. Thill George Dracopoulos
INSTRUCTOR’S RESOURCE MANUAL George Dracopoulos to accompany
Business in Action Second Canadian Edition In‐Class Edition Courtland L. Bovée Grossmont College John V. Thill Communication Specialists of America George Dracopoulos Vanier College
CONTENTS Chapter 1: Understanding the Fundamentals of Business and Economics...................1 Chapter 2: Competing in the Global Economy ..........................................................29 Chapter 3: Practising Ethical Behaviour and Social Responsibility ..........................51 Chapter 4: Starting and Financing a Small Business .................................................73 Chapter 5: Selecting the Proper Form of Business Ownership and Exploring Business Combinations ……………………………………………..98 Chapter 6: Understanding the Functions and Roles of Management .......................148 Chapter 7: Organizing and Working in Teams .........................................................168 Chapter 8: Producing Quality Goods and Services...................................................193 Chapter 9: Managing Human Resources .................................................................219 Chapter 10: Motivating Today’s Workforce and Handling Employee–Management Relations ..................................................243 Chapter 11: Developing Product and Pricing Strategies ..........................................271 Chapter 12: Developing Distribution and Promotional Strategies ..........................299 Chapter 13: Analyzing and Using Financial Information ........................................322 Chapter 14: Understanding Banking and Securities ................................................349 Appendix A: The Canadian Legal System ..............................................................376
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Chapter 1: Understanding the Fundamentals of Business and Economics Learning Objectives 1 2 3 4 5 6 7
Define what a business is and identify four key social and economic roles that businesses serve Differentiate between goods-producing and service businesses. List five factors that explain the rise in the number of service businesses Differentiate between a free-market system and a planned system Explain how supply and demand affect price Explain the four major economic roles of the Canadian government Explain how a free-market system monitors its economic performance Identify five challenges that businesses are facing in the global economy as well as how companies are using the Internet to improve efficiency
Summary of Learning Objectives 1
Define what a business is and identify four key social and economic roles that businesses serve A business is a profit-seeking activity that provides goods and services to satisfy consumer needs. The driving force behind most businesses is the chance to earn a profit; however, non-profit organizations exist to provide society with a social or educational service. Businesses serve four key functions: they provide society with necessities; they provide people with jobs and a means to prosper; they pay taxes that are used by the government to provide services for its citizens; and they reinvest their profits in the economy, thereby increasing a nation’s wealth. 2
Differentiate between goods-producing and service businesses. List five factors that explain the rise in the number of service businesses Goods-producing businesses produce tangible goods and tend to be capital-intensive, whereas service businesses produce intangible goods and tend to be labour-intensive. The number of service businesses is increasing because (1) consumers have more disposable income to spend on taking care of themselves, (2) many services target consumer needs brought about by changing demographic patterns and lifestyle trends, (3) consumers need assistance with using and integrating new technology into their business operations and lifestyles, (4) companies are turning to consultants and other professionals for advice to remain competitive, and (5) in general, barriers to entry are lower for service companies than they are for goods-producing businesses. 3 Differentiate between a free-market system and a planned system In a free-market system, individuals have a high degree of freedom to decide what is produced by whom and for whom. Moreover, the pursuit of private gain is regarded as a worthwhile goal. In a planned system, governments limit the individual’s freedom of choice to accomplish government goals, control the allocation of resources, and restrict private ownership to personal and household items. The pursuit of private gain is non-existent under a planned system.
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4 Explain how supply and demand affect price In the simplest sense, supply and demand affect price in the following manner: When the price goes up, the quantity demanded goes down but the supplier’s incentive to produce more goes up. When the price goes down, the quantity demanded increases but the quantity supplied may (or may not) go down. When the interests of buyers and sellers are in balance, an equilibrium price is established. However, adjusting price or supply to meet or spur demand does not guarantee profitability. The important thing to remember is that in a free-market system the interaction of supply and demand determines what is produced and in what amounts. 5 Explain the four major economic roles of the Canadian government The Canadian government fosters competition by enacting laws and regulations and by approving mergers and acquisitions, retaining the power to block those that might restrain competition. It regulates certain industries where competition would be wasteful or excessive. It protects stakeholders from potentially harmful actions of businesses. Finally, the government contributes to economic stability by regulating the money supply and by spending for the public good. 6 Explain how a free-market system monitors its economic performance Economists evaluate economic performance by monitoring a variety of indicators, such as unemployment statistics, housing starts, durable-goods orders, and inflation. They calculate the consumer price index (CPI) to keep an eye on price changes— especially inflation. In addition, economists measure the productivity of a nation by calculating the country’s gross domestic product (GDP)—the sum of all goods and services produced by both domestic and foreign companies as long as they are located within a nation’s borders. 7
Identify five challenges that businesses are facing in the global economy as well as how companies are using the Internet to improve their efficiency. The five challenges identified in the chapter are (1) producing quality products and services that satisfy customer’s changing needs, (2) starting and managing a small business in today’s competitive environment, (3) thinking globally and committing to a culturally diverse workforce, (4) behaving in an ethically and socially responsible manner, and (5) keeping pace with technology and electronic commerce. Nearly all aspects of business can be improved with the help of Internet technology. From improved communication in the supply chain to efficient 24-hour sales information to improved customer service and delivery, the Internet is a tool that, when used properly, can be a weapon for competitive advantage.
Brief Chapter Outline I. II.
Why study business? What is a Business? A. Business serves many functions in society and the economy. B. Profit vs. Not-for-Profit Organizations C. Businesses generally fall into one of two categories: 1. Goods-producing businesses 2. Service-producing businesses
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