Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-1
Taking Risks and
Making Profits within
the Dynamic Business
Environment
chapter
=
what’s new in this edition 1.3
brief chapter outline and learning goals 1.3
lecture outline and lecture notes 1.5
PowerPoint slide notes 1.36
lecture links 1.56
lecture link 1-1: THE WORLD’S RICHEST PEOPLE 1.56
lecture link 1-2: COMMUNITY COLLEGES THRIVE IN HARD TIMES 1.57
lecture link 1-3: UNEMPLOYED CLERGY ON THE RISE 1.57
lecture link 1-4: SOCIAL ENTREPRENEURSHIP MERCY CORPS 1.57
lecture link 1-5: SOCIAL ENTREPRENEURSHIP: IMPROVING WORLD 1.58
HEALTH WITHOUT PROFITS
lecture link 1-6: AMERICA’S LOST DECADE 1.59
lecture link 1-7: EDUCATION’S NEW WHITEBOARD 1.59
lecture link 1-8: PRVENTING IDENTY THEFT 1.60
1
1-2
lecture link 1-9: MAGAZINES PLEAD PRINT’S CASE 1.62
lecture link 1-10: THE LANGUAGE OF BUSINESS 1.63
lecture link 1-11: THE HIGH DEMAND FOR GREEN DEGREES 1.64
lecture link 1-12: MILESTONES IN BUSINESS 1.65
lecture link 1-13: EARNING AN HONEST MCPAYCHECK 1.65
critical thinking exercises 1.66
critical thinking exercise 1-1: HOW MUCH PROFIT? 1.66
critical thinking exercise 1-2: JOB AND CAREER VERSUS OWNING A 1.68
BUSINESS
critical thinking exercise 1-3: MAKING ETHICAL DECISIONS 1.69
bonus cases 1.70
bonus case 1-1: THE WORLD’S LARGEST CHARITY 1.70
bonus case 1-2: NETWORKING OUTSIDE THE NET 1.72
what’s new in
this edition
additions to the 10th edition:
revisions to the 10th edition:
• Text was revised to eliminate redundancy and tighten discussions.
• Statistical data and examples throughout the chapter were updated to reflect current in-formation.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-3
•
deletions from the 9th edition:
brief chapter outline
and learning goals
cha p t e r 2
Taking Risks and Making Profits
within the Dynamic Business Environment
Getting To Know MONIF CLARKE of MONIFC.COM
learning goal 1
Describe the relationship between profit and risk, and show how businesses and nonprofit or-
ganizations can raise the standard of living for all..
I. ENTREPRENEURSHIP AND WEALTH BUILDING
A. Revenues, Profits, and Losses
B. Matching Risk with Profit
C. Standard of Living and Quality of Life
D. Responding to the Various Business Stakeholders
E. Using Business Principles in Nonprofit Organizations
learning goal 2
Compare and contrast being an entrepreneur and working for others.
II. ENTREPRENEURSHIP VERSUS WORKING FOR OTHERS
A. Opportunities for Entrepreneurs
B. The Importance of Entrepreneurs to the Creation of Wealth.
III. THE BUSINESS ENVIRONMENT
learning goal 3
Analyze the effects of the economic environment and taxes on businesses.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-4
A. The Economic and Legal Environment
learning goal 4
Describe the effects of technology on businesses.
B. The Technological Environment
learning goal 5
Demonstrate how businesses can meet and beat competition.
C. The Competitive Environment
learning goal 6
Analyze the social changes affecting businesses.
D. The Social Environment
learning goal 7
Identify what businesses must do to meet global challenges, including war and terrorism.
E. The Global Environment
learning goal 8
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
V. SUMMARY
Getting to Know MONIF CLARKE of MONIFC.COM
Monif Clarke couldn’t find flattering clothing in the size she needed. She decided to fill the
need by creating her own line. With a $30,000 loan from her parents, she started Monif C. Con-
temporary Plus Sizes. She received lots of publicity when her fashions appeared on TLC’s
What Not to Wear, but she struggled with getting her clothes into leading department stores.
Instead she turned to the Internet where she’s developed a strong online presence. .
Describe the relationship between profit and risk, and show how businesses and non-
profit organizations can raise the standard of living for all.
I. ENTREPRENEURSHIP AND WEALTH BUILD-
ING
A. BASIC CONCEPTS:
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-6
PPT 1-1
Chapter Title
PPT 1-2
Monif Clarke
(See complete PowerPoint slide notes on page 1.36.)
PPT 1-3
Learning Goals
(See complete PowerPoint slide notes on page 1.36.)
PPT 1-4
Learning Goals (Cont’d)
(See complete PowerPoint slide notes on page 1.37.)
PPT 1-5
Name That Company
(See complete PowerPoint slide notes on page 1.37.)
PPT 1-6
Goods and Services
(See complete PowerPoint slide notes on page 1.37.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
prove profitable.
PPT 1-7
Business and Entrepreneurship
(See complete PowerPoint slide notes on page 1.38.)
PPT 1-8
Revenue, Profit, and Loss
(See complete PowerPoint slide notes on page 1.38.)
lecture link 1-1
THE WORLD’S RICHEST
PEOPLE
These are the world’s 20 richest people—their wealth, age,
residence, and country of citizenship. (See the complete lec-
ture link on page 1.56 in this manual.)
critical thinking
exercise 1-1
HOW MUCH PROFIT?
The text defines profit as the amount a business earns
above and beyond what it spends for salaries and other ex-
penses. Students often have a very inaccurate idea of how
much profit businesses actually make. This exercise leads stu-
dents to find this actual profit percentage. (See complete exer-
cise on page 1.66 of this manual.)
PPT 1-9
Risk
(See complete PowerPoint slide notes on page 1.38.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1. Entrepreneurs PROVIDE EMPLOYMENT for
other people.
STAKEHOLDERS
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
PPT 1-10
How Is Tax Money Used?
(See complete PowerPoint slide notes on page 1.39.)
PPT 1-11
Standard of Living
(See complete PowerPoint slide notes on page 1.39.)
PPT 1-12
Quality of Life
(See complete PowerPoint slide notes on page 1.39.)
lecture link 1-2
COMMUNITY COLLEGES
THRIVE IN HARD TIMES
During the recent recession, more students are turning to-
ward community colleges to prepare for four-year schools and
improve their quality of life. (See the complete lecture link on
page 1.56 in this manual.)
PPT 1-13
Stakeholders
(See complete PowerPoint slide notes on page 1.40.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
leaders.
3. The challenge for companies in the 21st century
will be to recognize and respond to the needs of
their stakeholders.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-12
TEXT FIGURE 1.1
A Business and its Stakeholders
(Text page 6)
This text figure shows all the people who stand to gain or
lose by the policies and activities of a business.
PPT 1-14
Outsourcing and Insourcing
(See complete PowerPoint slide notes on page 1.40.)
PPT 1-15
Nonprofit Organizations
(See complete PowerPoint slide notes on page 1.41.)
PPT 1-16
Well-Known Nonprofits in the Unit-
ed States
(See complete PowerPoint slide notes on page 1.41.)
PPT 1-17
Keeping Strong Employees at
Nonprofits
(See complete PowerPoint slide notes on page 1.41.)
lecture link 1-3
UNEMPLOYED CLERGY ON THE
RISE
As donations drop, nonprofits, especially churches, are feel-
ing the pinch and many clergy are out searching for jobs (See
the complete lecture link on page 1.57 in this manual.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
tions that are not for profit and who help coun-
tries with their social issues.
FOR OTHERS
A. THERE ARE TWO WAYS TO SUCCEED IN BUSI-
NESS:
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
bonus case 1-1
THE WORLD’S LARGEST
CHARITY
Three of the wealthiest people in the world are busy giving
away their wealth through the Bill and Melinda Gates Founda-
tion. (See the complete case, discussion questions, and sug-
gested answers beginning on page 1.70 of this manual.)
PPT 1-18
Social Entrepreneurs
(See complete PowerPoint slide notes on page 1.42.)
lecture link 1-4
SOCIAL ENTREPRENEURSHIP:
MERCY CORPS
Programs such as Yunus’s GrameenBank are known as mi-
crofinance institutions (MFIs). Mercy Corps provides these
institutions with organization and resources. (See the complete
lecture link on page 1.57 of this manual.)
lecture link 1-5
SOCIAL ENTREPRENEURSHIP:
IMPROVING WORLD HEALTH
WITHOUT PROFITS
Victoria Hale has created a nonprofit organization, One-
WorldHealth, to finance necessary prescription drugs that
have no profit potential. (See complete lecture link on page
1.58 of this manual.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-15
progress
assessment
(Text page 8)
PPT 1-19
Progress Assessment
(See complete PowerPoint slide notes on page 1.42.)
PPT 1-20
The Ups and Downs of
Entrepreneurship
(See complete PowerPoint slide notes on page 1.43.)
PPT 1-21
Who Takes the Entrepreneurial
Challenge?
(See complete PowerPoint slide notes on page 1.43.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
times faster than nonminority entrepreneurs.
C. THE IMPORTANCE OF ENTREPRENEURS TO THE
sources used to create wealth:
a. LAND (or natural resources)
tion is KNOWLEDGE.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
1-17
critical thinking
exercise 1-2
JOB AND CAREER VERSUS
OWNING A BUSINESS
This exercise guides the student through the decision-
making process of evaluating various career options. (See
complete exercise on page 1.68 of this manual.)
SPOTLIGHT ON
small
business
(Text page 10)
PPT 1-22
Networking of
Minority
Businesses
(See complete PowerPoint slide notes on page 1.43.)
PPT 1-23
Five Factors of Production
(See complete PowerPoint slide notes on page 1.44.)
TEXT FIGURE 1.2
The Five Factors of Production
(Text page 10)
This text figure shows the five resources used to create
wealth: land, labor, capital, entrepreneurship, and knowledge.
progress
assessment
(Text page 11)
PPT 1-24
Progress Assessment
(See complete PowerPoint slide notes on page 1.44.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
A. The BUSINESS ENVIRONMENT consists of the sur-
rounding factors that either help or hinder the devel-
opment of business; they are:
1. People are willing to risk starting businesses if
they feel that the risk is acceptable.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
TEXT FIGURE 1.3
Today’s Dynamic Business
Environment
(Text page 12)
This text figure illustrates the four environments of busi-
ness (economic and legal, technical, competitive, and social),
bounded by the global business environment.
PPT 1-25
What Is the Business Environment?
(See complete PowerPoint slide notes on page 1.44.)
lecture link 1-6
AMERICA’S LOST DECADE
The business environment of the “Oughts” has been seen as
an enormous step backward for the United States. (See the
complete lecture link on page 1.59 in this manual.)
PPT 1-26
Government’s Role in Business
(See complete PowerPoint slide notes on page 1.45.)
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
ly affect the business community and the econo–
my.