Giáo trình Contemporary business 15e boone kurtz

John Wiley & Sons, Inc.

David L. Kurtz
University of Arkansas

Boone & Kurtz’s

Contemporary

BUSINESS
15TH EDITION

. . . at the speed of business
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The 15th edition of Contemporary Business is dedicated to my wife, Diane.
She is the best thing that ever happened to me.
—Dave Kurtz
Vice President & Executive Publisher
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This book was set in Janson Text LT Std-Roman 10/13 by MPS Limited, Chennai, India and printed and bound
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This book is printed on acid free paper. ∞
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ISBN-13

978-1-118-29198-6

ISBN-13 978-1-118-21816-7 (Binder Ready Version)
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1

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About the Author
During Dave Kurtz’s high school days, no one in Salisbury, Maryland, would
have mistaken him for a scholar. In fact, he was a mediocre student, so bad that his father
steered him toward higher education by finding him a succession of backbreaking summer

jobs. Thankfully, most of them have been erased from his memory, but a few linger,
including picking peaches, loading watermelons on trucks headed for market, and working
as a pipefitter’s helper. Unfortunately, these jobs had zero impact on his academic standing.
Worse yet for Dave’s ego, he was no better than average as a high school athlete in football
and track.
But four years at Davis & Elkins College in Elkins, West Virginia, turned him around.
Excellent instructors helped get Dave on sound academic footing. His grade point average
soared—enough to get him accepted by the graduate business school at the University
of Arkansas, where he met Gene Boone. Gene and Dave became longtime co-authors;
together they produced more than 50 books. In addition to writing, Dave and Gene were
involved in various entrepreneurial ventures.
This long-term partnership ended with Gene’s death a few years ago. But, this book
will always be Boone & Kurtz’s Contemporary Business.
If you have any questions or comments about the new 15th edition, Dave can be
reached at

About the Author

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Preface
Solutions at the Speed of Business

A part of every business is change; now more than ever, business moves at a pace that
is unparalleled. Containing the most important introductory business topics, Contemporary

Business includes the most current information available and the best supplementary package
in the business. You’ll find that this new edition gets your students excited about the world of
business, helps them improve their critical-thinking skills, and offers you and your students
SOLUTIONS AT THE SPEED OF BUSINESS.
SOLUTIONS AT THE SPEED OF BUSINESS . . . FOR INSTRUCTORS. Consistent with
recent editions of Contemporary Business, the instructor resources are designed to propel
the instructor into the classroom with all the materials needed to engage students and help
them understand text concepts. As always, all the major teaching materials are contained
within the Instructor’s Manual, and this new Annotated Instructor’s Edition contains Lecture
Enhancers and Classroom Activities. The PowerPoint Presentations and Test Bank have
also been updated and improved. Greensburg, KS—our continuing case—is highlighted in
part videos, plus we’ve added two other videos: “One Year Later” and “Future Plans.” Our
Wiley Business End-of-Chapter Video Series showcases companies such as Zipcar, Seventh
Generation, New Harvest Coffee Roasters, and Comet Skateboards.
SOLUTIONS AT THE SPEED OF BUSINESS . . . FOR STUDENTS. With contemporary
being the operative word, we’ve added two videos to update our Greensburg, Kansas video
series. As always, every chapter is loaded with up-to-the-minute business issues and examples
to enliven classroom discussion and debate, such as how “social entrepreneurs” are making
their mark on emerging businesses. Processes, strategies, and procedures are brought to life
through videos highlighting real companies and employees, an inventive business model, and
collaborative learning exercises. And to further enhance the student learning process, with
WileyPLUS, instructors and students receive 24/7 access to resources that promote positive
learning outcomes. Throughout each study session, students can assess their progress and
gain immediate feedback on their strengths and weaknesses so they can be confident they are
spending their time effectively.
How Boone & Kurtz Became the Leading Brand in the Market For more
than three decades, Contemporary Business has provided the latest in content and pedagogy.
Our current editions have long been the model for our competitors’ next editions. Consider
Boone & Kurtz’s proven record of providing instructors and students with pedagogical firsts:
• Contemporary Business was the first introductory business text written specifically for

the student—rather than the instructor—featuring a motivational style students readily
understood and enjoyed.
• Contemporary Business has always been based on marketing research, written the way
instructors actually teach the course.
• Contemporary Business was the first text to integrate computer applications—and later,
Internet assignments—into each chapter.
• Contemporary Business was the first business text to offer end-of-chapter video cases as
well as end-of-part cases filmed by professional producers.

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• Contemporary Business was the first to use multimedia technology to integrate all
components of the Introduction to Business ancillary program, videos, and PowerPoint
CD-ROMs for both instructors and students—enabling instructors to custom-create
lively lecture presentations.
Wiley is proud to be publishing a book that has represented the needs of students and
instructors so effectively and for so many years. The 15th edition will continue this excellent tradition and will continue to offer students and instructors SOLUTIONS AT THE
SPEED OF BUSINESS.

Pedagogy Contemporary Business has always employed extensive pedagogy—such as
opening vignettes and boxed features—to breathe life into the exciting concepts and issues
facing contemporary business. The 15th edition is packed with updates and revisions to key
pedagogical features, including:

• Business Etiquette
• Assessment Checks
• Teamwork Exercises
• Self-Quizzes
• Hit & Miss
• Solving an Ethical Controversy
• Going Green

Continuing to Build the Boone & Kurtz Brand Because the business
world is constantly changing, the Introduction to Business instructors need a SOLUTION
AT THE SPEED OF BUSINESS. Trends, strategies, and practices are evolving, and
students must understand how to perform business in today’s world. Keeping this in mind,
here are just a few of the important business trends and practices we’ve focused on for this
new edition to help move students forward into a great business career.

Preface

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What Are Learning Styles?
Have you ever repeated something to yourself over and over to help remember it? Or does your best friend ask you to draw a map
to someplace where the two of you are planning to meet, rather than just tell her the directions? If so, then you already have an intuitive sense that people learn in different ways, Researchers in learning theory have developed various categories of learning styles. Some
people, for example, learn best by reading or writing. Others learn best by using various senses—seeing, hearing, feeling, tasting, or
even smelling. When you understand how you learn best, you can make use of learning strategies that will optimize the time you spend
studying. To find out what your particular learning style is, www.wiley.com/college/boone and take the learning styles quiz you find there.

The quiz will help you determine your primary learning style:
Visual Learner

Haptic Learner

Print Learner

Auditory Learner

Olfactory Learner

Interactive Learner

Kinesthetic Learner

Then, consult the information below and on the following pages for study tips for each learning style.
This information will help you better understand your learning style and how to apply it to the study of business.

Study Tips for Visual Learners
If you are a Visual Learner, you prefer to work with images and diagrams. It is important that you see information.

Visual Learning

• Draw charts/diagrams during lecture.
• Examine textbook figures and graphs.
• Look at images and videos on WileyPLUS and
other Web sites.
• Pay close attention to charts, drawings, and
handouts your instructor uses.
• Underline; use different colors.

• Use symbols, flowcharts, graphs, different
arrangements on the page, white spaces.

Visual Reinforcement

• Make flashcards by drawing tables/charts on
one side and definition or description on the
other side.
• Use art-based worksheets; cover labels on
images in text and then rewrite the labels.
• Use colored pencils/markers and colored
paper to organize information into types.
• Convert your lecture notes into “page
pictures.” To do this:
- Use the visual learning strategies outlined
above.

- Reconstruct images in different ways.
- Redraw pages from memory.
- Replace words with symbols and initials.
- Draw diagrams where appropriate.
- Practice turning your visuals back into
words.
If visual learning is your weakness: If you are not
a Visual Learner but want to improve your
visual learning, try re-keying tables/charts
from the textbook.

Study Tips for Print Learners
If you are a Print Learner, reading will be important but writing will be much more important.

Print Learning

• Write text lecture notes during lecture.
• Read relevant topics in textbook, especially
textbook tables.
• Look at text descriptions in animations and
Web sites.
• Use lists and headings.
• Use dictionaries, glossaries, and definitions.
• Read handouts, textbooks, and supplementary
library readings.
• Use lecture notes.

Print Reinforcement

• Rewrite your notes from class, and copy classroom handouts in your own handwriting.
• Make your own flashcards.
• Write out essays summarizing lecture notes or
textbook topics.
• Develop mnemonics.
• Identify word relationships.
• Create tables with information extracted from
textbook or lecture notes.
• Use text based worksheets or crossword
puzzles.
• Write out words again and again.
• Reread notes silently.

• Rewrite ideas and principles into other words.

• Turn charts, diagrams, and other illustrations
into statements.
• Practice writing exam answers.
• Practice with multiple choice questions.
• Write paragraphs, especially beginnings and
endings.
• Write your lists in outline form.
• Arrange your words into hierarchies and
points.
If print learning is your weakness: If you are not a
Print Learner but want to improve your print
learning, try covering labels of figures from
the textbook and writing in the labels.

Study Tips for Auditory Learners
If you are an Auditory Learner, then you prefer listening as a way to learn information. Hearing will be very important, and sound helps you focus.

Auditory Learning

• Make audio recordings during lecture.
• Do not skip class; hearing the lecture is
essential to understanding.

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• Play audio files provided by instructor and
textbook.
• Listen to narration of animations.

• Attend lecture and tutorials.
• Discuss topics with students and instructors.

• Explain new ideas to other people.
• Leave spaces in your lecture notes for later
recall.
• Describe overheads, pictures, and visuals to
somebody who was not in class.

Learning Styles

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Auditory Reinforcement

• Record yourself reading the notes and listen
to the recording
• Write out transcripts of the audio files.
• Summarize information that you have read,
speaking out loud.
• Use a recorder to create self-tests.
• Compose “songs” about information.

• Play music during studying to help
focus.
• Expand your notes by talking with other
and with information from your textbook.
• Read summarized notes out loud.
• Explain your notes to another auditory

learner.
• Talk with the instructor.

• Spend time in quiet places recalling
the ideas.
• Say your answers out loud.
If auditory teaming is your weakness: If you are not
an Auditory Learner but want to improve your
auditory learning, try writing out the scripts
from pre-recorded lectures.

Study Tips for Interactive Learners
If you are an Interactive Learner, you will want to share your information. A study group will be important.

Interactive Learning

• Ask a lot of questions during lecture or TA
review sessions.
• Contact other students, via e-mail or discussion forums, and ask them to explain what
they learned.

Interactive Reinforcement

• “Teach” the content to a group of other
students.
• Talking to an empty room may seem odd, but
it will be effective for you.
• Discuss information with others, making sure
that you both ask and answer questions.

• Work in small group discussions, making a verbal and written discussion of what others say.
If interactive learning is your weakness: If you are not
an Interactive Learner but want to improve
prove your interactive learning, try asking
your study partner questions and then repeating them to the instructor.

Study Tips for Haptic Learners
If you are a Haptic Learner, you prefer to work with your hands. It is important to physically manipulate material.

Haptic Learning

• Take blank paper to lecture to draw charts/
tables/diagrams.
• Using the textbook, run your fingers along
the figures and graphs to get a “feel” for
shapes and relationships.

Haptic Reinforcement

• Trace words and pictures on flashcards.
• Perform electronic exercises that involve dragand-drop activities.
• Alternate between speaking and writing
information.
• Observe someone performing a task that you
would like to learn.

• Make sure you have freedom of movement
while studying.
If haptic learning is your weakness: If you are not a
Haptic Learner but want to improve your haptic learning, try spending more time in class

working with graphs and tables while speaking or writing down information.

Study Tips for Kinesthetic Learners
If you are a Kinesthetic Learner, it will be important that you involve your body during studying.

Kinesthetic Learning

• Ask permission to get up and move during
lecture.
• Participate in role-playing activities in the
classroom.
• Use all your senses.
• Go to labs; take field trips.
• Listen to real-life examples.
• Pay attention to applications.
• Use trial-and-error methods.
• Use hands-on approaches.

Kinesthetic Reinforcement

• Make flashcards; place them on the floor, and
move your body around them.
• Move while you are teaching the material to
others.
• Put examples in your summaries.
• Use case studies and applications to help
with principles and abstract concepts.
• Talk about your notes with another
kinesthetic person.

• Use pictures and photographs that illustrate
an idea.
• Write practice answers.
• Role-play the exam situation.
If kinesthetic learning is your weakness: If you are not
a Kinesthetic Learner but want to improve
your kinesthetic learning, try moving flash
cards to reconstruct graphs and tables, etc.

Study Tips for Olfactory Learners
If you are an Olfactory Learner, you will prefer to use the senses of smell and taste to reinforce learning. This is a rare learning modality.

Olfactory Learning

• During lecture, use different scented markers
to identify different types of information.

Olfactory Reinforcement

• Rewrite notes with scented markers.

• If possible, go back to the computer lab to do
your studying.
• Burn aromatic candles while studying.
• Try to associate the material that you’re
studying with a pleasant taste or smell.

If olfactory learning is your weakness: If you are not
an Olfactory Learner but want to improve
your olfactory learning, try burning an aromatic candle or incense while you study, or

eating cookies during study sessions.

Learning Styles

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LEARNING STYLES SURVEY CHART
Resources

Visual

Print

Hit & Miss

✔

✔

✔

Launching Your Career

✔

✔

✔

Learning Goals

✔

✔

✔

Going Green

✔

✔

Business Etiquette

✔

✔

Solving an Ethical Controversy

✔

✔

Assessment Checks

✔

✔

✔

Review Questions

✔

✔

✔

Cases

✔

✔

✔

Project/Teamwork Applications

✔

✔

✔

Flashcards

✔

✔

✔

Business Terms

✔

✔

✔

Interactive Quizzes

✔

✔

✔

Student PowerPoints

✔

✔

✔

✔

Audio Summary (English/Spanish)

✔

✔

✔

✔

✔

Animated Figures

✔

✔

✔

✔

✔

Case Study Animations

✔

✔

✔

✔

✔

E-lectures

✔

✔

✔

✔

✔

Greensburg, KS Continuing Case

✔

✔

✔

✔

✔

✔

End-of-Chapter Videos

✔

✔

✔

✔

✔

✔

Final Exam Questions

✔

✔

✔

Quiz Questions

✔

✔

✔

Pre-lecture Questions

✔

✔

✔

Post-lecture Questions

✔

✔

✔

Video Questions

✔

✔

Drop-box Questions

✔

✔

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Auditory

Interactive

Haptic

Kinesthetic

✔

✔

✔

✔

✔

✔

✔

✔

Learning Styles

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Acknowledgements
Contemporary Business has long benefited from the instructors who have offered their time as reviewers. Comprehensive reviews of the 15th
edition and ancillary materials were provided by the following colleagues:

2012 Advisory Board

2011 Advisory Board

Kim Goudy – Central Ohio Technical College
Kelly Gold – Fayetteville Tech Community College
Frank Harber – Indian River State College
Lynda Hodge – Guilford Tech Community College
Chuck Kitzmiller – Indian River State College
Christy Shell – Houston Community College
Rudy Soliz – Houston Community College
Ted Tedmon – North Idaho College
Richard Warner – Lehigh Carbon Community College
Janet Seggern – Lehigh Carbon Community College
Susan Kendall – Arapahoe Community College
Annette Haugen – Merced Community College
Joseph Schubert – Delaware Technical and Community College

Robin Kelly – Cuyahoga Community College
Frank Barber – Cuyahoga Community College
Thomas Byrnes – Wake Tech Community College
Marian Matthews – Central New Mexico Community College
Tom Darling – Central New Mexico Community College
Laura Portolese-Dias – Shoreline Community College
Mary Gorman – University of Cincinnati
Diana Carmel – Golden West College
Eileen Kearney – Montgomery County Community College
John McCoy – Suffolk University
Cathleen Behan – Northern Virginia Community College
Donna Waldron – Manchester Community College
Thomas Mobley – Miami University

Gil Feiertag – Columbus State Community College
Kellie Enrich – Cuyahoga Community College
Sal Veas – Santa Monica College
Sally Proffitt – Tarrant County Community College – Northeast
David Robinson – University of California – Berkeley
Rodney Thirion – Pikes Peak Community College
Patricia Setlik – William Rainey Harper College
Gary Cohen – University of Maryland
Janice Feldbauer – Schoolcraft College
Linda Hefferin – Elgin Community College
Cynthia Miree-Coppin – Oakland University
David Oliver – Edison State College – Lee Campus
Lisa Zingaro – Oakton CC – Des Plaines Campus
Karen Halpern – South Puget Sound Community College
Colette Wolfson – Ivy Tech CC – South Bend
John Hilston – Brevard CC – Palm Bay Campus

John Striebich – Monroe Community College
Nathaniel Calloway – University of Maryland University College
Jayre Reaves – Rutgers University

In Conclusion
I would like to thank Ingrid Benson, Michelle Dellinger, and Cate Rzasa. Their editorial
and production efforts on behalf of Contemporary Business were terrific.
Let me conclude by noting that this new edition would never have become a reality
without the outstanding efforts of the Wiley editorial, production, and marketing teams.
Special thanks to George Hoffman, Lisé Johnson, Franny Kelly, Kelly Simmons, Brian
Kamins, Melissa Solarz, and Valerie Vargas.

Acknowledgements

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Brief Contents
PART 1

Business in a Global Environment
Chapter 1
Chapter 2
Chapter 3
Chapter 4

PART 2

Starting and Growing Your Business
Chapter 5
Chapter 6

PART 3

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Customer-Driven Marketing
Product and Distribution Strategies
Promotion and Pricing Strategies

Managing Technology and Information
Chapter 14

PART 6

Management, Leadership, and the Internal Organization
Human Resource Management: From Recruitment to Labor Relations
Top Performance through Empowerment, Teamwork, and Communication
Production and Operations Management

Marketing Management
Chapter 11
Chapter 12
Chapter 13

PART 5

Forms of Business Ownership and Organization
Starting Your Own Business: The Entrepreneurship Alternative

Management: Empowering People to Achieve Business
Chapter 7
Chapter 8
Chapter 9
Chapter 10

PART 4

The Changing Face of Business
Business Ethics and Social Responsibility
Economic Challenges Facing Contemporary Business
Competing in World Markets

Using Technology to Manage Information

Managing Financial Resources

2
2
30
64
96

132

132
168

200
200
230
260
288

320
320
354
390

428
428

456

Chapter 15
Chapter 16
Chapter 17

Understanding Accounting and Financial Statements
The Financial System
Financial Management

456
488
520

Appendix A

Business Law

A-1

Appendix B

Insurance and Risk Management

A-18

Appendix C

Personal Financial Planning

A-30

Appendix D

Developing a Business Plan

A-43

Appendix E

Careers in Contemporary Business

A-52

Brief Contents

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Contents
PART

1

Chapter 1
Opening Vignette
Apple and Steve Jobs:
Business Leadership as Art
Hit & Miss
Microsoft and Google Square
Off on the Web
BusinessEtiquette
Social Networking
Going Green
Save Paper, Save the Planet
Hit & Miss
Costco’s Jim Sinegal:
“A Classy Guy”
Solving an Ethical
Controversy
Can Fair Trade Be Ethical
and Flexible?

Business in a Global Environment

2

The Changing Face of Business

2

What Is Business?

4

Not-for-Profit Organizations 5

Factors of Production

6

The Private Enterprise System

8

Basic Rights in the Private Enterprise System 9, The Entrepreneurship Alternative 10

Six Eras in the History of Business

11

The Colonial Period 12, The Industrial Revolution 12, The Age of Industrial Entrepreneurs 12,
The Production Era 13, The Marketing Era 13, The Relationship Era 14, Managing

Relationships through Technology 15, Strategic Alliances 15, The Green Advantage 16

Today’s Business Workforce

17

Changes in the Workforce 17

The 21st-Century Manager

20

Importance of Vision 20, Importance of Critical Thinking and Creativity 20,
Ability to Lead Change 22

What Makes a Company Admired?

22

What’s Ahead

24

Summary of Learning Objectives 24, Business Terms You Need to Know 26,
Review Questions 26, Projects and Teamwork Applications 26, Web Assignments 27

Case 1.1 SAS Is Still a Great Place to Work

27

Case 1.2 Nordstrom Rides High

28

Video Case 1.3 New Harvest Coffee Roasters Brews Up Fresh Business

28

Chapter 2

Business Ethics and Social Responsibility

30

Opening Vignette
PepsiCo’s Chickpeas
to Relieve World Hunger

Concern for Ethical and Societal Issues

32

The Contemporary Ethical Environment

33

BusinessEtiquette
BusinessEtiquette 101
Solving an Ethical
Controversy

Are Businesses Protecting
Themselves from Social
Media Abuse?

Individuals Make a Difference 35, Development of Individual Ethics 35,
On-the-Job Ethical Dilemmas 36

How Organizations Shape Ethical Conduct

39

Ethical Awareness 39, Ethical Education 41, Ethical Action 41,
Ethical Leadership 42
Contents

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Going Green
Starbucks Re-Designs
Its Stores. Now, What
About the Cup?
Hit & Miss
Pacific Biodiesel Recycles Oil
from French Fries to Fuel
Hit & Miss

Finding Work–Life Balance for
the Sandwich Generation

Chapter 3
Opening Vignette
Boomerang Kids Come
Home to Roost
Hit & Miss
Smashburger Is, Well,
a Smash Hit
Going Green
Raleigh Hosts a Smart Grid
Hit & Miss
Microloans Aid Women’s
Businesses
Solving an Ethical
Controversy
Student Loans: Forgive
and Forget?
BusinessEtiquette
Dealing with the
Global Workforce

Chapter 4
Opening Vignette
Fiat Takes Over Chrysler in
Global Expansion
BusinessEtiquette
Tips for Understanding
Japanese Culture

Hit & Miss
The Tiny Nano—A Potential
Hit for Tata Motors

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Acting Responsibly to Satisfy Society

42

Responsibilities to the General Public 44, Responsibilities to Customers 49,
Responsibilities to Employees 51

Responsibilities to Investors and the Financial Community

57

What’s Ahead

57

Summary of Learning Objectives 57, Business Terms You Need to Know 59,
Review Questions 59, Projects and Teamwork Applications 59, Web Assignments 60

Case 2.1 Hilton Joins the Global Soap Project

60

Case 2.2 Greener Shipping—At Sea and in Port

61

Video Case 2.3 Seventh Generation: Beyond Paper and Plastic

62

Economic Challenges Facing Contemporary Business

64

Microeconomics: The Forces of Demand and Supply

66

Factors Driving Demand 66, Factors Driving Supply 69, How Demand
and Supply Interact 70

Macroeconomics: Issues for the Entire Economy

71

Capitalism: The Private Enterprise System and Competition 72, Planned Economies:
Socialism and Communism 75, Mixed Market Economies 76

Evaluating Economic Performance

76

Flattening the Business Cycle 77, Productivity and the Nation’s Gross
Domestic Product 79, Price-Level Changes 79

Managing the Economy’s Performance

84

Monetary Policy 84, Fiscal Policy 84

Global Economic Challenges of the 21st Century

86

What’s Ahead

88

Summary of Learning Objectives 89, Business Terms You Need to Know 90,
Review Questions 91, Projects and Teamwork Applications 91, Web Assignments 92

Case 3.1 Nuclear Energy: Making a Comeback?

92

Case 3.2 Smart Phones: Recession Proof and Growing

93

Video Case 3.3 Secret Acres: Selling Comics Is Serious Business

94

Competing in World Markets

96

Why Nations Trade

98

International Sources of Factors of Production 98, Size of the International
Marketplace 98, Absolute and Comparative Advantage 100

Measuring Trade between Nations

101

Major U.S. Exports and Imports 102, Exchange Rates 103

Barriers to International Trade

104

Social and Cultural Differences 105, Economic Differences 106, Political
and Legal Differences 107, Types of Trade Restrictions 110

Contents

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Going Green
Canon Aids Global
Reforestation Program
Hit & Miss
Groupon’s Goal: Spread
Deals Around the World
Solving an Ethical
Controversy
Bribery or the Cost of
Doing Business?

Reducing Barriers to International Trade

111

Organizations Promoting International Trade 111, International Economic
Communities 113, NAFTA 113, CAFTA-DR 114, European Union 114

Going Global

115

Levels of Involvement 116, From Multinational Corporation to Global Business 120

Developing a Strategy for International Business

121

Global Business Strategies 121, Multidomestic Business Strategies 122

What’s Ahead

123

Summary of Learning Objectives 123, Business Terms You Need to Know 125,
Review Questions 125, Projects and Teamwork Applications 126, Web Assignments 126

PART

2

Chapter 5
Opening Vignette
Snagajob’s Success
Hooks Investors
BusinessEtiquette
How to Use Social Networking
in Your Job Search
Hit & Miss
Turning Technologies
Creates High-Tech Jobs
Hit & Miss
One Small Franchise Produces
One Big Idea
Going Green
King Arthur Flour: EmployeeOwned and Green
Solving an Ethical
Controversy
Do Some Bosses Earn

Too Much?

Case 4.1 Apple Navigates China

126

Case 4.2 TOMS Shoes Takes One Step at a Time

127

Video Case 4.3 Smart Design: Life Is In the Details

128

Part 1 Greensburg, KS: New Ways to Be a Better Town

129

Part 1: Launching Your Global Business and Economics Career

130

Starting and Growing Your Business
Forms of Business Ownership and Organization
Most Businesses Are Small Businesses

132
132
134

What Is a Small Business? 134, Typical Small-Business Venture 134

Contributions of Small Business to the Economy

136

Creating New Jobs 137, Creating New Industries 137, Innovation 138

Why Small Businesses Fail

138

Management Shortcomings 139, Inadequate Financing 139, Government Regulation 140

The Business Plan: A Foundation for Success

141

Assistance for Small Businesses

143

Small Business Administration 143, Local Assistance for Small Businesses 144,
Private Investors 145, Small-Business Opportunities for Women and Minorities 146

Franchising

147

The Franchising Sector 147, Franchising Agreements 148, Benefits and Problems

of Franchising 148

Forms of Private Business Ownership

150

Sole Proprietorships 151, Partnerships 152, Corporations 152,
Employee-Owned Corporations 153, Family-Owned Businesses 154, Not-for-Profit
Corporations 155

Public and Collective Ownership of Business

156

Public (Government) Ownership 156, Collective (Cooperative) Ownership 156
Contents

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Organizing a Corporation

157

Types of Corporations 157, Where and How Businesses Incorporate 157,
Corporate Management 158

When Businesses Join Forces

160

Mergers and Acquisitions (M&A) 160, Joint Ventures: Specialized Partnerships 161

What’s Ahead

161

Summary of Learning Objectives 162, Business Terms You Need to Know 164,
Review Questions 164, Projects and Teamwork Applications 164, Web Assignments 165

Chapter 6
Opening Vignette
The Marketing Zen Group: From
$1,500 to Millions in Five Years
BusinessEtiquette
Communicating Electronically
Hit & Miss
Businesses Based at Home
Are Booming
Solving an Ethical
Controversy
Entrepreneurs and Ethics:
It’s Good Business
Going Green
Sungevity Follows the Sun
Hit & Miss

Intrapreneurship Brings
Truvia from the Woods to
the Tabletop

Case 5.1 Ideeli Gives Members (and Suppliers) Daily Deals

165

Case 5.2 Small Meets Big: Patagonia and Walmart Join Forces
for the Environment

166

Video Case 5.3 Seventh Generation Cleans Up with Consumer Products

166

Starting Your Own Business: The Entrepreneurship
Alternative

168

What Is an Entrepreneur?

170

Categories of Entrepreneurs

171

Reasons to Choose Entrepreneurship as a Career Path

172

Being Your Own Boss 173, Financial Success 173, Job Security 174, Quality of Life 174

The Environment for Entrepreneurs

175

Globalization 175, Education 176, Information Technology 177, Demographic
and Economic Trends 178

Characteristics of Entrepreneurs

179

Vision 179, High Energy Level 180, Need to Achieve 180, Self-Confidence
and Optimism 180, Tolerance for Failure 180, Creativity 181, Tolerance
for Ambiguity 182, Internal Locus of Control 182

Starting a New Venture

183

Selecting a Business Idea 183, Creating a Business Plan 185, Finding Financing 186,
Government Support for New Ventures 189

Intrapreneurship

189

What’s Ahead

191

Summary of Learning Objectives 191, Business Terms You Need to Know 192,
Review Questions 192, Projects and Teamwork Applications 193, Web Assignments 193

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Case 6.1 Glassybaby Does “One Thing Really Well”

194

Case 6.2 Small Businesses Are Big into Social Networking

194

Video Case 6.3 Comet Skateboards: It’s a Smooth Ride

195

Part 2 Greensburg, KS: Greensburg: A Great Place to Start

197

Part 2: Launching Your Entrepreneurial Career

198

Contents

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PART

3

Chapter 7
Opening Vignette
Wegmans Food Markets Still
a Great Place to Work
Solving an Ethical
Controversy
MF Global: Where Did
Customers’ Money Go?
Going Green
Johnson & Johnson:
Caring for the World
Hit & Miss
IBM’s First Female CEO
Says Hello
Hit & Miss
Southwest Airlines: “We
Love Your Bags”
BusinessEtiquette

Managing a Millennial
Workforce

Management: Empowering People
to Achieve Business
Management, Leadership, and the Internal Organization
What Is Management?

200
200
202

The Management Hierarchy 202, Skills Needed for Managerial Success 203,
Managerial Functions 204

Setting a Vision and Ethical Standards for the Firm

205

Importance of Planning

206

Types of Planning 207, Planning at Different Organizational Levels 209

The Strategic Planning Process

209

Defining the Organization’s Mission 209, Assessing Your Competitive Position 210, Setting

Objectives for the Organization 212, Creating Strategies for Competitive Differentiation 212,
Implementing the Strategy 212, Monitoring and Adapting Strategic Plans 213

Managers as Decision Makers

213

Programmed and Nonprogrammed Decisions 213, How Managers Make Decisions 214

Managers as Leaders

215

Leadership Styles 216, Which Leadership Style Is Best? 216

Corporate Culture

217

Organizational Structures

218

Departmentalization 219, Delegating Work Assignments 221,
Types of Organization Structures 222

What’s Ahead

224

Summary of Learning Objectives 224, Business Terms You Need to Know 226,
Review Questions 226, Projects and Teamwork Applications 227, Web Assignments 227

Chapter 8
Opening Vignette
Hiring Heroes Is Good
Business
Hit & Miss
Using Social Media for
Recruitment
Solving an Ethical
Controversy
Who Needs Performance
Appraisals?

Case 7.1 Ford Drives Out of the Financial Mud

228

Case 7.2 Using Business Students as Consultants

228

Video Case 7.3 Dan Formosa: At the Forefront of Smart Design

229

Human Resource Management: From Recruitment
to Labor Relations

230

Human Resources: The People Behind the People

232

Recruitment and Selection

232

Finding Qualified Candidates 233, Selecting and Hiring Employees 234

Orientation, Training, and Evaluation

236

Training Programs 236, Performance Appraisals 237

Compensation

238

Employee Benefits 240, Flexible Benefits 241, Flexible Work 241
Contents

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Hit & Miss
Stop Demotivating
Employees—And They’ll
Be Motivated
BusinessEtiquette
How to Ask for a Raise
Going Green
Labor Unions and Green
Construction

Employee Separation

243

Voluntary and Involuntary Turnover 243, Downsizing 244, Outsourcing 244

Motivating Employees

244

Maslow’s Hierarchy of Needs Theory 246, Herzberg’s Two-Factor Model of Motivation 246,
Expectancy Theory and Equity Theory 247, Goal-Setting Theory and Management
by Objectives 248, Job Design and Motivation 249, Managers’ Attitudes and Motivation 249

Labor–Management Relations

250

Development of Labor Unions 250, Labor Legislation 251, The Collective
Bargaining Process 251, Settling Labor–Management Disputes 251, Competitive
Tactics of Unions and Management 252, The Future of Labor Unions 253

What’s Ahead

254

Summary of Learning Objectives 254, Business Terms You Need to Know 256,
Review Questions 256, Projects and Teamwork Applications 256, Web Assignments 257

Chapter 9
Opening Vignette
Enterprise Rent-a-Car Thrives
on Empowerment, Teamwork
Hit & Miss
GM: Putting Workers in the
Driver’s Seat
Solving an Ethical
Controversy
Who Benefits from Virtual
Teamwork?
Hit & Miss
Team Diversity at
Ernst & Young
BusinessEtiquette
Tune Up Your Listening Skills
Going Green
SC Johnson Company Goes
Green and Beyond

Case 8.1 The Coca-Cola Company: Training for the Future Right Now

257

Case 8.2 Winning HR Practices at the Cheesecake Factory

258

Video Case 8.3 Seventh Generation Promotes Company Ownership

258

Top Performance through Empowerment, Teamwork,
and Communication
Empowering Employees

260
262

Sharing Information and Decision-Making Authority 262, Linking Rewards
to Company Performance 263

Teams

264

Team Characteristics

267

Team Size 267, Team Level and Team Diversity 268, Stages of Team Development 269

Team Cohesiveness and Norms

270

Team Conflict

271

The Importance of Effective Communication

272

The Process of Communication 272

Basic Forms of Communication

274

Oral Communication 274, Written Communication 275, Formal Communication 276,
Informal Communication 277, Nonverbal Communication 278

External Communication and Crisis Management

279

What’s Ahead

281

Summary of Learning Objectives 282, Business Terms You Need to Know 284,
Review Questions 284, Projects and Teamwork Applications 284, Web Assignments 284

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Case 9.1 Southwest Airlines Thrives on Customer Service

285

Case 9.2 Windy City Fieldhouse: It’s All about Teams

285

Video Case 9.3 Kimpton Hotels: “Our Employees Are Our Brand”

286

Contents

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Chapter 10
Opening Vignette
Intel’s “Fab” New
Manufacturing Facility

Going Green
Kraft Foods’ Recipe
for Zero Waste
Hit & Miss
The Sun Is Shining Brighter
in Senatobia
Hit & Miss
Goodyear Tire & Genencor:
A Sweet Alliance
BusinessEtiquette
Tips for Starting That New Job
Solving an Ethical
Controversy
Multivitamins Produced in
China: Are Stricter Quality
Controls Necessary?

Production and Operations Management
The Strategic Importance of Production

288
291

Mass Production 291, Flexible Production 292, Customer-Driven Production 292

Production Processes

292

Technology and the Production Process

293

Green Manufacturing Processes 293, Robots 294, Computer-Aided Design
and Manufacturing 295, Flexible Manufacturing Systems 295,
Computer-Integrated Manufacturing 296

The Location Decision

296

The Job of Production Managers

299

Planning the Production Process 299, Determining the Facility Layout 300,
Implementing the Production Plan 302

Controlling the Production Process

305

Production Planning 305, Routing 306, Scheduling 306, Dispatching 308, Follow-Up 308

Importance of Quality

308

Quality Control 309, ISO Standards 310

What’s Ahead

311

Summary of Learning Objectives 311, Business Terms You Need to Know 313,
Review Questions 313, Projects and Teamwork Applications 313, Web Assignments 314

PART

4

Case 10.1 Macedonia: New Apparel Manufacturing Hub?

314

Case 10.2 The F-35 Fighter Flies Over Budget

315

Video Case 10.3 Kimpton Hotels Puts Green Initiatives to Work

315

Part 3 Greensburg, KS: No Time to Micromanage

317

Part 3: Launching Your Management Career

318

Marketing Management

Chapter 11

Customer-Driven Marketing

Opening Vignette
Walmart Introduces “Great
for You”

What Is Marketing?

Hit & Miss
Ethnic Cuisine Goes Mobile
Going Green
The Tap Project
Solving an Ethical
Controversy
When Free Credit Reports
Aren’t Free

320
320
322

How Marketing Creates Utility 323

Evolution of the Marketing Concept

324

Emergence of the Marketing Concept 324

Not-for-Profit and Nontraditional Marketing

325

Not-for-Profit Marketing 325, Nontraditional Marketing 326

Developing a Marketing Strategy

328

Selecting a Target Market 329, Developing a Marketing Mix
for International Markets 331
Contents

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Hit & Miss
Redbox Teams with Verizon
to Offer Streaming
BusinessEtiquette
Calming the Angry Customer

Marketing Research

332

Obtaining Marketing Research Data 332, Applying Marketing Research Data 334,
Data Mining 334

Market Segmentation

335

How Market Segmentation Works 336, Segmenting Consumer Markets 336,
Segmenting Business Markets 341

Consumer Behavior

342

Determinants of Consumer Behavior 342, Determinants of Business Buying
Behavior 343, Steps in the Consumer Behavior Process 343

Relationship Marketing

344

Benefits of Relationship Marketing 344, Tools for Nurturing Customer Relationships 345

What’s Ahead

347

Summary of Learning Objectives 347, Business Terms You Need to Know 349,
Review Questions 349, Projects and Teamwork Applications 349, Web Assignments 350

Case 11.1 Advertising on Facebook: Unlimited Potential?

350

Case 11.2 Arthritis Foundation Takes Aim at Pain

351

Video Case 11.3 Zipcar and UNH: Customer-Driven Marketing

352

Chapter 12

Product and Distribution Strategies

Opening Vignette
Panama Canal’s Expansion
Is a Game Changer

Product Strategy

Hit & Miss
Kodak Ignores the
Digital Picture

Hit & Miss
PortionPac Makes More
By Selling Less
Going Green
Ave Anderson Non-Toxic:
Makeup via Direct Distribution
Solving an Ethical
Controversy
Teens at the Mall: Good
or Bad for Business?
BusinessEtiquette
Minding Your Social
Media Manners

354
356

Classifying Goods and Services 356, Classifying Consumer Goods and Services 356,
Marketing Strategy Implications 358, Product Lines and Product Mix 359

Product Life Cycle

359

Stages of the Product Life Cycle 359, Marketing Strategy Implications of the
Product Life Cycle 361, Stages in New-Product Development 362

Product Identification

364

Selecting an Effective Brand Name 364, Brand Categories 365, Brand Loyalty
and Brand Equity 365, Packages and Labels 367

Distribution Strategy

368

Distribution Channels 369

Wholesaling

371

Manufacturer-Owned Wholesaling Intermediaries 372, Independent Wholesaling
Intermediaries 372, Retailer-Owned Cooperatives and Buying Offices 373

Retailing

373

Nonstore Retailers 373, Store Retailers 374, How Retailers Compete 376

Distribution Channel Decisions and Logistics

378

Selecting Distribution Channels 379, Selecting Distribution Intensity 380, Logistics
and Physical Distribution 381

What’s Ahead

383

Summary of Learning Objectives 384, Business Terms You Need to Know 386,
Review Questions 386, Projects and Teamwork Applications 386, Web Assignments 386
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Chapter 13
Opening Vignette
Pfizer Faces the Impact of
Generic Drug Pricing
BusinessEtiquette
Eight Things Salespeople
Should Never Do
Hit & Miss
Daily Deal Sites Crowd a
Brand-New Market
Going Green
Green Seal Certification for
the Hotel Industry
Solving an Ethical
Controversy

Free E-Books: Good
or Bad for Business?
Hit & Miss
JC Penney Eliminates Sales

Case 12.1 Marketing Luxury Brands in China

387

Case 12.2 The Convergence of TV and the Internet

387

Video Case 12.3 Secret Acres: Getting the Word Out

388

Promotion and Pricing Strategies
Integrated Marketing Communications

390
392

The Promotional Mix 393, Objectives of Promotional Strategy 394, Promotional Planning 396

Advertising

397

Types of Advertising 398, Advertising and the Product Life Cycle 398, Advertising Media 399

Sales Promotion

404

Consumer-Oriented Promotions 404, Trade-Oriented Promotions 406, Personal Selling 407,
Public Relations 411

Pushing and Pulling Strategies

411

Pricing Objectives in the Marketing Mix

412

Profitability Objectives 412, Volume Objectives 413, Pricing to Meet Competition 413,
Prestige Objectives 413

Pricing Strategies

414

Price Determination in Practice 415, Breakeven Analysis 415, Alternative Pricing Strategies 416

Consumer Perceptions of Prices

418

Price–Quality Relationships 418, Odd Pricing 419

What’s Ahead

419

Summary of Learning Objectives 419, Business Terms You Need to Know 421,
Review Questions 421, Projects and Teamwork Applications 421, Web Assignments 422

PART

5

Case 13.1 Brand Names versus Store Brands

422

Case 13.2 Marketing to the Teenage Crowd

423

Video Case 13.3 Pet Airways Handles Pets With Loving Care

424

Part 4 Greensburg, KS: Think Green, Go Green, Save Green

425

Part 4: Launching Your Marketing Career

426

Managing Technology and Information

428

Chapter 14

Using Technology to Manage Information

Opening Vignette
Evernote Raises Notetaking
to a Profitable Art

Data, Information, and Information Systems

430

Components and Types of Information Systems

431

Hit & Miss
Cyber Attack Trips Up Zappos

428

Databases 432, Types of Information Systems 432

Computer Hardware and Software

434

Types of Computer Hardware 434, Computer Software 436
Contents

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BusinessEtiquette
Courteous Communications
via Wireless Devices
Solving an Ethical
Controversy
Should Employers Monitor
Employees’ Internet Use?
Going Green
Box.net Serving in the Cloud
Hit & Miss
Cisco Systems Tackles
Cloud Security

Computer Networks

437

Local Area Networks and Wide Area Networks 438, Wireless Local Networks 438,
Intranets 438, Virtual Private Networks 439, VoIP 440

Security and Ethical Issues Affecting Information Systems

440

E-Crime 440, Computer Viruses, Worms, Trojan Horses, and Spyware 441, Information
Systems and Ethics 443

Disaster Recovery and Backup

444

Information System Trends

444

The Distributed Workforce 444, Application Service Providers 445, On-Demand,
Cloud, and Grid Computing 446

What’s Ahead

447

Summary of Learning Objectives 447, Business Terms You Need to Know 449,
Review Questions 449, Projects and Teamwork Applications 450, Web Assignments 450

PART

6

Chapter 15
Opening Vignette
BKD LLP: A 21st Century
Accounting Firm
Hit & Miss
Forensic Accountants:
Fraud Busters
Going Green
KPMG’s Award-Winning
Green IT
Solving an Ethical
Controversy
Should Whistle-Blowers
Be Rewarded?
BusinessEtiquette
Managing Travel Expenses
Hit & Miss
Behind the Olympus
Accounting Scandal

Case 14.1 MICROS Systems Works on a Large Scale

450

Case 14.2 Skype Enters a New Era

451

Video Case 14.3 Zipcar: Technology Fuels Its Business

452

Part 5 Greensburg, KS: The Dog Ate My Laptop

454

Part 5: Launching Your Information Technology Career

455

Managing Financial Resources
Understanding Accounting and Financial Statements
Users of Accounting Information

456
456
458

Business Activities Involving Accounting 459

Accounting Professionals

459

Public Accountants 459, Management Accountants 461, Government and
Not-for-Profit Accountants 461

The Foundation of the Accounting System

462

The Accounting Cycle

463

The Accounting Equation 464, The Impact of Computers and the Internet
on the Accounting Process 465

Financial Statements

466

The Balance Sheet 468, The Income Statement 468, Statement of Owners’
Equity 470, The Statement of Cash Flows 471

Financial Ratio Analysis

473

Liquidity Ratios 473, Activity Ratios 474, Profitability Ratios 475, Leverage Ratios 476

Budgeting

476

International Accounting

478

Exchange Rates 479, International Accounting Standards 480
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What’s Ahead

481

Summary of Learning Objectives 481, Business Terms You Need to Know 483,
Review Questions 483, Projects and Teamwork Applications 484, Web Assignments 484

Chapter 16
Opening Vignette
Community Banks Team Up to
Fight the Megabanks
Going Green
Green Banking at New
Resource Bank
Hit & Miss
Facebook at the IPO
Crossroads
Hit & Miss
How News Lifts—or Sinks—

World Stocks
BusinessEtiquette
What to Do When Your
Credit Gets Pulled
Solving an Ethical
Controversy
Are Debit Card Fees
Too High?

Case 15.1 Shoeboxed to the Rescue

485

Case 15.2 BDO Seidman: Growing with the 20th Century and Beyond

485

Video Case 15.3 Pet Airways Is a “Feel-Good” Business

486

The Financial System

488

Understanding the Financial System

490

Types of Securities

491

Money Market Instruments 492, Bonds 492, Stock 495

Financial Markets

496

Understanding Stock Markets

498

The New York Stock Exchange 498, The NASDAQ Stock Market 499, Other U.S.
Stock Markets 499, Foreign Stock Markets 500, ECNs and the Future of Stock Markets 500,
Investor Participation in the Stock Markets 501

Financial Institutions

501

Commercial Banks 502, Savings Banks and Credit Unions 504, Nondepository
Financial Institutions 505, Mutual Funds 506

The Role of the Federal Reserve System

506

Organization of the Federal Reserve System 507, Check Clearing and the Fed 507,
Monetary Policy 508

Regulation of the Financial System

510

Bank Regulation 510, Government Regulation of the Financial Markets 510, Industry
Self-Regulation 512

The Financial System: A Global Perspective

513

What’s Ahead

514

Summary of Learning Objectives 514, Business Terms You Need to Know 516,
Review Questions 516, Projects and Teamwork Applications 517, Web Assignments 517

Chapter 17

Case 16.1 Silicon Valley’s Banker

517

Case 16.2 Credit Unions Find a Silver Lining in the Financial Crisis

518

Video Case 16.3 New Harvest Coffee Goes Beyond Fair Trade

519

Financial Management

520

Opening Vignette
Andreessen Horowitz: Silicon
Valley’s Venture Capital Firm

The Role of the Financial Manager

522

Financial Planning

524

Hit & Miss
Apptio Calculates the Cost of
Information Technology

Managing Assets

527

Short-Term Assets 527, Capital Investment Analysis 529, Managing
International Assets 529
Contents

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Hit & Miss
Colleges Sell Century Bonds
BusinessEtiquette
Tips from LearnVest
Solving an Ethical
Controversy
Are Dividends Necessary?
Going Green
KKR’s Smart Investments
Yield Greener Profits at
Dollar General

Sources of Funds and Capital Structure

530

Leverage and Capital Structure Decisions 531, Mixing Short-Term
and Long-Term Funds 532, Dividend Policy 532

Short-Term Funding Options

534

Trade Credit 534, Short-Term Loans 535, Commercial Paper 535

Sources of Long-Term Financing

536

Public Sale of Stocks and Bonds 536, Private Placements 536, Venture Capitalists 537,
Private Equity Funds 537, Hedge Funds 539

Mergers, Acquisitions, Buyouts, and Divestitures

539

What’s Ahead

541

Summary of Learning Objectives 541, Business Terms You Need to Know 543,
Review Questions 543, Projects and Teamwork Applications 544, Web Assignments 544

Case 17.1 ConocoPhillips Divests to Return to Its Core

544

Case 17.2 Hewlett-Packard Still Sailing into Financial Headwinds

545

Video Case 17.3 Comet Skateboards Rides the Triple Bottom Line

546

Part 6 Greensburg, KS: So Much to Do, So Little Cash

547

Part 6: Launching Your Finance Career

548

APPENDIXES
Appendix A

Business Law

Appendix B

Insurance and Risk Management

A-18

Appendix C

Personal Financial Planning

A-30

Appendix D

Developing a Business Plan

A-43

Appendix E

Careers in Contemporary Business

A-52

GLOSSARY

G-1

NOTES

N-1

NAME INDEX

I-1

SUBJECT INDEX

I-8

INTERNATIONAL INDEX

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A-1

I-25

Contents

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c01.indd 1

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Part 1

Business in a Global Environment

Learning Objectives
1 Define what is business.
2 Identify and describe the factors of production.

Chapter

1

3 Describe the private enterprise system.
4 Identify the six eras in the history of business.

5 Explain how today’s business workforce and the nature of work itself is changing.
6 Identify the skills and attributes needed for the 21st-century manager.
7 Outline the characteristics that make a company admired.

Neustockimages/iStockphoto

The Changing Face
of Business

c01.indd 2

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Apple and Steve Jobs: Business
Leadership as Art

W

hen Apple’s visionary founder and leader Steve Jobs
passed away on October 5, 2011, at the age of 56, he was
widely hailed as someone whose extraordinary career had
transformed the world of business. But Apple’s unsurpassed
string of successful technological innovations had done far
more. The Apple II, the Mac, iTunes, the iPod, the iPhone, the
MacBook, and the iPad have transformed the music industry,
the entertainment industry, the communications industry, and
even the world of print.
Despite a 12-year absence from Apple, during which he
founded another successful tech firm called NeXT and built

Pixar Animation Studios into an Academy Award winner, Jobs
brought his revolutionary computer company from humble
start-up to unheard-of success. Apple is estimated to be worth
nearly $400 billion today and has become one of the most
valuable brand names of all time.
Jobs was passionately committed to innovation. His innate
understanding of how to make technology transparently simple
to use ensured the success of many of Apple’s iconic products,
including generations of Mac personal computers and the iPod.

These achievements, and their sleek and appealing designs, led
many to think of him both as an artist and a business leader.
Jobs’s unrelenting attention to detail and quest for perfection
could also make him a difficult boss at times, but he inspired
enormous devotion and loyalty among his employees. Some say
he even transformed our idea of leadership, given his ability to
inspire others with the same ideals that fueled his own drive to
succeed.
Thanks to Apple, products we never knew we needed have
become indispensable to our lives. Nothing about the way we
write, listen, speak, text, view entertainment, present information, or surf the Internet will ever be the same. How does one
company achieve so much?
An extraordinary leader is an obvious advantage, and few
observers expect to see another CEO like Steve Jobs any time
soon. But many business leaders today are as passionate and
inspired, and their firms also seek to innovate and transform.
Those companies that correctly assess what customers want,
that deliver it at the right time and for the right price, and that
keep ahead of the wave of relentless change they face, as Apple
has done, will be more likely to succeed.1

Overview

c01.indd 3

Business is the nation’s engine for
growth. A growing economy—one that produces more goods and services with fewer
resources over time—yields income for business owners, their employees, and stockholders. So a country depends on the wealth its
businesses generate, from large enterprises
such as the Walt Disney Company to tiny
online start-ups, and from venerable firms
such as 150-year-old jeans maker Levi
Strauss & Company to powerhouses such as
Google. What all these companies and many
others share is a creative approach to meeting society’s needs and wants.

tables by growing, harvesting, processing,
packaging, and shipping everything from
spring water to cake mix and frozen shrimp.
Restaurants buy, prepare, and serve food, and
some even deliver. Construction companies
build our schools, homes, and hospitals,
while real estate firms bring property buyers
and sellers together. Clothing manufacturers
design, create, import, and deliver our jeans,
sports shoes, work uniforms, and party wear.
Entertainment for our leisure hours comes
from hundreds of firms that create, produce,
and distribute films, television shows, video
games, books, and music downloads.

Businesses solve our transportation
problems by marketing cars, tires, gasoline,
and airline tickets. They bring food to our

To succeed, business firms must know
what their customers want so that they can
supply it quickly and efficiently. That means

21/08/12 11:10 AM