Transcription
businessessentialsTENTH EDITIONGlobal EditionRonald J. EbertRicky W. GriffinPEARSONBoston Columbus Indianapolis New York San Francisco Upper Saddle RiverAmsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal TorontoDelhi Mexico City Säo Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
ContentsLetter from the AuthorsAbout the Authors1718Special Thanks to Our SuperReviewersPreface1920Part 1: The Contemporary BusinessWorld1 The U.S. Business Environment 28Chapter Opening Gase: What Goes Up. .Can GoEven Higher! 31The Concept of Business and the Concept of Profit 32The External Environments of Business 33Domestic Business Environment 33Global Business Environment 34Technological Environment 34Political-Legal Environment 35Sociocultural Environment 35Economic Environment 36managing in turbulent times: What GoesAround. 36Economic Systems 37Factors of Production 37Types of Economic Systems 38finding a better way: Blending Capitalism and SocialResponsibility at Mercy Corps 41The Economics of Market Systems 41Demand and Supply in a Market Economy 41Private Enterprise and Competition in a MarketEconomy 44entrepreneurship and new ventures: Business .and Pleasure 46Economic Indicators 46Economic Growth, Aggregate Output, and Standardof Living 47Economic Stability 51Managing the U.S. Economy 52summary of leaming objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notes82 Understanding BusinessEthics and SocialResponsibility 60Chapter Opening Case: Is Fair TradeReally Fair? 63Ethics in the Workplace 64Individual Ethics 65Ambiguity, the Law, and the Real World 65Individual Values and Codes 65Business and Managerial Ethics 65managing in turbulent times: Just When TheyNeed It Most 66Assessing Ethical Behavior 67Company Practices and Business Ethics 68Social Responsibility 71The Stakeholder Model of Responsibility 71entrepreneurship and new ventures:The Electronic Equivalent of PaperShredding 72Contemporary Social Consciousness 73Areas of Social Responsibility 74Responsibility toward the Environment 74finding a better way: Zero Waste 75Responsibility toward Customers 76Responsibility toward Employees 78Responsibility toward Investors 79Implementing Social ResponsibilityPrograms 80Approaches to Social Responsibility 80Social Responsibility and the SmallBusiness 81The Government and SocialResponsibility 82How Governments Influenae Organizations 83How Organizations Influenae Government 84Managing Social Responsibility 84Formal Organizational Dimensions 85Informal Organizational Dimensions 85Evaluating Social Responsibility 86summary of leaming objectives key terms questions & exercises building a business:continuing team exercises building yourbusiness skills exercising your ethics teamexercises cases end notes
CONTENTS3 Entrepreneurship, New Ventures,and Business Ownership 96Chapter Opening Gase: Launching a Business inthe Gym 99What is a "Small" Business 100The Importance of Small Business in the U.S.Economy 101Populär Areas of Small Business Enterprise 102finding a better way: The Rise of Services 104managing in turbulent times: The Wide World ofRisk 105Entrepreneurship 105Entrepreneurship Goals 105Entrepreneurial Characteristics 106Starting and Operating a New Business 106Understanding Distinctive Competencies 107Crafting a Business Plan 108Starting the Small Business 108Financing the Small Business 110Trends, Successes, and Failures inNew Ventures 111Trends in Small Business Start-Ups 111Reasons for Failure 113Reasons for Success 113entrepreneurship and new ventures: HarvardDropout Turned Billionaire 114Noncorporate Business Ownership 114Sole Proprietorships 114Partnerships 115Cooperatives 117Corporations 117The Corporate Entity 117Types of Corporations 118Managing a Corporation 120Special Issues in Corporate Ownership 120summary of learning objectives key terms questions& exercises building a business: continuing teamexercises building your business skills exercisingyour ethics team exercise cases end notes4Understanding the GlobalContext of Business 130Chapter Opening Gase: The Embargo Grinds On 133The Contemporary Global Economy 134The Major World Marketplaces 136finding a better way: Too Much of a Good Thing?China's Success Creates More Jobs in Mexico 137Trade Agreements and Alliances 1389International Trade 140Balance of Trade 140Balance of Payments 142Exchange Rates 143Forms of Competitive Advantage 144entrepreneurship and new ventures: Polling inthe Worldwide Dough 144International Business Management 145Going International 145Levels of International Involvement 147International Organization Structures 148managing in turbulent times: The Ups and Downsof Globalization 148Understanding the Cultural Environment 149Values, Symbols, Beliefs, and Language 150Employee Behavior across Cultures 150Barriers to International Trade 152Economic Differences 152Legal and Political Differences 153summary of learning objectives Key terms questions& exercises building a business: continuing teamexercise building your business skills exercising yourethics team exercise cases crafting a businessplan end notesPart 2: The Business of Managing5 Managing the Business 164Chapter Opening Case: Google KeepsGrowing 167The Management Process 168Basic Management Functions 168The Science and the Art of Management 171Becoming a Manager 171Types of Managers 173Levels of Management 173Areas of Management 174Management Roles and Skills 175Managerial Roles 175Basic Management Skills 177Management Skills for the Twenty-First Century 178Strategie Management: SettingGoals and Formulating Strategy 179Setting Business Goals 180entrepreneurship and new ventures:ButterflEYE 180Types of Strategy 182
10CONTENTSfinding a better way: A New Model for GoingGreen 183Formulating Strategy 183A Hierarchy of Plans 185managing in turbulent times: Challenging Times forGulf Airlines 186Contingency Flanning and CrisisManagement 186Contingency Flanning 187Crisis Management 187Management and the Corporate Culture 188Building and Communicating Culture 188Changing Culture 189summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notes6 Organizing the Business 198Chapter Opening Case: Organizing for Success atSouth African Airways 201What Is Organizational Structure? 202Organization Charts 203Determinants of Organizational Structure 203The Building Blocks of Organizational Structure 204Specialization 204Specialization and Growth 205finding a better way: Blending the Old withthe New 206Departmentalization 206Establishing the Decision-Making Hierarchy 208Distributing Authority: Centralization andDecentralization 208managing in turbulent times: The Complexities ofOffshoring 209The Delegation Process 211Three Forms of Authority 212Basic Forms of Organizational Structure 213Functional Structure 213Divisional Structure 213Matrix Structure 214entrepreneurship and new ventures: Makingthe Grade 215International Structure 215Organizational Design for the Twenty-first Century 216Informal Organization 218Informal Groups 218Organizational Grapevine 219Intrapreneuring 219summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills follow-upquestions exercising your ethics teamexercise cases end notes7 Operations Management andQuality for Producing Goodsand Services 228Chapter Opening Case: Ryanair CustomerSatisfaction—but Who to Believe? 231What Ooes Operations Mean Today? 232Growth in the Services and Goods Sectors 233Creating Value through Operations 234Differences between Service and Goods ManufacturingOperations 235Operations Processes 236Business Strategy as the Driver of Operations 238The Many Faces of Production Operations 238Operations Flanning 240Capacity Flanning 240entrepreneurship and new ventures: A BetterPath to Flanning Meals (and Better Eating, Too) 241Location Flanning 241finding a better way: "Going Green" Yields a BetterWay to Spin Clean 242Layout Flanning 242Quality Flanning 244Methods Flanning 245Operations Scheduling 246The Master Operations Schedule 246Detailed Schedules 247Staff Schedules and Computer-Based Scheduling 247Project Scheduling 248Operations Control 249Materials Management 249Quality Control 251Quality Improvement and Total QualityManagement 251The Quality-Productivity Connection 252Managing for Quality 252managing in turbulent times: Quick FootedEgyptian Businesses 253Tools for Total Quality Management 254Adding Value through Supply Chains 256The Supply Chain Strategy 256Outsourcing and Global Supply Chains 257summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases crafting abusiness plan end notes
CONTENTSPart 3: People in Organizations8 Employee Behavior andMotivation268Chapter Opening Case: Chicken or Egg?271Forms of Employee Behavior 272Performance Behaviors 273Organizational Citizenship 273Counterproductive Behaviors 274managing in turbulent times: The Law ofWell-Being 274Individual Differences among Employees 275Personality at Work 275Attitudes at Work 278Malching People and Jobs 280Psychological Contracts 280The Person-Job Fit 282Basic Motivation Concepts and Theories 282Classical Theory 282Early Behavioral Theory 282entrepreneurship and new ventures: Motivationat Bigfoot 286Contemporary Motivation Theory 287Strategies and Techniques for EnhancingMotivation 289Reinforcement/Behavior Modification 289Using Goals to Motivate Behavior 289finding a better way: Carrot or Stick? 290Participative Management and Empowerment 291Team Structures 291Job Enrichment and Job Redesign 291Modified Work Schedules and AlternativeWorkplaces 292summary of leaming objectives key terms questions & exercises building a business:continuing team exercise building yourbusiness skills exercising your ethics teamexercise cases end notes9 Leadership and DecisionMaking302Chapter Opening Case: Middle Eastern BusinessLeadership 30511The Situational Approach to Leadership 310Leadership through the Eyes of the Followers 311Transformational Leadership 311Charismatic Leadership 312managing in turbulent times: Leading duringTough Times 313Special Issues in Leadership 313Leadership Substitutes 313Leadership Neutralizers 314The Changing Nature of Leadership 314Leaders as Coaches 315Gender and Leadership 315Cross-Cultural Leadership 315finding a better way: Creating Board Diversity 316Emerging Issues in Leadership 317Strategie Leadership 317Ethical Leadership 317Virtual Leadership 317Leadership, Management, and Decision Making 318The Nature of Decision Making 318entrepreneurship and new ventures: A BadDecision at Wesabe 320Rational Decision Making 320Behavioral Aspects of Decision Making 323summary of leaming objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notes10 Human Resource Managementand Labor Relations 334Chapter Opening Case: A Unique PartnershipDrives Wegmans 337The Foundations of Human ResourceManagement 338The Strategie Importance of HRM 338HR Flanning 339The Legal Context of HRM 341Equal Employment Opportunity 341Compensation and Benefits 342Labor Relations 343Health and Safety 343Other Legal Issues 343The Nature of Leadership 306Leadership and Management 306Leadership and Power 307Staffing the Organization 344Recruiting HR 344Selecting HR 345finding a better way: Dock Strike in Hong KongEarly Approaches to Leadership 308Trait Approaches to Leadership 308Behavioral Approaches to Leadership 309Compensation and BenefitsWages and Salaries 348Incentive Programs 348348346
12CONTENTSBenefits Programs 349entrepreneurship and new ventures: WhoieBenefits? 350Developing the Workforce 351Training and Development 351Performance Appraisal 352New Challenges in the Changing Workplace 354Managing Workforce Diversity 354Managing Knowledge Workers 354Contingent and Temporary Workers 355managing in turbulent times: Temp or Perm? 356Dealing with Organized Labor 357Unionism Today 357Collective Bargaining 358summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases crafting abusiness plan end notesPart 4: Principles of Marketing:Building Relationships withCustomers for CompetitiveMarketing Research 388The Research Process 389Research Methods 390Understanding Consumer Behavior 391Influences on Consumer Behavior 391The Consumer Buying Process 392finding a better way: The Truth about Your OnlineCustomer Service 393Organizational Marketing and Buying Behavior 394Business Marketing 394B2B Buying Behavior 394Social Media and Marketing 395The International Marketing Mix 396Small Business and the Marketing Mix 397entrepreneurship and new ventures: SocialNetworking for Jobs in Good Times and in Bad 398Small-Business Products 398Small-Business Pricing 399Small-Business Distribution 399Small-Business Promotion 399summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notesAdvantage12 Developing and Pricing11 Marketing Processes andConsumer Behavior372Chapter Opening Case: Starbucks Brews a NewMarketing Mix 375What Is Marketing? 376Delivering Value 376Goods, Services, and Ideas 378Relationship Marketing and Customer RelationshipManagement 378The Marketing Environment 379managing in turbulent times: Feeling the Pressurefor "Green" 381Developing the Marketing Plan 382Marketing Strategy: Flanning the Marketing Mix 383Marketing Strategy: Target Marketing and MarketSegmentation 386Identifying Market Segments 387Geographie Segmentation 387Demographic Segmentation 387Geo-Demographic Segmentation 387Psychographic Segmentation 388Behavioral Segmentation 388Products410Chapter Opening Case: iTunes Is It 413What Is A Product? 414The Value Package 414Classifying Goods and Services 415The Product Mix 416Developing New Products 417The New Product Development Process 417entrepreneurship and new ventures: ThisBusiness Is /Appsolutely Booming 418Product Mortality Rates 419The Seven-Step Development Process 420Variations in the Process for Services 420Product Life Cycle 421Stages in the PLC 421Extending Product Life: An Alternative to NewProducts 423Identifying Products 423Determining Prices 425Pricing to Meet Business Objectives 426finding a better way: Fixed Prices in UAE 426Price-Setting Tools 427
CONTENTSPricing Strategies and Tactics 429Pricing Strategies 429managing in turbulent times: How RecessionaryTimes Became a Stimulus for Innovative Pricing andPromotion 431Pricing Tactics 431International Pricing 432summary of leaming objectives keyterms questions & exercises building abusiness: continuing team exercise building yourbusiness skills exercising your ethics teamexercise cases end notes13 Distributing and PromotingProducts 442Chapter Opening Case: With Its Worldly View,Netflix Wants an Entire Globe of Streamers 445The Distribution Mix 446Intermediaries and Distribution Channels 446Distribution Strategies 448Channel Conflict and Channel Leadership 449Wholesaling 449Merchant Wholesalers 449Agents and Brokers 450The Advent of the E-Intermediary 450Retailing 451Types of Brick-and-Mortar Retail Outlets 451finding a better way: Bye-Bye Cash Registers,Hello Tablets! 452Nonstore Retailing 452Online Retailing 453Physical Distribution 454Warehousing Operations 455Transportation Operations 455entrepreneurship and new ventures: Running inTwo Speeds at Once: Paperless and Paper 456Distribution through Supply Chains as a MarketingStrategy 457The Importance of Promotion 457Promotional Objectives 457Promotional Strategies 458The Promotional Mix 458Advertising Promotions 459Personal Selling 460Personal Selling Situations 460Personal Selling Tasks 461managing in turbulent times: Direct Mail Marketing:Back from a "Slow Death"? 462The Personal Selling Process 463Sales Promotions 46413Direct (or Interactive) Marketing 464Publicity and Public Relations 465summary of leaming objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases crafting abusiness plan end notesPart 5: Managing Information forBetter Business Decisions14 Information Technology (IT) forBusiness 476Chapter Opening Case: Online Pirates Feast onEconomic Downturn 479Information Technology Impacts: A Driver ofChanges for Business 480Creating Portable Offices: Providing Remote Access toInstant Information 480Enabling Better Service by Coordinating RemoteDeliveries 481Creating Leaner, More Efficient Organizations 481Enabling Increased Collaboration 482Enabling Global Exchange 482Improving Management Processes 482Providing Flexibility for Customization 483Providing New Business Opportunities 483Improving the World and Our Lives 484IT Building Blocks: Business Resources 485The Internet and Other Communication Resources 486Networks: System Architecture 487Hardware and Software 490Information Systems: Harnessing the CompetitivePower of IT 491managing in turbulent times: When CashGets Scarce, Businesses Switch to InternetBartering 491Leveraging Information Resources: Data Warehousingand Data Mining 492entrepreneurship and new ventures: SpeakingLoud and Clear: A New Voice Technology 493Types of Information Systems 494IT Risks and Threats 496Hackers 496Identity Theft 497Intellectual Property Theft 497Computer Viruses, Worms, and Trojan Horses 497Spyware 497Spam 498
CONTENTSIT Protection Measures 498Preventing Unauthorized Access: Firewalls 498Preventing Identity Theft 498Preventing Infectious Intrusions: Anti-VirusSoftware 499Protect!ng Electronic Communications: EncryptionSoftware 499Avoiding Spam and Spyware 499finding a better way: The Pentagon's New CareerTrack: Cyberwarfare 500Ethical Concems in IT 500summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notesfinding a better way: Ageing Asia 531Bringing Ethics into the AccountingEquation 531Why Accounting Ethics? 532Intemationalizing Accounting 533International Accounting Standards Board 533finding a better way: Accounting Practices for theSmall Business 534Why One Set of Global Practices? 535summary of learning objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases crafting abusiness plan end notesPart 6: The Financial System15 The Role of Accountants andAccounting Information510and Issues in FinancialManagementChapter Opening Case: Frenkel's Forensics 513What Is Accounting, and Who Uses AccountingInformation? 514Who Are Accountants and What Do They Do? 515Financial versus Managerial Accounting 515Certified Public Accountants 515Private Accountants and ManagementAccountants 518Forensic Accountants 518Federal Restrictions on CPA Services and FinancialReporting: Sarbox 519The Accounting Equation 520Assets and Liabilities 521Owners' Equity 521Financial Statements 521Balance Sheets 522Income Statements 523Statements of Cash Flows 525The Budget: An Internal Financial Statement 526Reporting Standards and Practices 526Revenue Recognition and Activity Timing 527Füll Disclosure 527Analyzing Financial Statements 527managing in turbulent times: The "Fairness"Dilemma: What's an Asset's Real Value? 528Solvency Ratios: Borrower's Ability to Repay Debt 529Profitability Ratios: Earnings Power for Owners 529entrepreneurship and new ventures: How WillTwitter Turn Tweets into Treasure? 530Activity Ratios: How Efficiently Is the Firm Using ItsResources? 53016 Understanding Money and theRole of Banking548Chapter Opening Case: A Tale of Two Worlds inBanking 551What Is Money? 552The Characteristics of Money 552The Functions of Money 553M-1: The Spendable Money Supply 553M-2: M-1 Plus the Convertible Money Supply 554Credit Cards and Debit Cards: Plastic Money? 556The U.S. Financial System 556Financial Institutions 556The Growth of Financial Services 558managing in turbulent times: Getting Serious withCredit Standards 559Financial Institutions Create Money and AreRegulated 560Regulation of the Banking System 561The Federal Reserve System 562The Structure of the Fed 562The Functions of the Fed 563The Tools of the Fed 563The Changing Money and Banking System 564finding a better way: In Search of a Much-NeededEconomic "Fix," the Fed Finds a Better Way 565Government Intervention for Stabilizing the U.S.Financial System 565Anticrime and Antiterrorism Regulations 566The Impact of Electronic Technologies 567
CONTENTSentrepreneurship and new ventures: Cultivating aSocial Side for Community Banking 568International Banking and Finance 569Currency Values and Exchange Rates 570The International Payments Process 571International Bank Structure 571summary of leaming objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases end notes15Choosing Equity versus Debt Capital 609Regulating Securities Markets 611The Securities and Exchange Commission 611Regulations against Insider Trading 612summary of leaming objectives key terms questions& exercises building a business: continuing teamexercise building your business skills exercisingyour ethics team exercise cases crafting abusiness plan end notesAppendices1 7 Managing BusinessFinances 584Chapter Opening Case: Investing in Green 587Maximizing Capital Growth 588The Time Value of Money and Compound Growth 588Common Stock Investments 589Investing to Fulfill Financial Objectives 591Reasons for Investing 591Most Mutual Funds Don't Match the Market 591Exchange-Traded Funds 592The Business of Trading Securities 592Primary and Secondary Securities Markets 593Stock Exchanges 593Nonexchange Trading: Electronic CommunicationNetworks 595Individual Investor Trading 595Tracking the Market Using Stock Indexes 596entrepreneurship and new ventures:An Entrepreneurship of Evil 598The Risk-Return Relationship 599Investment Dividends (or Interest), Appreciation, andTotal Return 599Fantasy Stock Markets 600Managing Risk with Diversification and AssetAllocation 601Finding a Better Way: Mass Communications with ITPuts Stock Trading within Easy Reach 602Financing the Business Firm 603Secured Loans for Equipment 603Working Capital and Unsecured Loans from Banks 603Angel Investors and Venture Capital 604Sale of Corporate Bonds 605Managing in Turbulent Times: Weakening SouthAfrican Housing Market? 606Becoming a Public Corporation 607Going Public Means Selling off Part of theCompany 608Stock Valuation 608Market Capitalization 609Appendix I: Risk Management623Coping with Risk 623Insurance as Risk Management 624Appendix II: The Legal Context ofBusiness627The U.S. Legal and Judicial Systems 627Types of Law 627The U.S. Judicial System 628Business Law 629Contract Law 629Tort Law 629Property Law 630Agency Law 631Commercial Law 631Bankruptcy Law 631The International Framework of BusinessLaw 632Appendix III: Managing YourPersonal Finances633Building Your Financial Plan 633Assessing Your Current Financial Condition 634Develop Your Financial Goals 635Making Better Use of the Time Value of Money 636Flanning for the Golden Years 636Time Value as a Financial-Planning Tool 637Conserving Money by Controlling It 637Credit Cards: Keys to Satisfaction or FinancialHandcuffs? 638Save Your Money: Lower Interest Rates and FasterPayments 638Financial Commitments of Home Ownership 639How Much House Can You Afford? 639Cashing out from Tax Avoidance (Legally) 640The IRA Tax Break 641
16CONTENTSProtecting Your Net Worth 642Why Buy Life Insurance? 643What Does Life Insurance Do? 643How Much Should I Buy? 643Why ConsiderTerm Insurance? 643How Much Does It Cost? 643Appendix IV: Unions and LaborManagement645Why Do Workers Unionize? 645The Evolution of Unionismin the United States 645Early Unions 646The Emergence of the Major Unions 646Unionism Today 648Trends in Union Membership 648Trends in Union-Management Relations 649Trends in Bargaining Perspectives 650The Future of Unions 650Contemporary Union Structure 651Locals 651Laws Governing Labor-ManagementRelations 652The Major Labor Laws 652How Unions Are Organized and Certified654Collective Bargaining 655Reaching Agreement on Contract Terms 656Contract Issues 656When Bargaining Fails 657Administering a Labor Agreement 659end notesGlossary 661Index 681
Part 1: The Contemporary Business World 1 The U.S. Business Environment 28 Chapter Opening Gase: What Goes Up. .Can Go Even Higher! 31 The Concept of Business and the Concept of Profit 32 The External Environments of Business 33 Domestic Business Environment 33 Global Business Environment 34 Technological Environment 34
