Business Principles

Overall, the United States is a prosperous nation. Much of its prosperity is due to business growth. Around the world, people admire and envy this country’s economic strength. Let’s look at two ways in which a nation measures its economic wealth and its benefits to citizens. GROSS DOMESTIC PRODUCT INDIVIDUAL WELL-BEI...

Companies can satisfy customers in many ways. Most buyers want a high-quality product at the lowest possible price and immediate help when trouble occurs with a product. Successful firms in recent years have introduced innovative ways to meet customer expectations. Not only pizza businesses make home deliveries; now many furniture companies make deliveries to the customer’s home on the day of purchase. United Parcel Service and Federal Express not only make door-to-door deliveries but also pick...

Not only must firms do the right things, such as offering high-quality products, but they must also produce their products efficiently. Efficiency is measured by output—the quantity produced within a given time. Productivity, on the other hand, refers to producing the largest quantity in the least amount of time by using efficient methods and modern equipment. Workers are more productive when they are well equipped, well trained, and well managed. Employee productivity in the United States has...

Making the right decisions requires both common sense and skill. Knowing what customers want is critical to business success and to achieving effectiveness. What kind of sleeping bags, for example, will best satisfy the needs of the Inglish family when they take their summer vacation in the mountains? In the early days of manufacturing, customers bought whatever was available because there were few brands, colors, and styles from which to select. Today, the choices for most products have increased...

Businesses often study their own operations to determine whether they are doing the right things and doing the right things well. Two terms are used to describe the best business practices. First, effectiveness means making the right decisions about what products or services to offer customers and the best ways to produce and deliver them. Second, efficiency means producing products and services quickly, at low cost, without wasting time and materials. Firms that provide products at the lowest cost...

For hundreds of years, American businesses led the way in producing new goods and services for sale around the world. Consumers worldwide eagerly purchased exciting new products that were invented and made in the United States. Factories hummed with activity, workers from other countries arrived by the thousands to find jobs, and people spent their wages buying the goods that the firms produced. Many businesspeople and government leaders from foreign countries also arrived to find out how American...

An innovation is something entirely new. Innovations affect the kinds of products and services offered for sale by other businesses. For example, clothing used to be made from only natural fibers, such as cotton and wool. Then chemical researchers developed synthetic fibers, such as rayon, nylon, and polyester. Now consumers have more choices in clothing and other fabric products.   Innovations also affect business operations. For example, since Apple Computer built one of the first personal...

An important characteristic of business is that it is dynamic, or constantly changing. To be successful, businesses must react quickly to the changing nature of society. For instance, horses were the principal means of transportation until the invention of steam power. Then, with the emergence of the first cross-country railroad in 1869, goods and services traveled mainly by rail for about 50 years. When the gasoline engine arrived, travel patterns shifted from train to car, bus, and truck. Shortly...

This book will focus on the various types of businesses and business activities and what it takes to manage a business successfully. But before beginning that study in detail, let’s take a look at the general nature of business. Generally, there are two major kinds of businesses—industrial and commercial. Industrial businesses produce goods used by other businesses or organizations to make things. Companies that mine coal or ore and that extract oil and gas from the earth provide resources for use...

An organization that produces or distributes a good or service for profit is called a business. Profit is the difference between earned income and costs. Every business engages in at least three major activities. The first activity, production, involves making a product or providing a service. Manufacturing firms create products that customers purchase to satisfy needs, whereas service firms use the skills of employees to offer activities and assistance to satisfy customer needs. Examples of service...