Contemporary Business

Preface vii


About The Authors ix


New and Continuing Features x


1 The Changing Face of Business 1


Chapter 1 Overview 2


What is Business? 2


Factors of Production 4


The Private Enterprise System 6


Business & Technology: Combining Business and Tech in Fashion at Nordstrom 7


Seven Eras in the History of Business 9


Job Description: “BizOps” Associate 12


Current Business Workforce Trends 14


EcoBiz: Internet Billionaire Helps China Breathe Easier 15


Today’s Manager 17


Business Model: Shake Shack Blends Up “Enlightened Hospitality” 18


What Makes a Company Admired? 20


Judgement Call: Volkswagen Fails the Emissions Test 21


What’s Ahead 21


Chapter in Review 22


2 Business Ethics and Social Responsibility 25


Chapter 2 Overview 26


Concern for Ethical and Societal Issues 26


The Contemporary Ethical Environment 27


Judgement Call: Creating a Good Ethical Foundation 30


How Organizations Shape Ethical Conduct 33


Judgement Call: Tesla CEO Actions Harm Company’s Brand 36


Acting Responsibly to Satisfy Society 37


EcoBiz: Starbucks Introduces A New Store-Design Strategy 37


Business & Technology: Pacific Biodiesel Recycles Oil from French Fries to Fuel 41


Business Model: Balancing Life and Work with a Cup of Tea 42


Responsibilities to Investors and the Financial Community 49


What’s Ahead 50


Chapter in Review 50


3 Economic Challenges Facing Business Today 53


Chapter 3 Overview 54


Microeconomics: The Forces of Demand and Supply 55


Business Model: Companies Compete for Share of “Athleisure” Market 60


Macroeconomics: Issues for the Entire Economy 61


Judgement Call: Drug Prices Soar Despite Falling Demand 63


Evaluating Economic Performance 66


EcoBiz: Alternative Energy Development and Job Creation 67


Business & Technology: ORION Helps UPS Deliver Productivity Gains 71


Managing the Economy’s Performance 72


Global Economic Challenges of the Twenty-First Century 74


Job Description: Economic Analyst 75


What’s Ahead 76


Chapter in Review 76


4 Competing in World Markets 80


Chapter 4 Overview 81


Why Nations Trade 81


Measuring Trade Between Nations 85


Barriers to International Trade 88


Business & Technology: The Tiny Nano—A Potential Hit for Tata Motors 90


Business Model: Delivering Alberta Oil through the Keystone XL Pipeline versus by Rail 91


EcoBiz: Campbell Warms Up to Reducing Food Waste 93


Reducing Barriers to International Trade 95


Going Global 99


Job Description: Import/Export Coordinator 101


Judgement Call: Apple Brings Manufacturing Work Back Home 103


Developing a Strategy for International Business 104


What’s Ahead 105


Chapter in Review 106


5 Forms of Business Ownership and Organization 109


Chapter 5 Overview 110


Most Businesses are Small Businesses 110


Contributions of Small Business to the Economy 113


Business & Technology: Financial Technology Streamlines Services 115


Why Small Businesses Fail 115


The Business Plan: A Foundation for Success 117


Assistance for Small Businesses 119


Business Model: CBC’s Dragons’ Den Highlights Entrepreneurial Thinking and Investing 121


Franchising 122


Job Description: Franchise Owner 124


Forms of Private Business Ownership 125


Public and Collective Ownership of Business 127


Organizing a Corporation 129


Judgement Call: Are Activist Investors Good for Business? 131


EcoBiz: Certified B Corporations as a Force for Good 132


When Businesses Join Forces 132


What’s Ahead 134


Chapter in Review 134


6 Starting Your Own Business: The Entrepreneurship Alternative 138


Chapter 6 Overview 139


What is an Entrepreneur? 140


Reasons to Choose Entrepreneurship as a Career Path 141


Job Description: Entrepreneur 143


Business Model: Entrepreneurism According to an Entrepreneur: Roland Salem, President of Saletex Inc. 144


The Environment for Entrepreneurs 145


Characteristics of Entrepreneurs 148


Judgement Call: Whose Idea? Ethical Challenges Facing Entrepreneurs 150


Starting a New Venture 153


EcoBiz: Holy Crap: Corin and Brian Mullins Sure Know How to Pick a Name for their Organic Cereals 154


Intrapreneurship 158


Business & Technology: Intrapreneurship: GE and the “Industrial Internet” 158


What’s Ahead 159


Chapter in Review 159


7 Management, Leadership, and the Internal Organization 162


Chapter 7 Overview 163


What is Management? 163


Setting a Vision and Ethical Standards for the Firm 167


EcoBiz: Levi’s Wants Your Old Jeans 168


Importance of Planning 168


The Strategic Planning Process 170


Managers as Decision Makers 174


Managers as Leaders 175


Judgement Call: GM’s First Female CEO Faces Challenges and Opportunities 176


Business & Technology: CEOs and Tweet Restraint 177


Corporate Culture 178


Business Model: WestJet Airlines: Most Admired Corporate Culture in Canada 179


Organizational Structures 180


Job Description: Management Analyst or Management Consultant 184


What’s Ahead 185


Chapter in Review 186


8 Human Resource Management: From Recruitment to Labour Relations 189


Chapter 8 Overview 190


Human Resources: The People Behind the People 190


Recruitment and Selection 191


Business & Technology: Recruitment: Using Cognitive Technology 193


Orientation, Training, and Evaluation 194


Business Model: Digital Learning Provides Great Returns 195


Compensation 197


Job Description: Compensation and Benefits Analyst 199


Employee Separation 201


Motivating Employees 202


Judgement Call: Screening Job Candidates via Social Media 203


Labour–Management Relations 208


EcoBiz: Labour Unions and Green Construction 211


What’s Ahead 211


Chapter in Review 211


9 Top Performance Through Empowerment, Teamwork, and Communication 215


Chapter 9 Overview 216


Empowering Employees 216


Business & Technology: Employee Collaboration Via the Cloud 217


Teams 219


Judgement Call: Virtual Teams: Cost Savings or Challenges? 221


Team Characteristics 221


Business Model: Facebook’s Sheryl Sandberg Promotes Inclusion 223


Team Cohesiveness and Norms 224


Team Conflict 224


The Importance of Effective Communication 225


Basic Forms of Communication 227


EcoBiz: Starbucks Listens to Energy-Saving Ideas 229


External Communication and Crisis Management 233


Job Description: Corporate Communications Specialist 234


What’s Ahead 235


Chapter in Review 235


10 Production and Operations Management 239


Chapter 10 Overview 240


The Strategic Importance of Production 240


Production Processes 243


Technology and the Production Process 243


EcoBiz: IKEA Is “Forest Positive” 244


The Location Decision 247


Business Model: Mexico Becomes a Major Hub for Auto Manufacturing 249


The Job of Production Managers 249


Business & Technology: 3D-Printed Airplane Parts Reduce the Wait 252


Controlling the Production Process 255


Job Description: Production Manager 258


Importance of Quality 258


Judgement Call: Supplement Makers Told to Relabel 260


What’s Ahead 261


Chapter in Review 261


11 Customer-Driven Marketing 265


Chapter 11 Overview 266


What is Marketing? 266


Business Model: Beyoncé Thrills Fans and Surprises Marketers 268


Evolution of the Marketing Concept 268


Not-for-Profit and Nontraditional Marketing 270


EcoBiz: Dell and Lonely Whale Foundation Direct Plastic Away from Waterways 272


Developing a Marketing Strategy 273


Judgement Call: When Free Credit Reports Aren’t Free 275


Marketing Research 277


Market Segmentation 279


Business & Technology: Disney XD TV: Marketing to Boys 283


Consumer Behaviour 285


Relationship Marketing 287


Job Description: Marketing Research Analyst 288


What’s Ahead 290


Chapter in Review 290


12 Product and Distribution Strategies 294


Chapter 12 Overview 295


Product Strategy 295


Product Life Cycle 299


EcoBiz: Transforming Trash into Fashion 301


Product Identification 303


Job Description: Brand Manager 307


Distribution Strategy 308


Business Model: Gourmet Chips & Sauces Targets a Niche Market 309


Wholesaling 311


Retailing 313


Judgement Call: Liberal Return Policies May Cost Retailers 317


Distribution Channel Decisions and Logistics 318


Business & Technology: Amazon “Dashes” to Connected Consumers 320


What’s Ahead 323


Chapter in Review 323


13 Promotion and Pricing Strategies 327


Chapter 13 Overview 328


Integrated Marketing Communications 329


Advertising 333


Business & Technology: Instagram Stories Drive Sales for Brands 337


Sales Promotion 340


Job Description: Advertising Sales Representative 346


EcoBiz: Canadian Businesses Move to Reduce or Eliminate Single-Use Plastic 347


Pushing and Pulling Strategies 348


Pricing Objectives in the Marketing Mix 348


Judgement Call: Is Surge Pricing Unfair or Smart Business? 350


Pricing Strategies 351


Business Model: A Bis Gourmet—Quality Fast Food at Competitive Prices 354


Consumer Perceptions of Prices 355


What’s Ahead 356


Chapter in Review 356


14 Using Technology to Manage Information 360


Chapter 14 Overview 361


Technology Has Forever Changed Business 361


Data, Information Systems, and Big Data 362


Components and Types of Information Systems 364


Business Model: Digital Technologies Replace Power Windows and Leather Seats 367


Computer Hardware and Software 367


Job Description: Computer Systems Analyst 369


Networks, the Internet, and Cloud Computing 370


Security and Ethical Issues Affecting Information Systems 374


Judgement Call: The Ethics of Employee Monitoring 378


Disaster Recovery and Backup 378


EcoBiz: IBM Helps Customers Build a Green Infrastructure 379


Information Technology Trends 380


Business & Technology: Internet of Things Provides Insight 382


What’s Ahead 382


Chapter in Review 383


15 Understanding Accounting and Financial Statements 387


Chapter 15 Overview 388


Users of Accounting Information 388


Accounting Professionals 390


Business & Technology: Forensic Accountants: Fraud Busters 391


Job Description: Accountants and Auditors 392


The Foundation of the Accounting System 393


The Accounting Cycle 395


EcoBiz: Deloitte Educates Itself—and Others—on Sustainability 398


Financial Statements 399


Judgement Call: Should Whistle-Blowers Be Rewarded? 400


Financial Ratio Analysis 405


Budgeting 409


International Accounting 410


Business Model: Accounting: Hong Kong Meets China 411


What’s Ahead 412


Chapter in Review 412


16 The Financial System 416


Chapter 16 Overview 417


Understanding the Financial System 417


EcoBiz: TD Bank: “As Green as Our Logo” 419


Types of Securities 419


Financial Markets 424


Business Model: A Major Spinoff for Citigroup 425


Job Description: Investment Banker 426


Understanding Stock Markets 427


Business & Technology: How News Lifts—or Sinks—Shares around the World 428


Financial Institutions 429


The Role of the Bank of Canada 434


Regulation of the Financial System 436


Judgement Call: Should U.S. Bank Regulations Be Stricter? 437


The Financial System: A Global Perspective 438


What’s Ahead 440


Chapter in Review 440


17 Financial Management 444


Chapter 17 Overview 445


The Role of the Financial Manager 445


Business & Technology: Apptio Calculates the Cost of Information Technology 446


Job Description: Financial Manager 447


Financial Planning 448


Managing Assets 450


Sources of Funds and Capital Structure 453


Judgement Call: Shareholders Want Say on Executive Pay 455


Short-Term Funding Options 457


Sources of Long-Term Financing 459


EcoBiz: A Knight in Shining Capitalism 459


Business Model: Harvest Partners Grows Its Investments 461


Mergers, Acquisitions, Buyouts, and Divestitures 462


What’s Ahead 464


Chapter in Review 464


18 Trends in E-Commerce 468


Chapter 18 Overview 469


The Capabilities of E-Commerce 470


B2B E-Commerce 472


Business Model: Dollar Shave Club Offers Cutting-Edge E-Commerce 472


B2C E-Commerce 474


Business & Technology: L’Oréal’s Virtual Cosmetic Counter 475


E-Commerce Challenges 477


Judgement Call: Using Location-Based Anti-Fraud Systems 479


EcoBiz: Hipcycle Lessens the Load on Landfills 481


Using the Web to Communicate 481


The Global Environment for E-Commerce 484


Job Description: E-Commerce Professional 486


Building and Managing a Website 486


Continuing Trends in E-Commerce 489


What’s Ahead 490


Chapter in Review 490


Appendix A Additional Cases 493


Appendix B Business Law 520


Appendix C Insurance and Risk Management 528


Appendix D Personal Financial Planning 537


Appendix E Developing a Business Plan 547


Appendix F Careers in Contemporary Business 555


Appendix G Launching Your Career 571


Appendix H Comprehensive Case Study: Beau’s All Natural Brewing Company 580


Glossary 585


Notes 593


Name Index 615


Subject Index 621