INTRODUCTION TO BUSINESS BSUAD-101 Poorna Pal, MS MBA Ph. D. Professor of Geology & Business #7516: Th & Coordinator: Program Review 23 PM, 6 -9 Glendale Community College Office: SG-152, Ph. Ext 5517 CR-137) E-mail: ppal@glendale. edu (Introduction to Business) is a 3 -units introductory course surveying the functions, characteristics, organization, and problems of business. Transfer credit: CSU, UC, USC
In this “Information Age” the U. S. is increasingly becoming a service Service Providing Jobs 1. Trade, Transportation 5. Education and economy. Note that and Utilities Health Services 2. 3. 4. all additional jobs in U. S. since 1970 have been created in economy’s service providing segment; and most of them are nongovernmental jobs. a c Service Providing 5 1970 Total 4 Employed: 3 2 71 million c b. c. 6 1 Service Providing 5 1 a. ds oo cin G u g d pro Goods producing 6 Goods Producing Jobs b 8 7 7 7. 8. Leisure and Hospitality Other Services Government a b 8 6. Information Financial Activities Professional and Business Services 4 3 2 Natural Resources and Mining Construction Manufacturing 2007 Total Employed: 137. 6 million Data source: Bureau of Labor Statistics: ftp: //ftp. bls. gov/pub/suppl/empsit. ceseeb 1. txt
We are mostly a service economy and most of our jobs are in the private sector. 2007: 22. 2 million goods producing jobs 3% Natural resources & Mining 34% Construction 63% Manufacturing 2007: 137. 6 million total non-farm employment = 115. 40 million service providing (= 115. 42 million private + 22. 2 million government ) + 22. 2 million goods producing jobs 2007: 115. 4 million service providing jobs 19% Government 5% Other services 12% Leisure and hospitality 22% transportation & utilities 3% Information 7% Financial activities 16% Professional 16% Education & health services & business services ftp: //ftp. bls. gov/pub/suppl/empsit. ceseeb 1. txt
That our labor-force is well-educated (by 2007, almost one in three had Bachelor’s degree or better) reflects this and the fact that employability rises with educational attainment. Data source: Bureau of Labor Statistics (ftp: //ftp. bls. gov/pub/special. requests/lf/aat 7. txt)
Most of this employment growth has been in the economy’s small business sector. And small business owners are hardly an uneducated lot! 19% Graduate School 24% Bachelor’s Degree 4% Not reported 24% High School or less 28% Some College Source: U. S. Census Bureau “Survey of Small Business Owners (SBO): Owner’s Education Levels at Start-Up, Purchase, or Acquisition of the Business” (http: //www. census. gov/csd/sbo/edu. html)
the kinds of goods and services that are needed, and the kinds of goods producers and service providers we can have. 70% 65% 16 -64 years (left scale) 14% 12% 10% 65 -plus years (right scale) 55% 6% 50% 1940 8% 1950 1960 1970 1980 Data source: 2008 Economic Report of the President 1990 2000 Proportion of Total Population The aging of our population too poses a problem. Demographics define …
2003 World Population = 6, 651 million 12% Sub. Saharan Africa 6% South America 1% Oceania 5% North America 7% North Africa & Middle East 11% Europe 3% Central America & Caribbean Demographics explain the Asian resurgence Compared to the 15 -65 years old “working population”, 55% Asia • Europe, North America and Oceania have (excluding too many elderly (>65 years old), whereas Middle East) • Central America & Caribbean, Middle East & North Africa, South America and Sub. Saharan Africa have too many children (<15 years old).
________ 60% 40% 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 0% 1992 The 1992 start-ups still alive Small businesses have high failure* rates. For instance, these Census Bureau data show that only 100% 29% of the 1992 start-ups still existed in 2002! 80% * “Failure” here encompasses all forms of failure to continue including insolvency, abandonment, sickness, death, closure, sale of business, loss of lease, acts of god etc. Scott Shane: “Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By “ (Yale University Press, 2008)
The confluence of four factors today supports and expands the entrepreneurial opportunities: Demographics Education Globalization and Information Technology The Rise of China, India & Russia: The Next American Century seeprogress Indian Call Center -1 05: 56 From: suprabhathalder
Advances in Information Technology have aided Trade, Commerce and Globalization, e. g. , … Electronic transactions and E-Commerce Outsourcing Play now May 26, 2007 video. yahoo. com
Your entrepreneurial effort is likely to succeed if you start it for the following reasons: You have a passion and love for what you'll be doing, and strongly believe ― based on educated study and investigation ― that your product or service would fulfill a real need in the marketplace. You are physically fit and possess the needed mental stamina to withstand potential challenges. Less-than-robust health has often been responsible for bankruptcies. You have drive, determination, patience and a positive attitude. When others throw in the towel, you are more determined than ever. Failure doesn’t defeat you. It is a "learning process" if you learn from your mistakes, and use these lessons to succeed the next time around. Studies of successful business owners showed they attributed much of their success to "building on earlier failures“. You thrive on independence, and are skilled at taking charge when a creative or intelligent solution is needed. This is especially important when under strict time constraints. You like ― if not love ― your fellow man, and show this in your honesty, integrity, and interactions with others. You get along with and can deal with all different types of individuals. Source: “The Seven Pitfalls of Business Failure and How to Avoid Them” by Patricia Schaefer (http: //www. businessknowhow. com/startup/businessfailure. htm accessed on 8/30/08)
A private enterprise system rewards the firm/business for its ability to identify and serve the needs and demands of its customers, and therefore operates in the framework of four basic rights: Right to private property: Every participant has the right to own, use, buy, sell, and/or bequeath most forms of property. Right to profit: Every firm/ business has the right to all profits, after taxes, it earns through its operations/activities. Right of free choice: Every participant in the system has the freedom of choice (with regard to jobs, purchases, and investments) Private Property Competition Rights Profits Right to compete: Every participant has the right to compete freely and fairly in the marketplace. Freedom of Choice
Why public policy needs strategies to promote small/medium-sized enterprises (SME)? The growth of a vibrant, thriving, highly productive and profitable SME sector is crucial for sustaining our living standards. It creates an abundance of job and investment opportunities. Appropriate public policies must be therefore designed to remove barriers to SME’s growth and to offer adequate incentives to foster their development. We need to continually examine if the entrepreneurs and managers at SMEs and their financiers are doing all they can to address the growth challenges. Rapidly changes in the international regulatory environment require that SMEs understand their implications. Adapted from Path to Prosperity http: //www. cme-mec. ca/national/documents/sme_final. pdf
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