Fundamentals of Business by Stephen J. Skripak Pamplin College of Business and Virginia Tech Libraries Virginia Tech Blacksburg, Virginia 2016 Download this book for free at: http://hdl.handle.net/10919/70961 Contents Download this book for free at: i http://hdl.handle.net/10919/70961 This book is dedicated to reducing the cost of education in business. – S. Skripak About this book: Content in the Preface, Chapters 1-14 and 16-17 was adapted from the Saylor Foundation’s http://www.saylor.org/site/textbooks/Exploring%20Business.docx by Virginia Tech under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License. The Saylor Foundation previously adapted this work under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work’s original creator or licensee. Chapter 15 was adapted by Virginia Tech from Introduction to Tourism and Hospitality in BC by Morgan Westcott, Editor, © Capilano University and is used under a CC-BY 4.0 International license. © Anonymous, Saylor Foundation, Capilano University, Stephen J. Skripak, Richard Parsons, Anastasia Cortes, Anita Walz, 2016 ISBN : (B&W): 978-0-9979201-1-6; (Color): 978-0-9979201-0-9 How this book is licensed: This work, excluding Chapter 15, is licensed with a Creative Commons Attribution-Non-Commercial- ShareAlike 3.0 license https://creativecommons.org/licenses/by-nc-sa/3.0/us/ If you redistribute any part of this work, you must retain on every digital or print page view the following attribution: Download this book for free at: http://hdl.handle.net/10919/70961 Chapter 15 of this work is licensed with a Creative Commons Attribution 4.0 International https://creativecommons.org/licenses/by/4.0 license. If you redistribute any part of this work, you must retain on every digital or print page view the following attribution: Download this book for free: http://hdl.handle.net/10919/70961; Download the original source of this chapter for free at: http://open.bccampus.ca Lead Author: Stephen J. Skripak Contributors: Richard Parsons, Anastasia Cortes, Anita Walz Layout: Anastasia Cortes Selected graphics: Brian Craig http://bcraigdesign.com Cover design: Trevor Finney Student Reviewers: Jonathan De Pena, Nina Lindsay, Sachi Soni Project Manager: Anita Walz Credits for cover images: “Hong Kong Skyscrapers” by Estial, cropped and modified by Trevor Finney CC BY-SA 4.0. “Paris vue d’ensemble tour Eiffel” by Taxiarchos228, cropped and modified by Poke2001 and Trevor Finney CC BY 3.0 “London Bridge” by Skitterphoto, cropped and modified by Trevor Finney. Public Domain. “New York” by Mscamilaalmeida, cropped and modified by Trevor Finney. Public Domain. Pamplin College of Business and Virginia Tech Libraries July 2016 Contents Download this book for free at: ii http://hdl.handle.net/10919/70961 Table of Contents Preface ................................................................................................................................... 1 Teamwork in Business ............................................................................................. 1 Learning Objectives ................................................................................................. 1 The Team with the RAZR’s Edge ......................................................................... 2 The Team and the Organization ........................................................................... 4 P Why Teamwork Works ....................................................................................... 10 The Team and Its Members ............................................................................... 13 Key Take-Aways ...................................................................................................................... 21 Chapter 1 ............................................................................................................................. 23 The Foundations of Business ................................................................................ 23 Learning Objectives ............................................................................................... 23 Why Is Apple Successful? .................................................................................. 24 Introduction ........................................................................................................ 25 1 Getting Down to Business .................................................................................. 27 Functional Areas of Business ............................................................................. 29 External Forces that Influence Business Activities ............................................. 30 Key Take-Aways ...................................................................................................................... 32 Chapter 2 ............................................................................................................................. 33 Economics and Business ....................................................................................... 33 Learning Objectives ............................................................................................... 33 What is Economics? ........................................................................................... 34 Perfect Competition and Supply and Demand ................................................... 39 2 Monopolistic Competition, Oligopoly, and Monopoly .......................................... 43 Measuring the Health of the Economy ............................................................... 45 Government’s Role in Managing the Economy .................................................. 51 Key Take-Aways ..................................................................................................................... 53 Contents Download this book for free at: i http://hdl.handle.net/10919/70961 Chapter 3 ............................................................................................................................. 56 Ethics and Social Responsibility ........................................................................... 56 Learning Objectives ............................................................................................... 56 Introduction ........................................................................................................ 57 What is Business Ethics? ................................................................................... 59 Identifying Ethical Issues and Dilemmas ............................................................ 60 3 Corporate Social Responsibility ......................................................................... 65 Ethical Organizations ......................................................................................... 71 The Individual Approach to Ethics ...................................................................... 72 Key Take-Aways ...................................................................................................................... 79 Chapter 4 ............................................................................................................................. 81 Business in a Global Environment ........................................................................ 81 Learning Objectives ............................................................................................... 81 The Globalization of Business ............................................................................ 82 Opportunities in International Business .............................................................. 87 The Global Business Environment ..................................................................... 94 4 Case Study: Hospitality & Tourism ................................................................... 101 Trade Controls ................................................................................................. 102 Reducing International Trade Barriers ............................................................. 105 Key Takeaways ..................................................................................................................... 111 Chapter 5 ........................................................................................................................... 115 Forms of Business Ownership ............................................................................. 115 Learning Objectives ............................................................................................. 115 The Ice Cream Men ......................................................................................... 116 5 Factors to Consider .......................................................................................... 117 Mergers and Acquisitions ................................................................................. 126 Key Take-Aways .................................................................................................................... 130 Contents Download this book for free at: ii http://hdl.handle.net/10919/70961 Chapter 6 ........................................................................................................................... 132 Entrepreneurship: Starting a Business .............................................................. 132 Learning Objectives ............................................................................................. 132 Cover Story: Build a