BUSINESS MANAGEMENT

PAVONE

1-2CHANGES AFFECTING BUSINESS

INNOVATION

INNOVATION

• Innovation – Something entirely new.

• Example of innovation would be how clothing was made from natural fibers and can now be made from synthetic fibers.

• Business operations have been affected by innovation. For instance:

• Apple Computers building one of first personal computers.

• Internet has changed the lives of people and businesses.

IMPACT OF GLOBAL COMPETITION ON BUSINESS

IMPACT OF GLOBAL COMPETITION ON BUSINESS

• Global Competition – Ability of businesses from one country to compete with similar businesses in other countries.

• America used to be a world leader in producing goods and services for hundreds of years.

• In recent years, other countries became industrialized and produced similar or better products at lower cost.

• America currently faces a great deal of competition from foreign businesses.

• Side Note: Learning a foreign language can provide great career advantages for a person.

FOCUSING ON THE RIGHT THINGS

FOCUSING ON THE RIGHT THINGS

• Effectiveness – Making the right decisions about what products or services to offer customers and the best ways to produce and deliver them.

• Efficiency – Producing products and services quickly, at low cost, without wasting time and materials.

• Both of these principles must be achieved in order to be a successful production firm.

ACHIEVING EFFECTIVENESS

• Domestic Goods – Products made by firms in the United States.

• Foreign Goods – Products made by firms in other countries.

• Domestic and foreign goods are constantly in competition.

• Large businesses spend a great deal of money in testing their products and services, looking for customer preferences and keeping customers satisfied.

• American companies are seeking ways to keep their customers satisfied with domestic products, while foreign competitors are providing more attractive similar products.

• American car producers currently use a process called TQM (Total Quality Management) to meet the standards of excellence.

ACHIEVING EFFICIENCY

• Output – Quantity produced within a given time.

• Productivity – Producing the largest quantity in the least amount of time by using efficient methods and modern equipment.

• Efficiency is measured by output.

• Efficiency can be achieved in three ways:

• Specialization of effort

• Better technology and innovation

• Reorganization of work activities

ACHIEVING EFFICIENCY

• Work can be more efficiently completed by having workers become specialists, therefore businesses hire or train employees for specialized jobs.

• Mass production is a manufacturing procedure that helps a product be more efficiently produced; an assembly line is a good example of this.

ACHIEVING EFFICIENCY

• Advanced technology can also help efficiency, through the use of equipment, manufacturing processes and materials; this also helps products be produced faster, higher quality and at lower cost.

ACHIEVING EFFICIENCY

• Downsize – Process by which a company would reduce the amount and variety of goods and services produced and the number of employees needed to produce them.

• Empowerment – Letting workers participate in determining how to perform their work tasks and offer ideas on how to improve the work process of the company.

• Reorganizing a workplace is a very challenging method to achieve efficiency.

• Empowering workers leads to better quality of work.

• Re-engineering is a concept by which work flow is redesigned.

• By using different methods of increasing efficiency, America is re-establishing itself as a world leader in business.