Griffin Introduction To Business Chapter 02

Business
Copyright 2005 PrenticeHall, Inc.
2-1
Chapter
Understanding the
Environments of
Business
1-2
Business
Chapter Outline
Organizational Boundaries &
Environments
Economic Environment
Technological Environment
Political-Legal Environment
Sociocultural Environment
Business Environment
2-3
Business
Organizational Boundaries
& Environments
External Environment
Organizational BoundarySeparates Organization
From
Environment
2-4
Business
Dimensions of
External Environments
Technological
Sociocultural
Economic
The
Business
Organization
Political
-Legal
Busines
s
2-5
Business
Economic Environment
Business Cycle
Aggregate Output
Standard of Living
Gross Domestic Product (GDP)
Real
Nominal
Gross National Product (GNP)

2-6
Business
Business Cycle
Expansion
Contraction
2-7
Business
% GDP Change
From Previous Period
Source: U.S. Department of Commerce, Bureau of Economic

Analysis
2-8
Business
U.S. GDP & Real GDP

(In $
Billons)
Source: U.S. Department of Commerce, Bureau of Economic

Analysis
2-9
Business
GDP & GDP Per Capita
2-10
Business
Purchasing Power Parity
(Big Mac Index Based On At Market Exchange Rate 12/13/04)
US Big Mac = $3
Average
(Average of 4 Cities)
Source: The New York Times, Big Mac Index, Dec. 16th, 2004. http://www.economist.com/markets/bigmac/displayStory.cfm?
story_id=3503641
2-11
Business
U.S. Productivity
2-12
Business
GDP % Change From

Preceding Period
*
Expansion vs. Recession vs.
Depression?
*3rd Quarter 2004
Source: U.S. Dept. of Commerce- Bureau of Economic Analysis
2-13
Business
% GDP Change vs.

% Labor Productivity Change
Source: U.S. Department of Commerce, Bureau of Economic Analysis U.S. Department of Labor- Bureau of Labor
Statistics
2-14
Business
U.S. Balance
of Trade (2003)
U.S. Sells $1.0
Trillion of
Goods/Services
U.S. Balance of
Trade
-$500 Billion
U.S. Buys $1.5

Trillion of
Goods/Services
Source: U.S. Census Bureau- Foreign Trade Statistics (2003 Annual Highlights), http://www.census.gov/foreigntrade/statistics/highlights/annual.html
2-15
Business
U.S. National Debt

In $ Trillions*
Source: Bureau of the Public Debt: Historical Debt Outstanding- Annual, http://www.publicdebt.treas.gov/opd/opdhisto4.htm
*For Todays Figure go to U.S. National Debt Clock,
http://www.brillig.com/debt_clock/
2-16
Business
Economic Stability
Inflation- Widespread Price
Increases In An Economic System
Unemployment- Level
of Joblessness Among
Those Actively Seeking
Work
In An Economic
System
Recession vs. Depression
2-17
Business
U.S. Consumer Price Index

(Dec.- All Urban Consumers)
1982-1984- = 100
Source: U.S. Department of Labor- Bureau of Labor Statistics
2-18
Business
U.S. Unemployment Rate

(Seasonally Adjusted on 12/31)
* 11/30/04
Source: U.S. Department of Labor- Bureau of Labor Statistics,
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
2-19
Business
Managing the U.S.

Economy
Fiscal Policy- Determines How
Government Collects/Spends
Revenues
Monetary Policy- Determines
Size of Nations Money Supply
2-20
Business
Monetary Policy
Interest Rates
Tigh
t
Spending
Interest Rates
Spending
Easy
2-21
Business
U.S. Prime Interest Rate

(Jan.1)
Source: Board of Governors of the Federal Reserve System
2-22
Business
Technological Environment
Product/Service
Technologies
Business Process
Technologies- Enterprise
Resource Planning
2-23
Business
Earnings & Educational

Attainment (1999 Dollars)
Full-Time YearRound Workers
Source: U.S. Census Bureau
2-24
Business
Political-Legal Environment
Regulation- Defines
Relationship Between
Government & Business
Government = Pro vs.
Anti-Business Sentiment
2-25
Business
Foreign Direct Investment

Confidence Index (Oct. 2004)
Corporate Investors
Interest in Global
Investment
Scale = 0-3
Low Confidence
High Confidence
Source: A.T. Kearney Consulting, http://www.atkearney.com/main.taf?p=5,3,1,89
2-26
Business
Sociocultural Environment
Customer Preferences/Tastes- Vary
International
National
Ethical Compliance &
Responsible Behavior
Enron
Arthur Andersen
2-27
Business
Business Environment
Redrawing Corporate BoundariesCore Competencies
Challenges/Opportunities
Outsourcing
Vertical Integration
Viral Marketing
Business Process Management
Post-9/11
2-28

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Business

Copyright 2005 PrenticeHall, Inc.

Copyright 2005 PrenticeHall, Inc.

Gross National Product (GNP)

Source: U.S. Department of Commerce, Bureau of Economic

Copyright 2005 PrenticeHall, Inc.

U.S. GDP & Real GDP

Source: U.S. Department of Commerce, Bureau of Economic

Copyright 2005 PrenticeHall, Inc.

GDP & GDP Per Capita

Copyright 2005 PrenticeHall, Inc.

Purchasing Power Parity

(Big Mac Index Based On At Market Exchange Rate 12/13/04)

Copyright 2005 PrenticeHall, Inc.

Copyright 2005 PrenticeHall, Inc.

GDP % Change From

Copyright 2005 PrenticeHall, Inc.

% GDP Change vs.

Copyright 2005 PrenticeHall, Inc.

U.S. Buys $1.5

Copyright 2005 PrenticeHall, Inc.

U.S. National Debt

Copyright 2005 PrenticeHall, Inc.

U.S. Consumer Price Index

Source: U.S. Department of Labor- Bureau of Labor Statistics

Copyright 2005 PrenticeHall, Inc.

U.S. Unemployment Rate

Copyright 2005 PrenticeHall, Inc.

Managing the U.S.

Copyright 2005 PrenticeHall, Inc.

Copyright 2005 PrenticeHall, Inc.

U.S. Prime Interest Rate

Source: Board of Governors of the Federal Reserve System

Copyright 2005 PrenticeHall, Inc.

Earnings & Educational

Source: U.S. Census Bureau

Copyright 2005 PrenticeHall, Inc.

Copyright 2005 PrenticeHall, Inc.

Foreign Direct Investment

Source: A.T. Kearney Consulting, http://www.atkearney.com/main.taf?p=5,3,1,89

Copyright 2005 PrenticeHall, Inc.

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