An Introduction to
Business
v. 1.0
,This is the book An Introduction to Business (v. 1.0).
This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
3.0/) license. See the license for more details, but that basically means you can share this book as long as you
credit the author (but see below), don't make money from it, and do make it available to everyone else under the
same terms.
This book was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz
(http://lardbucket.org) in an effort to preserve the availability of this book.
Normally, the author and publisher would be credited here. However, the publisher has asked for the customary
Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. Additionally,
per the publisher's request, their name has been removed in some passages. More information is available on this
project's attribution page (http://2012books.lardbucket.org/attribution.html?utm_source=header).
For more information on the source of this book, or why it is available for free, please see the project's home page
(http://2012books.lardbucket.org/). You can browse or download additional books there.
ii
,Table of Contents
About the Author .................................................................................................................. 1
Acknowledgments................................................................................................................. 2
Dedication............................................................................................................................... 5
Preface..................................................................................................................................... 6
Chapter 1: The Foundations of Business ........................................................................ 11
Introduction ................................................................................................................................................. 14
Getting Down to Business............................................................................................................................ 16
What Is Economics? ..................................................................................................................................... 22
Perfect Competition and Supply and Demand.......................................................................................... 29
Monopolistic Competition, Oligopoly, and Monopoly ............................................................................. 35
Measuring the Health of the Economy ...................................................................................................... 38
Government’s Role in Managing the Economy ......................................................................................... 47
Cases and Problems...................................................................................................................................... 51
Chapter 2: Business Ethics and Social Responsibility ................................................. 56
Misgoverning Corporations: An Overview ................................................................................................ 59
The Individual Approach to Ethics............................................................................................................. 64
Identifying Ethical Issues ............................................................................................................................ 71
The Organizational Approach to Ethics..................................................................................................... 79
Corporate Social Responsibility.................................................................................................................. 84
Environmentalism ....................................................................................................................................... 96
Stages of Corporate Responsibility .......................................................................................................... 101
Cases and Problems.................................................................................................................................... 106
Chapter 3: Business in a Global Environment............................................................. 113
The Globalization of Business ................................................................................................................... 115
Opportunities in International Business ................................................................................................. 126
The Global Business Environment............................................................................................................ 136
Trade Controls............................................................................................................................................ 148
Reducing International Trade Barriers ................................................................................................... 153
Preparing for a Career in International Business................................................................................... 159
Cases and Problems.................................................................................................................................... 162
iii
, Chapter 4: Selecting a Form of Business Ownership ................................................. 168
Factors to Consider .................................................................................................................................... 170
Sole Proprietorship.................................................................................................................................... 173
Partnership ................................................................................................................................................. 176
Corporation ................................................................................................................................................ 181
Other Types of Business Ownership......................................................................................................... 187
Mergers and Acquisitions.......................................................................................................................... 195
Cases and Problems.................................................................................................................................... 199
Chapter 5: The Challenges of Starting a Business ..................................................... 205
What Is an Entrepreneur? ......................................................................................................................... 207
The Place of Small Business in the Business Landscape ........................................................................ 216
What Industries Are Small Businesses In? .............................................................................................. 222
Advantages and Disadvantages of Business Ownership......................................................................... 227
Starting a Business..................................................................................................................................... 232
The Business Plan....................................................................................................................................... 241
How to Succeed in Managing a Business ................................................................................................. 249
Cases and Problems.................................................................................................................................... 256
Chapter 6: Managing for Business Success.................................................................. 262
What Do Managers Do?.............................................................................................................................. 264
Planning ...................................................................................................................................................... 266
Organizing .................................................................................................................................................. 276
Directing ..................................................................................................................................................... 290
Controlling.................................................................................................................................................. 294
Managerial Skills........................................................................................................................................ 297
Cases and Problems.................................................................................................................................... 304
Chapter 7: Recruiting, Motivating, and Keeping Quality Employees .................... 313
Human Resource Management................................................................................................................. 316
Developing Employees............................................................................................................................... 325
Motivating Employees ............................................................................................................................... 331
What Makes a Great Place to Work? ........................................................................................................ 339
Performance Appraisal.............................................................................................................................. 351
Labor Unions .............................................................................................................................................. 360
Cases and Problems.................................................................................................................................... 368
iv
Business
v. 1.0
,This is the book An Introduction to Business (v. 1.0).
This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
3.0/) license. See the license for more details, but that basically means you can share this book as long as you
credit the author (but see below), don't make money from it, and do make it available to everyone else under the
same terms.
This book was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz
(http://lardbucket.org) in an effort to preserve the availability of this book.
Normally, the author and publisher would be credited here. However, the publisher has asked for the customary
Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. Additionally,
per the publisher's request, their name has been removed in some passages. More information is available on this
project's attribution page (http://2012books.lardbucket.org/attribution.html?utm_source=header).
For more information on the source of this book, or why it is available for free, please see the project's home page
(http://2012books.lardbucket.org/). You can browse or download additional books there.
ii
,Table of Contents
About the Author .................................................................................................................. 1
Acknowledgments................................................................................................................. 2
Dedication............................................................................................................................... 5
Preface..................................................................................................................................... 6
Chapter 1: The Foundations of Business ........................................................................ 11
Introduction ................................................................................................................................................. 14
Getting Down to Business............................................................................................................................ 16
What Is Economics? ..................................................................................................................................... 22
Perfect Competition and Supply and Demand.......................................................................................... 29
Monopolistic Competition, Oligopoly, and Monopoly ............................................................................. 35
Measuring the Health of the Economy ...................................................................................................... 38
Government’s Role in Managing the Economy ......................................................................................... 47
Cases and Problems...................................................................................................................................... 51
Chapter 2: Business Ethics and Social Responsibility ................................................. 56
Misgoverning Corporations: An Overview ................................................................................................ 59
The Individual Approach to Ethics............................................................................................................. 64
Identifying Ethical Issues ............................................................................................................................ 71
The Organizational Approach to Ethics..................................................................................................... 79
Corporate Social Responsibility.................................................................................................................. 84
Environmentalism ....................................................................................................................................... 96
Stages of Corporate Responsibility .......................................................................................................... 101
Cases and Problems.................................................................................................................................... 106
Chapter 3: Business in a Global Environment............................................................. 113
The Globalization of Business ................................................................................................................... 115
Opportunities in International Business ................................................................................................. 126
The Global Business Environment............................................................................................................ 136
Trade Controls............................................................................................................................................ 148
Reducing International Trade Barriers ................................................................................................... 153
Preparing for a Career in International Business................................................................................... 159
Cases and Problems.................................................................................................................................... 162
iii
, Chapter 4: Selecting a Form of Business Ownership ................................................. 168
Factors to Consider .................................................................................................................................... 170
Sole Proprietorship.................................................................................................................................... 173
Partnership ................................................................................................................................................. 176
Corporation ................................................................................................................................................ 181
Other Types of Business Ownership......................................................................................................... 187
Mergers and Acquisitions.......................................................................................................................... 195
Cases and Problems.................................................................................................................................... 199
Chapter 5: The Challenges of Starting a Business ..................................................... 205
What Is an Entrepreneur? ......................................................................................................................... 207
The Place of Small Business in the Business Landscape ........................................................................ 216
What Industries Are Small Businesses In? .............................................................................................. 222
Advantages and Disadvantages of Business Ownership......................................................................... 227
Starting a Business..................................................................................................................................... 232
The Business Plan....................................................................................................................................... 241
How to Succeed in Managing a Business ................................................................................................. 249
Cases and Problems.................................................................................................................................... 256
Chapter 6: Managing for Business Success.................................................................. 262
What Do Managers Do?.............................................................................................................................. 264
Planning ...................................................................................................................................................... 266
Organizing .................................................................................................................................................. 276
Directing ..................................................................................................................................................... 290
Controlling.................................................................................................................................................. 294
Managerial Skills........................................................................................................................................ 297
Cases and Problems.................................................................................................................................... 304
Chapter 7: Recruiting, Motivating, and Keeping Quality Employees .................... 313
Human Resource Management................................................................................................................. 316
Developing Employees............................................................................................................................... 325
Motivating Employees ............................................................................................................................... 331
What Makes a Great Place to Work? ........................................................................................................ 339
Performance Appraisal.............................................................................................................................. 351
Labor Unions .............................................................................................................................................. 360
Cases and Problems.................................................................................................................................... 368
iv
