J L

University of Maryland

St. Louis Community College at Forest Park

Applied Learning Systems

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I

Prologue: Getting Ready for Prime Time P-l

part IBusiness Trends: Cultivating a Business in

Diverse, Global Environments

Chapter One

2 Taking Risks and Making Profits within the

Dynamic Business Environment

Profile: Getting to Know Monif Clarke,Monifc.com 3

Entrepreneurship and Wealth Building 4

Revenues, Profits, and Losses 4Matching Risk with Profit 5Standard of Living and Quality of Life 5Responding to the Various Business Stakeholders

Chapter Two

28 Understanding Economics and How It

Affects Business

Profile: Getting to Know John Maynard Keynes,Economist 29

How Economic Conditions AffectBusinesses 30

What Is Economics? 30

The Secret to Creating a Wealthy Economy 31

Thinking Green: Bringing in the Green with

Green Products 32

Adam Smith and the Creation of Wealth 33

How Businesses Benefit the Community 33

Making Ethical Decisions: Corruption's Effect onthe Economy 34

Understanding Free-Market Capitalism 34The Foundations of Capitalism 35

contentsUsing Business Principles in NonprofitOrganizations 7

Entrepreneurship Versus Working forOthers 8

Opportunities for Entrepreneurs 8Spotlight on Small Business: Networking ofMinority Businesses 9The Importance of Entrepreneurs to the Creationof Wealth 9

The Business Environment IIThe Economic and Legal Environment 12

The Technological Environment 13Making Ethical Decisions: Ethics Begins withYou 14Social Media in Business: JCPenney Keeps inTouch 15

The Competitive Environment 16

The Social Environment 17

The Global Environment 18

Thinking Green: Getting Involved Personally 20

The Evolution Of U.S. Business 20Progress in the Agricultural and ManufacturingIndustries 20Progress in Service Industries 21Your Future in Business 21

Video Case: Redbox 26

Spotlight on Small Business: A Small Loan CanMake a Big Difference 36How Free Markets Work 36How Prices Are Determined 37The Economic Concept of Supply 37The Economic Concept of Demand 37The Equilibrium Point, or Market Price 37Competition within Free Markets 39Benefits and Limitations of Free Markets 40

Understanding Socialism 41The Benefits of Socialism 41The Negative Consequences of Socialism 42

Understanding Communism 42

The Trend toward Mixed Economies 43Reaching beyond Our Borders: China's ChangingEconomy 44

Understanding the U.S. Economic System 46Key Economic Indicators 46Productivity in the United States 48Productivity In the Service Sector 49The Business Cycle 49

Stabilizing the Economy through Fiscal Policy 50Fiscal Policy in Action during the EconomicCrisis that Began in 2008 50Using Monetary Policy to Keep the EconomyGrowing 51

Video Case: Opportunity International 57

Chapter Three

58 Doing Business in Global Markets

Profile: Getting to Know Yang Lan, Co-founderand Chairman of Sun Media Group 59The Dynamic Global Market 60Why Trade with Other Nations? 61

The Theories of Comparative and AbsoluteAdvantage 62

Getting Involved In Global Trade 63Importing Goods and Services 63Exporting Goods and Services 63Spotlight on Small Business: A Small Businesswith a Big Vision 64Measuring Global Trade 64

Strategies for Reaching Global Markets 66Licensing 66Exporting 68Franchising 68Contract Manufacturing 68Reaching beyond Our Borders: Golden ArchesGlowing across the Globe 69International Joint Ventures and StrategicAlliances 70Foreign Direct Investment 70

Forces Affecting Trading in Global Markets 72Sociocultural Forces 72Economic and Financial Forces 74Legal and Regulatory Forces 75Physical and Environmental Forces 75

Trade Protectionism 76The World Trade Organization 77Common Markets 77The North American and Central American Free

Trade Agreements 79

The Future of Global Trade 80The Challenge of Offshore Outsourcing 81Globalization and Your Future 82Making Ethical Decisions: See the Sights,Meet the Doctors 83

Video Case: CH2M Hill 87

Chapter Four

88 Demanding Ethical and Socially ResponsibleBehavior

Profile: Getting to Know Blake Mycoskie,Founder of TOMS Shoes 89Ethics Is More Than Legality 90

Legal Briefcase: Cost of Corruption 91Ethical Standards Are Fundamental 91Ethics Begins with Each of Us 92Making Ethical Decisions: Facebook orFakebook? 93

Managing Businesses Ethically andResponsibly 94

Setting Corporate Ethical Standards 96

Corporate Social Responsibility 98Responsibility to Customers 100Responsibility to Investors 101Responsibility to Employees 102Responsibility to Society and the Environment 103Thinking Green: Sustainable or Suspect:Greenwashing 104Social Auditing 104

International Ethics and SocialResponsibility 106

Reaching beyond Our Borders: Ethical CultureClash 108

Video Case: Cell Phones for Soldiers 112

part 2Business Ownership: Starting aSmall Business

Chapter Five

114 How to Form a Business

Profile: Getting to Know Mary Ellen Sheets,Founder of Two Men and a Truck 115Basic Forms of Business Ownership 116Sole Proprietorships 117

Advantages of Sole Proprietorships 117Disadvantages of Sole Proprietorships 118

Partnerships 119Advantages of Partnerships 120Spotlight on Small Business: The Ties That Bind 121Disadvantages of Partnerships 121

Corporations 123Advantages of Corporations 123Disadvantages of Corporations 125Individuals Can Incorporate 126S Corporations 127Limited Liability Companies 128Legal Briefcase: Virtual Companies 129

Corporate Expansion: Mergers andAcquisitions 131

Thinking Green: Play Ball but Play Green—133Franchises 133

Advantages of Franchises 134Disadvantages of Franchises 135Diversity in Franchising 137Home-Based Franchises 138E-Commerce in Franchising 138Using Technology in Franchising 138Social Media in Business: FranchiseExpansion on Facebook 139Franchising in Global Markets 139

Cooperatives 140

Which Form of Ownership Is for You? 141

Video Case: Pods 145

Chapter Six

146 Entrepreneurship and Starting a Small

Business

Profile: Getting to Know Jay-Z, Rapper andFounder of Roc Nation 147The Age of the Entrepreneur 148The Job-Creating Power ofEntrepreneurs in the United States 148

Spotlight on Small Business: Success KnowsNo Age 149

Why People Take The EntrepreneurialChallenge 150

What Does It Take to Be an Entrepreneur? 150Turning Your Passions and Problems intoOpportunities 151Entrepreneurial Teams 152Micropreneurs and Home-Based Businesses 152Web-Based Businesses 156Entrepreneurship within Firms 157Encouraging Entrepreneurship: What Government

Can Do 157

Getting Started in Small Business 159Small versus Big Business 159Importance of Small Businesses 159Small-Business Success and Failure 160

Learning about Small-Business Operations 161Learn from Others 161Making Ethical Decisions:Going Down with the Ship 162Get Some Experience 162Take Over a Successful Firm 162

Managing a Small Business 163Begin with Planning 163Writing a Business Plan 164Getting Money to Fund a Small Business 164Social Media in Business: Social Lending 167The Small Business Administration (SBA) 168Knowing Your Customers 169Managing Employees 169Keeping Records 170Looking for Help 170

Going Global: Small-Business Prospects 172 ~Reaching beyond Our Borders: Emerging Markets,Emerging Entrepreneurship 173

Video Case: Pillow Pets 177

part 3Business Management: EmpoweringEmployees to Satisfy Customers

Chapter Seven

178 Management and Leadership

Profile: Getting to Know John Mackey, Founderof Whole Foods Market 179Managers' Roles Are Evolving 180

The Four Functions of Management 181

Planning and Decision Making 183Reaching beyond OurtBorders: The JapaneseCrisis, Terrorism, and American Business 185Decision Making: Finding the Best Alternative 187

Organizing: Creating a Unified System 188Tasks and Skills at Different Levels ofManagement 189Staffing: Getting and Keeping the Right People 190

Leading: Providing ContinuousVision and Values 190

Making Ethical Decisions:To Share or Not to Share 191Leadership Styles 192Social Media in Business: Using Social Media toBuild Customer Support 193Empowering Workers 194

Managing Knowledge 195

Controlling: Making Sure It Works 195A Key Criterion for Measurement:Customer Satisfaction 196

Video Case: Zappos 201

Chapter Eight

202 Structuring Organizations for Today's

Challenges

Profile: Getting to Know Ursula Burns,CEO of Xerox 203Everyone's Reorganizing 204

Making Ethical Decisions: Safety versus Profit 205Building an Organization from the Bottom Up 205

The Changing Organization 206The Development of Organization Design 206Turning Principles into Organization Design 208

Decisions to Make in StructuringOrganizations 210

Choosing Centralized or DecentralizedAuthority 210Choosing the Appropriate Span of Control 210Choosing between Tall and Flat OrganizationStructures 211Weighing the Advantages and Disadvantages ofDepartmentalization 212

Organizational Models 215Line Organizations 215Line-and-Staff Organizations 215Matrix-Style Organizations 216Cross-Functional Self-Managed Teams 218Going beyond Organizational Boundaries 218

Managing the Interactions among Firms 219Transparency and Virtual Organizations 220Spotlight on Small Business: When Your WorkersWork for Someone Else 221Benchmarking and Core Competencies 221

Adapting to Change 222Social Media in Business: When Twitter andFacebook Are Old School 223Restructuring for Empowerment 223

Creating a Change-Oriented OrganizationalCulture 224Managing the Informal Organization 225

Video Case: New Belgium Brewery 230

Chapter Nine

232 Production and Operations Management

Profile: Getting to Know Samuel J. Palmisano,CEO of IBM 233

Manufacturing and Services in Perspective 234Thinking Green: Key Word: Sustainability 235Manufacturers and Service OrganizationsBecome More Competitive 236Reaching beyond Our Borders: Learning fromGermany 237

From Production to OperationsManagement 237

Operations Management in the ServiceSector 238

Production Processes 239The Need to Improve Production Techniquesand Cut Costs 240Computer-Aided Design and Manufacturing 241Flexible Manufacturing 241Lean Manufacturing 242Mass Customization 242Spotlight on Small Business: MassCustomization of Candy 243

Operations Management Planning 244Facility Location 244Facility Location for Manufacturers'' 244Taking Operations Management to theInternet 245Making Ethical Decisions: Stay or Leave? 246Facility Location in the Future 246Facility Layout 246Materials Requirement Planning 247Purchasing 249Just-in-Time Inventory Control 249Quality Control 248The Baldrige Awards 250ISO 9000 and ISO 14000 Standards 251

Control Procedures: Pert and Gantt Charts 252Preparing for the Future 253Video Case: Ball Corporation 257

part 4Management of Human Resources:Motivating Employees to Produce QualityGoods and Services

Chapter Ten

25S Motivating Employees

Profile: Getting to Know Andrew Cherng, Founderand Co-CEO of Panda Express 259

The Value of Motivation 260Frederick Taylor: The Father of ScientificManagement 261Elton Mayo and the Hawthorne Studies 262

Motivation and Maslow's Hierarchy ofNeeds 263Herzberg's Motivating Factors 265McGregor's Theory X and Theory Y 267

Theory X 267Theory Y 267

Ouchi's Theory Z 268Goal-Setting Theory and Management byObjectives 270Meeting Employee Expectations:Expectancy Theory 271Reinforcing Employee Performance:Reinforcement Theory 272Treating Employees Fairly: Equity Theory 272Putting Theory into Action. 273

Motivation through Job Enrichment 273Motivating through Open Communication 274Social Media in Business: Keepingthe Lines Open 275Applying Open Communication inSelf-Managed Teams 275Recognizing a Job Well Done 276

Personalizing Motivation 277Spotlight on Small Business: Small Incentives Canbe Big Motivators 278Motivating Employees across the Globe 278Reaching beyond Our Borders: Importance ofCultural Competency 279Motivating Employees across Generations 279

Video Case: The Container Store 286

C h a p t e r Eleven

288 Human Resource Management: Finding and

Keeping the Best Employees

Profile: Getting to Know Mark Parker,CEO of Nike 289Working with People Is Just TheBeginning 290

Developing the Ultimate Resource 290The Human Resource Challenge 291

Laws Affecting Human ResourceManagement 293

Laws Protecting Employees with Disabilities andOlder Employees 294Legal Briefcase: The Million Woman Suit againstWalmart 295Effects of Legislation 296

Determining a Firm'sHuman Resource Needs 296Recruiting Employees from a DiversePopulation 298

Spotlight on Small Business: It's Not EasyBeing Small 300

Selecting Employees Who Will BeProductive 3 0 0

Hiring Contingent Workers 302Training and Developing Employees for OptimumPerformance 303

Making Ethical Decisions:Are Unpaid Interns Too Interred? 304Management Development 305Networking 307Diversity in Management Development 307

Appraising Employee Performanceto Get Optimum Results 308Compensating Employees: Attracting andKeeping the Best 309

Pay Systems 309Compensating Teams 310Fringe Benefits 311

Scheduling Employees to Meet Organizationaland Employee Needs 312

Reaching beyond Our Borders: WorkingWorldwide 313Flextime Plans 313Home-Based Work 314

Job-Sharing Plans 315

Moving Employees Up, Over, and Out 316Promoting and Reassigning Employees 316Terminating Employees 316Retiring Employees 317

Losing Valued Employees 317

Video Case: SAS 321

Chapter Twelve

322 Dealing with Union andEmployee-Management Issues

Profile: Getting to Know David Stern,Commissioner of the National BasketballAssociation (NBA) 323Employee-Management Issues 324Labor Unions from Different Perspectives 325

The History of Organized Labor 326Spotlight on Small Business:The Triangle Fire 327Public Sector Union Membership 328

Labor Legislation and CollectiveBargaining 328

Union Organizing Campaigns 329Objectives of Organized Labor over Time 331Resolving Labor-Management Disagreements 332Mediation and Arbitration 333

Tactics Used in Labor-ManagementConflicts 334

Union Tactics 334Management Tactics 335Making Ethical Decisions:Walking a Fine Line 336The Future of Unions and Labor-ManagementRelations 336

Controversial Employee-ManagementIssues 338

Executive Compensation 338Legal Briefcase: Executive PayRemains on the Rise 339Pay Equity 340Sexual Harassment 341Child Care 342Elder Care 343Drug Testing 344Violence in the Workplace 345

Video Case: Screen Actors Guild 349

part 5Marketing: Developing and ImplementingCustomer-Oriented Marketing Plans

Chapter Thirteen

350 Marketing: Helping Buyers Buy

Profile: Getting to Know Joseph Jimenez,CEO of Novartis 351What Is Marketing? 352

The Evolution of Marketing 353Spotlight on Small Business:Let's Go to the Movies 354Nonprofit Organizations and Marketing 355Thinking Green: How Green Is Green? 356

The Marketing Mix 356Applying the Marketing Process 357Designing a Product to MeetConsumer Needs 358Setting an Appropriate Price 359Getting the Product to the Right Place 359Developing an Effective PromotionalStrategy 359Social Media in Business: Calling AllBusinesses! 360

Providing Marketers with Information 360The Marketing Research Process 361

The Marketing Environment 363Global Factors 364Technological Factors 364Sociocultural Factors 364Competitive Factors 365Economic Factors 365

Two Different Markets: Consumer andBusiness-to-Business (B2B) 365The Consumer Market 366

Segmenting the Consumer Market 367Reaching Smaller Market Segments 368Moving toward Relationship Marketing 368The Consumer Decision-Making Process 369

The Business-to-Business Market 370Your Prospects in Marketing 372Video Case: Energizer 375

Chapter Fourteen

376 Developing and Pricing Goods and Services

Profile: Getting to Know Mary Barra, GM SeniorVice President 377Product Development and theTotal Product Offer 378

Distributed Product Development 379Developing a Total Product Offer 380Thinking Green: Quality and Sustainability 381Product Lines and the Product Mix 381

Product Differentiation 382Marketing Different Classes ofConsumer Goods and Services- 382Marketing Industrial Goods and Services 384

Packaging Changes the Product 385The Growing Importance of Packaging 386

Branding and Brand Equity 387Brand Categories 387Reaching beyond Our Borders:The Name Game 388.Generating Brand Equity and Loyalty 389Creating Brand Associations 389Brand Management 390

The New-Product Development Process 390Generating New-Productideas 390Product Screening 391Product Analysis 391Product Development and Testing 391Spotlight on Small Business: Don'tCome to Me; I'll Come to You 392Commercialization 393

The Product Life Cycle 393Example of the Product Life Cycle 394Using the Product Life Cycle 395

Competitive Pricing 395Pricing Objectives 396Cost-Based Pricing 397Demand-Based Pricing 397Competition-Based Pricing 397Break-Even Analysis 397Other Pricing Strategies 398

How Market Forces Affect Pricing 399

Nonprice Competition 399

Video Case: Dream Dinners 403

Chapter F i f teen

404 Distributing Products

Profile: Getting to Know Tony Hsieh,CEOofZappos 405The Emergence of MarketingIntermediaries 406

Thinking Green: Distribution andSustainability 407Why Marketing Needs Intermediaries 407How Intermediaries Create ExchangeEfficiency 408The Value versus the Cost of Intermediaries 409

The Utilities Created by Intermediaries 411Form Utility 411Time Utility 411Place Utility 411Possession Utility 412Information Utility 412Service Utility 412

Wholesale Intermediaries 413Merchant Wholesalers 413Agents and Brokers 414Retail Intermediaries 415

Spotlight on Small Business:Pop Goes the Retail Store 416Retail Distribution Strategy 416

Nonstore Retailing 417Electronic Retailing 417Telemarketing 418Vending Machines, Kiosks, and Carts 418Direct Selling 419Multilevel Marketing 419

Direct Marketing 419

Building Cooperation in Channel Systems 4 2 0Corporate Distribution Systems 420Contractual Distribution Systems 420Administered Distribution Systems 421Supply Chains 421Reaching beyond Our Borders:The Global Supply Chain for Services 422

Logistics: Getting Goods to ConsumersEfficiently 423

Trains Are Great for Large Shipments 425Trucks Are Good for Small Shipmentsto Remote Locations 425Water Transportation Is Inexpensive but Slow 426Pipelines Are Fast and Efficient 426Air Transportation Is Fast but Expensive 426Intermodal Shipping 426The Storage Function 427

Tracking Goods 427

What All This Means to You 428

Video Case: Netflix 432

C h a p t e r S ix teen

434 Using Effective Promotions

Profile: Getting to Know Andrew Mason,CEOofGroupon 435

Promotion and the Promotion Mix 436Spotlight on Small Business:Fresh-Baked Promotion 437

Advertising: Informing, Persuading, andReminding 438

Television Advertising 441Product Placement 441Infomercials 442Online Advertising 442Social Media in Business: Social MediaComplements Other Promotions 443

Using Social Media to Monitor AdEffectiveness 444Global Advertising 444Making Ethical Decisions: Electronic Ethics 445Reaching beyond Our Borders:Promotion in Rural India 446

Personal Selling: Providing PersonalAttention 446

Steps in the Selling Process 447The Business-to-Consumer Sales Process 449

Public Relations: Building Relationships 450Publicity: The Talking Arm of PR 450

Sales Promotion: Giving Buyers Incentives 451Word Of Mouth and Other PromotionalTools 453

Viral Marketing 454Blogging 454

Podcasting 454E-Mail Promotions 455Mobile Media 455

Managing the Promotion Mix: Putting It AllTogether 455

Promotional Strategies 455

Video Case: Groupon 460

part 6Managing Financial Resources

Chapter Seventeen

462 Understanding Accounting and FinancialInformation

Profile: Getting to Know Siggi Hilmarsson,Founder of Siggi's Yogurt 463

The Role of Accounting Information 464What Is Accounting? 464

Accounting Disciplines 465Managerial Accounting 465Financial Accounting 466Legal Briefcase: Fighting Accounting FraudLine-by-Line 468Auditing 468Tax Accounting 469Government and Not-for-Profit Accounting 469

The Accounting Cycle 470Accounting Technology 471

Understanding Key FinancialStatements 472

The Fundamental Accounting Equation 472The Balance Sheet 473Classifying Assets 474Liabilities and Owners' Equity Accounts 474The Income Statement 476Revenue 476Cost of Goods Sold 476

Operating Expenses 477Spotlight on Small Business: What's Coming andGoing at the College Bookstore? 478Net Profit or Loss 478The Statement of Cash Flows 479The Need for Cash Flow Analysis 480Making Ethical Decisions: Barking Up theWrong Financial Statement 481

Analyzing Financial PerformanceUsing Ratios 482

Liquidity Ratios 482Leverage (Debt) Ratios 483Profitability (Performance) Ratios 483Activity Ratios' 485Reaching beyond Our Borders:Accountants of the World United 486

Video Case: Goodwill 490

C h a p t e r E i g h t e e n

492 Financial Management

Profile: Getting to Know Carol Tome, CFO ofHome Depot 493The Role of Finance and FinancialManagers 494

The Value of Understanding Finance 495What Is Financial Management? 496

Financial Planning 497Forecasting Financial Needs 497Working with the Budget Process 498Establishing Financial Controls 499

The Need for Operating Funds 500Legal Briefcase: Financial Order or FinancialMartial Law? 501Managing Day-by-Day Needsof the Business 501Controlling Credit Operations 502Acquiring Needed Inventory 502Making Ethical Decisions:Good Finance or Bad Medicine? 503Making Capital Expenditures 503Alternative Sources of Funds 503

Obtaining Short-Term Financing 504Trade Credit 504Family and Friends 505Commercial Banks 505Different Forms of Short-Term Loans 506Spotlight on Small Business:Exploring the Financing Universe 507Factoring Accounts Receivable 508Commercial Paper 508Credit Cards 509

Obtaining Long-Term Financing 510Debt Financing 510Equity Financing 511

Comparing Debt and Equity Financing 513Lessons from the Financial Crisis 514

Video Case: Tom & Eddie's 518

Chapter Nineteen

520 Using Securities Markets for Financing andInvesting Opportunities

Profile: Getting to Know Maria Bartiromo,CNBC Financial Analyst 521The Function of Securities Markets 522

The Role of Investment Bankers 523Stock Exchanges 523

Spotlight on Small Business:A Place for Small Companies to Call Home 525Securities Regulations and theSecurities and Exchange Commission 525Foreign Stock Exchanges 526

How Businesses Raise Capitalby Selling Stock 527

Advantages and Disadvantagesof Issuing Stock 527Issuing Shares of Common Stock 528Issuing Shares of Preferred Stock 528

How Businesses Raise Capitalby Issuing Bonds 529

Learning the Language of Bonds 529Advantages and Disadvantagesof Issuing Bonds 530Different Classes of Bonds 530

Special Bond Features 531

How Investors Buy Securities 532Investing through Online Brokers 532Making Ethical Decisions:Money Going Up in Smoke 533Choosing the Right Investment Strategy 533Reaching beyond Our Borders: The SunNever Sets on Stock Opportunities 534Reducing Risk by Diversifying Investments 534

Investing in Stocks 535Stock Splits 536Buying Stock on Margin 536Understanding Stock Quotations 537

Investing in Bonds 538Investing in High-Risk (Junk) Bonds 538Understanding Bond Quotations 538

Investing in Mutual Funds andExchange-Traded Funds 539

Understanding Mutual Fund Quotations 541Understanding Stock Market Indicators 542

Riding the Market's Roller Coaster 543Legal Briefcase: Cleaning Up the Street 545Investing Challenges in the 21st-centuryMarket 546

Video Case: Morningstar 5 5 0

Chapter Twenty

552 Money, Financial Institutions, and theFederal Reserve

Profile: Getting to Know Ben S. Bernanke,Chairman of the Federal Reserve 553

Why Money Is Important 554What Is Money? 555What Is the Money Supply? 556Managing Inflation and the Money Supply 556The Global Exchange of Money 557

Control of the Money Supply 557

Basics about the Federal Reserve 557The Reserve Requirement 559Open-Market Operations 559The Discount Rate 559The Federal Reserve's Check-Clearing Role 560

The History of Banking and the Need forthe Fed 561

Banking and the Great Depression 562The U.S. Banking System 563

Commercial Banks 563Services Provided by Commercial Banks 563Social Media in Business:Banking on Social Media 564Services to Borrowers 564Savings and Loan Associations (S&Ls) 564Making Ethical Decisions:What to Tell the Teller 565Credit Unions 565Other Financial Institutions (Nonbanks) 566Spotlight on Small Business:The Rise of the Nonbank 567

The Recent Banking Crisis and How theGovernment Protects Your Money 567

Protecting Your Funds 568The Federal Deposit Insurance Corporation(FDIC) 568The Savings Association Insurance Fund(SAIF) 569The National Credit Union Administration(NCUA) 569

Using Technology to Make Banking MoreEfficient 569

Online Banking 571International Banking andBanking Services 571

Leaders in International Banking 571The World Bank and the International MonetaryFund (IMF) 572Reaching beyond Our Borders: New Issues Facing-the World Bank and the IMF 573

Video Case: Financial Crisis-BankingDisaster 577

Bonus C h a p t e r A

A Working within the Legal Environment

Profile: Getting to Know Kenneth C. Frazier,CEO of Merck A-lThe Case For Laws A-2

Statutory and Common Law A-3Administrative Agencies A-3

Tort Law A-4Product Liability A-4

Legally Protecting Ideas: Patents,Copyrights, and Trademarks A-6Sales Law: The Uniform Commercial Code A-8

Warranties A-8Negotiable Instruments A-9

Contract Law A-9Breach of Contract A-IO

Promoting Fair and CompetitiveBusiness Practices A-ll

The History of Antitrust Legislation A-llLaws to Protect Consumers A-13Tax Laws A-14Bankruptcy Laws A-15Deregulation versus Regulation A-17

Bonus C h a p t e r B

B Using Technology to Manage Information

Profile: Getting to Know Chris Hughes,Co-founder of Facebook B-lThe Role of Information Technology B-2

Evolution from Data Processing to BusinessIntelligence B-2How Information Technology ChangesBusiness B-3

Types of Information B-5Managing Information B-6Organizing E-Mail and Electronic Files B-7Storing and Mining Data B-8

The Heart of Knowledge Management:The Internet B-9

Broadband Technology B-IOSocial Media and Web 2.0 B-llWeb 3.0 B-12

The Enabling Technology: Hardware B-13Mobile Devices B-13Computer Networks B-14Virtualization and Cloud Computing B-14

Software B-l 6Effects of Information Technology onManagement B-17

Human Resource Issues B-17Security Issues B-18Privacy Issues B-21Stability Issues B-21

Technology and You B-22

Bonus Chapter C

C Managing Risk

Profile: Getting to Know Joachim Oechslin, ChiefRisk Officer of Munich Re C-lUnderstanding Business Risks C-2

How Rapid Change Affects Risk Management C-2

Managing Risk C-3Reducing Risk C-3Avoiding Risk C-4Self-Insurance C-4Buying Insurance to Cover Risk C-5

Understanding Insurance Policies C-6Rule of Indemnity C-7Types of Insurance Companies C-7

Insurance Coverage for VariousKinds of Risk C-7

Health Insurance C-9Disability Insurance C-IOWorkers' Compensation C-IOLiability Insurance C-IOLife Insurance for Businesses C-llInsurance Coverage for Home-Based Businesses C-llThe Risk of Damaging the Environment C-ll

Bonus C h a p t e r D

D Managing Personal Finances

Profile: Getting to Know Nathan Myhrvold andOther Millionaires: How to Be a Millionaire D-lThe Need for Personal FinancialPlanning D-2

Financial Planning Begins with Making Money D-2Six Steps to Controlling Your Assets D-3

Building Your Financial Base D-6Real Estate: Historically, a Relatively SecureInvestment D-7Tax Deductions and Homeownership D-8Where to Put Your Savings D-8Learning to Manage Credit D-8

Protecting Your Financial Base: BuyingInsurance D-IO

Health Insurance D-llHomeowner's or Renter's Insurance D-llOther Insurance D-12

Planning Your Retirement D-12Social Security D-13Individual Retirement Accounts (IRAs) D-13Simple IRAs D-1440l(k) Plans D-14Keogh Plans D-15Financial Planners D-15Estate Planning D-16

Chapter Notes NGlossary GPhoto Credits PCName Index IOrganization Index 1-7Subject Index 1-12