Understanding Business [9 ed.] 0078003296, 9780073511702

Table of contents :
Title
Contents
Part 1 Business Trends: Cultivating a Business in Diverse, Global Environments
1 Taking Risks and Making Profits within the Dynamic Business Environment Profile: Getting to Know Nick Graham, Owner of the Main Street Market
2 Understanding How Economics Affects Business Profile: Getting to Know Muhammad Yunus, Founder of the Grameen Bank
3 Doing Business in Global Markets Profile: Getting to Know Sheikha Lubna al-Qasimi, Foreign Trade Minister of the United Arab Emirates
4 Demanding Ethical and Socially Responsible Behavior Profile: Getting to Know Steve Ells, Founder and CEO of Chipotle Mexican Grill
Part 2 Business Ownership: Starting a Small Business
5 How to Form a Business
6 Entrepreneurship and Starting a Small Business
Part 3 Business Management: Empowering Employees to Satisfy Customers
7 Management and Leadership
8 Adapting Organizations to Today’s Markets
9 Production and Operations Management
Part 4 Management of Human Resources: Motivating Employees to Produce Quality Goods and Services
10 Motivating Employees
11 Human Resource Management: Finding and Keeping the Best Employees
12 Dealing with Employee–Management Issues and Relationships
Part 5 Marketing: Developing and Implementing Customer-Oriented Marketing Plans
13 Marketing: Helping Buyers Buy
14 Developing and Pricing Goods and Services
15 Distributing Products
16 Using Effective Promotions
Part 6 Managing Financial Resources
17 Understanding Accounting and Financial Information
18 Financial Management
19 Using Securities Markets for Financing and Investing Opportunities
20 Money, Financial Institutions, and the Federal Reserve
Bonus Chapter
A Working within the Legal Environment
B Using Technology to Manage Information
C Managing Risk
D Managing Personal Finance
Glossary
Photo Credits
Name Index
Organization Index
Subject Index

Citation preview

understanding ninth edition

BUSINESS William G. Nickels University of Maryland

James M. McHugh St. Louis Community College at Forest Park

Susan M. McHugh Applied Learning Systems

UNDERSTANDING BUSINESS Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2005, 2002, 1999, 1996, 1993, 1990, 1986 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 WCK/WCK 0 9 ISBN 978-0-07-351170-2 (student edition) MHID 0-07-351170-6 (student edition) ISBN 978-0-07-726834-3 (annotated instructor’s edition) MHID 0-07-726834-2 (annotated instructor’s edition) Vice president and editor-in-chief: Brent Gordon Publisher: Paul Ducham Executive editor: Doug Hughes Director of development: Ann Torbert Senior development editor: Christine Scheid Vice president and director of marketing: Robin J. Zwettler Senior marketing manager: Sarah Schuessler Vice president of editing, design, and production: Sesha Bolisetty Senior project manager: Bruce Gin Lead production supervisor: Carol A. Bielski Lead designer: Matthew Baldwin Senior photo research coordinator: Jeremy Cheshareck Photo researcher: Jennifer Blankenship Lead media project manager: Brian Nacik Cover design: Kay Lieberherr Interior design: Kay Lieberherr Typeface: 10/12 New Aster Compositor: Laserwords Private Limited Printer: World Color USA/Versailles The Library of Congress has cataloged the preview edition as follows: Nickels, William G. Understanding business : preview edition/William G. Nickels, James M. McHugh, Susan M. McHugh.—9th ed. p. cm. Includes index. ISBN-13: 978-0-07-735546-3 (alk. paper) ISBN-10: 0-07-735546-6 (alk. paper) 1. Industrial management. 2. Business. 3. Business—Vocational guidance. I. McHugh, James M. II. McHugh, Susan M. III. Title. HD31.N4897 2010 650—dc22 2009019015

www.mhhe.com

dedication To Marsha, Joel, Casey, Dan, Molly, Michael, and Colin—you have been our strength in the past, our joy in the present, and our hope for the future.

and To the team that made nine editions of Understanding Business possible, especially the instructors and students who give us the feedback we use to continuously improve the text and package.

***** ABOUT THE

authors

The Understanding Business author team possesses a unique blend of university, community college, industry, public service, small-business, and curriculum development experience that helps them breathe life into the dynamic business concepts presented in the text. As instructors who have used the text and supplements in their own classrooms, Bill Nickels and Jim McHugh have a personal stake in the quality of the entire project. As a curriculum specialist, Susan McHugh is committed to making certain that Bill and Jim (and all of the other Understanding Business users) have the best materials possible for creating interesting and useful classes that make learning business an exciting experience.

Bill Nickels is professor emeritus of business at the University of Maryland, College Park. He has over 35 years’ experience teaching graduate and undergraduate business courses, including introductory courses in business, marketing, and promotion. He has won the Outstanding Teacher on Campus Award four times and was nominated for the award many other times. He received his M.B.A. degree from Western Reserve University and his Ph.D. from The Ohio State University. He has written a marketing communications text and two marketing principles texts in addition to many articles in business publications. He has taught many seminars to businesspeople on subjects like power communications, marketing, nonbusiness marketing, and stress and life management. His son, Joel, is a Professor of English at the University of Miami (Florida).

Jim McHugh holds an M.B.A. degree from Lindenwood University and has had broad experience in education, business, and government. As chairman of the Business and Economics Department of St. Louis Community College/Forest Park, Jim coordinated and directed the development of the business curriculum. In addition to teaching several sections of Introduction to Business each semester for nearly 30 years, Jim taught in the marketing and management areas at both the undergraduate and graduate levels. Jim enjoys conducting business seminars and consulting with small and large businesses. He is actively involved in the public service sector and served as chief of staff to the St. Louis County Executive.

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Susan McHugh is a learning specialist with extensive training and experience in adult learning and curriculum development. She holds an M.Ed. degree from the University of Missouri and completed her coursework for a Ph.D. in education administration with a specialty in adult learning theory. As a professional curriculum developer, she has directed numerous curriculum projects and educator training programs. She has worked in the public and private sectors as a consultant in training and employee development. While Jim and Susan treasure their participation in the Understanding Business project, their greatest accomplishment is their collaboration on their three children, Casey, Molly, and Michael, who have all grown up regarding the text as a fourth sibling. Casey is carrying on the family’s teaching tradition as an adjunct professor at Washington University. Molly and Michael offered to express their appreciation for all the tuition bills Understanding Business helped pay by working on several supplementary materials for the new edition.

by colleagues in hundreds of colleges and universities throughout the United States and around the world. Understanding Business is again the most widely used text in introductory business courses. While we obviously did play a significant role in the development of this text and package, the greatest joy we find in performing this task comes from working with the many people who deserve credit for the evolution of this remarkable project. Over 250 faculty, who teach the course, and hundreds of students who have used the book and its supplements were formally involved in various stages of our research and writing of this edition. We continue to hear informally from students and faculty throughout the country who call and e-mail us with comments and suggestions. We encourage you to do the same. We enjoy the interaction. Prior to writing this edition, we held several close-to-the-customer focus groups in cities around the country. Discussions with instructors and students in these sessions helped us define, clarify, and test the needs of the diverse group who teach and take this course. Additionally, more than 20 instructors provided us with in-depth evaluations of the eighth edition, providing insights for the improvements that you will encounter on every page of this edition. Once the first draft was written, another group of instructors critiqued our initial effort, which led to many more important refinements. Many consider this process the most extensive product development process ever implemented for a text of this type. While that’s probably true, we consider this talking and sharing of ideas with our colleagues and students across the country as one of the greatest perks of our jobs.

preface * *

A s authors, it is thrilling to see the results of the work we love embraced

KEEPING UP WITH WHAT’S NEW Users of Understanding Business have always appreciated the currency of the material and the large number of examples from companies of all sizes and industries (e.g., service, manufacturing, profit, and nonprofit) in the United States and around the world. A glance at the Chapter Notes will show you that most of them are from 2008–2009. Accordingly, this edition features the latest business practices and other developments affecting business, including: • • • • • • • • • • •

The economic crisis of 2008–2009—its causes, effects, and attempted remedies, including the TARP and the stimulus package. Green marketing (including greenwashing). Social networking media (e.g., Facebook, Twitter) as used in business communication and marketing. Sovereign wealth funds. Insourcing. Affiliate marketing. Widgets. Cloud computing. Web 2.0. International financial reporting standards. Growth of electronic stock exchanges (e.g., Euronext, NASDAQ).

We firmly believe that no course in college is more important than the introductory business course. That’s why we enjoy teaching it so much and why we are willing to spend so much time helping others make this the best v

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PREFACE

course on campus. We are proud of the text and the integrated teaching and testing system that you have helped us develop. We thank the many text and supplements users who have supported us through the years and welcome new instructors to the team. We look forward to a continuing relationship with all of you and to sharing what we consider the most exciting classroom experience possible: teaching students to understand business. Bill Nickels

Jim McHugh

Susan McHugh

**

acknowledgments Our executive editor, Doug Hughes, led the talented team at Irwin/McGrawHill. We appreciate his dedication to the success of the project and his responsiveness to the demands of the market. Christine (Chipper) Scheid served as our developmental editor and kept everyone on task and on schedule. Elisa Adams did a stellar job of helping us reduce the length of the text. We thank her for insights and precision that resulted in a 20 percent weight loss without content loss. Copyeditor Janet Renard continues to amaze us with her ability to improve the text. Michael Hannon provided much appreciated research assistance in addition to his many other text development responsibilities. Molly and Michael McHugh contributed several of the new boxes and profiles. Matt Baldwin and Kay Lieberherr created the new fresh, open interior design and extraordinary cover. Jennifer Blankenship carried out the extensive research for photos that was necessary to effectively reflect the concepts presented in the text. Bruce Gin did a splendid job of keeping the production of the text on schedule. Manufacturing was kept on time under the watchful eye of Heather Burbridge. Len Davis and his crew produced the fabulous new videos. Brian Nacik expertly supervised the supplements and media assets. Joanne Butler and Kelly Lowery graciously managed the text reviews that have proved so helpful in revising the text and the supplements. Many dedicated educators made extraordinary contributions to the quality and utility of this text and package. For the ninth time, Barbara Barrett of St. Louis Community College at Meramec prepared an exemplary student assessment and learning guide that truly guides students on the path to mastering the course concepts. Pam McElligott of St. Louis Community College at Meramec and Anthony Chelte of University of Arkansas–Little Rock did an exceptional job in preparing the Test Bank and creating the quizzes for the Online Learning Center. Gayle Lois Megginson Ross of Circle Publishing continued to achieve miracles for us with her contributions to and management of the various resources that eventually came together to form the Instructor’s Manual and AIE. Molly McHugh of Applied Learning Systems did a superb job of creating the PowerPoint slides. Jeffrey Jones of St. Louis Community College at Forest Park enhanced the teaching value of the PowerPoints by preparing insightful lecture notes that accompany them, along with the scripts for the narration of the Narrated PowerPoint slides. Erwin Llereza, along with our Advisory Board and course writers, consisting of: Myra Allen, Fayetteville Technical Community College Vondra Armstrong, Pulaski Technical College Susan Berston, City College of San Francisco Judith Bulin, Monroe Community College Nate Calloway, University of Maryland University College Rachna Condos, American River College Michael Discello, Pittsburg Technical Institute

Linda Hefferin, Elgin Community College Jeffrey Jones, St. Louis Community College Dmitriy Kalyagin, Chabot College Michelle Meyer, Joliet Junior College Jeff Miller, University of Maryland College Park Mihai Nica, University of Central Oklahoma Jeffrey D. Penley, J.D., Catawba Valley Community College

George Redmond, Franklin University Susan Roach, Georgia Southern University Tim Rogers, Ozarks Tech College Storm Russo, Valencia Community College Shafi Ullah, Broward Community College

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produced the remarkable new Understanding Business Online—and what a superb job they did incorporating visuals, narratives, and interactive exercises that support the text! Anthony Chelte, University of Arkansas–Little Rock, prepared a handy media resource guide that adds instructional value to the video package. Michael McHugh of Applied Learning Systems helped make sure we all stay current by expertly producing the monthly newsletter and accompanying PowerPoints. And many more people than we can ever acknowledge worked behind the scenes to translate our manuscript into the text you see; we thank them all. Our outstanding marketing manager, Sarah Reed Schuessler, was up to the challenge of once again guiding the text to market leadership. With the assistance of the market’s finest sales professionals, she led the text to record highs. We appreciate her commitment and the renowned product knowledge, service, and dedication of the McGraw-Hill/Irwin sales reps. We want to thank the many instructors who contributed to the development of Understanding Business. An exceptional group of reviewers dedicated many long hours to critiquing the previous edition and subsequent drafts of this edition, and attending our focus groups and symposia. Their recommendations and contributions were invaluable in making this edition a stronger instructional tool.

REVIEWERS OF THE NINTH EDITION We would like to thank the following instructors and students who generously provided the input and advice on which the refinements and enhancements to the ninth edition of the text and supplements are based.

9E REVIEWERS, FOCUS GROUP, AND SYMPOSIA PARTICIPANTS Nikolas Adamou, Borough of Manhattan Community College Cathy Adamson, Southern Union State Community College Gary Amundson, Montana State University–Billings Kenneth Anderson, Borough of Manhattan Community College Kenneth Anderson, Mott Community College Lydia Anderson, Fresno City College Narita Anderson, University of Central Oklahoma Roanne Angiello, Bergen Community College Chi Anyansi-Archibong, North Carolina A&T University Michael Atchison, University of Virginia–Charlottesville

Andrea Bailey, Moraine Valley Community College Sandra Bailey, Ivy Tech Community College of Indiana Scott Bailey, Troy University Wayne Ballantine, Prairie View A&M University Ruby Barker, Tarleton State University Rosalia (Lia) Barone, Norwalk Community College Barbara Barrett, St. Louis Community College– Meramec Barry Barrett, University of Wisconsin–Milwaukee Lorraine Bassette, Prince George’s Community College Robb Bay, College of Southern Nevada–West Charle

Charles Beavin, Miami Dade College North Charles Beem, Bucks County Community College Cathleen Behan, Northern Virginia Community College Lori Bennett, Moorpark College Ellen Benowitz, Mercer Community College Patricia Bernson, County College of Morris William Bettencourt, Edmonds Community College Robert Blanchard, Salem State College Mary Jo Boehms, Jackson State Community College James Borden, Villanova University

ACKNOWLEDGMENTS

Michael Bravo, Bentley College Dennis Brode, Sinclair Community College Harvey Bronstein, Oakland Community College– Farmington Hills

Julie Cross, Chippewa Valley Tech College Geoffrey Crosslin, Kalamazoo Valley Community College Douglas Crowe, Bradley University

Deborah Brown, North Carolina State University–Raleigh

John David, Stark State College of Tech

Aaron A. Buchko, Bradley University

Peter Dawson, Collin County Community College

Laura Bulas, Central Community College–Hastings

Joseph Defilippe, Suffolk County Community College–Brentwood

Judy Bulin, Monroe Community College

Tim DeGroot, Midwestern State University

Barry Bunn, Valencia Community College–West Camp

Len Denault, Bentley College

Bill Burton, Indiana Wesleyan University Paul Callahan, Cincinnati State Technical and Community College William Candley, Lemoyne Owen College

Frances Depaul, Westmoreland County Community College Donna Devault, Fayetteville Tech Community College Sharon Dexter, Southeast Community College-Beatrice John Dilyard, St. Francis College

Nancy Carr, Community College of Philadelphia

Barbara Dinardo, Owens Community College

Ron Cereola, James Madison University

George Dollar, St. Petersburg College

Bonnie Chavez, Santa Barbara City College

Glenn Doolittle, Santa Ana College

Susan Cisco, Oakton Community College

Ron Dougherty, Ivy Tech Community College of Indiana

Margaret (Meg) Clark, Cincinnati State Technical and Community College

Michael Drafke, College of DuPage

David Clifton, Ivy Tech Community College of Indiana

Karen Eboch, Bowling Green State University

C. Cloud, Phoenix College

Brenda Eichelberger, Portland State University

Doug Cobbs, JS Reynolds Community College Brooks Colin, University of New Orleans Debbie Collins, Anne Arundel Community College Andrew Cook, Limestone College

Kelvin Elston, Nashville State Tech Community College Robert Ettl, Stony Brook University Nancy Evans, Heartland Community College Michael Ewens, Ventura College

Bob Cox, Salt Lake Community College

Hyacinth Ezeka, Coppin State University

Susan Cremins, Westchester Community College

Bob Farris, Mt. San Antonio College

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Karen Faulkner, Long Beach City College Gil Feiertag, Columbus State Community College Joseph Flack, Washtenaw Community College Lucinda Fleming, Orange County Community College Jackie Flom, University of Toledo Andrea Foster, John Tyler Community College Michael Foster, Bentley College Leatrice Freer, Pitt Community College Alan Friedenthal, Kingsborough Community College Charles Gaiser, Brunswick Community College Ashley Geisewite, Southwest Tennessee Community College Katie Ghahramani, Johnson County Community College Debora Gilliard, Metropolitan State College–Denver James Glover, Community College of Baltimore County Essex Constance Golden, Lakeland Community College Toby Grodner, Union County College Clark Hallpike, Elgin Community College Geri Harper, Western Illinois University Frank Hatstat, Bellevue Community College Spedden Hause, University of Maryland-University College Karen Hawkins, Miami-Dade College–Kendall Travis Hayes, Chattanooga State Tech Jack Heinsius, Modesto Junior College Charlane Held, Onondaga Community College James Hess, Ivy Tech Community College of Indiana

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ACKNOWLEDGMENTS

Steve Hester, Southwest Tennessee Community College–Macon Campus William Hill, Mississippi State University Nathan Himelstein, Essex County College Paula Hladik, Waubonsee Community College David Ho, Metropolitan Community College Douglas Hobbs, Sussex County Community College Maryanne Holcomb, Antelope Valley College Mary Carole Hollingsworth, Georgia Perimeter College Russell Holmes, Des Moines Area Community College Scott Homan, Purdue University– West Lafayette Stacy Horner, Southwestern Michigan College Dennis Hudson, University of Tulsa Jo Ann Hunter, Community College Allegheny County in Pittsburgh Kimberly Hurns, Washtenaw Community College

Jack Kant, San Juan College Jimmy Kelsey, Seattle Central Community College Robert Kemp, University of Virginia–Charlottesville David Kendall, Fashion Institute Technology Kristine Kinard, Shelton State Community College Sandra King, Minnesota State University–Mankato John Kurnik, Saint Petersburg College Jeff LaVake, University of Wisconsin–Oshkosh Robert Lewis, Davenport University Byron Lilly, Deanza College Beverly Loach, Central Piedmont Community College Boone Londrigan, Mott Community College

Gina McConoughey, Illinois Central College Patricia McDaniel, Central Piedmont Community College Pam McElligott, St. Louis Community College–Meramec Tom McFarland, Mt. San Antonio College Bill McPherson, Indiana University of Pennsylvania Ginger Moore, York Technical College Sandy Moore, Ivy Tech Community College of Indiana Jennifer Morton, Ivy Tech Community College of Indiana Peter Moutsatson, Central Michigan University Rachna Nagi-Condos, American River College Darrell Neron, Pierce College

Ladonna Love, Fashion Institute Technology

Mihia Nica, University of Central Oklahoma

Ivan Lowe, York Technical College

Charles Nichols, Sullivan University

Yvonne Lucas, Southwestern College Robert Lupton, Central Washington University

Victor Isbell, University of Nevada–Las Vegas

Megan Luttenton, Grand Valley State University

Deloris James, University of Maryland–University College Pam Janson, Stark State College of Tech William Jedlicka, William Rainey Harper College Carol Johnson, University of Denver Gwendolyn Jones, University of Akron Kenneth Jones, Ivy Tech Community College of Indiana Marilyn Jones, Friends University Michael Jones, Delgado Community College Dmitriy Kalyagin, Chabot College

Elaine Madden, Anne Arundel Community College

Frank Novakowski, Davenport University Mark Nygren, Brigham Young University–Idaho Paul Okello, Tarrant County College Faviana Olivier, Bentley College

Lawrence Maes, Davenport University

John Olivo, Bloomsburg University of Pennsylvania

Niki Maglaris, Northwestern College

Teresa O’Neill, International Institute of the Americas

James Maniki, Northwestern College

Cathy Onion, Western Illinois University

Martin Markowitz, College of Charleston

Susan Ontko, Schoolcraft College

Fred Mayerson, Kingsborough Community College

Glenda Orosco, Oklahoma State University Institute of Technology

Stacy McCaskill, Rock Valley College

Christopher O’Suanah, J. S. Reynolds Community College

Vershun L. McClain, Jackson State University

Daniel Pacheco, Kansas City Kansas Community College

ACKNOWLEDGMENTS

Esther Page-Wood, Western Michigan University Lauren Paisley, Genesee Community College John Pappalardo, Keene State College Ron Pardee, Riverside Community College Jack Partlow, Northern Virginia Community College Jeff Pepper, Chippewa Valley Tech College Sheila Petcavage, Cuyahoga Community College Western-Parma

Catherine Roche, Rockland Community College

Ron Surmacz, Duquesne University

Tim Rogers, Ozarks Technical College

William Syvertsen, Fresno City College

Sam Rohr, University of Northwestern Ohio

Scott Taylor, Moberly Area Community College

Pamela Rouse, Butler University

Jim Thomas, Indiana University Northwest

Roy Pipitone, Erie Community College Lana Powell, Valencia Community College–West Campus Dan Powroznik, Chesapeake College Litsa Press, College of Lake County Sally Proffitt, Tarrant County College Northeast Michael Quinn, James Madison University

Richard Sarkisian, Camden County College

Anthony Racka, Oakland Community College Larry Ramos, Miami-Dade Community College Greg Rapp, Portland Community College–Sylvania Robert Reese, Illinois Valley Community College David Reiman, Monroe County Community College Gloria Rembert, Mitchell Community College Levi Richard, Citrus College Clinton Richards, University of Nevada–Las Vegas Patricia Richards, Westchester Community College Susan Roach, Georgia Southern University Sandra Robertson, Thomas Nelson Community College

Carol Rowey, Community College of Rhode Island Jeri Rubin, University of Alaska–Anchorage Storm Russo, Valencia Community College Mark Ryan, Hawkeye Community College

Andy Saucedo, Dona Ana Community College–Las Cruces James Scott, Central Michigan University Janet Seggern, Lehigh Carbon Community College

Deborah Thompson, Bentley College Evelyn Thrasher, University of Massachusetts–Dartmouth Jon Tomlinson, University of Northwestern Ohio Bob Trewartha, Minnesota School of Business Bob Urell, Irvine Valley College Dan Vetter, Central Michigan University Andrea Vidrine, Baton Rouge Community College Daniel Viveiros, Johnson & Wales University

Sashi Sekhar, Purdue University–Calumet-Hammond

Joann Warren, Community College of Rhode Island–Warwick

Pat Setlik, William Rainey Harper College

R. Patrick Wehner, Everest University

Swannee Sexton, University of Tennessee–Knoxville

Sally Wells, Columbia College

Phyllis Shafer, Brookdale Community College Richard Shortridge, Glendale Community College Louise Stephens, Volunteer State Community College Desiree Stephens, Norwalk Community College Clifford Stalter, Chattanooga State Technical Community College Kurt Stanberry, University of Houston Downtown Martin St. John, Westmoreland County Community College John Striebich, Monroe Community College David Stringer, Deanza College

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Mildred Wilson, Georgia Southern University Karen Wisniewski, County College of Morris Greg Witkowski, Northwestern College Colette Wolfson, Ivy Tech Community College of Indiana Deborah Yancey, Virginia Western Community College Mark Zarycki, Hillsborough Community College Lisa Zingaro, Oakton Community College Mark Zorn, Butler County Community College

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REVIEWERS AND OTHER PARTICIPANTS IN THE DEVELOPMENT OF PREVIOUS EDITIONS Larry Aaronson, Catonsville Community College; Alison Adderley-Pittman, Brevard Community College–Melbourn; Dave Aiken, Hocking College; M. T. Alabbassi, University of North Florida; Milton Alderfer, Miami-Dade Community College; Dennis G. Allen, Grand Rapids Community College; Sylvia Allen, Los Angeles Valley College; Dan Anderson, Sullivan Jr. College; Kenneth Anderson, Charles S. Mott Community College; Kenneth F. Anderson, CUNY–Borough of Manhattan Community College; Lydia E. Anderson, Fresno City College; Marilyn Anderson, Phoenix College; John Anstey, University of Nebraska–Omaha; Chi AnyansiArchibong, North Carolina A&T State University; Maria Zak Aria, Camden County College; Vondra O. Armstrong, Pulaski Technical College; Glenann Arnold, Pueblo Community College; Ed Aronson, Golden West College; Larry Arp, University of Southern Indiana; Robert Ash, Santiago Canyon College; Lee Ash, Skagit Valley College; Doug Ashby, Lewis & Clark; Hal Babson, Columbus State Community College; Harold Babson, Columbus State Community College; Chani Badrian, CUNY–Baruch College; Herm Baine, Broward Community College; Morris Baird, The Community College of Baltimore County; Russell Baker, Florida Metropolitan University; Xenia Balabkins, Middlesex County College; Michael Baldigo, Sonoma State University; Lee R. Baldwin, Mt. San Antonio College; John Balek, Morton College; Fran Ballard, Florida Community College; Mike Baran, South Puget Sound Community College; Robert Barker, Daytona Beach Community College; Cora Barnhart, Palm Beach Atlantic College; Barbara Barrett, St. Louis Community College; William Barrett, University of Wisconsin–Milwaukee; Richard Bartlett, Muskigan Area Technical College; Lorraine Bassette, Prince George’s Community College; Jade Beavers, Jefferson State Community College; Charles Beavin, Miami-Dade–North; John Beem, College of DuPage; Michael Bejtlich, Cape Cod Community College; Larry Benke, Sacramento City College; Lori Bennett, Moorpark College; Robert Bennett, Delaware County Community College; Ellen Benowitz, Mercer County Community College; Michael Bento, Owens Community College; Alec Beudoin, Triton College; Marcel Berard, Community College of Rhode Island; Janet L. Bernard, Tampa College; Patricia Bernson, County College of Morris; John Berry, Antelope Valley College; Bill Bettencourt, Edmonds Community College; Iris Berdrow, Bentley College; Carol Bibly, Triton College; Dean Bittick, East Central College; Chris Bjornson, Indiana University Southeast; Margaret Black, San Jacinto College, North Campus; John Blackburn, Ohio State University; Jane Bloom, Palm Beach Community College; James H. Boeger, Rock Valley College; Mary Jo Boehms, Jackson State Community College; Jessee Bolton, Charles County Community College; Robert Bouck, Lansing Community College; John Bowdidge, Southwest Missouri State University; Barbara Ann Boyington, Brookdale Community College; Steven E. Bradley, Austin Community College– Riverside; Stephen Branz, Triton College; David Braun, Pierce College; Robert Brechner, Miami-Dade Community College; Sonya Brett, Macomb Community College; Harvey Bronstein, Oakland Community College; Richard Brooke, Florida Community College at Jacksonville; Joseph Brum, Fayetteville Technical Community College; Thomas Buchl, Northern Michigan University; Howard Budner, CUNY–Borough of Manhattan Community College; Albert Bundons, Johnson County Community College; Nichole Burnes, FMU–Tampa College; Barrett R. Burns, Houston Community College; Cathleen Burns, University of Missouri–Columbia; John Burns, Tomball College; Harrison Burris, DeVry University; William F. Burtis, DeAnza College; Dennis Butler, Orange Coast Community College; Ron Bytnar, South Suburban College; Willie Caldwell, Houston Community College; J. Callahan, Florida Institute of Technology; Paul Callahan,

ACKNOWLEDGMENTS

Cincinnati State Tech Community College; Nathaniel Calloway, University of Maryland–University College; Nathaniel R. Calloway, University of Maryland– University College; B. J. Campsey, San Jose State University; Jim Carey, Onandaga Community College; Marilyn Carlson, Clark State Community College; Michele Lynn Carver, The Community College of Baltimore County; Lesley Casula, Lord Fairfax Community College; Mary Margaret Cavera, Davenport College; Sandra Cece, Triton College; Ron Cereola, James Madison University; Kevin Chandler, DeVry Institute of Technology–Orlando; Sam Chapman, Diablo Valley College; Glen Chapuis, St. Charles Community College; Bruce Charnov, Hofstra University; Bonnie Chavez, Santa Barbara City College; Barbara Ching, Los Angeles City College; William Chittenden, Texas Tech University; Larry Chonko, Baylor University; Jill Chown, Mankato State University; Nancy Christenson, Brevard Community College; Peter D. Churchill, Diablo Valley College; Gary Ciampa, Wayne County Community College; Michael Cicero, Highline Community College; J. Cicheberger, Hillsborough Community College; Monico Cisneros, Austin Community College; Antoinette Clegg, Delta College; Robert Clobes, St. Charles County Community College; Cindy Cloud, Phoenix College; Paul Coakley, The Community College of Baltimore County; James Cocke, Pima County Community College; Jerry Cohen, Raritan Valley Community College; Barbara Connelly, DeVry Institute–Phoenix; Jeffrey Conte, Westchester Community College; Elijah Cooks, Prince George’s Community College; Ron Cooley, South Suburban College; Allen Coon, Robert Morris College; Yolanda Cooper, Collin County Community College; Doug Copeland, Johnson County Community College; John Coppage, Saginaw Valley State University; Bobbie Corbett, Northern Virginia Community College– Annandale; John Courtney, University of Maryland, University College; James Cox, Jefferson Community College; William Crandall, College of San Mateo; Susan Cremins, Westchester Community College; Bruce Cudney, Middlesex Community College; C. Culbreth, Brevard Community College; Rex Cutshall, Vincennes University; Amy Daniel, Saddleback College; Dean Danielson, San Joaquin Delta College; Lawrence Danks, Camden County College; Clifford Davis, SUNY–Cobleskill; Helen M. Davis, Jefferson Community College; R. K. Davis, University of Akron; Burton V. Dean, San Jose State University; Cindy Del Medico, Oakton Community College; Evelyn Delaney, Daytona Beach Community College; Peter DelPiano, Florida Metropolitan University; Vincent Deni, Oakland Community College; Kathleen Denisco, SUNY– Buffalo; S. Desai, Cedar Valley College; Jack Dilbeck, Ivy Tech State College; Katherine Dillon, Ocean County College; Samuel DiRoberto, Penn State University–Ogontz; Cory Dobbs, Rio Salado College; Ron Dolch, Wor-Wi Community College; Steve Dolvin, Pensacola Christian College; Richard Drury, North Virginia Community College–Annandale; Frank Dumas, Baker College–Flint; Beverly Dunlop-Loach, Central Piedmont Community College; Steven M. Dunphy, Indiana University Northwest; Timothy R. Durfield, Citrus College; Linda Durkin, Delaware County Community College; Dana Dye, Gulf Coast Community College; James Eason, Coastal Carolina University; Shannon M. Ebersol, Hagerstown Community College; Joe Eble, Burlington Community College; Ronald Eggers, Barton College; Pat Ellsberg, Lower Columbia College; Frank Emory, Northern Virginia Community College–Woodbridge; Warren Enos, Ohlone College; David Erickson, College of Lake County; Ted Erickson, Normandale Community College; Alton Evans, Tarrant County Community College; John Evans, New Hampshire College; Nancy Evans, Heartland Community College; C. S. Everett, Des Moines Area Community College; Shad Ewart, Anne Arundel Community College; Al Fabian, Ivy Tech; Karen Fager, Umpqua Community College; Joyce Fairchild, North Virginia Community College–Alexandria; Frank Falcetta, Middlesex Community College; S. Fante, Central Florida Community College; Bob Farris, Mt. San Antonio College; James Fatina, College of Lake County–Harper College; Edward Fay, Canton College of Technology; Nancy

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ACKNOWLEDGMENTS

J. Feather, Pittsburgh Technical Institute; Janice Feldbauer, Austin Community College; Kevin Feldt, University of Akron; David Felt, Northern Virginia Community College–Manassas; Bob Ferrentino, Lansing Community College; Ivan Figueroa, Miami-Dade Community College; Robert Fineran, East-West University; Robert Fishco, Middlesex County Community College; Charles FitzPatrick, Central Michigan University; Joseph L. Flack, Washtenaw Community College; Jane Flagello, DeVry Institute of Technology–Lombard; H. Steven Floyd, Manatee Community College; Ronald E. Foshee, North Harris College; Dennis Foster, Northern Arizona University; John Foster, Montgomery College; Robin Frazee, Anne Arundel Community College; Barry Freeman, Bergen Community College; Leatrice Freer, Pitt Community College; Roger Fremier, Monterey Peninsula College; Edward Friese, Okaloosa Walton Community College; John Frith, Central Texas College; Michael Fritz, Portland Community College; Thomas Frizzel, Massasoit Community College; J. Pat Fuller, Brevard Community College; Steven L. Fuller, Waubonsee Community College; Arlen Gastineau, Valencia Community College; Alan Gbur, Richard J. Daley College; Michael Geary, Pensacola Christian College; Ellen S. Kaye Gehrke, Alliant International University; Lucille S. Genduso, Nova Southeastern University; James George, Jr., Seminole Community College; Richard Ghirdella, Citrus College; Vic Giardini, University of Delaware; Tom Gilbertson, Baker College; Julie Giles, DeVry Institute of Technology DuPage Campus; Sofia Gill, Palm Beach Community College; Peter Giuliani, Franklin University; Eileen Baker Glassman, Montgomery College; Bernette Glover, Olive Harvey College; Alfredo Gomez, Broward Community College; Don Gordon, Illinois Central College; Ron Gordon, Florida Metropolitan University; Mary E. Gorman, University of Cincinnati; Mark Goudreau, Johnson and Wales University; Kay Gough, Bellevue Community College; Patricia Graber, Middlesex County College; Mike Graves, Portland Community College; Joe Gray, Nassau Community College; Gary Greene, Manatee Community College; Roberta Greene, Central Piedmont Community College; Chris W. Grevesen, DeVry College of New Jersey; Stephen Griffin, Tarrant County Junior College; John Gubbay, Moraine Valley Community College; Jonathan Gueverra, Newbury College; Paula Gulbicki, Middlesex Community College; Bill Hafer, South Suburban College; James Hagel, Davenport College; Jim Hagen, Cornell University; Dan Hall, East Central College; Daniel Hallock, St. Edward’s University; Clark Hallpike, Elgin Community College; Karen Halpern, South Puget Sound Community College; Ron Halsac, Community College Allegheny North; Maurice Hamington, Lane Community College; E. Hamm, Tidewater Community College; Crystal Hance, Charles County Community College; Dennis L. Hansen, Des Moines Area Community College; Paula W. Hansen, Des Moines Area Community College; Carnella Hardin, Glendale Community College; Jean Harlan, Glendale College; Bob Harmel, Midwestern State University; Jeri Harper, Western Illinois University; Karen Harris, Montgomery College; Rowland Harvey, DeVry Institute–Houston; Gene Hastings, Portland Community College; Carolyn Hatton, Cincinnati State University; Frederic Hawkins, Westchester Business Institute; Karen H. Hawkins, Miami Dade College; Lewis Jerome Healy, Chesapeake College; Joseph Hecht, Montclair State College; Douglas Heeter, Ferris State University; Linda Hefferin, Elgin Community College; Michael Heim, Lakewood Community College; Dennis Heiner, College of Southern Idaho; Jack Heinsius, Modesto Junior College; Charlane Held, Onondaga Community College; Sanford B. Helman, Middlesex County College; Tim Helton, Juliet Junior College; Edward Henn, Broward Community College; Charles P. Hiatt, Central Florida Community College; David Hickman, Frederick Community College; Leslie Hickman, Frederick Community College; George Hicks, Muskigan Area Technical College; George M. Hihn, III, University of Akron; Nathan Himelstein, Essex County College; Kevin Hofert, Elgin Community College; Stacey Hofert, Elgin Community College; Merrily Hoffman, San Jacinto College–Central; Cheryl Lynn Holliday,

ACKNOWLEDGMENTS

Calvert County Community College; Alice J. Holt, Benedict College; William Leigh Holt, Mercer County Community College; Trinh Hong Hoang, Mt. San Antonio College; B. Hoover, Brevard Community College; Vince Howe, University of North Carolina–Wilmington; Joseph Hrebenak, Community College Allegheny County; Julie Huang, Rio Hondo College; Tom Humphrey, Palomar College; Howard Hunnius, John Tyler Community College; Richard Hunting, Montgomery College– Houston; Curtis W. Hwang, Mt. San Antonio College; Donald Inman, Grand Valley State University; Robert Ironside, North Lake College; Jim Isherwood, Community College of Rhode Island; Gary Izumo, Moorpark College; Bill Jackson, Green River Community College; Gloria Jackson, San Antonio College; Henry Jackson, Delaware County Community College; Charlotte Jacobsen, Montgomery College– Rockville; Ralph Jagodka, Mt. San Antonio College; Paloma Jalife, SUNY–Oswego; William Jedlicka, William Rainey Harper College; Paul Jenner, Southwest Missouri State University; Velma Jesser, Lane Community College; Lauren Jeweler, Frederick Community College; Andrew Johnson, Bellevue Community College; Constance Johnson, Tampa College; Gene Johnson, Clarke College; Herbert J. Johnson, Blinn College; Jack Johnson, Consumnes River College; Marie Johnson, Skagit Valley College; M. E. “Micki” Johnson, Nova Southeastern University; M. Gwen Johnson, Black Hawk College; Michael Johnson, Delaware County Community College; Wallace Johnston, Virginia Commonwealth University; Valerie Jones, Kalamazoo Valley Community College; Edgar Joya, St. Augustine College; John Kalaras, DeVry Institute of Technology; Alan Kardoff, Northern Illinois University; Norman Karl, Johnson County Community College; Janice Karlen, LaGuardia Community College; Allen Kartchner, Utah State University; Jehan Kavoosi, Clarion University; Bob Kegel, Cypress College; Warren Keller, Grossmont College; Donald Kelley, Francis Marion University; Roland Kelley, Tarrant County Junior College–NE Campus; Ann Kelly, Georgia Southern University; Marce Kelly, Santa Monica College; Jim Kennedy, Angelina College; Daniel Kent, Northern Kentucky University; Robert Kersten, St. Louis Community College–Florissant Valley; Scott Key, Pensacola Junior College; Emogene King, Tyler Junior College; James H. King, McLennan Community College; Jerry Kinskey, Sinclair Community College; Betty Ann Kirk, Tallahassee Community College; Gregory Kishel, Fullerton College; Patricia Kishel, Cypress College; Charles C. Kitzmiller, Indian River Community College; Karl Kleiner, Ocean County College; Mary Beth Klinger, College of Southern Maryland; John A. Knarr, University of Maryland–European Division; Tom Knoll, DeVry Institute of Technology–Houston; Steve Kober, Pierce College; Anna Kostorizos, Middlesex Community College; Barbara Kriechbaum, Hagerstown Business College; Pat Laidler, Massasoit Community College; Barbara G. Kreichbaum, Hagerstown Business College; Patrick C. Kumpf, University of Cincinnati; Kenneth Lacho, University of New Orleans; Micheale LaFalce, Tampa College; Fay Lamphear, San Antonio College; Keith Lane, Fresno City College; Jennifer Landig, Saddleback Valley Community College; Gary Langdale, Saddleback College; Michael LaSala, Westchester Business Institute; Roger Lattanza, University of New Mexico; Amy J. Lee, Parkland College; Donna Lees, Butte College; Jay LeGregs, Tyler Junior College; Jim Lentz, Moraine Valley Community College; Dane Leonard, Chabot College; George Leonard, St. Petersburg Junior College; Harry Lepinske, Purdue/Calumet– Hammond; Bruce Leppien, Delta College; Dawn Lerman, CUNY–Bernard Baruch College; Thomas Lerra, Quinsigamond Community College; Murray Levy, Glendale Community College; Richard Lewis, Lansing Community College; Joseph Liebreich, Reading Area Community College; Tom Lifvendahl, Cardinal Stritch College; Ellen Reynolds Ligons, Pasadena City College; Bryon Lilly, DeAnza College; Yet Mee Lim, Alabama State University; Stephen Lindsey, Citrus College; Telissa K. Lindsey, Peirce College; Vasant Limaye, SouthWest Collegiate Institute for the Deaf (SWCID) of Howard College; Donald Linner, Essex County College; Corinne

xv

xvi

ACKNOWLEDGMENTS

B. Linton, Valencia Community College; Robert Livingston, Cerritos College; John Lloyd, Monroe Community College; Thomas Lloyd, Westmoreland County Community College; Beverly Loach, Central Piedmont Community College; Paul Londrigan, Charles S. Mott Community College; Hanh Long, DeAnza College; Patricia Long, Tarrant Junior College; Terry Lovell, Yavapai College; B. Tim Lowder, Francis Marion University; Anthony Lucas, Allegheny Community College; Yvonne I. Lucas, Southwestern College; Barbara Luck, Jackson Community College; Joyce Luckman, Jackson Community College; Carmelo Luna, DeVry–DuPage; Jerry Lunch, Purdue University; Elaine Luther, Point Park College; Judith Lyles, Illinois State University; Richard Lyons, Indian River Community College; Rippy Madan, Frostburg State University; Ashford Marahaja, Berkeley College–White Plains; James W. Marco, Wake Technical Community College; Richard Maringer, University of Akron–Wayne College; Suzanne K. Markow, Des Moines Area Community College; Leon E. Markowicz, Lebanon Valley College; Alan Marks, DeVry Institute of Technology; Larry Martin, Community College of Southern Nevada; Travaul Martin, East-West University; Randolph L. Martin, Germanna Community College; Thomas Mason, Brookdale Community College; Bob Mathews, Oakton Community College; Jane Mattes, Community College of Baltimore College–Dundalk Campus; Stacy McAfee, College of Southern Maryland; Christine McCallum, University of Akron–Wayne College; Diana McCann, Kentucky College of Business; Mark M. McCarthy, Davenport College; Susan Smith McClaren, Mt. Hood Community College; Paul McClure, Mt. San Antonio College; Tom McFarland, Mt. San Antonio College; Tim McHeffey, Suffolk County Community College; Jimmy McKenzie, Tarrant County Junior College; Andrea G. McKeon, Florida Community College at Jacksonville; Noel McKeon, Florida Community College; Pat McMahon, Palm Beach Community College–Glades; Michael McNutt, Orlando College South/FL Metropolitan Univ.; Lasche McRorey, Southwest Texas Junior College; Carl Meskimen, Sinclair Community College; Herbert L. Meyer, Scott Community College; Michelle Meyer, Joliet Junior College; Bob Meyers, Palm Beach Atlantic Community College; Jacqueline Middleton, Montgomery College–Germantown; Athena Miklos, The College of Southern Maryland; Rebecca Miles, Delaware Tech Community College; Duane Miller, SUNY–Cobleskill; Herbert Miller, Indiana University–Kokomo; Willie Minor, Rio Salado College; Ed Mitchell, Hillsborough Community College; Terrance Mitchell, South Suburban College; Kimberly Montney, Kellogg Community College; Joyce Mooneyhan, Pasadena City College; Willy Morris, Northwestern Business College; Richard Morrison, Northeastern University; William Morrison, San Jose State University; Ed Mosher, Laramie County Community College; William Motz, Lansing Community College; Carolyn Mueller, Ball State University; Micah Mukabi, Essex County College; Alison Mukweyi, Midland College; Liz Murata, Edmonds Community College; Gary R. Murray, Rose State College; Jerry Myers, Stark State College; Tom Nagle, Northland Pioneer College; Winford C. Naylor, Santa Barbara City College; Andrew Nelson, Montgomery College–Germantown; Herschel Nelson, Polk Community College; Linda Newell, Saddleback College; Ken Newgren, Illinois State University; Joe Newton, Bakersfield College; Janet Nichols, Northeastern University; Sharon J. Nickels, St. Petersburg Junior College; Carolyn Nickeson, Del Mar College; Cynthia Nicola, Carlow University; Elaine Novak, San Jacinto College; Phil Nufrio, Essex County College; Edward O’Brien, Scottsdale Community College; John O’Brien, Valencia Community College; Eugene O’Connor, California Polytechnical University–San Luis Obispo; Marie D. O’Dell, Anne Arundel Community College; Cletus O’Drobinak, South Suburban College; Ron O’Neal, Pierce College; Susan Ockert, Charles County Community College; Susan Oleson, Central Piedmont Community College; David Oliver, Edison Community College; Katherine Olson, Northern Virginia Community College; Kenneth A. Olson, County College of Morris; J. Ashton Oravetz, Tyler Junior College; Tibor Osztreicher,

ACKNOWLEDGMENTS

Baltimore County Community College–Baltimore Campus; George Otto, Truman College; Karen Overton, Houston Community College Northwest; Nikki Paahana, DeVry Institute of Technology; Robert A. Pacheco, Massasoit Community College; Richard Packard, City College–Richard J. Daley; Norman Pacula, College of Marin; Mike Padbury, Arapahoe Community College; Roger Pae, Cuyahoga Community College; Esther S. Page-Wood, Western Michigan University; Teresa Palmer, Illinois State University; Dennis Pappas, Columbus State Community College; Richard Paradiso, Thomas Nelson Community College; Ron Pardee, Riverside Community College; Knowles Parker, Wake Technical Community College; Patricia Parker, Maryville University; Rex A. Parker, Rock Valley College; Jack Partlow, Northern Virginia Comm. College; Janis Pasquali, University of California–Riverside; Charlotte A. Patterson, Tampa College; Don Paxton, Pasadena City College; Lou Pearsall, DeVry University; Jeffrey D. Penley, Catawba Community College; Darlene Raney Perry, Columbus State; Stephen Peters, Walla Walla Community College; Melinda Philabaum, Indiana University–Kelley School of Business; John P. Phillips, Northern Virginia Community College–Manassas; Jim Pfister, St. Petersburg Junior College; John Phillips, North Virginia Community College– Manassas; Marie Pietak, Bucks County Community College; Anita Pinkston, Vincennes University; Warren Pitcher, Des Moines Area Community College; Joseph Platts, Miami-Dade Community College; Wayne Podgorski, University of Memphis; Raymond Pokhon, MATC; Robert Pollero, Anne Arundel Community College; Michael Potter, DeVry Institute–Phoenix; Lana Powell, Valencia Community College–West; Geraldine Powers, Northern Essex Community College; Roderick Powers, Iowa State University; Fred Pragasam, University of North Florida; Mark Preising, Florida Metro University; Ian Priestman, Linn Benton Community College; Renee Prim, Central Piedmont Community College; Marva Pryor, Valencia Community College; Kathy Pullins, Columbus State Community College; Brokke Quigg, Pierce College; Charles C. Quinn, Austin Community College–Northridge; Michael Quinn, James Madison University; Donald Radtke, Richard J. Daley College; Anne Ranczuch, Monroe Community College; Richard Randall, Nassau Community College; Richard J. Randolph, Johnson County Community College; Gregg Rapp, Portland Community College–Sylvania; Mary E. Ray, Indiana Business College; Robert Reck, Western Michigan University; Robert A. Redick, Lincoln Land Community College; Scott Reedy, Brookes College; Phil Reffitt, Florida Metro University; Robert O. Reichl, Morton College; James Reinemann, College of Lake County; Dominic Rella, Polk Community College; Jeffrey R. Ricciardi, North Harris Montgomery College; Carla Rich, Pensacola Junior College; John Rich, Illinois State University; Levi Richard, Citrus College; Doug Richardson, Eastfield College; Karen Richardson, Tarrant County Junior College; Dan Ricica, Sinclair Community College; Al Rieger, Burlington County College; Denver Riffe, National College of Business & Technology; Kathryn Roberts, Chipola Junior College; Pollis Robertson, Kellogg Community College; Harriett Rojas, Indiana Wesleyan; Paul Rompala, Triton College; Ali Roodsari, Baltimore City Community College; Barbara Rosenthal, Miami-Dade Community College; Bob Roswell, Jackson Community College; Eric Rothenburg, Kingsborough Community College; Carol Rowey, Community College of Rhode Island; Linda Roy, Evergreen Valley College; Jeri Rubin, University of Alaska; Bonnie S. Rucks, DeVry Institute–DuPage; Jill Russell, Camden County College; Karl Rutkowski, Pierce Jr. College; Tom Rutkowski, SUNY–Cobleskill; Joan Ryan, Clackamas Community College; James Sagner, Berkeley CollegeWestchester; Timothy E. Samolis, Pittsburgh Technical Institute; Maurice M. Sampson, Community College of Philadelphia; Roy Sanchez, San Jacinto College; Cathy Sanders, San Antonio College; Joseph C. Santora, Essex County College; Nicholas Sarantakes, Austin Community College; Billie Sargent, National College; Quinn Sasaki, Mt. San Antonio College; Jim (Wallace) Satchell, St. Philips College; Marcy Satterwhite, Lake Land Community College; Gordon Saul, National Business

xvii

xviii

ACKNOWLEDGMENTS

College; Pookie Truly Sautter, New Mexico State University; Larry Saville, Des Moines Area Community College; Robert R. Schaller, Charles County Community College; Gerry Scheffelmaier, Middle Tennessee State University; Kurt Schindler, Wilbur Wright College; Ron Schloemer, Miami University; Lewis Schlossinger, Community College of Aurora; Lance Schmeidler, Northern Virginia Community College; Linda Schmitigal, Lake Superior State University; Dennis Schmitt, Emporia State University; Marcianna Schusler, Prairie State College; Marilyn Schwartz, College of Marin; Tom Secrest, Coastal Carolina University; Jim Seeck, Harper College; Daniel C. Segebath, South Suburban College; Justin Selden, The University of Akron; Patricia A. Serraro, Clark College; Greg Service, Broward Community College–North; Pat Setlik, William Rainey Harper College; Guy Sessions, Spokane Falls Community College; Phyllis T. Shafer, Brookdale Community College; Dennis Shannon, Belleville Area College; Martin Shapiro, Berkeley College–White Plains; Richard Shapiro, Cuyahoga Community College; Dick Sharman, Montgomery College; Charles Shatzer, Solano Community College; Mark Sheehan, Bunker Hill Community College; Richard Sherer, Los Angeles Trade–Tech College; Nora Jo Sherman, Houston Community College; Charlie Shi, Diablo Valley College; Donald Shifter, Fontbonne College; Lynette Shishido, Santa Monica College; Gerald Silver, Purdue/Calumet–Hammond; Cynthia Singer, Union City College; Leon Singleton, Santa Monica College; Rajendra Sinhaa, Des Moines Area Community College; Steven Skaggs, Waubonsee Community College; Jerry Sitek, Southern Illinois University; Michelle Slagle, The George Washington University; James A. Smalley, DeVry–DuPage; Noel Smith, Palm Beach Community College; Bill Snider, Cuesta College; Paul Solomon, San Jose State University; Stephen Snyder, University of West Florida; Sol A. Solomon, Community College of Rhode Island; Carl Sonntag, Pikes Peak Community College; Melinda Soto, Mt. San Antonio Community College; Russell W. Southall, Laney College; Ray Sparks, Pima Community College–East Campus; Rieann Spence-Gale, Northern Virginia Community College; Sandra Spencer, DeAnza College; Richard Stanish, Tulsa Junior College; Elizabeth Stanley, Northern Virginia Community College; Camille Stallings, Pima Community College– Downtown; Vernon Stauble, San Bernardino Valley College; Jeffery Stauffer, Ventura College; Lynda St. Clair, Bryant College; William A. Steiden, Jefferson Community College Southwest Campus; Emanual Stein, Queensborough Community College; Scott Steinkamp, Northwestern Business College; Kenneth Steinkruger, DeVry Institute of Technology–Chicago; Carl Stem, Texas Tech University; Leo Stevenson, Western Michigan University; Richard Stewart, Gulf Coast Community College; Robert Stivender, Wake Technical Community College; Edith Strickland, Tallahassee Community College; David Stringer, DeAnza College; Charles I. Stubbart, Southern Illinois University; Jacinto Suarez, Bronx Community College; Paul Sunko, Olive Harvey College; Lynn Suksdorf, Salt Lake Community College; George Sutcliffe, Central Piedmont Community College; Dottie Sutherland, Pima Community College–East Campus; Lorraine Suzuki, University of Maryland– Asian Division; Verna Swanljung, North Seattle Community College; Carl Swartz, Three Rivers Community College; William Syvertsen, Fresno City College; James Taggart, University of Akron; Robert Tansky, St. Clair County Community College; Daryl Taylor, Pasadena City College; Merle E. Taylor, Santa Barbara City College; Verna Teasdale, Prince George’s Community College; Ray Tewell, American River College; Gary W. Thomas, Anne Arundel Community College; Bill Thompson, Foothill Community College; Darrell Thompson, Mountain View College; Linda Thompson, Massasoit Community College; Susan Thompson, Palm Beach Community College; Tom Thompson, University of Maryland University College; Linda Tibbetts, Sinclair Community College; Darlene Tickle, Southern Arkansas University–Magnolia; Vern Timmer, SUNY–Alfred; Frank Titlow, St. Petersburg College; Patricia Torpey, National American University; Amy Toth, Northampton County Area Community College; Jane A. Treptow, Broward Community College; Bonnie Luck-Yan Tsang, DeAnza College; Stephen Tsih, San Jose City College;

ACKNOWLEDGMENTS

Chuck Tychsen, Northern Virginia Community College; J. Robert Ulbrich, Parkland College; Shafi Ullah, Broward Community College (South campus); Pablo Ulloa, El Paso Community College; Vern Urlacher, Colorado Technical University; Margie Vance, Albuquerque Vo-Tech Institute; Robert Vandellen, Baker College–Cadillac; Richard Van Ness, Schenectady County Community College; Sal Veas, Santa Monica College; Heidi Vernon-Wortzel, Northeastern University; Julie C. Verrati, Montgomery College; Janna P. Vice, Eastern Kentucky University; Michael Vijuk, William Rainey Harper College; Martha Villarreal, San Joaquin Delta College; William Vincent, Santa Barbara City College; Douglas S. Viska, William Rainey Harper College; Nancy Waldron, Lasell College; Cortez Walker, Baltimore City Community College; Steve Walker, Midwestern State University; Tom Walker, Seminole Community College; Carl Wall, Broward Community College–North; Roger Waller, San Joaquin Delta College; Christopher Walsh, Hagerstown Community College; Joyce Walsh-Portillo, Broward Community College–Central; Leatha Ware, Waubonsee Community College; Richard C. Warner, Lehigh Carbon Community College; Dorothy S. Warren, Middle Tennessee State University; Louis Watanabe, Bellevue Community College; W. J. Waters, Central Piedmont Community College; Philip Weatherford, Embry-Riddle Aeronautical University; Connie Wedemeyer, McLennan Community College; Warren Wee, Hawaii Pacific University; Ron Weidenfeller, Grand Rapids Community College; Pete Weiksner, Lehigh County Community College; Henry Weiman, Bronx Community College; Bernard Weinrich, St. Louis Community College–Forest Park; Bill Weisgerber, Saddleback College; Gregor Weiss, Prince George’s Community College; Martin Welc, Saddleback College; William A. Weller, Modesto Junior College; James H. Wells, Daytona Beach Community College; Sally Wells, Columbia College; Michael David Wentz, Hagerstown Community College; Richard Westfall, Cabrillo College; Aimee Wheaton, Regis University; Cammie White, Santa Monica College; Donald White, Prince George’s Community College; Frederick D. White, Indian River Community College; Jay Whitelock, Community College of Baltimore County– Catonsville; John Whitlock, Community College of Baltimore County–Cantonsville; Jean Wicks, Bowie State University; Timothy Wiedman, Thomas Nelson Community College; Paul Wilcox, DeVry Institute of Technology–Orlando; Walter Wilfong, Florida Technical College; Dick Williams, Laramie County Community College; Mary E. Williams, University of Central Oklahoma; Paul Williams, Mott Community College; Stanley Williams, Pensacola Christian College; Gayla Jo Wilson, Mesa State College; Lynn Wilson, Saint Leo University; Greg Winter, Barry University; Wallace Wirth, South Suburban Community College; Amy Wojciechowski, West Shore Community College; Colette Wolfson, Ivy Tech Community College; Steve Wong, Rock Valley College; Judy Eng Woo, Bellevue Community College; Joyce Wood, Northern Virginia Community College; Bennie Woods, Burlington County College; Nathaniel Woods, Columbus State Community College; Greg Worosz, Schoolcraft College; William Wright, Mt. Hood Community College; Daniel Wubbena, Western Iowa Tech Community College; Merv Yeagle, Hagerstown Junior College; C. Yin, DeVry Institute of Technology; Ned Young, Sinclair Community College; Ron Young, Kalamazoo Valley Community College; Charles D. Zarubba, Florida Metropolitan University–Tampa College; C. Zarycki, Hillsborough Community College; John Ziegler, Hagerstown Community College; Nancy Zimmerman, Community College of Baltimore County—Cantonsville; Richard Zollinger, Central Piedmont College; Gail A. Zwart, Riverside Community College District, Norco Campus. The ninth edition continues to be the market’s gold standard due to involvement of these committed instructors and students. We thank them all for their help, support, and friendship. Bill Nickels

Jim McHugh

Susan McHugh

xix

Introduction to Business Instructors How quickly things are changing! The ways instructors teach, the ways students learn, and the ways information is delivered are all changing rapidly. This evolution is affecting college courses across the country. As authors, we must consider all of these changes, both in the types of resources we offer and in the way we provide them to you.

WE HAVE 3 GOALS IN THIS EDITION: • To sustain the celebrated quality of the text and its supplement package. • To address the changing course environment and methods for information delivery. • To help you build your course by providing what YOU need most.

We remain dedicated to listening vigilantly to what you tell us you need in this course. We have made changes and enhancements in this revision that are all based on what we heard from you. As you look through the next few pages, you’ll find what you need to navigate your way most effectively through this book and its supplements. We firmly believe that no course in college is more important than the introduction to business course. We thank all the dedicated instructors who have shared their work with us in previous editions and look forward to welcoming new instructors to the Understanding Business team.

Bill Nickels

Jim McHugh

Susan McHugh

* *

to our fellow

text changes

CURRENCY

*THEMES

*

BONUS CHAPTERS You may notice this edition has gone through a bit of a makeover. In an effort to

We have retained the four bonus chapters: Bonus Chapter A: Working within the Legal Environment Bonus Chapter B: Using Technology to Manage Information Bonus Chapter C: Managing Risk Bonus Chapter D: Managing Your Personal Finances

reduce the length of the text

without

sacrificing

As usual, we listened to you to see which, if any, chapters you wanted dropped. There was no agreement as to which chapters should be deleted. For example, many instructors consider the personal

coverage,

we

eliminated

redundancy and extraneous verbiage. This meas a more

finance chapter to be critical; others have a whole course on the subject and don’t want to repeat it. Instructors did agree that it was best to have many chapters to choose from, and that they would choose which ones to assign and which ones to let the students read for themselves. As a consequence, we have maintained the four

concise read for students, but everything you know and love about Understanding

bonus chapters at the end of the text. It is important to note that all the accompanying supplemental materials (PowerPoints, test questions, etc.) are included for these bonus chapters. Our bonus chapters are easy to include in your lectures and easy to skip if you don’t cover this material in your course.

Business is still here.

THE DYNAMIC NATURE OF BUSINESS Key topics and issues are still incorporated as themes throughout the text, with particular emphasis given to climate change, small business, global business, legal issues, and ethics through boxes in each chapter: • Thinking green • Small business and entrepreneurship • Global business • Ethics and social responsibility • Legal briefcase • Economic crisis • Technology and change • Pleasing customers • Cultural diversity issues and examples • Teams • Quality • E-commerce

students * understanding

LEARNING GOALS Everything in the text and supplements package ties back to the chapter learning goals. The learning goals help students preview what they should know after reading the chapter, and then the chapter summaries test students’ knowledge by asking questions related to the learning goals. The Test Bank, Instructor’s Manual, PowerPoints, Understanding Business Online, Connect Business, and Student Assessment and Learning Guide are all organized according to the learning goals as well.

DEVELOPING WORKPLACE SKILLS This section has activities designed to increase student involvement in the learning process. Some of these miniprojects require Internet searches, while others can be used as team activities either in or out of the classroom.

GETTING READY FOR PRIME TIME This section, found at the front of the text, introduces students to the skills they need to succeed in this course, in future courses, and in their careers. It includes material on business etiquette, study skills and time management, and career management advice.

GETTING TO KNOW BUSINESS PROFESSIONALS Every chapter and bonus chapter opens with the profile of a business professional whose career relates closely to the material in the chapter. These business professionals work for a variety of businesses,

from small businesses and nonprofit organizations to large corporations. These career profiles are an engaging way to open the chapter and to introduce students to a variety of business career paths.

4 * *

NAME *

Demanding

Ethical and Socially Responsible

Behavior

*

goals *

A f t e r y o u h a v e r e a d a n d s t u d i e d t h i s c h a p t e r, y o u s h o u l d b e a b l e t o

1

Explain why obeying the law is only the first step in behaving ethically.

2

Ask the three questions to answer when faced with a potentially unethical action.

3

Describe management’s role in setting ethical standards.

4

Distinguish between compliance-based and integrity-based ethics

L EARNI NG

THAT

COMPANY

Every chapter opens with a Name

codes, and list the six steps in setting up a corporate ethics code.

That

5

Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.

answer for the challenge can be

6

Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.

profile

Company

challenge.

The

found somewhere in the chapter.

CRITICAL THINKING These

*

I

n the mind of burrito baron Steve Ells, founder and CEO with no antibiotics or growth hormones. Although there are of Chipotle Mexican Grill, a fast-food restaurant shouldn’t not yet enough producers of naturally raised chicken and have to sacrifice quality or ethical responsibility in order to be beef to supply all of Chipotle’s meat, the supply is growing: inexpensive and, well, fast. Customers agree as they line up 80 percent of Chipotle’s chicken and 50 percent of its beef for Chipotle’s gourmet burritos, made with fresh ingredients is humanely raised, and in 2008 Chipotle committed to servright before their eyes. Dedication to quality has made Chipo- ing 52 million pounds of humanely raised meat to its customers. Its support of family farms has made Chipotle the leading tle a national hit, with current annual sales over $1 billion. restaurant buyer of humanely But it’s not just big burriraised meats. tos or towering sales that make G et ti ng to K now Thanks to its high-quality Chipotle an exceptional restaufood and humane treatment of rant chain. In 2000, Ells visited animals, U.S. diners are going one of his meat suppliers and X hog wild for Chipotle. The avercould not believe the horrible Fo u n d e r and C EO o f Ch ipot l e age annual revenue for a Chipoconditions of the supplier’s facMe xi can G r ill tory farm. As a result of this tle restaurant that has been eye-opening visit, Ells launched open more than a year is $1.7 Chipotle’s “Food With Integrity” campaign, with “a philosophy million, and analysts predict Chipotle could expand from 840 that we can always do better in terms of the food we buy,” locations to more than 3,000 restaurants across the United States. Its environmentally friendly attitude has even rubbed said Ells. “If people know that the food is based on abusing ani- off on fast-food giants Wendy’s and Burger King, which have mals, how satisfying can that dining experience be?” said Ells. begun to incorporate humanely raised pork in their food. But All Chipotle’s pork now comes from family farms with open despite such strides, Ells’s mission to serve “Food With Integpastures, bedded pens, and vegetarian meals for the pigs, rity” is far from complete.

Steve Ells

“Have we achieved our mission? No. Will we ever accomplish it? Never, because ‘Food With Integrity’ is a constant process of searching and improving. But the changes will be noticeable, positive and significant,” said Ells. Though they may not receive as much press as their corrupt colleagues, ethical entrepreneurs are the backbone of the business world. In this chapter, we explore the responsibility of businesses to their stakeholders: customers, investors, employees, and society. We look at the responsibilities of individuals as well. After all, responsible business behavior depends on responsible behavior of each individual in the business.

Sources: Chipotle Mexican Grill, www.chipotle.com/#flash/ fwi_story; Humane Farming Association, www.hfa.org/factory/ index.html; “Chipotle Commits to Serving More Than 50 Million Pounds of Naturally Raised Meat in 2008,” Business Wire, January 7, 2008; Adrianne Cohen, “Ode to a Burrito,” Fast Company, April 2008; and Anna Kuchment, “A Chain That Pigs Would Die For,” Newsweek, May 12, 2008.

end-of-chapter questions ask students to pause and think about how the material they‘re reading applies to their own lives.

www.chip o tl e.com

*

Learning tools are included to help students understand and review necessary business concepts and to give them an introduction to the functional areas of business.

NEW! UNDERSTANDING BUSINESS ONLINE Understanding Business Online provides what’s been missing in online course material: engaging, professional presentation of key chapter concepts in an online, interactive format. Whether you’re teaching completely online, or you’re teaching in a face-to-face course, Understanding Business Online is tied specifically to the market-leading textbook, Nickels/McHugh/ McHugh: Understanding Business. The online materials follow the chapter structure of the text and are organized according to the learning objectives within those chapters. It is not meant to replace the textbook in this course. The material presented online is meant to explain and enhance the chapter material from the text and make it more understandable by providing students with new and engaging exchapter are used in the chapter presentations. Self-check feedback refers students back to specific pages in the text where they can (re)read to gain a better understanding of concepts with which they are struggling. Reading assignments from each chapter also link back to specific pages within Nickels/McHugh/McHugh: Understanding Business. See below in the Instructor’s Resources section for more information on Understanding Business Online.

** review

amples to which they can relate. The Learning Objectives and chapter summaries from each

*

We know how much material instructors must cover in this course, and there

is a wealth of resources available to you with this text. One of our main goals with Understanding Business is to help you piece together which supplements can be most useful to YOU in your course. All of the supplements in this package are fully integrated with the text, easy to use, author-reviewed, and responsive

prep **

to instructors’ requests.

STUDENT ASSESSMENT AND LEARNING GUIDE The Student

updated on the Online Learning Center (www.mhhe .com/ub9e) as necessary.

Assessment and Learning Guide contains various forms of open-ended ques-

CASING THE WEB Short cases are provided on

tions, key term review, practice tests and

the text Web site (www.mhhe.com/ub9e) that allow

answers, and Internet exercises to help

students to practice managerial decision-making.

them be successful in the introduction to

They are meant to be discussion starters rather than

business course.

comprehensive cases that require a large percentage of class time. These cases are provided for every

PROGRESS

ASSESSMENTS To

help students understand and retain the material in

chapter and are referenced in the text (but housed on the text Web site).

the chapters, progress assessments will stop them at important points in the chapters to assess what they

SUMMARIES The end-of-chapter summaries

should have learned before proceeding. These ques-

are directly tied with the learning objectives from

tions can also be found on the PowerPoint slides for

the beginning of the chapters and are written in a

the chapter. They are a great tool for reviewing the

unique question-and-answer format to help stu-

material for quizzes/tests.

dents review the chapter material more effectively.

KEY TERMS The key terms from each chapter

iPOD CONTENT Quizzes and Narrated Power-

are highlighted in the text and defined in the mar-

Point slides are available on the text’s Web site as

gin. They’re again listed at the end of each chapter

Premium Content to students to help them review

and in the glossary at the end of the text. Matching

the chapters. Students can purchase it directly from

exercises in the Student Assessment and Learning

the site for $10, or they can receive an access card

Guide help to reinforce the key business terms they

directly with the purchase of a new text. Ask your

need to know and understand. Multilingual glossa-

McGraw-Hill sales representative about the package

ries are also provided on the Online Learning Center

that is right for you and your students.

(Mandarin Chinese, Spanish, and Russian) to help ESL students understand basic terminology.

INSTRUCTOR’S MANUAL This two-volume print instructor’s manual uses the ground-breaking

TAKING IT TO THE NET Each chapter con-

format that others in many disciplines now copy.

tains Taking It to the Net exercises that allow stu-

Detailed lecture outlines are included and contain

dents to research topics and issues on the Web and

marginal notes recommending where to use other

make decisions based on their research. These are

supplementary material from the text such as

PowerPoint slides, supplementary cases, lecture links,

online,

and critical thinking exercises. Many instructors,

you’re teach-

especially part-time faculty, tell us that the IM is a

ing

valuable time-saver and a very easy way to start

face-to-face

using the text quickly.

in

or a

course, Understanding Business Online is tied specifically to the market-leading textbook, Nickels/

ANNOTATED INSTRUCTOR’S EDITION

McHugh/McHugh: Understanding Business. The

The AIE is the same as the student edition with the

online materials follow the chapter structure of the

addition of marginal notes that suggest where to

text and are organized according to the learning

use various instructional tools such as PowerPoints,

objectives within those chapters. It is not meant to

supplementary cases, lecture links, and critical

replace the textbook in this course.

thinking exercises.

UNDERSTANDING BUSINESS ONLINE SUPPLEMENTS ORIENTATION VIDEO works with any major course management system ONLINE (www.mhhe.com/ub9e) Let author Jim that is in use today. The following course management McHugh walk you through the supplements package.

systems will all function with our Understanding

New and part-time professors can easily see what

Business Online content:

supplements are available, and full-time professors who are interested in seeing how to revitalize their courses with fresh instructor support will enjoy a video walkthrough. A perfect introduction for adjunct instructors!

NEW! UNDERSTANDING BUSINESS ONLINE Again, whether you’re teaching completely

• Blackboard • Blackboard (CE) Campus Edition (formerly WebCT) • Moodle • Angel • Desire2Learn (D2L) • Sakai • eCollege

The content will upload into your course management system and you can add your own content or hide some of the content that has been provided. The entire course is 508 compliant. Section 508 requires that federal agencies’ electronic and information technology is accessible to people with disabilities. Be sure to ask your McGraw-Hill sales representative about the many packaging options for Understanding Business and Understanding Business Online.

NEW! MONTHLY NEWSLETTER This newsletter contains a variety of tools to help freshen your classes: (1) links to interesting new videos; (2) abstracts of recent articles with accompanying critical thinking questions to spark class discussion (of course, we also include sample answers); and

more efficient studying, and higher retention of knowledge.

MCGRAW-HILL CONNECT BUSINESS FEATURES Connect Business offers a number of powerful tools and features to make managing assignments easier, so faculty can spend more time teaching. With Connect Business, students can engage with their coursework anytime and anywhere, making the learning process more accessible and efficient. Connect Business offers you the features described below.

SIMPLE ASSIGNMENT MANAGEMENT With Connect Business, creating assignments is easier than ever, so you can spend more time teaching and less time managing. The assignment management function enables you to: • Create and deliver assignments easily with

(3) a PowerPoint file that integrates these elements

selectable end-of-chapter questions and test

in an easy to use package. If you’re a current adopter

bank items.

of the text, then you are already receiving our new monthly newsletter.

• Streamline lesson planning, student progress reporting, and assignment grading to make class-

INSTRUCTOR’S RESOURCE CD The IRCD includes electronic versions of the Instructor’s Resource Manual, PowerPoint slides, and Test Bank, as well as the complete library of figures and photos from the text.

REFERENCE TABLE The reference table, on the inside front cover of the Annotated Instructor’s Edition, also gives you—at a glance—an idea of the topics/concepts/resources available with this book and where they’re provided to you and your students.

McGraw-Hill Connect Business

TM

room management more efficient than ever. • Go paperless with the eBook and online submission and grading of student assignments.

SMART GRADING When it comes to studying, time is precious. Connect Business helps students learn more efficiently by providing feedback and practice material when they need it, where they need it. When it comes to teaching, your time also is precious. The grading function enables you to: • Have assignments scored automatically, giving students immediate feedback on their work and side-by-side comparisons with correct answers. • Access and review each response; manually

LESS MANAGING. MORE change grades or leave comments for students TEACHING. GREATER to review. LEARNING. McGraw-Hill • Reinforce classroom concepts with practice tests

Connect Business is an online assignment and assessment solution that connects students with the tools and resources they’ll need to achieve success. McGraw-Hill Connect Business helps prepare students for their future by enabling faster learning,

and instant quizzes.

INSTRUCTOR LIBRARY The Connect Business Instructor Library is your repository for additional resources to improve student engagement in and out of class. You can select and use any asset

that enhances your lecture. The Connect Business Instructor Library includes: • Instructor’s Manual • Testbank • PowerPoint presentation • Videos • eBook

STUDENT STUDY CENTER The Connect Business Student Study Center is the place for students to access additional resources. The Student Study Center: • Offers students quick access to lectures, practice materials, eBooks, and more. • Provides instant practice material and study questions, easily accessible on the go. • Gives students access to the Personalized Learning Plan described below.

DIAGNOSTIC AND ADAPTIVE LEARNING OF CONCEPTS: LEARNSMART Students want to make the best use of their study time. The LearnSmart adaptive self-study technology within Connect Business provides students with a seamless combination of practice, assessment, and remediation for every concept in the textbook. LearnSmart’s intelligent software adapts to every student response and automatically delivers concepts that advance the student’s understanding while reducing time devoted to the concepts already mastered. The result for every student is the fastest path to mastery of the chapter concepts. LearnSmart: • Applies an intelligent concept engine to identify the relationships between concepts and to serve new concepts to each student only when he or she is ready. • Adapts automatically to each student, so stu-

• Provides continual reinforcement and remediation, but gives only as much guidance as students need. • Integrates diagnostics as part of the learning experience. • Enables you to assess which concepts students have efficiently learned on their own, thus freeing class time for more applications and discussion.

STUDENT PROGRESS TRACKING Connect Business keeps instructors informed about how each student, section, and class is performing, allowing for more productive use of lecture and office hours. The progress-tracking function enables you to: • View scored work immediately and track individual or group performance with assignment and grade reports. • Access an instant view of student or class performance relative to learning objectives. • Collect data and generate reports required by many accreditation organizations, such as AACSB.

LECTURE CAPTURE Increase the attention paid to lecture discussion by decreasing the attention paid to note-taking. For an additional charge Lecture Capture offers new ways for students to focus on the in-class discussion, knowing they can revisit important topics later. Lecture Capture enables you to: • Record and distribute your lecture with a click of button. • Record and index PowerPoint presentations and anything shown on your computer so it is easily searchable, frame by frame. • Offer access to lectures anytime and anywhere by computer, iPod, or mobile device. • Increase intent listening and class participation

dents spend less time on the topics they under-

by easing students’ concerns about note-taking.

stand and practice more those they have yet to

Lecture Capture will make it more likely you will

master.

see students’ faces, not the tops of their heads.

MCGRAW-HILL CONNECT PLUS BUSINESS McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Business. A seamless integration of an eBook and Connect Business, Connect Plus Business provides all of the Connect Business features plus the following: • An integrated eBook, allowing for anytime, anywhere access to the textbook. • Dynamic links between the problems or questions you assign to your students and the location in the eBook where that problem or question is covered. • A powerful search function to pinpoint and connect key concepts in a snap.

Business also offers a wealth of content resources for both instructors and students. This state-of-the-art, thoroughly tested system supports you in preparing students for the world that awaits. For more information about Connect, go to www.mcgrawhillconnect.com, or contact your local McGraw-Hill sales representative.

MCGRAW-HILL CUSTOMER CARE CONTACT INFORMATION At McGraw-Hill, we understand that getting the most from new technology can be challenging. That’s why our services don’t stop after you purchase our products. You can e-mail our Product Specialists 24 hours a day to get producttraining online. Or you can search our knowledge bank of Frequently Asked Questions on our support

In short, Connect Business offers you and your students powerful tools and features that optimize your

Web site. For Customer Support, call 800-331-5094, e-mail [email protected], or visit www. mhhe.com/support. One of our Technical Support

time and energies, enabling you to focus on course content, teaching, and student learning. Connect

Analysts will be able to assist you in a timely fashion.

instructor 1. Knowledge of key terms 2. Understanding

of

concepts

and

principles

3. Application of principles Rationales for the correct answer and the page references are included for each of the 6,000⫹ questions that have all been reviewed for accuracy. The test bank also asks questions about the boxed material and end-of-chapter material. Last but not least, each chapter and bonus chapter in the test bank includes a Test Table that organizes the questions by learning objective and level of learning, as well as identifies what type of question each is (multiple-choice, true/false, essay, question on boxed material, etc). A quick quiz is also provided in each chapter as an easy handout and mimics the chapter quiz for each chapter found on the Web site.

ASSURANCE

OF

LEARNING

READY

Educational institutions are often focused on the notion of assurance of learning, an important element of many accreditation standards. Understanding Business is designed specifically to support your assurance of learning initiatives with a simple, yet powerful, solution. We’ve aligned our test bank questions with Bloom’s Taxonomy and AACSB guidelines, tagging each question according to its knowledge and skills areas. Each test bank question for Understanding Business also maps to a specific chapter learning objective listed in the text. You can use our test bank software, EZ Test, to easily query for learning objectives that directly relate to the learning objectives for your course. You can use the reporting features of EZ Test to aggregate student results in a similar fashion, making the collection and presentation of assurance of learning data quick and easy.

testing**

TEST BANK The Nickels/McHugh/McHugh test bank has set the standard. It is designed to test three levels of learning:

AACSB STANDARDS McGraw-Hill Companies is a proud corporate member of AACSB International. Understanding the importance and value of AACSB accreditation, the authors of Understanding Business have sought to recognize the curriculum guidelines detailed in the AACSB standards for business accreditation by connecting all questions in the test bank to the general knowledge and skill guidelines found in the AACSB standards. The statements contained in Understanding Business are provided only as a guide for the users of this text. The AACSB leaves content coverage and assessment clearly within the realm and control of individual schools, the mission of the school, and the faculty. The AACSB also charges schools with the obligation of doing assessment against their own content and learning goals. While Understanding Business and the teaching package make no claim of any specific AACSB qualification or evaluation, we have within Understanding Business labeled selected questions according to the six general knowledge and skills areas. The labels or tags within Understanding Business are as indicated.

EZ TEST ONLINE McGraw-Hill’s EZ Test Online is a flexible and easy-to-use electronic testing program. The program allows instructors to create tests from book-specific items, accommodates a wide range of question types, and enables instructors to add their own questions. Multiple versions of the test can be created, and any test can be exported for use with WebCT, BlackBoard, or any other course management system. EZ Test Online is accessible to busy instructors virtually anywhere via the Web, and the program eliminates the need for them to install test software. Utilizing EZ Test Online also allows instructors to create and deliver multiple-choice or true/false quiz questions using iQuiz for iPod. For more information about EZ Test Online, please see the Web site at www.eztestonline.com.

* presentation VIDEOS Understanding Business is known for high-quality videos, and this edition is no exception. We have provided exciting new videos, along with video cases included at the end of every chapter that discuss the key concepts of each video. Some of the exciting companies that are featured in our newest videos include: • iContact • Netflix • Leo Burnett • Cellphonesforsoldiers.com • Ball Corporation • Broad Reach Sails

MANAGER’S

HOTSEAT

ONLINE The

Manager’s HotSeat Online (www.mhhe.com/mhs) is an interactive application that allows students to watch 15 real managers apply their years of experience in confronting certain management and organizational behavior issues. Students assume the role of the manager as they watch the video and answer

multiple-choice questions that pop up during the segment, forcing them to make decisions on the spot. Students learn from the managers’ mistakes and successes, and then do a report critiquing the managers’ approach by defending their reasoning. Manager’s HotSeat is available as Premium Content on the text Web site.

POWERPOINT™ New and improved, over 900 slides are available that include material from the text as well as slides that support and expand the text discussion. The PowerPoints have detailed teaching notes as well as page references and correlation to the learning objectives. The slides can be modified and are available at Understanding Business Online as well as on the Instructor’s CD. A PowerPoint presentation of basic concepts is available to students online to help them review the chapter material.

MEDIA

RESOURCE

GUIDE This guide

includes teaching notes for all of the media material available with the book. Detailed teaching notes to accompany the chapter videos are available, as well as the Investments Trader.

online components ONLINE LEARNING CENTER www.mhhe.com/ub9e

The Online Learning Center contains

*

We know the number of

hybrid and online courses

material for both instructors and students. Instructor supplements are available here to view or download, and stu-

is increasing every day.

dents can find resources such as the

For those of you who

Taking It to the Net exercises or Casing

have some sort of online

the Web cases; small business; global, and technology resources; the McGraw-

component to your course,

Hill Investments Trader; news links, chapter quizzes, and

we

multilingual glossaries.

offer

a

number

of

options depending on how

TEGRITY CAMPUS

much material you need—

Why use Tegrity Campus?

from a basic text Web site

• You speak 120 words per minute.

to

• Your students write only 20, forcing them to decide between listening or taking notes.

our

completely

Understanding Online, course

Business

enabling to

run

new your

entirely

• Students no longer have to make that decision. They can engage in class discussion, listen more intently, and retain more. Why instructors LOVE Tegrity Campus:

online.

It’s a simple one-click start/stop process that automatically captures audio, PowerPoint, Web pages, all computer screens, video, and more.

**

Why students LOVE Tegrity Campus: It allows them to: • Access your lectures anytime or anywhere. • Search across all lectures using keywords, to find exactly what they need. • Review a missed class, for an exam or to complete their lecture notes. For less than $1.00 a lecture your students can use Tegrity Campus! For more information visit us at http://tegritycampus.mhhe .com

options *

Consider the options for you and your students—there are different

methods of delivering the textbook as well as packaging options available to you for your course.

eBOOKS Digital textbooks—eBooks—are exact

and approval. Visit www.primisonline.com or talk

replicas of the print version and can offer substan-

to your McGraw-Hill/Irwin sales representative for

tial savings to your students off the cost of their

more details.

textbook. Understanding Business offers the CourseSmart eBook version of this title. With CourseSmart,

BUSINESS PLANNING SOFTWARE You

students can save up to 50 percent off the cost of a

have two options if you incorporate a business

print book, reduce their impact on the environment,

planning project into your course. The New Busi-

and access powerful Web tools for learning. Faculty

ness Mentor and the Business Plan Pro are both

can also review and compare the full text online

available as packaging options with the text. Both

without having to wait for a print desk copy. Course-

software packages provide sample business plans

Smart is an online eBook, which means users need

and resources, along with financial worksheets

to be connected to the Internet in order to access

and help along the way.

it. Students can also print sections of the book for maximum portability.

THE WALL STREET JOURNAL Students can go to www.wsjstudent.com to subscribe to the

PRIMIS Primis Online allows you to build your

print and online journal for $29.95. They have the

own custom textbook if you don’t use the entire

option to pay by credit card or to be billed for

text. Select the content and chapters that you are

the subscription. Students will be required to fill in

interested in from this book, arrange them in the

school and professor information during the reg-

order that’s most effective for your class, personal-

istration process, and professors will receive a

ize them with the information from your course, and

free subscription to the Journal after 10 students

request a complimentary print copy for your review

register.

Preface v Prologue: Getting Ready for Prime Time P-1

part 1 Business Trends: Cultivating a Business in Diverse, Global Environments 1 2 3 4

Taking Risks and Making Profits within the Dynamic Business Environment 2 Understanding How Economics Affects Business 28 Doing Business in Global Markets 58 Demanding Ethical and Socially Responsible Behavior 88

par t 4 Management of Human Resources: Motivating Employees to Produce Quality Goods and Services 10 Motivating Employees 254 11 Human Resource Management: Finding and Keeping the Best Employees 282 12 Dealing with Employee–Management Issues and Relationships 316

par t 5 Marketing: Developing and Implementing Customer-Oriented Marketing Plans

brief CONTENTS part 2 Business Ownership: Starting a Small Business 5 6

13 14 15 16

Marketing: Helping Buyers Buy 344 Developing and Pricing Goods and Services 372 Distributing Products 400 Using Effective Promotions 428

par t 6 Managing Financial Resources 17 Understanding Accounting and Financial Information 454 18 Financial Management 484 19 Using Securities Markets for Financing and Investing Opportunities 512 20 Money, Financial Institutions, and the Federal Reserve 544

How to Form a Business 112 Entrepreneurship and Starting a Small Business 144

Bonus Chapters

part 3 Business Management: Empowering Employees to Satisfy Customers 7 8 9

Management and Leadership 176 Adapting Organizations to Today’s Markets 200 Production and Operations Management 228

A B C D

Working within the Legal Environment A Using Technology to Manage Information B Managing Risk C Managing Your Personal Finances D

Chapter Notes N Glossary G Photo Credits PC-1 Name Index I Organization Index I-7 Subject Index I-11

*

Preface v

Chapter Two

Prologue: Getting Ready for Prime Time P-1

28 Understanding How Economics Affects Business

part 1 Business Trends: Cultivating a Business in Diverse, Global Environments

Profile: Getting to Know Muhammad Yunus, Founder of the Grameen Bank 28 How Economic Conditions Affect Businesses What Is Economics?

30

The Secret to Creating a Wealthy Economy 31

Chapter One 2

Thinking Green: More Profits from the Green Revolution 32

Taking Risks and Making Profits within the Dynamic Business Environment Profile: Getting to Know Nick Graham, Owner of the Main Street Market 2 Entrepreneurship and Wealth Building 4 Revenues, Profits, and Losses Matching Risk with Profit

5

Adam Smith and the Creation of Wealth

33

How Businesses Benefit the Community

33

Making Ethical Decisions: Corruption Destroys Economies 34

Understanding Free-Market Capitalism 34 The Foundations of Capitalism 35

5

Standard of Living and Quality of Life

Spotlight on Small Business: The Key to Capitalism Is Capital 36

5

Responding to the Various Business Stakeholders 6

How Free Markets Work 36

Using Business Principles in Nonprofit Organizations 7

The Economic Concept of Supply 37

How Prices Are Determined 36 The Economic Concept of Demand 37

contents Entrepreneurship versus Working for Others 8 Opportunities for Entrepreneurs 9 The Importance of Entrepreneurs to the Creation of Wealth 9 Spotlight on Small Business: Hiring People with Special Needs 10

The Business Environment

11

The Economic and Legal Environment 12 The Technological Environment

14

Making Ethical Decisions: Ethics Begins with You 15 The Competitive Environment

16

The Equilibrium Point, or Market Price 37 Competition within Free Markets

39

Benefits and Limitations of Free Markets 39

Understanding Socialism

40

The Benefits of Socialism 41 The Negative Consequences of Socialism

Reaching Beyond Our Borders: Prospering in Foreign Lands 43

Understanding the U.S. Economic System Key Economic Indicators 45 Productivity in the United States

48

The Social Environment

17

Productivity in the Service Sector 48

The Global Environment

18

The Business Cycle

Thinking Green: Getting Involved Personally 20

The Evolution of U.S. Business 20

41

Understanding Communism 41 The Trend toward Mixed Economies 42

48

Stabilizing the Economy through Fiscal Policy 49

Progress in the Agricultural and Manufacturing Industries 20

Fiscal Policy in Action during the Economic Crisis of 2008–2009 50

Progress in Service Industries

Using Monetary Policy to Keep the Economy Growing 51

Your Future in Business

21

21

Video Case: College Entrepreneurs Do Good and Make Money 26

Video Case: Giving the Poor a Working Chance 56

45

30

Chapter Three

Ethics Begins with Each of Us

58 Doing Business in Global Markets

Making Ethical Decisions: To Tube or Not to Tube? 93

Managing Businesses Ethically and Responsibly 94

Profile: Getting to Know Sheikha Lubna al-Qasimi, Foreign Trade Minister of the United Arab Emirates 58 The Dynamic Global Market 60 Why Trade with Other Nations? 61

Setting Corporate Ethical Standards

Corporate Social Responsibility Responsibility to Customers

The Theories of Comparative and Absolute Advantage 61

Getting Involved in Global Trade

Responsibility to Investors

102

Thinking Green: Green Greed 104 Social Auditing

Spotlight on Small Business: Finding Cracks in the Great Wall 64

104

International Ethics and Social Responsibility 105

64

Strategies for Reaching Global Markets

Reaching Beyond Our Borders: Ethical Culture Clash 107

66

Licensing 66

Video Case: Going Beyond Legality

111

67

Reaching Beyond Our Borders: The Sun Never Sets on Mickey D’s 68 Franchising

100

Responsibility to Society and the Environment 102

Exporting Goods and Services 63

Exporting

96

98

101

Responsibility to Employees

62

Importing Goods and Services 63

Measuring Global Trade

92

*

68

Contract Manufacturing

69

International Joint Ventures and Strategic Alliances 70 Foreign Direct Investment

72

72 74

Physical and Environmental Forces

Trade Protectionism

75

75

The World Trade Organization

Advantages of Sole Proprietorships

76

115

Disadvantages of Sole Proprietorships

Common Markets 77 The North American and Central American Free Trade Agreements 78 Legal Briefcase: NAFTA or SHAFTA?

112 How to Form a Business Profile: Getting to Know Brian Scudamore, Founder of 1-800-GOT-JUNK? 112 Basic Forms of Business Ownership 114 Sole Proprietorships 115

Economic and Financial Forces 73 Legal and Regulatory Forces

Business Ownership: Starting a Small Business Chapter Five

70

Forces Affecting Trading in Global Markets Sociocultural Forces

par t 2

79

The Future of Global Trade 80 The Challenge of Offshore Outsourcing

81

Making Ethical Decisions: Take Two Aspirins and Go to Thailand 82 Globalization and Your Future 83

Video Case: The Mouse that Doesn’t Come with a Computer 87

Partnerships

Advantages of Partnerships

118

Spotlight on Small Business: Pick Your Partner Wisely 119 Disadvantages of Partnerships

Corporations

88 Demanding Ethical and Socially Responsible Behavior Profile: Getting to Know Steve Ells, Founder and CEO of Chipotle Mexican Grill 88 Ethics Is More Than Legality 90

119

121

Advantages of Corporations

121

Disadvantages of Corporations

123

Individuals Can Incorporate 124 S Corporations

125

Limited Liability Companies

Chapter Four

116

117

126

Legal Briefcase: Vermont Wants to Be the Home of Your New Virtual Company 127

Corporate Expansion: Mergers and Acquisitions 129 Thinking Green: Root, Root, Root for the Green Team 131

Franchises

131

Legal Briefcase: Paying the Price 91

Advantages of Franchises

Ethical Standards Are Fundamental 92

Disadvantages of Franchises

132 133

xxxv

Diversity in Franchising

134

Home-Based Franchises

Keeping Records 167

135

Looking for Help 167

Going International: Small-Business Prospects 169 Video Case: Sailing for Sale 173

E-Commerce in Franchising 136 Using Technology in Franchising

136

Franchising in International Markets 136

Cooperatives 137 Which Form of Ownership Is for You? 138 Video Case: Sonic Is Booming 142

*

Chapter Six 144 Entrepreneurship and Starting a Small Business

Business Management: Empowering Employees to Satisfy Customers Chapter Seven

Profile: Getting to Know Sheila C. Johnson, Cofounder of Black Entertainment Television (BET) 144 The Age of the Entrepreneur 146 The Job-Creating Power of Entrepreneurs in the United States 146

176 Management and Leadership Profile: Getting to Know Indra Krishnamurthy Nooyi, CEO of PepsiCo 176 Managers’ Roles Are Evolving 178 The Four Functions of Management 179 Reaching Beyond Our Borders: We Need Managers Over Here 180

Spotlight on Small Business: You’re Never Too Young to Be an Entrepreneur 147

Planning and Decision Making

Why People Take the Entrepreneurial Challenge 147

181

What Does It Take to Be an Entrepreneur? 148

Spotlight on Small Business: I’d Rather Be Blue 185

Thinking Green: Socially Responsible Entrepreneurship 149

Decision Making: Finding the Best Alternative 185

Organizing: Creating a Unified System 186

Turning Your Passions and Problems into Opportunities 149 Entrepreneurial Teams

Tasks and Skills at Different Levels of Management 188

150

Micropreneurs and Home-Based Businesses

150

Reaching Beyond Our Borders: Outsourcing Your Small Business 153 Web-Based Businesses

154

Entrepreneurship within Firms

Getting Started in Small Business 157 Small versus Big Business

160

160

192

193

Video Case: Best Buy’s Clockless Office 199

160

Chapter Eight

Take Over a Successful Firm 160 Making Ethical Decisions: Going Down with the Ship 161

Managing a Small Business 161 162

Writing a Business Plan

162 164

The Small Business Administration (SBA)

165

Knowing Your Customers 167

166

200 Adapting Organizations to Today’s Markets Profile: Getting to Know Anne Mulcahy, Former CEO of Xerox 200 Everyone’s Organizing 202 Building an Organization from the Bottom Up

Getting Money to Fund a Small Business

Managing Employees

190

Empowering Workers 192

A Key Criterion for Measurement: Customer Satisfaction 194

Small-Business Success and Failure 158

Begin with Planning

Leadership Styles

Controlling: Making Sure It Works

Learning about Small-Business Operations Get Some Experience

Leading: Providing Continuous Vision and Values 189

Managing Knowledge

157

Importance of Small Businesses 158

Learn from Others

Staffing: Getting and Keeping the Right People 189

Making Ethical Decisions: To Share or Not to Share 190

155

Encouraging Entrepreneurship: What Government Can Do 156

xxxvi

par t 3

202

Reaching Beyond Our Borders: General Electric Looks for More Profits 203 Making Ethical Decisions: Safety versus Profit 204

The Changing Organization

204

Making Ethical Decisions: Stay or Leave?

The Development of Organization Design Turning Principles into Organization Design

207

Facility Location in the Future

Decisions to Make in Structuring Organizations 208

Facility Layout 241

Choosing the Appropriate Span of Control

208

Materials Requirement Planning

Choosing between Tall and Flat Organization Structures 209

Purchasing

Weighing the Advantages and Disadvantages of Departmentalization 210

Quality Control

213 216

Transparency and Virtual Organizations

217

*

217 218

Adapting to Change 219 Restructuring for Empowerment

219

Creating a Change-Oriented Organizational Culture 220 Managing the Informal Organization

254 Motivating Employees

226

228 Production and Operations Management Profile: Getting to Know Samuel J. Palmisano, CEO and President of IBM 228 Manufacturing and Services in Perspective 230 Thinking Green: The Green Movement Improves the Economy 231 Manufacturers and Service Organizations Become More Competitive 231

From Production to Operations Management 232 Operations Management in the Service Sector 233

Production Processes 234 The Need to Improve Production Techniques and Cut Costs 236 Computer-Aided Design and Manufacturing 237

Mass Customization

237

Operations Management Planning Facility Location

238

238

Facility Location for Manufacturers

Management of Human Resources: Motivating Employees to Produce Quality Goods and Services

Chapter Ten

Chapter Nine

237

par t 4

221

Spotlight on Small Business: Keeping That Small-Company Feeling 222

Video Case: New Belgium Brewery

252

216

Managing the Interactions among Firms Benchmarking and Core Competencies

245

Control Procedures: PERT and Gantt Charts 246 Preparing for the Future 248 Video Case: Keeping Your Eye on Ball

214

Going Beyond Organizational Boundaries

Lean Manufacturing

245

ISO 9000 and ISO 14000 Standards

Cross-Functional Self-Managed Teams

Flexible Manufacturing

244

244

The Baldrige Awards

213

Matrix-Style Organizations

242

244

Just-in-Time Inventory Control

Organization Models 213 Line-and-Staff Organizations

240

Reaching Beyond Our Borders: Partnering Beyond Country Borders 241

Choosing Centralized or Decentralized Authority 208

Line Organizations

240

Taking Operations Management to the Internet 240

205

236

Profile: Getting to Know Sergey Brin and Larry Page, Founders of Google 254 The Value of Motivation 256 Frederick Taylor: The Father of Scientific Management 257 Legal Briefcase: Upset at UPS 258 Elton Mayo and the Hawthorne Studies

Theory X

264

Theory Y

264

Ouchi’s Theory Z 265 Goal-Setting Theory and Management by Objectives 267 Meeting Employee Expectations: Expectancy Theory 267 Reinforcing Employee Performance: Reinforcement Theory 268 Treating Employees Fairly: Equity Theory 268 Putting Theory into Action 269 Motivation through Job Enrichment

270

Motivating through Open Communication 239

259

Motivation and Maslow’s Hierarchy of Needs 260 Herzberg’s Motivating Factors 261 McGregor’s Theory X and Theory Y 263

Thinking Green: Green Team, Go!

270

271

xxxvii

Applying Open Communication in Self-Managed Teams 272 Recognizing a Job Well Done

272

Spotlight on Small Business: Big Motivators for Small Businesses 273

Personalizing Motivation

274

Motivating Employees across the Globe

Flextime Plans

306

Reaching Beyond Our Borders: Working Worldwide 307 Home-Based Work

308

Job-Sharing Plans

308

Moving Employees Up, Over, and Out 274

Motivating Employees across Generations

275

Video Case: Getting More Enterprise Out of Workers 281

Terminating Employees Retiring Employees

310 311

Video Case: Surf’s Up at Patagonia!

282 Human Resource Management: Finding and Keeping the Best Employees

309

310

Losing Valued Employees

Chapter Eleven

Profile: Getting to Know Sally Mainquist, President and CEO of Certes Financial Pros 282 Working with People Is Just the Beginning

309

Promoting and Reassigning Employees

315

Chapter Twelve 316 Dealing with Employee–Management Issues and Relationships

Developing the Ultimate Resource 284

Profile: Getting to Know Roger Goodell, Commissioner of the National Football League 316

The Human Resource Challenge 286

Employee–Management Issues

284

318

Labor Unions from Different Perspectives

Thinking Green: Green Eggs and Green Ham 287

The Early History of Organized Labor

Laws Affecting Human Resource Management 287

319

319

Labor Legislation and Collective Bargaining 320

Legal Briefcase: Government Legislation 288

Objectives of Organized Labor

Laws Protecting Employees with Disabilities and Older Employees 289

Reaching Beyond Our Borders: Workers of the World, Unite 325

Effects of Legislation 290

Resolving Labor–Management Disagreements 325

Determining a Firm’s Human Resource Needs 290 Recruiting Employees from a Diverse Population 292 Selecting Employees Who Will Be Productive 293

Mediation and Arbitration

Union Tactics 327

296

Making Ethical Decisions: Motivating Temporary Employees 297

Training and Developing Employees for Optimum Performance 297 Management Development Networking

301

Appraising Employee Performance to Get Optimum Results 301 Compensating Employees: Attracting and Keeping the Best 303 Pay Systems

303

Compensating Teams Fringe Benefits

Management Tactics

328

Making Ethical Decisions: When Do You Cross the Line? 329 The Future of Unions and Labor–Management Relations 329 Spotlight on Small Business: Nursing the Unions Back to Health 331

Controversial Employee–Management Issues 332

300

300

Diversity in Management Development

326

Tactics Used in Labor–Management Conflicts 327

Spotlight on Small Business: It’s Not Easy Being Small 294 Hiring Contingent Workers

323

304

305

Scheduling Employees to Meet Organizational and Employee Needs 306 xxxviii

Executive Compensation

332

Legal Briefcase: Paying for Incompetence 333 Pay Equity

334

Sexual Harassment Child Care

336

Elder Care

337

Drug Testing

335

338

Violence in the Workplace 338

Video Case: United We Stand

342

*

Product Differentiation 378

part 5

Marketing Different Classes of Consumer Goods and Services 378

Marketing: Developing and Implementing Customer-Oriented Marketing Plans

Marketing Industrial Goods and Services 379

Packaging Changes the Product 381

Chapter Thirteen

The Growing Importance of Packaging 382

344 Marketing: Helping Buyers Buy

Branding and Brand Equity 382 Brand Categories

Profile: Getting to Know Cricket Lee, Creator of Fitlogic 344 What Is Marketing? 346 The Evolution of Marketing

Generating Brand Equity and Loyalty 384

347

Creating Brand Associations

Spotlight on Small Business: Find a Need and Fill It 348 Nonprofit Organizations and Marketing

The Marketing Mix

383

Thinking Green: Couldn’t You Make a Smaller Footprint? 384

Brand Management 349

385

385

The New-Product Development Process 385

350

Generating New-Product Ideas

386

Applying the Marketing Process 350

Product Screening

Thinking Green: Four Ps Drive Marketing 351

Product Analysis

Designing a Product to Meet Consumer Needs 352

Product Development and Testing

387

Commercialization

Setting an Appropriate Price 353

Providing Marketers with Information

388

Example of the Product Life Cycle

Developing an Effective Promotional Strategy

354

354

The Marketing Research Process 354

357

387

387

The Product Life Cycle

Getting the Product to the Right Place 353

The Marketing Environment

386

Using the Product Life Cycle

Competitive Pricing

388

389

390

Pricing Objectives

390

Cost-Based Pricing

391

Reaching Beyond Our Borders: Social Marketing Goes Global 358

Demand-Based Pricing

Global Factors

Reaching Beyond Our Borders: When Selling Sweets Goes Sour 392

358

Technological Factors 358

391

Competition-Based Pricing

Sociocultural Factors 359

Break-Even Analysis

Competitive Factors 359

Other Pricing Strategies

Economic Factors 359

Two Different Markets: Consumer and Businessto-Business (B2B) 359 The Consumer Market 360 Segmenting the Consumer Market

361

The Consumer Decision-Making Process

393

How Market Forces Affect Pricing

394

Nonprice Competition 394 Video Case: Going for the Green Market

399

Chapter Fifteen

Reaching Smaller Market Segments 362 Moving toward Relationship Marketing

392

392

400 Distributing Products

363 363

The Business-to-Business Market 365 Your Prospects in Marketing 366 Video Case: We All Scream for Ice Cream

370

Profile: Getting to Know Mark Stern of Doggypads.com 400 The Emergence of Marketing Intermediaries 402

Chapter Fourteen

Spotlight on Small Business: Recycling Is Part of the Whole Supply-Chain Process 403

372 Developing and Pricing Goods and Services

Why Marketing Needs Intermediaries 403

Profile: Getting to Know Ratan Tata from the Tata Group 372 Product Development and the Total Product Offer 374

How Intermediaries Create Exchange Efficiencies 404 The Value versus the Cost of Intermediaries Form Utility

407

Spotlight on Small Business: Home Cooking in Half the Time 376

Time Utility

407

Product Lines and the Product Mix

Possession Utility

Developing a Total Product Offer

375

377

405

The Utilities Created by Intermediaries 407

Place Utility 407 408

xxxix

Information Utility

408

Steps in the Selling Process 438

Service Utility 408

The Business-to-Consumer Sales Process

Wholesale Intermediaries Merchant Wholesalers

409

Public Relations: Building Relationships

409

Agents and Brokers

410

Retail Intermediaries

411

Publicity: The Talking Arm of PR 441

Sales Promotion: Giving Buyers Incentives 442 Word of Mouth and Other Promotional Tools 444

Retail Distribution Strategy 411

Nonstore Retailing Telemarketing

Viral Marketing

412

Electronic Retailing

Blogging

412

445

445

Podcasting

413

445

Vending Machines, Kiosks, and Carts 413

E-Mail Promotions

Direct Selling

Spotlight on Small Business: Fresh-Baked Promotion 446

414

Multilevel Marketing Direct Marketing

414

Mobile Media

414

Building Cooperation in Channel Systems Corporate Distribution Systems

415

Promotional Strategies

416

Reaching Beyond Our Borders: How to Reach the Little Guy 417

Logistics: Getting Goods to Consumers Efficiently 418 419

Trucks Are Good for Small Shipments to Remote Locations 420 Water Transportation Is Inexpensive but Slow 420 Thinking Green: Keeping Your Carbon Footprint Low 421 Pipelines Are Fast and Efficient

421

Air Transportation Is Fast but Expensive 421 Intermodal Shipping 421 The Storage Function 422 Tracking Goods

*

452

par t 6 Managing Financial Resources Chapter Seventeen 454 Understanding Accounting and Financial Information Profile: Getting to Know Sean Perich of Bakery Barn 454 The Role of Accounting Information 456 What Is Accounting? 456

Accounting Disciplines 457

422

What All This Means to You 422 Video Case: Making Life Easier 427

Managerial Accounting 457 Financial Accounting 458 Legal Briefcase: Balance Sheet Sherlocks

Chapter Sixteen

Auditing

428 Using Effective Promotions

Tax Accounting 461

Profile: Getting to Know Laurel Richie, Chief Marketing Officer of the Girl Scouts 428 Promotion and the Promotion Mix 430 Advertising: Informing, Persuading, and Reminding 431 Television Advertising

433

Thinking Green: Finding a Competitive Advantage in Sustainability 434 Product Placement Infomercials

434

460

460

Government and Not-for-Profit Accounting

461

The Accounting Cycle 462 Accounting Technology 463

Understanding Key Financial Statements

463

The Fundamental Accounting Equation 464 The Balance Sheet 465 Classifying Assets

466

Liabilities and Owners’ Equity Accounts 466 The Income Statement 468 Revenue

435

469

Online Advertising

435

Cost of Goods Sold

Global Advertising

436

Operating Expenses

Personal Selling: Providing Personal Attention 437 xl

447

447

Video Case: Leo Burnett

416

Trains Are Great for Large Shipments

446

Reaching Beyond Our Borders: Going Digital

415

Administered Distribution Systems

445

Managing the Promotion Mix: Putting It All Together 446

415

Contractual Distribution Systems Supply Chains

440

441

469 469

Spotlight on Small Business: Accounting for What’s Coming and Going in a Small Business 470

Net Profit or Loss

470

The Statement of Cash Flows

471

The Need for Cash Flow Analysis

512 Using Securities Markets for Financing and Investing Opportunities

473

Profile: Getting to Know Warren Buffett, CEO of Berkshire Hathaway 512 The Function of Securities Markets 514

474

Profitability (Performance) Ratios 475 Activity Ratios

506

510

Chapter Nineteen

Analyzing Financial Performance Using Ratios 473 Leverage (Debt) Ratios

505

Financial Management in Trying Times

Video Case: It’s My Money

472

Making Ethical Decisions: On the Accounting Hot Seat 473

Liquidity Ratios

Comparing Debt and Equity Financing

475

Reaching Beyond Our Borders: The Accounting Shot Heard around the World 477

The Role of Investment Bankers

Stock Exchanges

515

515

Securities Regulations and the Securities and Exchange Commission 516

Video Case: When the Goal Line Meets the Bottom Line 481

Making Ethical Decisions: Wagging the Dog 518

Chapter Eighteen

Foreign Stock Exchanges

484 Financial Management

Reaching Beyond Our Borders: The Wide, Wide World of Investing 519

Profile: Getting to Know Tonya Antonucci, Commissioner of the Women’s Professional Soccer League 484 The Role of Finance and Financial Managers 486

How Businesses Raise Capital by Selling Stock 519 Advantages and Disadvantages of Issuing Stock 520 Issuing Shares of Common Stock

The Value of Understanding Finance 487 What Is Financial Management?

Financial Planning

Issuing Shares of Preferred Stock

488

489

Learning the Language of Bonds

Working with the Budget Process 490 Establishing Financial Controls

492

Different Classes of Bonds

Making Ethical Decisions: Sail Smoothly or Rock the Boat? 493 Managing Day-by-Day Needs of the Business

493

Spotlight on Small Business: Keeping the Cash Flowing in Hard Times 494 Controlling Credit Operations 494

Trade Credit

495

496

497

Commercial Banks

497 498

Legal Briefcase: Making Sure It’s a Done Deal 500 500

Equity Financing

526

527 527

Understanding Stock Quotations

502 503

528

Investing in Bonds 529 529

530

Investing in Mutual Funds and ExchangeTraded Funds 530 Thinking Green: Investing with Integrity 531 Understanding Mutual Fund Quotations 532 Riding the Market’s Roller Coaster

501

Reaching Beyond Our Borders: Sharing the Wealth? 502 Debt Financing

Reducing Risk by Diversifying Investments 525

Understanding Stock Market Indicators 533

501

Obtaining Long-Term Financing

524

Choosing the Right Investment Strategy 525

Understanding Bond Quotations

Factoring Accounts Receivable 499

Credit Cards

524

Investing in High-Risk (Junk) Bonds

Different Forms of Short-Term Loans

Commercial Paper

523

Investing through Online Brokers

Buying Stock on Margin

496

Family and Friends

521

523

How Investors Buy Securities

Stock Splits

Alternative Sources of Funds 495

Obtaining Short-Term Financing

Special Bond Features

Investing in Stocks

Acquiring Needed Inventory 495 Making Capital Expenditures

520

Advantages and Disadvantages of Issuing Bonds 522

491

The Need for Operating Funds

520

How Businesses Raise Capital by Selling Bonds 521

489

Forecasting Financial Needs

518

534

Legal Briefcase: Gambling with Investors’ Security 536 Investing Challenges in the 21st-Century Market 536

Video Case: Where Did All My Money Go? 541 xli

Chapter Twenty

Bonus Chapter A

544 Money, Financial Institutions, and the Federal Reserve

A

Profile: Getting to Know David Boies, Corporate Attorney A The Case for Laws A-2

Profile: Getting to Know Ben S. Bernanke, Chairman of the Federal Reserve 544 Why Money Is Important 546

Statutory and Common Law

What Is Money? 547

Administrative Agencies

What Is the Money Supply?

Tort Law

548

The Global Exchange of Money

Control of the Money Supply

A-4

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

549

549

Basics about the Federal Reserve 549

Warranties

The Reserve Requirement

Negotiable Instruments

Open-Market Operations

550

Contract Law

551

The Federal Reserve’s Check-Clearing Role

Banking and the Great Depression

551

554

555

Savings and Loan Associations (S&Ls)

556

556

Spotlight on Small Business: How the Banking Crisis Affected Small Businesses 557 Other Financial Institutions (Nonbanks)

557

The Current Banking Crisis and How the Government Protects Your Money 558 Protecting Your Funds

559

Reaching Beyond Our Borders: The Banking Crisis Goes Global 560 The Savings Association Insurance Fund (SAIF) 560 The National Credit Union Administration (NCUA) 560

Using Technology to Make Banking More Efficient 561 562

International Banking and Banking Services 563 Leaders in International Banking

Using Technology to Manage Information Profile: Getting to Know David Steward, CEO of World Wide Technology B The Role of Information Technology B-2 How Information Technology Changes Business B-3 The Move toward Business Intelligence B-3

Types of Information

B-5

Managing Information

The Federal Deposit Insurance Corporation (FDIC) 559

Online Banking

Bonus Chapter B B

Services to Borrowers 556 Credit Unions

The History of Antitrust Legislation A-11

553

Services Provided by Commercial Banks

A-10

Laws to Protect Consumers A-12 Tax Laws A-13 Bankruptcy Laws A-14 Deregulation versus Regulation A-17

554

Making Ethical Decisions: What to Tell the Teller 555

563

The World Bank and the International Monetary Fund (IMF) 563

Video Case: PBS: Where Do We Get Bailout Money? 568

A-8

A-9

Promoting Fair and Competitive Business Practices A-10

The History of Banking and the Need for the Fed 553

Commercial Banks

A-8

Breach of Contract

The Discount Rate 551

The U.S. Banking System

A-3

A-3

A-4

Product Liability

Managing Inflation and the Money Supply 548

xlii

Working within the Legal Environment

B-6

Organizing E-Mail and Electronic Files Storing and Mining Data

B-7

B-7

The Road to Knowledge: The Internet B-8 The Front Door: Enterprise Portals

B-9

Broadband Technology B-10 Social Networking and Web 2.0

B-10

The Enabling Technology: Hardware

B-11

Cutting the Cord: Wireless Information Appliances B-12 Computer Networks

B-12

Virtualization and Cloud Computing Green IT

B-14

Software B-14 Effects of Information Technology on Management B-15 Human Resource Issues Security Issues

B-16

B-15

B-13

Privacy Issues

B-18

Stability Issues

The Need for Personal Financial Planning

B-19

Technology and You B-19

Six Steps to Controlling Your Assets

Building Your Financial Base

Bonus Chapter C C

Tax Deductions and Homeownership

Profile: Getting to Know Richard Ward, CEO of Lloyd’s (INSURANCE) C Understanding Business Risks C-2

Avoiding Risk

Where to Put Your Savings

D-8

Learning to Manage Credit

D-8

D-8

Protecting Your Financial Base: Buying Insurance D-9

How Rapid Change Affects Risk Management C-2

Health Insurance D-11

C-3

Reducing Risk

D-3

D-6

Real Estate: Historically, a Relatively Secure Investment D-7

Managing Risk

Managing Risk

D-2

Financial Planning Begins with Making Money D-2

Homeowner’s or Renter’s Insurance D-11

C-3

Other Insurance D-11

C-4

Planning Your Retirement

Self-Insurance C-4

D-12

Social Security D-12

Buying Insurance to Cover Risk C-4

Individual Retirement Accounts (IRAs) D-12

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

Insurance Coverage for Various Kinds of Risk C-7

Simple IRAs

D-14

401(k) Plans

D-14

Keogh Plans

D-14

Financial Planners

Health Insurance C-7

Estate Planning

D-15

D-15

Disability Insurance C-9 Workers’ Compensation

Chapter Notes

C-9

Liability Insurance C-9

Glossary

Life Insurance for Businesses C-10

Photo Credits

Insurance Coverage for Home-Based Businesses C-10

Name Index

The Risk of Damaging the Environment

N

G PC-1 I

Organization Index C-10

Subject Index

I-7

I-11

Bonus Chapter D D

Managing Your Personal Finances Profile: Getting to Know How to Be a Millionaire D

xliii

**

prime

time

To p 1 0 R e a s o n s to R e a d T h i s I n t ro d u c t i o n (Even If It Isn’t Assigned)

10

What the heck—you already bought the book, so you might as well get your money’s worth.

9

You don’t want the only reason you get a raise to be that the government has increased the minimum wage.

8

How else would you find out a spork isn’t usually one of the utensils used at a business dinner?

7

You need to know a cover letter isn’t a blank sheet of paper used to protect your résumé.

6

Not many successful job interviews start with “Like, you know, this is like, what I want to, like, do, you know.”

5

Getting off to a good start in the course can improve your chances of getting a higher grade, and your Uncle Ernie will send you a dollar for every A you get.

4

You don’t want to experience the irony of frantically reading the “time management” section at 3 a.m.

3

It must be important because the authors spent so much time writing it.

2

You want to run with the big dogs someday. A n d t h e n u m b e r o n e re a s o n f o r re a d i n g t h i s i n t ro d u c to r y s e c t i o n i s . . .

1

It could be on a test.

*

PROLOGUE

getting ready for

P-2

PROLOGUE

✽

Getting Ready for Prime Time

LEARNING THE SKILLS YOU NEED TO SUCCEED TODAY AND TOMORROW Your life is full. You’re starting a new semester, perhaps even beginning your college career, and you’re feeling pulled in many directions. Why take time to read this introduction? We lightheartedly offer our top 10 reasons on page P-1, but the real importance of this section is no joking matter. Its purpose, and that of the entire text, is to help you learn principles, strategies, and skills for success that will serve you not only in this course but also in your career and your life. Whether you learn them is up to you. Learning them won’t guarantee success, but not learning them—well, you get the picture. We hope you invest the time to read the entire Getting Ready for Prime Time section. However, we realize some parts may be more relevant at a particular time than others. To help you focus on the most important information for your needs, we’ve divided it into two major categories: 1. Succeeding in This Course. An overview of the skills you’ll need to succeed in this course and throughout college, as well as the skills you need to succeed in your career after you earn your diploma. READ THIS SECTION BEFORE YOUR FIRST CLASS and make a great first impression! 2. Getting the Job You Want. Guidelines to finding and getting the job you want with an emphasis on job search, résumé writing, and interviewing skills. This is an exciting and challenging time. Success in any venture comes from understanding basic principles and knowing how to apply them effectively. What you learn now could help you be a success—for the rest of your life. Begin applying these skills now to gain an edge on the competition. Good luck. We wish you the best. Bill Nickels

Jim McHugh

Susan McHugh

Getting Ready for Prime Time

✽

P-3

PROLOGUE

SUCCEEDING IN THIS COURSE Since you’ve signed up for this course, we’re guessing you already know the value of a college education. The holders of bachelor’s degrees will make an average of $51,000 per year compared to just $31,500 for high school graduates.1 Compounded over the course of a lifetime, the college grad will make over $300,000 more than the high school grad!2 Thus, what you invest in a college education is likely to pay you back many times. See Figure P.1 for more of an idea of how much salary difference a college degree makes by the end of a 30-year career. That doesn’t mean there aren’t good careers available to non–college graduates. It just means those with an education are more likely to have higher earnings over their lifetime. The value of a college education is more than just a larger paycheck. Other benefits include increasing your ability to think critically and communicate your ideas to others, improving your ability to use technology, and preparing yourself to live in a diverse world. Knowing you’ve met your goals and earned a college degree also gives you the selfconfidence to work toward future goals.3 Experts say today’s college graduates will likely hold seven or eight different jobs (often in several different careers) in their lifetime. Many returning students are changing their careers and their plans for life. In fact, 39 percent of the people enrolled in college today are 25 or older. By 2016, almost half the college population is expected to be in this category.4 You too may want to change careers someday. It can be the path to longterm happiness and success. That means you’ll have to be flexible and adjust your strengths and talents to new opportunities. Learning has become a lifelong job. You’ll constantly update your skills to achieve and remain competitive. If you’re typical of many college students, you may not have any idea what career you’d like to pursue. That isn’t necessarily a big disadvantage in today’s fast-changing job market. After all, many of the best jobs of the future don’t even exist today. There are no perfect or certain ways to prepare for the most interesting and challenging jobs of tomorrow. Rather, you should continue your college education, develop strong computer and Internet skills, improve your verbal and written communication skills, and remain flexible while you explore the job market.5

The rewards of college are well worth the effort for graduates, who can expect to earn 60 to 80 percent more than high school graduates over the course of their careers. Businesses like graduates too, because the growing needs of a global workplace require knowledgeable workers to fill the jobs of the future. What other benefits do you see from earning a college degree?

figure P.1 SALARY COMPARISON OF HIGH SCHOOL VERSUS COLLEGE GRADUATES

$1,400,000.00 $1,200,000.00 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $-

5 Years 20 Years 30 Years $40,478.00 $202,390.00 $404,780.00 $809,560.00 $1,214,340.00 C llege Graduate High School Graduate $22,895.00 $ 1 1 4,475.00 $228,950.00 $457,900.00 $686,850.00

College Graduate High School Graduate

P-4

PROLOGUE

✽

Getting Ready for Prime Time

USING THIS COURSE TO PREPARE FOR YOUR CAREER One of the objectives of this class, and this book, is to help you choose an area in which you might enjoy working and have a good chance to succeed. You’ll learn about economics, global business, ethics, entrepreneurship, management, marketing, accounting, finance, and more. At the end of the course, you should have a much better idea which careers would be best for you and which you would not enjoy. But you don’t have to be in business to use business principles. You can use marketing principles to get a job and to sell your ideas to others. You can use your knowledge of investments to make money in the stock market. You’ll use your management skills and general business knowledge wherever you go and in whatever career you pursue—including government agencies, charities, and social causes.

ASSESSING YOUR SKILLS AND PERSONALITY The earlier you can do a personal assessment of your interests, skills, and values, the better it can help you find career direction. Hundreds of schools use software exercises like the System for Interactive Guidance and Information (SIGI) and DISCOVER to offer self-assessment exercises, personalized lists of occupations based on your interests and skills, and information about different careers and the preparation each requires. Visit your college’s placement center, career lab, or library soon and learn what programs are available for you. Even if you’re a returning student, an assessment of your skills will help you choose the right courses and career path to follow next. Self-assessment will help you determine the kind of work environment you’d prefer (technical, social service, or business); what values you seek to fulfill in a career (security, variety, or independence); what abilities you have (creative/artistic, numerical, or sales); and what job characteristics matter to you (income, travel, or amount of job pressure versus free time).

Networking provides you with an array of personal contacts on whom you can call for career advice and help. Have you begun creating your network yet? Are you part of someone else’s?

USING PROFESSIONAL BUSINESS STRATEGIES RIGHT NOW Here are two secrets to success you can start practicing now: networking and keeping files on subjects important to you. Networking is building a personal array of people you’ve met, spoken to, or corresponded with who can offer you advice about and even help with your career options. Start with the names of your professors, both as employment references and as resources about fields of interest to you. Add additional contacts, mentors, and resource people, and keep the notes you make when talking with them about careers including salary information and courses you need to take.

Getting Ready for Prime Time

✽

PROLOGUE

All students need a way to retain what they learn. An effective way to become an expert on almost any business subject is to set up your own information system. You can store data on your computer and cell phone (back these files up!), or you can establish a comprehensive filing system on paper, or you can use a combination of the two. Few college students make this effort; those who don’t, lose much of the information they read in college or thereafter. Keep as many of your textbooks and other assigned readings as you can, and your course notes. Read a national newspaper such as The Wall Street Journal, The New York Times, or USA Today. Read your local newspaper. Each time you read a story that interests you, save a paper copy or add a link to the story online in your electronic file, under a topic heading like careers, small business, marketing, economics, or management. You’ll easily find the latest data on almost any subject on the Internet. Don’t rely on just one site for information (and be especially wary of Wikipedia)! Get familiar with a variety of sources and use them. Start a file for your résumé. In it, keep a copy of your current résumé along with reference letters and other information about jobs you may have held, including projects accomplished and additions to your responsibilities over time. Soon you’ll have a tremendous amount of information to help you prepare a polished résumé and answer challenging job interview questions with ease. Watching television shows about business, such as Nightly Business Report and Jim Cramer’s Mad Money, is like getting a free graduate education in business. Try viewing some of these shows or listening to similar ones on the radio, and see which ones you like best. Take notes and put them in your files. Keep up with business news in your area so that you know what jobs are available and where. You may also want to join a local business group to begin networking with people and learning the secrets of the local business scene. Many business groups and professional societies accept student members.

LEARNING TO BEHAVE LIKE A PROFESSIONAL There’s a reason good manners never go out of style. As the world becomes increasingly competitive, the gold goes to teams and individuals with that extra bit of polish. The person who makes a good impression will be the one who gets the job, wins the promotion, or clinches the deal. Good manners and professionalism are not difficult to acquire; they’re second nature to those who achieve and maintain a competitive edge.6 Not even a great résumé or designer suit can substitute for poor behavior, including verbal behavior, in an interview.7 Say “Please” and “Thank you” when you ask for something. Open doors for others, stand when an older person enters the room, and use a polite tone of voice. You may want to take a class in etiquette to learn the proper way to eat in a nice restaurant, what to do at a formal party, and so on. Of course, it’s also critical to be honest, reliable, dependable, and ethical at all times. Some rules are not formally written anywhere; instead, every successful businessperson learns them through experience. If you follow these rules in college, you’ll have the skills for success when you start your career. Here are the basics: 1. Making a good first impression. An old saying goes, “You never get a second chance to make a good first impression.” You have just a

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few seconds to make an impression. Therefore, how you dress and how you look are important. Take a clue as to what is appropriate at any specific company by studying the people there who are most successful. What do they wear? How do they act? 2. Focusing on good grooming. Be aware of your appearance and its impact. Wear appropriate, clean clothing and a few simple accessories. Revealing shirts, nose rings, and tattoos may not be appropriate in a work setting. Be consistent too; you can’t project a good image by dressing well a few times a week and then showing up looking like you’re getting ready to mow a lawn. Many organizations have adopted “business casual” guidelines, but others still require traditional attire, so ask what the organization’s policies are and choose your wardrobe accordingly. Casual doesn’t mean sloppy or shabby. Wrinkled clothing, shirttails hanging out, and hats worn indoors are not usually appropriate. For women, business casual attire includes simple skirts and slacks (no jeans), cotton shirts, sweaters (not too tight), blazers, and low-heeled shoes or boots (always with socks or stockings). Men may wear khaki trousers, sport shirts with collars, sweaters or sport jackets, and casual loafers or lace-up shoes. Many businesses have adopted business casual as the proper work attire, but others still require traditional clothing styles. How does your appearance at work affect both you and your company?

3. Being on time. When you don’t come to class or work on time, you’re sending this message to your teacher or boss: “My time is more important than your time. I have more important things to do than be here.” In addition to showing a lack of respect to your teacher or boss, lateness rudely disrupts the work of your colleagues. Pay attention to the corporate culture. Sometimes you have to come in earlier than others and leave later to get that promotion you desire. To develop good work habits and get good grades, arrive in class on time and avoid leaving (or packing up to leave) early. 4. Practicing considerate behavior. Listen when others are talking—for example, don’t read the newspaper or eat in class. Don’t interrupt others when they are speaking; wait your turn. Eliminate profanity from your vocabulary. Use appropriate body language by sitting up attentively and not slouching. Sitting up has the added bonus of helping you stay awake! Professors and managers alike get a favorable impression from those who look and act alert. 5. Practicing good netiquette. The basic rules of courtesy in face-to-face communication also apply to e-mail exchanges. Introduce yourself at the beginning of your first e-mail message. Next, let your recipients know how you got their names and e-mail addresses. Then proceed with your clear but succinct message, and always be sure to type full words (ur is not the same thing as your). Finally, close the e-mail with a signature. Do not send an attachment unless your correspondent has indicated he or she will accept it. Ask first! You can find much more information about proper Internet etiquette, or netiquette, online—for example, at NetManners.com. 6. Practicing good cell phone manners. Your Introduction to Business class is not the place to be arranging a date for tonight. Turn off the phone during class or in a business meeting unless you are expecting a critical call. If you are expecting such a call, let your professor know before class. Turn off your ringer and put the phone on vibrate. Sit by the aisle and near the door. If you do receive a critical call, leave

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the room before answering it. Apologize to the professor after class and explain the situation. 7. Being prepared. A businessperson would never show up for a meeting without having read the appropriate materials and being prepared to discuss the topics on the agenda. For students, acting like a professional means reading assigned materials before class, asking and responding to questions in class, and discussing the material with fellow students. Just as traffic laws enable people to drive more safely, business etiquette allows people to conduct business with the appropriate amount of consideration. Sharpen your competitive edge by becoming familiar with its rules. If your job or career requires you to travel internationally, learn the proper business etiquette for each country you visit. Customs differ widely for such everyday activities as greeting people, eating, giving gifts, presenting and receiving business cards, and conducting business in general. In Japan, businesspeople typically bow instead of shaking hands, and in some Arab countries it is insulting to sit so as to show the soles of your shoes. Honesty, high ethical standards, and reliability and trustworthiness are important for success in any country. Having a reputation for integrity will enable you to be proud of who you are and contribute a great deal to your business success. Unethical behavior can ruin your reputation, so think carefully before you act. When in doubt, don’t! Ethics is so important to success that we include discussions about it throughout the text.

DOING YOUR BEST IN SCHOOL The skills you need to succeed in life after college are the same ones that will serve you well in your studies. Career, family, and hobbies all benefit from organizational and time-management skills you can apply right now. Here are some tips for improving your study habits, taking tests, and managing your time.

Study Hints For the remainder of your college career, consider studying to be your business. Though you may hold another job while enrolled in this class, you’re in school because you want to advance yourself. So until you get out of school and into your desired occupation, studying is your business. And like any good businessperson, you aim for success. Follow these strategies: 1. Go to class. It’s tempting to cut a class on a nice day or when there are other things to do. But nothing is more important to doing well in school than going to class every time. If possible, sit in the front near the instructor. This will help you focus better and avoid distractions in the room. 2. Listen well. It’s not enough to show up for class if you use the time for a nap. Make eye contact with the instructor. In your mind, form a picture of what he or she is discussing. Include your existing knowledge

Behavior that’s taken for granted in other countries might be unusual in the United States. In some cultures bowing is a form of greeting to show respect. How can you learn the appropriate business etiquette for the countries in which you do business?

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The SQ3R study system recommends that you “survey, question, read, recite, and review” to stay up-to-date with assignments and shine in class every day. Have you adopted this system?

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and past experiences in your picture. This ties new knowledge to what you already know. Take careful notes. Make two columns in your notebook. On one side write down important concepts, and on the other examples or more detailed explanations. Use abbreviations and symbols whenever possible and wide spacing to make the notes easier to read. Rewrite your notes after class to make them easier to read. Rereading and rewriting help store the information in your long-term memory. Learn the concepts in your courses the same way you learn the words to your favorite song: through repetition and review. Find a good place to study. Find a place with good lighting and a quiet atmosphere. Some students do well with classical music or other music without lyrics playing in the background. Keep your study place equipped with extra supplies such as pens, pencils, calculator, folders, and paper so you don’t have to interrupt studying to hunt for them. 5. Read the text using a strategy such as “survey, question, read, recite, review” (SQ3R). a. Survey or scan the chapter first to see what it is all about. This means looking over the table of contents, learning goals, headings, photo essays, and charts so you get a broad idea of the content. Scanning will provide an introduction and help get your mind in a learning mode. b. Write questions, first by changing the headings into questions. For example, you could change the heading of this section to “What hints can I use to study better?” Read the questions that appear throughout each chapter in the Progress Assessment sections to give yourself a chance to recall what you’ve read. c. Read the chapter to find the answers to your questions. Be sure to read the boxes as well. They offer extended examples or discussions of the concepts in the text. You’ve probably asked, “Will the material in the boxes be on the tests?” Even if your instructor chooses not to test over them directly, they are often the most interesting parts of the chapter and will help you retain the concepts better. d. Recite your answers to yourself or to others in a study group. Make sure you say the answers in your own words so that you clearly understand the concepts. Research has shown that saying things is a more effective way to learn them than seeing, hearing, or reading about them. While often used in study groups, recitation is also good practice for working in teams in the work world. e. Review by rereading and recapping the information. The chapter summaries are written in a question-and-answer form, much like a classroom dialogue. They’re also tied directly to the learning goals so that you can see whether you’ve accomplished the chapter’s objectives. Cover the written answers and see whether you can answer the questions yourself first. Use the study guide. The Student Assessment Learning Guide gives you the chance to practice thinking through answers and writing them down. It also includes practice multiple-choice tests. Use flash cards. You’ll master the course more easily if you know the language of business. To review the key terms in the book, write

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any terms you don’t know on index cards and go through your cards between classes and when you have other free time. 8. Use this text’s Online Learning Center. Using the Online Learning Center (OLC) on this text’s Web site (www.mhhe.com/ub9e) is a great way to practice your test-taking skills. The OLC contains sample test questions, review work allowing you to gauge what material you have mastered, and other material you may need to review again. 9. Go over old exams, if possible. If old exams are not available from your professor, ask how many multiple-choice, true/false, and essay questions will be on your test. It’s acceptable to ask your professor’s former students what kind of questions are given and what material is usually emphasized. It is unethical, though, to go over exams you obtain illegally. 10. Use as many of your senses in learning as possible. If you’re an auditory learner—that is, if you learn best by hearing—record yourself reading your notes and answering the questions you’ve written. Listen to the tape while you’re dressing in the morning. You can also benefit from reading or studying aloud. If you’re a visual learner, use pictures, charts, colors, and graphs. Your professor has a set of videos that illustrate the concepts in this text. If you’re a kinesthetic learner, you remember best by doing, touching, and experiencing. Do some of the Developing Workplace Skills and Taking It to the Net exercises at the end of each chapter.

Test-Taking Hints Often students will say, “I know this stuff, but I’m just not good at taking multiple-choice (or essay) tests.” Other students find test-taking relatively easy. Here are a few test-taking hints: 1. Get plenty of sleep and a good meal. It’s better to be alert and awake during an exam than to study all night and be groggy. If you keep up with your reading and your reviews, you won’t need to pull an allnighter. Proper nutrition plays an important part in your brain’s ability to function. 2. Bring all you need for the exam. Sometimes you’ll need No. 2 pencils, erasers, and a calculator. Ask beforehand. 3. Relax. At home before the test, take deep, slow breaths. Picture yourself in the testing session, relaxed and confident. Get to class early to settle down. If you start to get nervous during the test, stop and take a few deep breaths. Turn the test over and write down information you remember. Sometimes this helps you connect the information you know to the questions on the test. 4. Read the directions on the exam carefully. You don’t want to miss anything or do something you’re not supposed to do. 5. Read all the answers in multiple-choice questions. Even if there is more than one correct-sounding answer to a multiple-choice question, one is clearly better. Read them all to be sure you pick the best. Try covering up the choices while reading the question. If the answer you think of is one of the choices, it is probably correct. If you are still unsure of the answer, start eliminating options you know are wrong. Narrowing the choices to two or three improves your odds.

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6. Answer all the questions. Unless your instructor takes off more for an incorrect answer than for no answer, you have nothing to lose by guessing. Also, skipping a question can lead to inadvertently misaligning your answers on a scan sheet. You could end up with all your subsequent answers scored wrong! 7. Read true/false questions carefully. All parts of the statement must be true or else the entire statement is false. Watch out for absolutes such as never, always, and none. These often make a statement false. 8. Organize your thoughts before answering essay questions. Think about the sequence in which to present what you want to say. Use complete sentences with correct grammar and punctuation. Explain or defend your answers. 9. Go over the test at the end. Make sure you’ve answered all the questions, put your name on the exam, and followed all directions.

Time Management Hints The most important management skill you can learn is how to manage your time. Now is as good an opportunity to practice as any. Here are some hints other students have learned—often the hard way: 1. Write weekly goals for yourself. Make certain your goals are realistic and attainable. Write the steps you’ll use to achieve each goal. Reward yourself when you reach a goal. 2. Keep a “to do” list. It’s easy to forget things unless you write them down. Jot tasks down as soon as you know of them. That gives you one less thing to do: remembering what you have to do. 3. Prepare a daily schedule. Use a commercial daily planner or create your own. Write the days of the week across the top of the page. Write the hours of the day from the time you get up until the time you go to bed down the left side. Draw lines to form columns and rows and

Keeping a daily schedule is only one of the many strategies that will help you manage your time. You should also keep a running list of goals and things you need to do each week. In what other ways can you defend your study time?

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fill in all the activities you have planned in each hour. Hopefully, you will be surprised to see how many slots of time you have available for studying. Prepare for the next day the night before. Having everything ready to go will help you make a quick, stress-free start in the morning. Prepare weekly and monthly schedules. Use a calendar to fill in activities and upcoming assignments. Include both academic and social activities so that you can balance your work and fun. Space out your work. Don’t wait until the last week of the course to write all your papers and study for your exams. If you do a few pages a day, you can write a 20-page paper in a couple of weeks with little effort. It is really difficult to push out 20 pages in a day or two. Defend your study time. Study every day. Use the time between classes to go over your flash cards and read the next day’s assignments. Make it a habit to defend your study time so you don’t slip.

8. Take time for fun. If you have some fun every day, life will be full. Schedule your fun times along with your studying so that you have balance. “Time is money,” the saying goes. Some, however, would argue that time is more valuable than money. If your bank account balance falls, you might be able to build it back up by finding a better-paying job, taking a second job, or even selling something you own. But you only have a limited amount of time and there is no way to make more. Learn to manage your time well, because you can never get it back.

MAKING THE MOST OF THE RESOURCES FOR THIS COURSE College courses and textbooks are best at teaching you concepts and ways of thinking about business. However, to learn firsthand how to apply those ideas to real business situations, you need to explore and interact with other resources. Here are seven basic resources for the class in addition to the text and study guide: 1. The professor. One of the most valuable facets of college is the chance to study with experienced professors. Your instructor is a resource who’s there to answer some questions and guide you to answers for others. Many professors get job leads they can pass on to you and can provide letters of recommendation too. Thus it’s important to develop a friendly relationship with your professors. 2. The supplements that come with this text. The Online Learning Center (at www.mhhe.com/ub9e), the Student Assessment Learning Guide, and Understanding Business Online course material (if your professor has recommended it for your course) will help you review and interpret key material and give you practice answering test questions. Even if your professor does not assign these materials, you may want to use them anyhow. Doing so will improve your test scores and help you compete successfully with the other students.

Your college professors are among the most valuable resources and contacts you’ll encounter as you develop your career path. How many of your professors have you gotten to know so far?

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3. Outside readings. One secret to success in business is staying current. Review and become familiar with the following magazines and newspapers during the course and throughout your career: The Wall Street Journal, Forbes, Barron’s, BusinessWeek, Fortune, Money, Hispanic Business, Smart Money, Harvard Business Review, Black Enterprise, BtoB, Inc., and Entrepreneur. You may also want to read your local newspaper’s business section and national news magazines such as Time and Newsweek. You can find them in your school’s learning resource center or the local public library. Some are also available online free. 4. Your own experience and that of your classmates. Many college students have had experience working in business or nonprofit organizations. Hearing and talking about those experiences exposes you to many real-life examples that are invaluable for understanding business. Don’t rely exclusively on the professor for answers to the cases and other exercises in this book. Often there is no single “right” answer, and your classmates may open up new ways of looking at things for you. Part of being a successful businessperson is knowing how to work with others. Some professors let their students work together and build teamwork as well as presentation and analytical skills. Students from other countries can help you learn about different cultures and different approaches to handling business problems. There is strength in diversity, so seek out people different from you to work with on teams. 5. Outside contacts. Who can tell you more about what it’s like to start a career in accounting than someone who’s doing it now? One of the best ways to learn about different businesses is to visit them in person. The world can be your classroom. When you go shopping, think about whether you would enjoy working in and managing a store. Think about owning or managing a restaurant, an auto body shop, a health club, or any other establishment you visit. If something looks interesting, talk to the employees and learn more about their jobs and the industry. Be constantly on the alert to find career possibilities, and don’t hesitate to talk with people about their careers. Many will be pleased to give you their time. 6. The Internet. The Internet offers more material than you could use in a lifetime. Throughout this text we present information and exercises that require you to use the Internet. Information changes rapidly, and it is up to you to stay current. 7. The library or learning resource center. The library is a great complement to the Internet and a valuable resource. Work with your librarian to learn how to best access the information you need.

Getting the Most from This Text Many learning aids appear throughout this text to help you understand the concepts: 1. List of Learning Goals at the beginning of each chapter. Reading through these goals will help you set the framework and focus for the

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chapter material. Since every student at one time or other has found it difficult to get into studying, the Learning Goals are there to provide an introduction and to get your mind into a learning mode. 2. Self-test questions. Periodically, within each chapter, you’ll encounter set-off lists of questions called Progress Assessment. These questions give you a chance to pause, think carefully about, and recall what you’ve just read. 3. Key terms. Developing a strong business vocabulary is one of the most important and useful aspects of this course. To assist you, all key terms in the book are highlighted in boldface type. Key terms are also defined in the margins, and page references to these terms are given at the end of each chapter. A full glossary is located in the back of the book. You should rely heavily on these learning aids in adding new terms to your vocabulary. 4. Boxes. Each chapter contains a number of boxed extended examples or discussions that cover major themes of the book: (a ) ethics (Making Ethical Decisions); (b) small business (Spotlight on Small Business); (c) legal environment of business (Legal Briefcase); (d) global business (Reaching Beyond Our Borders); and (e) environmental issues (Thinking Green). They’re fun to read; we hope you enjoy and learn from them. 5. End-of-chapter summaries. The chapter summaries are directly tied to the chapter Learning Goals so that you can see whether you’ve accomplished the chapter’s objectives. 6. Critical Thinking questions. The end-of-chapter questions help you relate the material to your own experiences. 7. Developing Workplace Skills exercises. To really remember something, it’s best to do it. That’s why Developing Workplace Skills sections at the end of each chapter suggest small projects that help you use resources, develop interpersonal skills, manage information, understand systems, and sharpen computer skills. 8. Taking It to the Net exercises. These exercises not only give you practice surfing the Internet but, more important, direct you to dynamic outside resources that reinforce the concepts introduced in the text. You might want to bookmark some of the Web sites you’ll discover. They appear on the Online Learning Center at www.mhhe .com/ub9e. 9. Video Cases. These cases feature companies, processes, practices, and managers that bring to life the key concepts in the chapter and give you real-world information to think over and discuss. 10. Casing the Web cases. These cases give you another chance to think about the material and apply it in real-life situations. They also appear on the Online Learning Center at www.mhhe.com/ub9e. If you use the suggestions we’ve presented here, you’ll actively participate in a learning experience that will help you greatly in your chosen career. The most important secret to success may be to enjoy what you’re doing and do your best in everything. To do your best, take advantage of all the learning aids available to you.

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GETTING THE JOB YOU WANT One of the more important objectives of this text is to help you get the job you want. First, you have to decide what you want to do. We’ll help you explore this decision by explaining what people do in the various business functions: human resource management, marketing, accounting, finance, and so on. There are many good books about finding the job you want, so we can only introduce the subject here to get you thinking. If you’re a returning student, you have blessings and handicaps other students don’t have. You may have had a full-time job already. If you have one now, you’ve already discovered that working while going to school means juggling family responsibilities in addition to school and work. But take heart. You’ve also acquired many skills from these experiences. Even if you gained them in unrelated fields, they will be invaluable as you enter your new career. Your focus and experience will help you greatly, as well as offering your classmates a welcome new perspective. So whether you’re beginning your first or your latest career, it’s time to develop a strategy for finding and obtaining a personally satisfying job.

Do you look forward to saying, “I got the job!” after your years of college study? Job fairs are among the many resources that can help you find the right job for you. Is it ever too early to start thinking about your career?

JOB SEARCH STRATEGY It is never too early to begin thinking about a future career or careers. The following strategies will give you some guidance in that pursuit: 1. Begin with self-analysis. You might begin your career quest by completing a self-analysis inventory. You can refer to Figure P.2 for a sample of a simple assessment. 2. Search for jobs you would enjoy. Begin at your college’s career planning office or placement office, if your school has one. Keep interviewing people in various careers, even after you’ve found a job. Career progress demands continuous research. 3. Begin the networking process. For many professionals, having a strong list of contacts and important acquaintances is the surest route to obtaining the job you want.8 Start with your fellow students, family, relatives, neighbors, friends, professors, and local businesspeople. Keep a file with the names, addresses, and phone numbers of contacts— where they work, the person who recommended them to you, and the relationship between the source person and the contact. A great way to make contacts and a good impression on employers is to do part-time work and summer internships at those firms you find interesting. Many young professionals use social-networking sites, such as LinkedIn, Facebook, and MySpace, to expand their networks. More and more employers are also turning to these sites to check résumés, job histories, and work samples from potential employees.9 If you choose to post to one of them, include only information you would want a potential hiring agent to see and not something that might hurt your chances for landing a job. In a recent survey by the National Association of Colleges and Employers, nearly 27 percent of employers said they check the Facebook and MySpace profiles of job candidates, with

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Interests 1. 2. 3. 4. 5. 6. 7.

How do I like to spend my time? Do I enjoy being with people? Do I like working with mechanical things? Do I enjoy working with numbers? Am I a member of many organizations? Do I enjoy physical activities? Do I like to read?

Abilities 1. Am I adept at working with numbers? 2. Am I adept at working with mechanical things? 3. Do I have good verbal and written communication skills? 4. What special talents do I have? 5. In which abilities do I wish I were more adept? Education 1. Have I taken certain courses that have prepared me for a particular job? 2. In which subjects did I perform the best? The worst? 3. Which subjects did I enjoy the most? The least? 4. How have my extracurricular activities prepared me for a particular job? 5. Is my GPA an accurate picture of my academic ability? Why? 6. Do I want a graduate degree? Do I want to earn it before beginning my job? 7. Why did I choose my major? Experience 1. What previous jobs have I held? What were my responsibilities in each? 2. Were any of my jobs applicable to positions I may be seeking? How? 3. What did I like the most about my previous jobs? Like the least? 4. Why did I work in the jobs I did? 5. If I had to do it over again, would I work in these jobs? Why?

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Personality 1. What are my good and bad traits? 2. Am I competitive? 3. Do I work well with others? 4. Am I outspoken? 5. Am I a leader or a follower? 6. Do I work well under pressure? 7. Do I work quickly, or am I methodical? 8. Do I get along well with others? 9. Am I ambitious? 10. Do I work well independently of others? Desired job environment 1. 2. 3. 4. 5. 6. 7. 8.

Am I willing to relocate? Why? Do I have a geographic preference? Why? Would I mind traveling in my job? Do I have to work for a large, nationally known firm to be satisfied? Must I have a job that initially offers a high salary? Must the job I assume offer rapid promotion opportunities? In what kind of job environment would I feel most comfortable? If I could design my own job, what characteristics would it have?

Personal goals 1. What are my short- and long-term goals? Why? 2. Am I career-oriented, or do I have broader interests? 3. What are my career goals? 4. What jobs are likely to help me achieve my goals? 5. What do I hope to be doing in 5 years? In 10 years? 6. What do I want out of life?

59 percent saying the information influenced their hiring decisions. But most important, 25 percent of human resources employees said they rejected applicants because of personal information found online.10 4. Go to the Internet for help. You’ll find details about landing jobs on a variety of Web sites. Many can help you write your résumé and search for jobs that meet your interests and skills.11 Later we’ll list a number of these sites. 5. Prepare a good cover letter and résumé. Once you know what you want to do and where you would like to work, develop a good résumé and cover letter. Your résumé lists your education, work experience, and activities. We’ll talk about résumés and cover letters later in more detail.

figure P.2 A PERSONAL ASSESSMENT

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6.

Professional interview behavior includes writing a follow-up letter to thank the person or persons you met. What are your goals in writing such a letter?

Develop interviewing skills. Interviewers will be checking your appearance (present clean and appropriate clothes, haircut, fingernails, shoes); your attitude (friendliness is desired); your verbal ability (speak clearly and fluently); and your motivation (be enthusiastic). They want you to have been active in clubs and activities and to have set goals. Have someone evaluate you on these scales now to see whether you have any weak points. You can then work on those points before you have any actual job interviews. We’ll give you some clues on how to do this later.

7. Follow up. Write a thank-you note after interviews, even if you think they didn’t go well. You have a chance to make a lasting impression with a follow-up note. Keep in touch with companies in which you have an interest by calling periodically or sending e-mail and letting the company know you are still interested. Indicate your willingness to travel to be interviewed. Get to know people in the company and learn from them whom to contact and what qualifications to emphasize.

MORE HINTS ON THE JOB SEARCH The placement bureau at your school is a good place to begin reading about potential employers. On-campus interviewing is often a great source of jobs (see Figure P.3). Another strategy is sending companies a good cover letter and résumé. Check your library or the Internet for such sources as the Million Dollar Directory, the Standard Directory of Advertisers, and annual reports that will give you even more information about your selected companies. Other good sources of jobs include want ads, job fairs, summer and other internship programs, placement bureaus, and sometimes walking into firms

figure P.3 WHERE COLLEGE STUDENTS FIND JOBS

SOURCE OF JOB On-campus interviewing Write-ins Current employee referrals Job listings with placement office Responses from want ads Walk-ins Cooperative education programs Summer employment College faculty/staff referrals Internship programs High-demand major programs Minority career programs Part-time employment Unsolicited referrals from placement Women’s career programs Job listings with employment agencies Referrals from campus organizations

PERCENTAGE OF NEW EMPLOYEES 49.3% 9.8 7.2 6.5 5.6 5.5 4.8 4.7 4.5 4.5 4.4 2.9 2.4 2.1 2.1 1.9 1.8

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that appeal to you and asking for an interview. The Occupational Outlook Quarterly, produced by the U.S. Department of Labor, says this about job hunting: The skills that make a person employable are not so much the ones needed on the job as the ones needed to get the job, skills like the ability to find a job opening, complete an application, prepare the résumé, and survive an interview. Here are a few printed sources you can use for finding out about jobs, writing résumés and cover letters, and other career information: • • • • • • • • • • • • •

Tony Bashar, Acing the Interview (New York: AMACOM, 2008). Michael Betrus, 202 Great Cover Letters (New York: McGraw-Hill, 2008). Richard Nelson Bolles, What Color Is Your Parachute? (Berkeley, CA: Ten Speed Press, 2008, or newer edition). Brian D. Drueger, The College Grad Job Hunter, 6th ed. (Avon, MA: Adams Media, 2008). Michael Farr, The Quick Résumé & Cover Letter Book (Indianapolis: JIST, 2008). Caitlin Friedman and Kimberly Yorio, The Girl’s Guide to Kicking Your Career Into Gear (New York: Broadway Books, 2008). Bronwyn Llewellyn, James P. Hendrix, and K. C. Goldern, Green Jobs (Avon, MA: Adams Media, 2008). Occupational Outlook Handbook, 2008–2009 (Washington, DC: U.S. Department of Labor. Laura Gassner Otting, Transitioning to the Nonprofit Sector (New York: Kaplan Publishing, 2007). Arthur D. Rosenberg, The Résumé Handbook, 5th ed. (Avon, MA: Adams Media, 2008). Nancy Schuman, The Everything Résumé Book (Avon, MA: Adams Media, 2008). Cynthia Shapiro, What Does Somebody Have to Do to Get a Job Around Here? (New York: St. Martin’s Griffin, 2008). Martin Yate, Knock ’Em Dead 2008 (Holbrook, MA: Adams Media Corporation, 2008).

You can also use the Internet to search for job information. Try these sites (though keep in mind that addresses on the Internet are subject to sudden and frequent change): • • • • •

CareerBuilder: www.careerbuilder.com Yahoo: http://hotjobs.yahoo.com Hoovers: www.hoovers.com Monster: www.monster.com Jibber Jobber: www.jibberjobber.com

WRITING YOUR RÉSUMÉ It’s never too early in your career to begin designing a résumé and thinking of cover letters. Preparing such documents reveals your strengths and weaknesses more clearly than most other techniques. For instance, you may discover you haven’t engaged in enough outside activities to impress an employer. That information may prompt you to join some student groups, to become

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figure P.4 SAMPLE ACTION WORDS

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Managed Planned Organized Coordinated Supervised Trained

Wrote Produced Scheduled Operated Conducted Administered

Budgeted Designed Directed Developed Established Implemented

Improved Increased Investigated Teamed Served Handled

a volunteer, or otherwise enhance your social skills. You may also discover you’re weak on experience and seek an internship or part-time job to fill in that gap.12 Let’s discuss how to prepare your résumé and cover letter. A résumé is a document that lists information an employer would need to evaluate you and your background. It explains your immediate goals and career objectives, followed by an explanation of your educational background, experience, interests, and other relevant data. Be sure to use industry buzzwords (see Figure P.4), because companies use them as keywords to scan résumés.13 Having experience working in teams, for example, is important to many companies. Your résumé is an advertisement for yourself. If your ad is better than the other person’s ad, you’re more likely to get the interview. In this case, better means that your ad highlights all your attributes and does so attractively. In discussing your education, for example, be sure to highlight your extracurricular activities such as part-time jobs, sports, and clubs. If you did well in school, include your grades. If you have exceptional abilities but your résumé doesn’t communicate them to the employer, those abilities aren’t part of the person he or she will evaluate. The idea is to make yourself look as good on paper as you are in reality. The same is true for your job experience. Be sure to describe what you did, any special projects in which you participated, and any responsibilities you had. For the interests section, if you include one, don’t just list your interests, but describe how deeply you were involved. If you organized the club, volunteered your time, or participated more often than usual in an organization, say so. See Figure P.5 for a sample résumé. Most companies prefer that you keep your résumé to one page unless you have years of experience.

PUTTING YOUR RÉSUMÉ ON THE INTERNET Many larger firms seek candidates online. An online résumé can thus allow you to reach the greatest number of potential employers with the least amount of effort. However, the Internet is not always the most effective job search tool. One reason is volume. Thousands of other eager job hunters post their résumés online and sometimes overwhelm recruiters. That doesn’t mean you shouldn’t post yours; it does mean, though, that you can’t just send a few hundred résumés into cyberspace and then sit back and wait for the phone to ring. Include online résumés as a tool in your job search process, but continue to use traditional tools such as networking as well. An Internet résumé must be different from a standard one because the computer usually makes the first cut to winnow the responses. Thus, you must understand what the computer is programmed to look for. It wants nouns, not verbs. Whereas the traditional résumé is built on verbs like managed and supervised, online résumés are built around nouns like program management and teams. They emphasize computer skills you have mastered, like Excel or Acrobat. Instead of listing jobs chronologically, emphasize knowledge, skills, and abilities. You may want to include a new section called Key Skills or Functional Expertise and list all the nouns that describe your experience. For example, a salesperson might put terms that apply to selling such as prospect,

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figure P.5 Yann Ng 345 Big Bend Boulevard Kirkwood, Missouri, 63122 314-555-5385 [email protected] Job objective: Sales representative in business-to-business marketing Education: St. Louis Community College at Meramec A.A. in Business (3.6 grade point average) Served on Student Representative Board University of Missouri, St. Louis B.S. in Business: Marketing major (3.2 grade point average, 3.5 in major) Earned 100 percent of college expenses working 35 hours a week. Member of Student American Marketing Association Vice President of Student Government Association Dean's List for two semesters Work experience: Schnuck's Supermarket: Worked checkout evenings and weekends for four years while in school. Learned to respond to customer requests quickly, and communicate with customers in a friendly and helpful manner. Mary Tuttle's Flowers: For two summers, made flower arrangements, managed sales transactions, and acted as assistant to the manager. Also trained and supervised three employees. Often handled customer inquiries and complaints. Special skills: Fluent in Vietnamese, French, and English. Proficient at using Word. Developed my own Web site ([email protected]) and use the Internet often to do research for papers and for personal interests. Other interests: Cooking: often prepare meals for my family and friends. Reading, especially the classics. Piano playing and aerobics. Traveling: Asia, Europe, and America. Doing research on the Internet.

approach, presentations, close sale, follow up, focus groups, and service. Here are some hints on preparing your résumé for the Internet (note that some companies prefer letters or faxes instead): • • • • •

Keep it simple, and use text only. Put a summary of your skills and your objective at the top so the reader can capture as much information as possible in the first 30 seconds. If you e-mail your résumé, send it in the text of the message; don’t make it an attachment. It takes too long for the receiver to open an attachment. Customize each mailing to that specific company. You may standardize your basic résumé, but add data to customize it and to introduce it. Use the advertised job title as the subject of your e-mail message, citing any relevant job numbers.

SAMPLE RÉSUMÉ

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Posting résumés to Internet job sites can cause privacy nightmares for job seekers, resulting in everything from identity theft to loss of their current job when their employers, who use the same job search services, find out they are looking for new jobs. Sometimes posted résumés are sold to other sites or individuals willing to pay for them. Scam artists posing as recruiters, meanwhile, can download all the résumés they want and do virtually whatever they want with them. Here are tips to protect your résumé and your identity: • • • • •

Never include highly private information, such as Social Security numbers and birthdays. Check job boards’ privacy policies to see how information is used and resold. Post résumés directly to employers if possible. Date résumés and remove them promptly after finding a job. If possible, withhold confidential information such as telephone numbers and your name and use temporary e-mail addresses for contacts.

You can find more details about applying for jobs on the Internet in Margaret Riley Dikel and Frances E. Roehm, Guide to Internet Job Searching: 2008–2009 edition (New York: McGraw-Hill, 2008). See Figure P.6 for a sample Internet résumé.

WRITING A COVER LETTER A cover letter announces your availability and introduces your résumé. It is probably one of the most important advertisements anyone can prepare. Let’s talk about how to do it right. First, the cover letter should indicate you’ve researched the organization in question and are interested in a job there. In the first paragraph let the organization know what sources you used and what you know about it to get the attention of the reader and show your interest. You may have heard people say, “What counts is not what you know, but whom you know.” This is only partly true—both knowledge and personal contacts are necessary for success, but the saying makes an important point nonetheless. If you don’t know someone, you can get to know someone. Call or visit the organization and talk to people who already have the kind of job you’re hoping to get. Ask about training, salary, and other relevant issues. Then, in your cover letter, mention that you’ve talked with some of the firm’s employees and this discussion increased your interest. You’re showing the letter reader that you know someone, if only casually, and you’re interested enough to actively pursue the organization. This is all part of networking. Second, in the description of yourself, be sure to say how your attributes will benefit the organization. Don’t just say, “I will be graduating with a degree in marketing.” Say, “You will find my college training in marketing and marketing research has prepared me to learn your marketing system quickly and begin making a contribution right away.” The sample cover letter in Figure P.7 will give you a better feel for how this looks. Third, be sure to “ask for the order.” That is, in your final paragraph say you’re available for an interview at a time and place convenient for the interviewer. Again, see the sample cover letter in Figure P.7 for guidance. Notice in this letter how the writer subtly shows that she reads business publications and draws attention to her résumé.

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figure P.6 Yann Ng 345 Big Bend Boulevard Kirkwood, Missouri, 63122 314-555-5385 [email protected] Job objective: Sales representative in business-to-business marketing Education: St. Louis Community College at Meramec A.A. in Business (3.6 grade point average) Service on Student Representative Board Courses included introduction to business, accounting, and marketing. University of Missouri, St. Louis B.S. in Business: Marketing major (3.2. grade point average, 3.5 in major) Earned 100 percent of college expenses working 35 hours a week. Member of Student American Marketing Association Vice President of Student Government Association Dean's List for two semesters Work experience: Schnuck's Supermarket: Worked checkout evenings and weekends for four years while in school. Learned to respond to customer requests quickly, and communicate with customers in a friendly and helpful manner. Mary Tuttle's Flowers: For two summers, made flower arrangements, managed sales transactions, and acted as assistant to the manager. Also trained and supervised three employees. Often handled customer inquiries and complaints. Special skills: Fluent in Vietnamese, French, and English. Proficient at using MS Word, MS Excel, and MS PowerPoint. Developed my own Web site ([email protected]) and use the Internet often to do research for papers and for personal interests. Sales skills include conducting focus groups, prospecting, making presentations, and customer service. Other interests: Cooking: often prepare meals for my family and friends. Reading, especially the classics. Piano playing and aerobics. Traveling: Asia, Europe, and America. Doing research on the Internet.

Principles to follow in writing a cover letter and preparing your résumé include the following: • • • •

Be confident. List all your good qualities and attributes. Don’t be apologetic or negative. Write as one professional to another, not as a humble student begging for a job. Describe how your experience and education can add value to the organization. Research every prospective employer thoroughly before writing anything. Use a rifle approach rather than a shotgun approach. That is, write effective marketing-oriented letters to a few select companies rather than to a general list.

SAMPLE INTERNET RÉSUMÉ

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figure P.7

345 Big Bend Blvd. Kirkwood, MO 63122 October 10, 2010

SAMPLE COVER LETTER

Mr. Carl Karlinski Premier Designs 45 Apple Court Chicago, IL 60536

Dear Mr. Karlinski: [Note that it's best to know the name of the recipient.] Recent articles in Inc. and Success have praised your company for its innovative products and strong customer orientation. I'm familiar with your creative display materials. In fact, we've used them at Mary Tuttle's Flower Shop—my employer for the last two summers. Christie Bouchard, your local sales representative, told me all about your products and your training program at Premier Designs. Christie mentioned the kind of salespeople you are seeking. Here's what she said and my qualifications. Requirement: Men and women with proven sales ability. Qualifications: Success making and selling flower arrangements at Mary Tuttle's and practicing customer relations at Schnuck's Supermarket. As you know, Schnuck's has one of the best customer-oriented training programs in the food industry. Requirement: Self-motivated people with leadership ability. Qualifications: Paid my way through college working nights and summers. Selected to be on the Student Representative Board at St. Louis Community College at Meramec and active in student government at the University of Missouri. Paid my own way to Asia, Europe, and the Americas. Could you use such a successful salesperson at Premier Designs? I will be in the Chicago area the week of January 4–9. What time and date would be most convenient for us to discuss career opportunities at Premier? I'll phone your secretary to set up an appointment. Sincerely, Yann Ng

•

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Have someone edit your materials for spelling, grammar, and style. Don’t be like the student who sent out a second résumé to correct “some mixtakes.” Or another who said, “I am acurite with numbers.” Don’t send the names of references until asked. Use good-quality white paper and a letter-quality laser printer for your printed copies.

PREPARING FOR JOB INTERVIEWS Companies usually don’t interview someone unless they’re fairly certain the candidate has the requirements for the job. The interview, therefore, can be a make-or-break situation. If it goes well, you have a greater chance of being

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•

How would you describe yourself?

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Are you willing to travel (or move)?

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What are your greatest strengths and weaknesses?

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How did you choose this company?

Which accomplishments have given you the most satisfaction?

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hired. That’s why you must be prepared for your interviews. There are five stages of interview preparation:

figure P.8 FREQUENTLY ASKED QUESTIONS

1. Do research about the prospective employers. Learn what industry the firm is in, its competitors, the products or services it produces and their acceptance in the market, and the title of your desired position. You can find such information in print or online in the firm’s annual reports, in Standard & Poor’s, Hoover’s, Moody’s manuals, and various business publications such as Fortune, BusinessWeek, and Forbes. Ask your librarian for help or search the Internet. You can look in the Reader’s Guide to Business Literature or use Google or Yahoo to locate the company name and look for articles about it. This important first step shows you have initiative and interest in the firm. 2. Practice the interview. Figure P.8 lists some of the more frequently asked questions in an interview. Practice answering these questions and more at the placement office and with your roommate, parents, or friends.14 Don’t memorize your answers, but do be prepared— know what you’re going to say.15 Interviewers will be impressed if you thought enough to prepare questions for them about the products, job, company culture, and so on. Figure P.9 shows sample questions you might ask. Be sure you know whom to contact, and write down the names of everyone you meet. Review the action words in Figure P.4 and try to fit them into your answers. 3. Be professional during the interview. Look and sound professional throughout the interview. Do your homework and find out how managers dress at the firm. Make sure you wear an appropriate outfit. When you meet the interviewers, greet them by name, smile, and

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Who are your major competitors, and how would you rate their products and marketing relative to yours? How long does the training program last, and what is included?

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figure P.9 SAMPLE QUESTIONS TO ASK THE INTERVIEWER

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How would I be evaluated?

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How soon should I expect to hear from you?

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What other information would you like about my background, experience, or education?

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What is your highest priority in the next six months and how could someone like me help?

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maintain good eye contact. Sit up straight in your chair and be alert and enthusiastic. If you have practiced, you should be able to relax and be confident. Other than that, be yourself, answer questions, and be friendly and responsive. (You will learn more about what types of questions job interviewers are legally allowed to ask you in Chapter 11.) Remember, the interview is not one-way communication; don’t forget to ask the questions you’ve prepared before the interview.16 Do not ask about salary, however, until you’ve been offered a job. When you leave, thank the interviewers and, if you’re still interested in the job, tell them so. If they don’t tell you, ask them what the next step is. Maintain a positive attitude. Figures P.10 and P.11 outline what the interviewers will be evaluating. 4. Follow up on the interview. First, write down what you can remember from the interview: names of the interviewers and their titles, dates for training, and so on. Put the information in your career file. You can send a follow-up letter thanking each interviewer for his or her time. You can also send a letter of recommendation or some other piece of added information to keep their interest. “The squeaky wheel gets the

figure P.10 TRAITS RECRUITERS SEEK IN JOB PROSPECTS

1. Ability to communicate. Do you have the ability to organize your thoughts and ideas effectively? Can you express them clearly when speaking or writing? Can you present your ideas to others in a persuasive way? 2. Intelligence. Do you have the ability to understand the job assignment? Learn the details of operation? Contribute original ideas to your work? 3. Self-confidence. Do you demonstrate a sense of maturity that enables you to deal positively and effectively with situations and people? 4. Willingness to accept responsibility. Are you someone who recognizes what needs to be done and is willing to do it? 5. Initiative. Do you have the ability to identify the purpose for work and to take action? 6. Leadership. Can you guide and direct others to obtain the recognized objectives? 7. Energy level. Do you demonstrate a forcefulness and capacity to make things move ahead? Can you maintain your work effort at an above-average rate? 8. Imagination. Can you confront and deal with problems that may not have standard solutions? 9. Flexibility. Are you capable of changing and being receptive to new situations and ideas? 10. Interpersonal skills. Can you bring out the best efforts of individuals so they become effective, enthusiastic members of a team? 11. Self-knowledge. Can you realistically assess your own capabilities? See yourself as others see you? Clearly recognize your strengths and weaknesses? 12. Ability to handle conflict. Can you successfully contend with stress situations and antagonism? 13. Competitiveness. Do you have the capacity to compete with others and the willingness to be measured by your performance in relation to that of others? 14. Goal achievement. Do you have the ability to identify and work toward specific goals? Do such goals challenge your abilities? 15. Vocational skills. Do you possess the positive combination of education and skills required for the position you are seeking? 16. Direction. Have you defined your basic personal needs? Have you determined what type of position will satisfy your knowledge, skills, and goals? Source: “So You’re Looking for a Job?” The College Placement Council.

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Candidate: “For each characteristic listed below there is a rating scale of 1 through 7, where ‘1’ is generally the most unfavorable rating of the characteristic and ‘7’ the most favorable. Rate each characteristic by circling just one number to represent the impression you gave in the interview that you have just completed.” Name of Candidate 1. Appearance Sloppy

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13. Would you hire this individual if you were permitted to make a decision right now? Yes No

grease” is the operating slogan. Your enthusiasm for working for the company could be a major factor in hiring you. 5. Be prepared to act. Know what you want to say if you do get a job offer. You may not want the job once you know all the information. Don’t expect to receive a job offer from everyone you meet, but do

figure P.11 INTERVIEW RATING SHEET

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expect to learn something from every interview. With some practice and persistence, you should find a rewarding and challenging job.

BE PREPARED TO CHANGE CAREERS

All your efforts pay off when you land the job you wanted and take the first big step in your career. Go for it!

If you’re like most people, you’ll follow several different career paths over your lifetime. This is a good thing in that it enables you to try different jobs and stay fresh and enthusiastic. The key to moving forward in your career is a willingness to change jobs, always searching for the career that will bring the most personal satisfaction and growth. This means that you’ll have to write many cover letters and résumés and go through many interviews. Each time you change jobs, go through the steps in this section of the Prologue to be sure you’re fully prepared. Good luck!

1

* * *

Taking

Making

Risks and Profits within the DYNAMIC BUSINESS

Environment *

profile *

T

he business environment in the downtown area of many to buy the store building and fixtures. Since the teen wasn’t small U.S. cities does not seem to favor the small busi- legally old enough to buy property, the group let him lease the nesses that once thrived there. Often big companies come building until he turned 18. Graham got the additional $10,000 to the outskirts of a town and draw business away from the he needed to stock the store by shingling roofs and by worktown center. It is not unusual, therefore, that the Main Street ing on his uncle’s turkey farm. When Graham was only 4, his dad died; he and his mom Market, the only grocery store in Truman, Minnesota, went moved to Iowa when he was 7, and at 15 Graham returned to out of business. What is unusual is what happened next. Truman to live with his grandNick Graham was a high mother. He works in the Main school senior in Truman. He G et ti n g to K n o w Street Market every day and thought he could provide a comhas one clerk to help. He carmunity service and create a profX ries bags out to the car for his itable enterprise by reopening customers, and on Wednesdays the grocery store. That meant O w ne r of t h e M a in S t re e t M a r ke t he delivers orders to residents taking some risk, of course, but at the local retirement home, Nick was ready for the challenge. putting the groceries away if The community was thrilled, and people came to the Main Street Market to volunteer to do necessary. Everyone appreciates his good service, and cuseverything from stock the shelves to mop the floor. They were tomers flow through the door each day. Graham did so well with his first store that by the end of happy to have the store back because the nearest supermarket was 14 miles away—a distance that proved a hardship the first year he was able to pay off his loan and buy another store, Armstrong Foods, in Armstrong, Iowa. He’s looking for for older folks. But where does a 17-year-old boy get the money to buy a a pharmacy for his town and has thought of putting a fitness grocery store? The Truman Development Corporation, a com- center in the old post office. He bought a refrigerated truck munity investment group, approved Graham’s $22,000 loan and delivers food to his Truman store and other stores in the

Nick Graham

2