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9780134788852

1 20

Library and Archives Canada Cataloguing in Publication

Ebert, Ronald J., author

Business essentials / Ronald J. Ebert, University of Missouri-Columbia, Ricky W. Griffin, Texas A&M University, Frederick A. Starke, University of Manitoba, George Dracopoulos, Vanier College and McGill University.—Ninth Canadian edition.

Includes bibliographical references and indexes.

ISBN 978-0-13-478885-2 (hardcover)

1. Industrial management—Textbooks. 2. Business enterprises—Textbooks. 3. Industrial management— Canada—Textbooks. 4. Business enterprises—Canada—Textbooks. 5. Textbooks. I. Griffin, Ricky W., author II. Starke, Frederick A., 1942-, author III. Dracopoulos, George, 1970-, author IV. Title.

HD70.C3E32 2018 658 C2018-903860-8

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http://www.pearson.com/ca/en/contact%E2%80%90us/permissions.html
To Fran, for bringing a lifetime of friendship, fun, and love into our family. —R.J.E.

For Paul and Sherry—Friends for life. —R.W.G.

To Nitsa and Costa Dean. —G.D.

To Ann, Eric, and Grant. —F.A.S.

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01 UNDERSTANDING THE CANADIAN BUSINESS SYSTEM 2

02 THE ENVIRONMENT OF BUSINESS 20

03 CONDUCTING BUSINESS ETHICALLY AND RESPONSIBLY 40

04 ENTREPRENEURSHIP, SMALL BUSINESS, AND NEW VENTURE CREATION 61

05 THE GLOBAL CONTEXT OF BUSINESS 86

PART 1 INTRODUCING THE CONTEMPORARY

BUSINESS WORLD 1

PART 2 THE BUSINESS OF MANAGING 111

PART 4 PRINCIPLES OF MARKETING 261

PART 5 MANAGING FINANCIAL ISSUES 311

PART 3 MANAGING OPERATIONS AND

INFORMATION 213

BRIEF CONTENTS

06 MANAGING THE BUSINESS ENTERPRISE 112

07 ORGANIZING THE BUSINESS ENTERPRISE 136

08 MANAGING HUMAN RESOURCES AND LABOUR RELATIONS 157

09 MOTIVATING, SATISFYING, AND LEADING EMPLOYEES 184

10 OPERATIONS MANAGEMENT, PRODUCTIVITY, AND QUALITY 214

11 UNDERSTANDING ACCOUNTING 240

12 UNDERSTANDING MARKETING PRINCIPLES AND DEVELOPING PRODUCTS 262

13 PRICING, PROMOTING, AND DISTRIBUTING PRODUCTS 287

14 MONEY AND BANKING 312

15 FINANCIAL DECISIONS AND RISK MANAGEMENT 331

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LO-2 The Economic Environment 23 Economic Growth 23 Economic Stability 26

THERE’S AN APP FOR THAT! 26

Managing the Canadian Economy 28

LO-3 The Technological Environment 28 Research and Development (R&D) 28 Product and Service Technologies 28

THE GREENING OF BUSINESS Environmentally Friendly Automobiles 29

LO-4 The Political–Legal Environment 30

DISRUPTIONS IN BUSINESS The Physical Environment 30

LO-5 The Socio-Cultural Environment 31 Customer Preferences and Tastes 31 Ethical Compliance and Responsible Business Behaviour 31 The Business Environment 31 The Industry Environment 32

ENTREPRENEURSHIP AND NEW VENTURES Goldline Curling: Dealing with New Industry Threats 33

LO-6 Emerging Challenges and Opportunities in the Business Environment 33

Outsourcing 34 The Growing Role of Social Media 34 Business Process Management 34

LO-7 Redrawing Corporate Boundaries 34 Mergers and Acquisitions 34 Divestitures and Spinoffs 35 Employee-Owned Corporations 35 Strategic Alliances 35 Subsidiary and Parent Corporations 35

Summary of Learning Objectives 36 Questions and Exercises 37 Team Exercises 37 business case 2 38

03 CONDUCTING BUSINESS ETHICALLY AND RESPONSIBLY 40

Is Legalization of Marijuana a Good Idea? 40

Ethics in the Workplace 42

LO-1 Individual Ethics 42

Business and Managerial Ethics 43 Assessing Ethical Behaviour 43 Encouraging Ethical Behaviour in Organizations 45

LO-2 Corporate Social Responsibility 46

PART 1 INTRODUCING THE CONTEMPORARY BUSINESS WORLD 1

01 UNDERSTANDING THE CANADIAN BUSINESS SYSTEM 2

Spin Master: Canadian Toy Maker Becomes a Global Children’s Entertainment Company 2

LO-1 The Idea of Business and Profit 4

LO-2 Economic Systems Around the World 4 Factors of Production 4 Types of Economic Systems 5

DISRUPTIONS IN BUSINESS Disruptions Are Everywhere! 6

THERE’S AN APP FOR THAT! 8

LO-3 Interactions between Business and Government 8 How Government Influences Business 8

THE GREENING OF BUSINESS Problems in the Ontario Power System 10

How Business Influences Government 11

LO-4 The Canadian Market Economy 11 Demand and Supply in a Market Economy 11

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS The Lucrative Business of App Development 13

LO-5 Private Enterprise and Competition 14 Degrees of Competition 14

Summary of Learning Objectives 16 Questions and Exercises 17 Team Exercises 17 business case 1 18

02 THE ENVIRONMENT OF BUSINESS 20

Growth and Success: A Few Dollars at a Time 20

LO-1 Organizational Boundaries and Environments 22 Organizational Boundaries 22 Multiple Organizational Environments 23

CONTENTS

Preface xv Acknowledgments xix About the Authors xx

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LO-5 Success and Failure in Small Business 76 Reasons for Success 76 Reasons for Failure 77

LO-6 Forms of Business Ownership 77 The Sole Proprietorship 77 The Partnership 77 The Corporation 78 The Co-Operative 80

Summary of Learning Objectives 81 Questions and Exercises 82 Team Exercises 83 business case 4 84

05 THE GLOBAL CONTEXT OF BUSINESS 86

Couche-Tard: Your Global Convenience Store 86

The Contemporary Global Economy 88

LO-1 The Major World Marketplaces 89

LO-2 Emerging Markets: BRICS and Beyond 90

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS The Goose Is Flying East: CanadaGoose.cn 91

LO-3 Forms of Competitive Advantage 92

The Balance of Trade 93 The Balance of Payments 93 Exchange Rates 93

THERE’S AN APP FOR THAT! 94

LO-4 International Business Management 94 Going International 94 Levels of Involvement in International Business 95 International Organizational Structures 96

LO-5 Barriers to International Trade 97 Social and Cultural Differences 97

ENTREPRENEURSHIP AND NEW VENTURES A Better Coconut Water 98

Economic Differences 98 Legal and Political Differences 99 Business-Practice Laws 100

DISRUPTIONS IN BUSINESS Is Supply Management Doomed? 101

LO-6 Overcoming Barriers to Trade 101 General Agreement on Tariffs and Trade (GATT) 101 World Trade Organization 101 The European Union 102 The North American Free Trade Agreement and the

New US-Mexico-Canada Agreement (USMCA) 103 Major New Agreements: TPP and CETA 103 Other Free Trade Agreements Around the World 104

Summary of Learning Objectives 104 Questions and Exercises 106 Team Exercises 106 business case 5 107

LO-3 The Stakeholder Model of Responsibility 47

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Retailers Are Watching You: Is That Okay? 48

THERE’S AN APP FOR THAT! 49

DISRUPTIONS IN BUSINESS Key Issues in Whistle-Blower Programs 51

THE GREENING OF BUSINESS Which Car Pollutes Less? Electric or Gasoline? 53

Implementing Social Responsibility Programs 55

LO-4 Approaches to Social Responsibility 55

Managing Social Responsibility Programs 55

LO-5 Social Responsibility and the Small Business 56

Summary of Learning Objectives 57 Questions and Exercises 58 Team Exercises 58 business case 3 59

04 ENTREPRENEURSHIP, SMALL BUSINESS, AND NEW VENTURE CREATION 61

Tim Hortons’ Franchisee Challenges: Heroes, and Villains 61

LO-1 Interrelationship of Small Business, New Venture Creation, and Entrepreneurship 63

Small Business 63 The New Venture/Firm 64 Entrepreneurship 64 Intrapreneurs 65

LO-2 The Role of Small and New Businesses in the Canadian Economy 66

Small Businesses 66 New Ventures 66

LO-3 The Entrepreneurial Process 67 Identifying Opportunities 67

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Shopify: Helping Entrepreneurs Expand and Monetize Their Client Base 69

Accessing Resources 70

THERE’S AN APP FOR THAT! 71

Building the Right Team 72

ENTREPRENEURSHIP AND NEW VENTURES Crowdfunding: Finance from the Masses 73

Assessing the Fit between Elements in the Entrepreneurial Process 73

THE GREENING OF BUSINESS Green Growth in Small Businesses 74

LO-4 Starting Up a Small Business 74 Buying an Existing Business 74 Buying a Franchise 75

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PART 2 THE BUSINESS OF MANAGING 111

06 MANAGING THE BUSINESS ENTERPRISE 112

A Surprising Change in Corporate Strategy at Bombardier 112

Who Are Managers? 114

LO-1 The Management Process 114 Planning 115 Organizing 115 Leading 115 Controlling 115 Management: Science or Art? 116

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Managing Customer Service Touch Points 116

Becoming a Manager 117

What Should You Expect in a Management Job? 117

ENTREPRENEURSHIP AND NEW VENTURES Innovations in Management 118

LO-2 Types of Managers 118 Levels of Management 118 Areas of Management 119

LO-3 Management Roles and Skills 120 Management Roles 120 Management Skills 121

LO-4 Strategic Management 124 Setting Business Goals 124 Formulating Strategy 125

THERE’S AN APP FOR THAT! 126

Levels of Strategy 127

LO-5 Contingency Planning and Crisis Management 128

Contingency Planning 128 Crisis Management 128

DISRUPTIONS IN BUSINESS When Disaster Strikes 129

LO-6 Management and the Corporate Culture 129

THE GREENING OF BUSINESS Mission Zero 130

Communicating the Culture and Managing Change 131

Summary of Learning Objectives 131 Questions and Exercises 132 Team Exercises 133 business case 6 134

07 ORGANIZING THE BUSINESS ENTERPRISE 136

Building a Foundation and Structure for Long-Term Success 136

What Is Organizational Structure? 138

LO-1 Determinants of Organizational Structure 138

ENTREPRENEURSHIP AND NEW VENTURES Organizing for Growth 139

The Chain of Command 139

The Building Blocks of Organizational Structure 139

LO-2 Job Specialization 139

Departmentalization 141

Establishing the Decision-Making Hierarchy 142

LO-3 Assigning Tasks 142

Performing Tasks 143 Distributing Authority: Centralization and

Decentralization 143 Three Forms of Authority 145

LO-4 Basic Organizational Structures 146 The Functional Structure 146 The Divisional Structure 146 Project Organization 147 Matrix Structure 147 International Structures 149

Organizational Design for the Twenty-First Century 149

Boundaryless Organization 149 Team Organization 150 Virtual Organization 150

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS “Simon Says,” Alexa, What Have You Done? 150

Learning Organization 151

LO-5 The Informal Organization 151 Informal Groups 151 The Organizational Grapevine 151

THERE’S AN APP FOR THAT! 152

Summary of Learning Objectives 152 Questions and Exercises 154 Team Exercises 154 business case 7 155

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08 MANAGING HUMAN RESOURCES AND LABOUR RELATIONS 157

An Avalanche of Sexual Harassment Cases 157

LO-1 The Foundations of Human Resource Management 159

The Strategic Importance of HRM 159 Human Resource Planning 160

LO-2 Recruiting Human Resources 160

THE GREENING OF BUSINESS What Are “Green” Jobs? 161

Selecting Human Resources 162

THERE’S AN APP FOR THAT! 163

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Artificial Intelligence Meets HR 164

LO-3 Developing Human Resources 164 New Employee Orientation 164 Training 165

ENTREPRENEURSHIP AND NEW VENTURES Are You LinkedIn? 165

Evaluating Employee Performance 166

LO-4 Compensation and Benefits 167 Determining Basic Compensation 167 Incentive Programs 168 Benefits 169

LO-5 The Legal Context of HRM 170 Equal Employment Opportunity 170 Comparable Worth 170 Sexual Harassment 171 Employee Safety and Health 171 Retirement 171

LO-6 New Challenges in the Changing Workplace 172

Managing Workforce Diversity 172 Managing Knowledge Workers 173 Managing Contingent Workers 173

LO-7 Dealing with Organized Labour 173

The Development of Canadian Labour Unions 173

Unionism Today 174 The Future of Unions 174

LO-8 The Legal Environment for Unions in Canada 174

Federal Legislation—The Canada Labour Code 175

Provincial Labour Legislation 175 Union Organizing Strategy 175 Union Security 176 Types of Unions 177

LO-9 Collective Bargaining 177 Reaching Agreement on the Contract’s Terms 177

Contract Issues 177 When Bargaining Fails 178

DISRUPTIONS IN BUSINESS Community College Strike Disrupts Students’ Lives 179

Conciliation, Mediation, and Arbitration 179

Summary of Learning Objectives 180 Questions and Exercises 181 Team Exercises 182 business case 8 183

09 MOTIVATING, SATISFYING, AND LEADING EMPLOYEES 184

Hunter Harrison 184

LO-1 Forms of Employee Behaviour 186

LO-2 Individual Differences among Employees 187 Personality 187 Attitudes at Work 188

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Caution: Words Matter and Online Posts Can Haunt You 189

LO-3 Matching People and Jobs 189 Psychological Contracts 189 The Person–Job Fit 190

Motivation in the Workplace 190

Classical Theory 190

ENTREPRENEURSHIP AND NEW VENTURES Rebooting with Lessons from Past Ventures 191

Early Behavioural Theory 191

LO-4 Behavioural Theory in the Mid-Twentieth Century 192

Contemporary Motivation Theory 193

LO-5 Strategies for Enhancing Motivation 194 Reinforcement/Behaviour Modification 194 Goal-Setting Theory 195 Participative Management and Empowerment 195 Team Management 196 Job Enrichment and Redesign 196 Modified Work Schedules 197

THE GREENING OF BUSINESS The Compressed Workweek and Telecommuting: Are They Really Green? 199

LO-6 Leadership and Motivation 199 Leadership and Power 200

LO-7 Approaches to Leadership 201

THERE’S AN APP FOR THAT! 202

LO-8 Recent Trends in Leadership 202

DISRUPTIONS IN BUSINESS Women in Leadership 204

Summary of Learning Objectives 205 Questions and Exercises 207 Team Exercises 207 business case 9 209

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PART 3 MANAGING OPERATIONS AND INFORMATION 213

10 OPERATIONS MANAGEMENT, PRODUCTIVITY, AND QUALITY 214

The Robots Keep Coming 214

LO-1 Providing Goods and Services to Customers 216 Changes in Canadian Manufacturing

over Time 216 Industrial Revolutions 217

ENTREPRENEURSHIP AND NEW VENTURES Entrepreneurship That Matters: Speaking Loud and Clear 217

Creating Value through Operations 218

LO-2 Differences between Service and Manufacturing Operations 218

LO-3 Operations Processes 219

Business Strategy as the Driver of Operations 221

LO-4 Operations Planning 222 Capacity Planning 222 Location Planning 222 Layout Planning 222 Quality Planning 224 Methods Planning 224

Operations Scheduling 225

The Master Operations Schedule 225 Detailed Schedules 225 Staff Schedules and Computer-Based

Scheduling 226 Project Scheduling 226

Operations Control 227

Materials Management 227 Production Process Control 227

LO-5 The Productivity–Quality Connection 228

Meeting the Productivity Challenge 228

Meeting the Quality Challenge 229

LO-6 Managing for Quality 230

THERE’S AN APP FOR THAT! 231

Tools for Quality Assurance 231

LO-7 Adding Value Through Supply Chains 233

THE GREENING OF BUSINESS Too Good to Waste 234

Summary of Learning Objectives 235 Questions and Exercises 236 Team Exercises 237 business case 10 238

11 UNDERSTANDING ACCOUNTING 240

Future Directions for the Modern Accountant 240

What Is Accounting, and Who Uses Accounting Information? 242

LO-1 Who Are Accountants and What Do They Do? 243

Financial versus Managerial Accounting 243 Professional Accountants 243

THERE’S AN APP FOR THAT! 244

Accounting Services 244 Private Accountants 245

LO-2 The Accounting Equation 246 Assets and Liabilities 246 Owners’ Equity 246

ENTREPRENEURSHIP AND NEW VENTURES Working with the Accounting Equation 247

LO-3 Financial Statements 247 Balance Sheets 247

LO-4 Income Statements 249 Statements of Cash Flows 250 The Budget: An Internal Financial

Statement 250

LO-5 Analyzing Financial Statements 251 Solvency Ratios: Borrower’s Ability to

Repay Debt 251 Short-Term Solvency Ratios 251

DISRUPTIONS IN BUSINESS Skimming off the Top 251

Long-Term Solvency 252 Profitability Ratios: Earnings Power

for Owners 252 Return on Equity 252 Return on Sales 252 Earnings Per Share 252 Activity Ratios: How Efficiently Is the Firm

Using Its Resources? 253

LO-6 Bringing Ethics into the Accounting Equation 253

Why Accounting Ethics? 253

LO-7 The Evolving Role of the Modern Accountant 254

Summary of Learning Objectives 255 Questions and Exercises 256 Team Exercises 257 business case 11 258

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PART 4 PRINCIPLES OF MARKETING 261

12 UNDERSTANDING MARKETING PRINCIPLES AND DEVELOPING PRODUCTS 262

Maple Leaf: Capitalizing on the Meatless Meat Movement 262

LO-1 What Is Marketing? 264 Delivering Value 264 Goods, Services, and Ideas 265 Relationship Marketing and Customer Relationship

Management 266 The Marketing Environment 266

LO-2 Developing the Marketing Plan 267 Strategy: The Marketing Mix 268

THERE’S AN APP FOR THAT! 268

Product 268 Pricing 269 Place (Distribution) 269 Promotion 269

LO-3 Marketing Strategy: Market Segmentation, Target Marketing, and Positioning 269

Identifying Market Segments 270

LO-4 Marketing Research 271 The Research Process 271 Research Methods 272

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Crowdsourcing: Wisdom from the Consumer World 273

LO-5 Understanding Consumer Behaviour 274

Influences on Consumer Behaviour 274 The Consumer Buying Process 274

LO-6 Organizational Marketing and Buying Behaviour 274

Business Marketing 275 B2B Buying Behaviour 275

LO-7 What Is a Product? 275 The Value Package 275 Classifying Goods and Services 276 The Product Mix 276

DISRUPTIONS IN BUSINESS Counterfeit Products 277

LO-8 Developing New Products and Branding 277 The New Product Development Process 277 Product Life Cycle 278

ENTREPRENEURSHIP AND NEW VENTURES Copper Branch: Plant-Based Power Food 279

Identifying Products: Branding and Packaging 280

Packaging Products 281 Labelling Products 281

Summary of Learning Objectives 282 Questions and Exercises 284 Team Exercises 284 business case 12 285

13 PRICING, PROMOTING, AND DISTRIBUTING PRODUCTS 287

Amazon Versus the Bay: Past, Present, and Future of Retail 287

LO-1 Determining Prices 289 Pricing to Meet Business Objectives 289 Price-Setting Tools 290

LO-2 Pricing Strategies and Tactics 291 Pricing Strategies 291

THERE’S AN APP FOR THAT! 292

Pricing Tactics 292

LO-3 Promoting Products and Services 293 Promotional Strategies 293 The Promotional Mix 293

LO-4 Advertising Promotions and Media 294 Advertising Media 294 Traditional Media: Changing Times 294 Online: The Power of Consumer

Engagement 294

LO-5 Personal Selling, Sales Promotions, Direct (or Interactive) Marketing, Public Relations, and Publicity 296

Personal Selling 296 Sales Promotions 296 Publicity and Public Relations 297

DISRUPTIONS IN BUSINESS Now Here’s a Story About Disruption! 297

LO-6 The Distribution Mix 298 Intermediaries and Distribution Channels 298

THE GREENING OF BUSINESS Single-Use Packaging Under Fire 299

Distribution Strategies 300 Channel Conflict and Channel Leadership 300

LO-7 The Role of Intermediaries 300 Wholesaling 300 Retailing 301

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS The Long Tail, Revisited 302

LO-8 Physical Distribution 303 Warehousing Operations 303

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Transportation Operations 303 Distribution through Supply Chains as a Marketing

Strategy 303

Summary of Learning Objectives 304 Questions and Exercises 306 Team Exercises 306 business case 13 308

PART 5 MANAGING FINANCIAL ISSUES 311

14 MONEY AND BANKING 312

RBC: A Symbol of Canadian Banking Strength 312

LO-1 What Is Money? 314 The Characteristics of Money 314 The Functions of Money 315 The Spendable Money Supply: M-1 315 M-1 Plus the Convertible Money Supply: M-2 315 Credit Cards and Debit Cards: Plastic Money? 315

LO-2 The Canadian Financial System 316 Financial Institutions 316

Financial Pillar #1—Chartered Banks 316

Services Offered by Banks 317

THERE’S AN APP FOR THAT! 317

Bank Loans 318

E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Real-Time Investing: Just a Click Away 319

Banks as Creators of Money 319 Other Changes in Banking 320

LO-3 The Bank of Canada 320

LO-4 Financial Pillar #2—Alternate Banks 321 Trust Companies 321 Credit Unions/Caisses Populaires 321

Financial Pillar #3—Specialized Lending and Savings Intermediaries 322

Life Insurance Companies 322 Factoring Companies 322 Financial Corporations 322 Venture Capital Firms 322 Pension Funds 323

Financial Pillar #4—Investment Dealers 323

ENTREPRENEURSHIP AND NEW VENTURES Risky Business 323

Other Sources of Funds 324

Government Financial Institutions and Granting Agencies 324

International Sources of Funds 324

LO-5 International Banking and Finance 324 Currency Values and Exchange Rates 324 The International Payments Process 325

THE GREENING OF BUSINESS Is Bitcoin Environmentally Friendly? 326

The International Bank Structure 326

Summary of Learning Objectives 327 Questions and Exercises 328 Team Exercises 328 business case 14 329

15 FINANCIAL DECISIONS AND RISK MANAGEMENT 331

Blockchain and Bitcoin: New Models or Modern-Day Bubbles? 331

LO-1 The Role of the Financial Manager 333 Objectives of the Financial Manager 333 Responsibilities of the Financial Manager 333

LO-2 Why Businesses Need Funds 334 Short-Term (Operating) Expenditures 334 Long-Term (Capital) Expenditures 335

ENTREPRENEURSHIP AND NEW VENTURES Social Capital Is Making the World a Better Place 335

LO-3 Sources of Short-Term Funds 336 Trade Credit 336 Secured Short-Term Loans 336 Unsecured Short-Term Loans 336

LO-4 Sources of Long-Term Funds 337 Debt Financing 337

THE GREENING OF BUSINESS What Are the Prospects for “Green Bonds”? 338

LO-5 Equity Financing 339

Hybrid Financing: Preferred Stock 340 Choosing between Debt and Equity Financing 341 The Risk–Return Relationship 341

Securities Markets 343

Investment Banking 343 Stock Exchanges 344 LO-6 Buying and Selling Securities 345

Financing Securities Purchases 346

DISRUPTIONS IN BUSINESS Short Sellers Are Everywhere 347

LO-7 Other Investments 348 Mutual Funds 348 Exchange-Traded Funds 348 Hedge Funds 348 Commodities 349

THERE’S AN APP FOR THAT! 349

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Securities Regulation 349

Financial Management for Small Businesses 349

Establishing Bank Credit and Trade Credit 350 Venture Capital 350 Planning for Cash-Flow Requirements 350

LO-8 Risk Management 350 Coping with Risk 350

Summary of Learning Objectives 351 Questions and Exercises 353 Team Exercises 354 business case 15 355

APPENDIX A A BRIEF HISTORY OF BUSINESS IN CANADA 359

APPENDIX B BUSINESS LAW 360

APPENDIX C USING TECHNOLOGY TO MANAGE INFORMATION IN THE INTERNET AND SOCIAL MEDIA ERA 364

APPENDIX D MANAGING YOUR PERSONAL FINANCES: A SYNOPSIS 376

APPENDIX E INSURANCE AS RISK MANAGEMENT 378

Endnotes and Source Notes 381 Name and Organization Index 409 Subject Index 415

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and responsibilities, but you’ll also need to understand how to manage other people—how to motivate and reward them, how to lead them, how to deal with conflict among them, and the legal parameters that may affect how you treat them. Chapters 3, 6, 8, and 9 provide a lot of information about how you can best wear this hat, although information about the role of employer is found throughout the book.

• The Consumer Hat. Even if you don’t work for a business, you will still wear the hat of a consumer. Whenever you fill your car with Petro Canada gasoline; buy on Amazon, Zara, or Reitmans; or download a song from iTunes, you’re consuming products or ser- vices created by businesses. To wear this hat effectively, you need to understand how to assess the value of what you’re buying, your rights as a consumer, and so on. We discuss how you can best wear this hat in Chapters 1, 3, 12, and 13.

• The Investor Hat. The final business hat many people wear is that of an investor. You may buy your own business or work for a com- pany that allows you to buy its stock. You may also invest in other companies through the purchase of stocks or shares of a mutual fund. In order for you to invest wisely, you must understand some basics, such as financial markets, business earnings, and the costs of investment. Chapters 4, 11, 14, and 15 will help you learn how to best wear this hat.

Most people wear more than one of these hats at the same time. Regardless of how many hats you wear or when you may be putting them on, you will interface with many different businesses in different ways. Knowing how to best wear all of these hats is what this book is all about.

The world is populated with a breathtaking range of businesses and business opportunities. Big and small businesses, traditional and online businesses, established and new businesses, broad-based and niche businesses, successful and unsuccessful businesses, global and domestic businesses—regardless of where your future plans take you, we hope that you will look back on this course as one of your positive first steps.

Keep in mind that what you get out of this course depends on at least three factors. One factor is this book and the information about business that you will acquire as a result of reading it. Another factor is your instructor, who is a dedicated professional who wants to help you grow and develop intellectually and academically. The third factor is YOU. Learning is an active process that requires you to be a major participant. Simply memorizing the key terms and concepts in this book may help you achieve an acceptable course grade, but true learning requires that you read, study, discuss, question, review, experience, evaluate––and wear the four hats—as you go along. Tests and homework are neces- sary, but we hope that you will finish this course with new knowledge and increased enthusiasm for the world of business. Your instructor will do his or her part to facilitate your learning. The rest, then, is up to you. We wish you success.

PREFACE

HELPING STUDENTS BUILD A SOLID BUSINESS KNOWLEDGE FOUNDATION

Welcome to the ninth Canadian edition of Business Essentials. If you’re like many students, you may be starting this term with some questions about why you’re here. You may be taking this course at a community college, CEGEP, or at a university, and you may be taking it in a traditional classroom setting or online. Whatever the case, you may be wondering just what you’re supposed to get from this course and how it will benefit you. In short, you may be wondering, “How will this help me?”

This is a survey course designed to introduce you to the exciting and challenging world of business, both in Canada and elsewhere. The course is designed to fit the needs of a wide variety of students. You may be taking this course as the first step towards earning a degree in …

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