Contents PART 1 Business in a Global Environment Chapter 1 Opening Vignette Google and Android: Fast and Faster Hit & Miss Microsoft and Google Square Off on the Web BusinessEtiquette Social Networking Hit & Miss How Tablets Will Change Business Going Green Exelon Bets on Nuclear Solving an Ethical Controversy SEC Lax on Oversight?
1
The Changing Face of Business
2
What Is Business?
5
Not-for-Profit Organizations 5
Factors of Production
7
The Private Enterprise System
9
Basic Rights in the Private Enterprise System 10, The Entrepreneurship Alternative 11
Six Eras in the History of Business
13
The Colonial Period 13, The Industrial Revolution 13, The Age of Industrial Entrepreneurs 14, The Production Era 14, The Marketing Era 15, The Relationship Era 15, Managing Relationships through Technology 16, Strategic Alliances 16, The Green Advantage 17
Today’s Business Workforce
20
Changes in the Workforce 20
The 21st-Century Manager
23
Importance of Vision 23, Importance of Critical Thinking and Creativity 23, Ability to Lead Change 24
What Makes a Company Admired?
25
What’s Ahead
25
Summary of Learning Objectives 27, Business Terms You Need to Know 28, Review Questions 28, Projects and Teamwork Applications 29, Web Assignments 29
Chapter 2 Opening Vignette PharmaJet Jumps from Doing Good to Doing Well BusinessEtiquette How to Handle Ethical Dilemmas at Work
Case 1.1 SAS Is Still a Great Place to Work
30
Case 1.2 Kayak.com
31
Video Case 1.3 New Harvest Coffee Roasters Brews Up Fresh Business
32
Business Ethics and Social Responsibility
34
Concern for Ethical and Societal Issues
36
The Contemporary Ethical Environment
38
Individuals Make a Difference 40, Development of Individual Ethics 40, On-the-Job Ethical Dilemmas 41
How Organizations Shape Ethical Conduct
44
Ethical Awareness 45, Ethical Education 45, Ethical Action 46, Ethical Leadership 47 xx
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Going Green Starbucks Re-Designs Its Stores. Now, What About the Cup? Solving an Ethical Controversy Are Prescription Drug Advertisements Helpful or Harmful to Consumers? Hit & Miss Pacific Biodiesel Recycles Oil from French Fries to Fuel Hit & Miss Balancing Life and Work with a Cup of Tea
Chapter 3 Opening Vignette NASCAR Tries to Restart Its Engine Hit & Miss Five Guys Burgers and Fries: A Simple Recipe for Success Solving an Ethical Controversy Should Alternative Energy Development Be Relied on to Create New Jobs? Hit & Miss Microloans Aid Women’s Businesses Going Green Tax Credits for an Energy Star BusinessEtiquette Tips for International Travel
Acting Responsibly to Satisfy Society
47
Responsibilities to the General Public 49, Responsibilities to Customers 55, Responsibilities to Employees 57, Responsibilities to Investors and the Financial Community 63
What’s Ahead
64
Summary of Learning Goals 64, Business Terms You Need to Know 65, Review Questions 65, Projects and Teamwork Applications 66, Web Assignments 66
Case 2.1 Cause-Related Marketing—Give a Day, Get a Disney Day
67
Case 2.2 Greener Shipping—At Sea and in Port
68
Video Case 2.3 Seventh Generation: Beyond Paper and Plastic
69
Economic Challenges Facing Contemporary Business Microeconomics: The Forces of Demand and Supply
70 73
Factors Driving Demand 73, Factors Driving Supply 76, How Demand and Supply Interact 77
Macroeconomics: Issues for the Entire Economy
78
Capitalism: The Private Enterprise System and Competition 79, Planned Economies: Socialism and Communism 82, Mixed Market Economies 83
Evaluating Economic Performance
83
Flattening the Business Cycle 84, Productivity and the Nation’s Gross Domestic Product 86, Price-Level Changes 88
Managing the Economy’s Performance
91
Monetary Policy 91, Fiscal Policy 92
Global Economic Challenges of the 21st Century
94
What’s Ahead
96
Summary of Learning Objectives 96, Business Terms You Need to Know 98, Review Questions 98, Projects and Teamwork Applications 99, Web Assignments 100
Chapter 4 Opening Vignette Ford Figo: India’s Cool New Car BusinessEtiquette Tips for Understanding Japanese Culture Hit & Miss The Tiny Nano—A Potential Hit for Tata Motors
Case 3.1 Nuclear Energy: Making a Comeback?
100
Case 3.2 Smart Phones: Recession Proof and Growing
101
Video Case 3.3 Secret Acres: Selling Comics Is Serious Business
102
Competing in World Markets Why Nations Trade
104 107
International Sources of Factors of Production 107, Size of the International Marketplace 107, Absolute and Comparative Advantage 109
Measuring Trade between Nations
110
Major U.S. Exports and Imports 110, Exchange Rates 111
Barriers to International Trade
113
Social and Cultural Differences 113, Economic Differences 115, Political and Legal Differences 116, Types of Trade Restrictions 120 Contents
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Solving an Ethical Controversy How Fair Is Fair Trade? Going Green IBM Helps Keep Water Flowing Hit & Miss Groupon’s Goal: Spread Deals Around the World
Reducing Barriers to International Trade
121
Organizations Promoting International Trade 122, International Economic Communities 123, NAFTA 123, CAFTA-DR 124, European Union 125
Going Global
125
Levels of Involvement 126, From Multinational Corporation to Global Business 130
Developing a Strategy for International Business
131
Global Business Strategies 132, Multidomestic Business Strategies 132
What’s Ahead
133
Summary of Learning Objectives 133, Business Terms You Need to Know 135, Review Questions 135, Projects and Teamwork Applications 136, Web Assignments 136
Case 4.1 Google and Facebook Face Off in India’s Social Networking Wars
137
Case 4.2 TOMS Shoes Takes One Step at a Time
137
Video Case 4.3 Smart Design: Life Is In the Details
138
Part 1 Greensburg, KS: New Ways to Be a Better Town
140
Part 1: Launching Your Global Business and Economics Career
141
PART 2 Starting and Growing Your Business Chapter 5
Forms of Business Ownership and Organization Most Businesses Are Small Businesses
Opening Vignette Dewey Weber Makes Surfing a Family Business
What Is a Small Business? 147, Typical Small-Business Ventures 147
Going Green Green Mama: Small Business with a Big Message
Creating New Jobs 150, Creating New Industries 150, Innovation 151
BusinessEtiquette How to Use Social Networking in Your Job Search Solving an Ethical Controversy Good Karma or Bad Karma? Hit & Miss Turning Technologies Creates High-Tech Jobs Hit & Miss One Small Franchise Produces One Big Idea
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Contributions of Small Business to the Economy Why Small Businesses Fail
143 144 146 149 152
Management Shortcomings 153, Inadequate Financing 153, Government Regulation 154
The Business Plan: A Foundation for Success
155
Assistance for Small Businesses
157
Small Business Administration 157, Local Assistance for Small Businesses 159, Private Investors 160, Small-Business Opportunities for Women and Minorities 160
Franchising
162
The Franchising Sector 163, Franchising Agreements 163, Benefits and Problems of Franchising 164
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Forms of Private Business Ownership
166
Sole Proprietorships 166, Partnerships 167, Corporations 168, Employee-Owned Corporations 169, Family-Owned Businesses 169, Not-for-Profit Corporations 170
Public and Collective Ownership of Business
171
Public (Government) Ownership 171, Collective (Cooperative) Ownership 171
Organizing a Corporation
172
Types of Corporations 172, Where and How Businesses Incorporate 172, Corporate Management 173
When Businesses Join Forces
174
Mergers and Acquisitions (M&A) 174, Joint Ventures: Specialized Partnerships 175
What’s Ahead
175
Summary of Learning Objectives 176, Key Terms 178, Review Questions 178, Projects and Teamwork Applications 178, Web Assignments 179
Chapter 6 Opening Vignette Elon Musk Launches Space X into the Final Frontier BusinessEtiquette Communicating By Email, Text Message, or Social Networking Updates: You Don’t Have to Be All Thumbs Hit & Miss Meyer Wells: New Life for Old Wood Hit & Miss Businesses Based at Home Are Booming Solving an Ethical Controversy Entrepreneurs and Ethics: It’s Good Business Going Green Adam Lowry and Eric Ryan: There’s a Method to Their Madness
Case 5.1 Leslie Blodgett: The Bare Escentuals of Business
179
Case 5.2 Small Meets Big: Patagonia and Walmart Join Forces for the Environment
180
Video Case 5.3 Seventh Generation Cleans Up with Consumer Products
181
Starting Your Own Business: The Entrepreneurship Alternative
182
What Is an Entrepreneur?
184
Categories of Entrepreneurs
185
Reasons to Choose Entrepreneurship as a Career Path
186
Being Your Own Boss 187, Financial Success 188, Job Security 188, Quality of Life 189
The Environment for Entrepreneurs
189
Globalization 190, Education 191, Information Technology 192, Demographic and Economic Trends 193
Characteristics of Entrepreneurs
194
Vision 194, High Energy Level 195, Need to Achieve 195, Self-Confidence and Optimism 195, Tolerance for Failure 196, Creativity 196, Tolerance for Ambiguity 198, Internal Locus of Control 198
Starting a New Venture
199
Selecting a Business Idea 199, Creating a Business Plan 202, Finding Financing 203, Government Support for New Ventures 205
Intrapreneurship
205
What’s Ahead
206
Summary of Learning Objectives 206, Business Terms You Need to Know 208, Review Questions 208, Projects and Teamwork Applications 208, Web Assignments 209 Contents
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Chapter 7 Opening Vignette Ursula Burns: Moving Xerox Forward Solving an Ethical Controversy Google Stands Alone: When Ethics and Business Don’t Mix Going Green Johnson & Johnson: Caring for the World Hit & Miss Jeff Immelt Tries to Lead GE in a New Direction Hit & Miss Southwest Airlines: “We Love Your Bags” BusinessEtiquette Managing a Millennial Workforce
Case 6.1 Marco Giannini’s Dogswell: A Healthy Company after All
209
Case 6.2 Small Businesses Are Big into Social Networking
210
Video Case 6.3 Comet Skateboards: It’s a Smooth Ride
210
Part 2 Greensburg, KS: Greensburg: A Great Place to Start
212
Part 2: Launching Your Entrepreneurial Career
213
PART 3 Management: Empowering People to Achieve Business
215
Management, Leadership, and the Internal Organization
216
What Is Management?
218
The Management Hierarchy 218, Skills Needed for Managerial Success 220, Managerial Functions 221
Setting a Vision and Ethical Standards for the Firm
222
Importance of Planning
224
Types of Planning 225, Planning at Different Organizational Levels 226
The Strategic Planning Process
227
Defining the Organization’s Mission 227, Assessing Your Competitive Position 228, Setting Objectives for the Organization 230, Creating Strategies for Competitive Differentiation 230, Implementing the Strategy 231, Monitoring and Adapting Strategic Plans 231
Managers as Decision Makers
231
Programmed and Nonprogrammed Decisions 231, How Managers Make Decisions 232
Managers as Leaders
233
Leadership Styles 234, Which Leadership Style Is Best? 235
Corporate Culture
235
Organizational Structures
236
Departmentalization 238, Delegating Work Assignments 240, Types of Organization Structures 241
What’s Ahead
244
Summary of Learning Objectives 244, Business Terms You Need to Know 246, Review Questions 246, Projects and Teamwork Applications 247, Web Assignments 247
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Chapter 8 Opening Vignette After the Flood: Gaylord Opryland Hotel Stays Afloat Hit & Miss Stop Demotivating Employees—And They’ll Be Motivated Solving an Ethical Controversy Should Paid Sick Leave Be Required by Law? BusinessEtiquette How to Ask for a Raise Hit & Miss AOL Employees Don’t Exit Voluntarily Going Green Labor Unions and Green Construction
Case 7.1 Ford Drives Out of the Financial Mud
248
Case 7.2 Military Leaders in Business
249
Video Case 7.3 Dan Formosa: At the Forefront of Smart Design
250
Human Resource Management: From Recruitment to Labor Relations
252
Human Resources: The People Behind the People
254
Recruitment and Selection
255
Finding Qualified Candidates 255, Selecting and Hiring Employees 256
Orientation, Training, and Evaluation
257
Training Programs 257, Performance Appraisals 259
Compensation
260
Employee Benefits 261, Flexible Benefits 263, Flexible Work 264
Employee Separation
265
Voluntary and Involuntary Turnover 265, Downsizing 265, Outsourcing 267
Motivating Employees
267
Maslow’s Hierarchy of Needs Theory 268, Herzberg’s Two-Factor Model of Motivation 269, Expectancy Theory and Equity Theory 270, Goal-Setting Theory and Management by Objectives 271, Job Design and Motivation 272, Managers’ Attitudes and Motivation 272
Labor–Management Relations
273
Development of Labor Unions 273, Labor Legislation 274, The Collective Bargaining Process 274, Settling Labor–Management Disputes 275, Competitive Tactics of Unions and Management 275, The Future of Labor Unions 276
What’s Ahead
277
Summary of Learning Objectives 278, Business Terms You Need to Know 279, Review Questions 280, Projects and Teamwork Applications 280, Web Assignments 280
Case 8.1 The Coca-Cola Company: Training for the Future Right Now
281
Case 8.2 Strikes: Who Wins, Who Loses?
282
Video Case 8.3 Seventh Generation Promotes Company Ownership
282
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Chapter 9 Opening Vignette Innovation at Mayo Clinic through Teamwork Solving an Ethical Controversy Employee Empowerment: Yes or No? Hit & Miss GM: Putting Workers in the Driver’s Seat Hit & Miss Team Diversity at Ernst & Young BusinessEtiquette Tune Up Your Listening Skills Going Green Clorox Comes Clean— Naturally
Top Performance through Empowerment, Teamwork, and Communication Empowering Employees
284 286
Sharing Information and Decision-Making Authority 286, Linking Rewards to Company Performance 288
Teams
290
Team Characteristics
292
Team Size 292, Team Level and Team Diversity 292, Stages of Team Development 293
Team Cohesiveness and Norms
294
Team Conflict
295
The Importance of Effective Communication
296
The Process of Communication 296
Basic Forms of Communication
298
Oral Communication 298, Written Communication 300, Formal Communication 300, Informal Communication 302, Nonverbal Communication 303
External Communication and Crisis Management
304
What’s Ahead
306
Summary of Learning Objectives 306, Business Terms You Need to Know 308, Review Questions 309, Projects and Teamwork Applications 309, Web Assignments 309
Case 9.1 SeaWorld Faces a Public Relations Crisis
310
Case 9.2 Windy City Fieldhouse: It’s All about Teams
311
Video Case 9.3 Kimpton Hotels: “Our Employees Are Our Brand”
312
Chapter 10
Production and Operations Management
Opening Vignette Boeing’s Next-Generation 737s Take to the Skies
Mass Production 318, Flexible Production 318, Customer-Driven Production 319
Going Green Drilling for Natural Gas— Clean Alternatives Hit & Miss The Sun Is Shining Brighter in Senatobia
The Strategic Importance of Production
314 317
Production Processes
319
Technology and the Production Process
320
Green Manufacturing Processes 320, Robots 321, Computer-Aided Design and Manufacturing 322, Flexible Manufacturing Systems 322, Computer-Integrated Manufacturing 323
Hit & Miss Goodyear Tire & Genencor: A Sweet Alliance
The Location Decision
323
The Job of Production Managers
326
BusinessEtiquette Making the Most of Business Meetings
Planning the Production Process 327, Determining the Facility Layout 327, Implementing the Production Plan 329
Controlling the Production Process
333
Production Planning 333, Routing 334, Scheduling 334, Dispatching 335, Follow-Up 336 xxvi
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Solving an Ethical Controversy Multivitamins Produced in China: Are Stricter Quality Controls Necessary?
Importance of Quality What’s Ahead
Opening Vignette NetFlix: Streaming Versus DVDs Hit & Miss The Pepsi Refresh Project: Viral Marketing Going Green The Tap Project Solving an Ethical Controversy When Free Credit Reports Aren’t Free Hit & Miss Disney XD TV: Marketing to Boys BusinessEtiquette Calming the Angry Customer
339
Summary of Learning Objectives 340, Business Terms You Need to Know 341, Review Questions 341, Projects and Teamwork Applications 342, Web Assignments 342
Case 10.1 Macedonia: The New Hub of Apparel Manufacturing?
343
Case 10.2 Zappos: How Not to Get Zapped by Customer Service
344
Video Case 10.3 Kimpton Hotels Puts Green Initiatives to Work
344
Part 3 Greensburg, KS: No Time to Micromanage
346
Part 3: Launching Your Management Career
347
PART 4 Marketing Management Chapter 11
336
Quality Control 337, ISO Standards 338
Customer-Driven Marketing What Is Marketing?
349 350 352
How Marketing Creates Utility 354
Evolution of the Marketing Concept
355
Emergence of the Marketing Concept 355
Not-for-Profit and Nontraditional Marketing
356
Not-for-Profit Marketing 356, Nontraditional Marketing 357
Developing a Marketing Strategy
360
Selecting a Target Market 361, Developing a Marketing Mix for International Markets 363
Marketing Research
364
Obtaining Marketing Research Data 364, Applying Marketing Research Data 365, Data Mining 365
Market Segmentation
366
How Market Segmentation Works 367, Segmenting Consumer Markets 367, Segmenting Business Markets 373
Consumer Behavior
374
Determinants of Consumer Behavior 374, Determinants of Business Buying Behavior 374, Steps in the Consumer Behavior Process 375
Relationship Marketing
375
Benefits of Relationship Marketing 376, Tools for Nurturing Customer Relationships 377
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What’s Ahead
378
Summary of Learning Goals 379, Key Terms 380, Review Questions 381, Projects and Teamwork Applications 381, Web Assignments 382
Chapter 12 Opening Vignette Bag Balm: A Simple Product with Hundreds of Uses Hit & Miss Buick: Making an Old Brand New Again Hit & Miss PortionPac Makes More By Selling Less Going Green Testa Produce Sells—and Builds—Green Solving an Ethical Controversy Teens at the Mall: Good or Bad for Business? BusinessEtiquette Minding Your Social Media Manners
Case 11.1 Advertising on Facebook: Unlimited Potential?
382
Case 11.2 Marketing Gone Wrong: Johnson & Johnson and Risperdal
383
Video Case 11.3 Zipcar and UNH: Customer-Driven Marketing
384
Product and Distribution Strategies Product Strategy
386 388
Classifying Goods and Services 389, Classifying Consumer Goods and Services 389, Marketing Strategy Implications 391, Product Lines and Product Mix 391
Product Life Cycle
392
Stages of the Product Life Cycle 392, Marketing Strategy Implications of the Product Life Cycle 394, Stages in New-Product Development 395
Product Identification
397
Selecting an Effective Brand Name 397, Brand Categories 398, Brand Loyalty and Brand Equity 398, Packages and Labels 400
Distribution Strategy
402
Distribution Channels 402
Wholesaling
406
Manufacturer-Owned Wholesaling Intermediaries 406, Independent Wholesaling Intermediaries 406, Retailer-Owned Cooperatives and Buying Offices 407
Retailing
407
Nonstore Retailers 408, Store Retailers 409, How Retailers Compete 410
Distribution Channel Decisions and Logistics
413
Selecting Distribution Channels 414, Selecting Distribution Intensity 415, Logistics and Physical Distribution 416
What’s Ahead
419
Summary of Learning Goals 419, Business Terms You Need to Know 421, Review Questions 421, Projects and Teamwork Applications 422, Web Assignments 422
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Case 12.1 Luxury Brands Market to Millennials
423
Case 12.2 The Convergence of TV and the Internet
424
Video Case 12.3 Secret Acres: Getting the Word Out
425
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Chapter 13 Opening Vignette San Francisco Giants Win with Pricing Strategy Hit & Miss Heritage Oaks: “Expert Success” Going Green How Much Would You Pay for a Plastic Shopping Bag? BusinessEtiquette How to Negotiate in a Difficult Economy Solving an Ethical Controversy Free E-Books: Good or Bad for Business? Hit & Miss Will Lower Prices Help Nokia Regain Its Edge?
Promotion and Pricing Strategies Integrated Marketing Communications
426 429
The Promotional Mix 430, Objectives of Promotional Strategy 431, Promotional Planning 432
Advertising
434
Types of Advertising 434, Advertising and the Product Life Cycle 435, Advertising Media 436
Sales Promotion
441
Consumer-Oriented Promotions 441, Trade-Oriented Promotions 443, Personal Selling 444
Pushing and Pulling Strategies
449
Pricing Objectives in the Marketing Mix
449
Profitability Objectives 450, Volume Objectives 450, Pricing to Meet Competition 450, Prestige Objectives 451
Pricing Strategies
452
Price Determination in Practice 452, Breakeven Analysis 452, Alternative Pricing Strategies 454
Consumer Perceptions of Prices
455
Price–Quality Relationships 456, Odd Pricing 456
What’s Ahead
456
Summary of Learning Goals 457, Business Terms You Need to Know 458, Review Questions 458, Projects and Teamwork Applications 459, Web Assignments 459
Case 13.1 Brand Names versus Store Brands
459
Case 13.2 Marketing to the Teenage Crowd
460
Video Case 13.3 Pet Airways Handles Pets With Loving Care
461
Part 4 Greensburg, KS: Think Green, Go Green, Save Green
462
Part 4: Launching Your Marketing Career
463
PART 5 Managing Technology and Information Chapter 14 Opening Vignette The Shopkick App Kicks Shopping Up a Notch
Using Technology to Manage Information
465 466
Data, Information, and Information Systems
468
Components and Types of Information Systems
469
Databases 470, Types of Information Systems 471
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Hit & Miss Wyndham Hotels and Resorts Database Breached BusinessEtiquette Courteous Communications via Wireless Devices Going Green Can Cloud Computing Also Be “Green” Computing? Solving an Ethical Controversy Should Employers Monitor Employees’ Internet Use? Hit & Miss Cisco Systems Tackles Cloud Security
Computer Hardware and Software
473
Types of Computer Hardware 473, Computer Software 475
Computer Networks
476
Local Area Networks and Wide Area Networks 476, Wireless Local Networks 477, Intranets 478, Virtual Private Networks 478, VoIP 479
Security and Ethical Issues Affecting Information Systems
479
E-Crime 480, Computer Viruses, Worms, Trojan Horses, and Spyware 481, Information Systems and Ethics 482
Disaster Recovery and Backup
483
Information System Trends
484
The Distributed Workforce 484, Application Service Providers 485, On-Demand, Cloud, and Grid Computing 485
What’s Ahead
486
Summary of Learning Goals 487, Business Terms You Need to Know 488, Review Questions 489, Projects and Teamwork Applications 489, Web Assignments 489
Case 14.1 MICROS Systems Works on a Large Scale
490
Case 14.2 Kaspersky Lab Busts Computer Bugs
491
Video Case 14.3 Zipcar: Technology Fuels Its Business
492
Part 5 Greensburg, KS: The Dog Ate My Laptop
494
Part 5: Launching Your Information Technology and Accounting Career
495
PART 6 Managing Financial Resources
497
Chapter 15
Understanding Accounting and Financial Statements
498
Opening Vignette Deloitte Consulting Meets Challenges with Optimism
Users of Accounting Information
Hit & Miss Forensic Accountants: Fraud Busters BusinessEtiquette Tips for Foreign Corrupt Practices Act Compliance Going Green Deloitte Educates Itself—and Others—on Sustainability
500
Business Activities Involving Accounting 501
Accounting Professionals
502
Public Accountants 502, Management Accountants 503, Government and Not-for-Profit Accountants 504
The Foundation of the Accounting System
504
The Accounting Cycle
506
The Accounting Equation 507, The Impact of Computers and the Internet on the Accounting Process 508
Financial Statements
510
The Balance Sheet 511, The Income Statement 512, Statement of Owners’ Equity 514, The Statement of Cash Flows 515 xxx
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Solving an Ethical Controversy Should Whistle-Blowers Be Rewarded? Hit & Miss Accounting: Hong Kong Meets China
Financial Ratio Analysis
517
Liquidity Ratios 518, Activity Ratios 519, Profitability Ratios 520, Leverage Ratios 520
Budgeting
521
International Accounting
523
Exchange Rates 524, International Accounting Standards 524
What’s Ahead
525
Summary of Learning Objectives 525, Business Terms You Need to Know 527, Review Questions 528, Projects and Teamwork Applications 528, Web Assignments 528
Chapter 16 Opening Vignette Sam’s Club Lends to Small Businesses Going Green TD Bank: “As Green as Our Logo” Hit & Miss Citigroup Spins Off Primerica, Inc. Hit & Miss How News Lifts—or Sinks— World Stocks BusinessEtiquette What to Do When Your Credit Gets Pulled Solving an Ethical Controversy Can Wall Street Regulate Itself?
Case 15.1 Intacct Provides Accounting Software as a Service
529
Case 15.2 BDO Seidman: Growing with the 20th Century and Beyond
530
Video Case 15.3 Pet Airways Is a “Feel-Good” Business
531
The Financial System
532
Understanding the Financial System
534
Types of Securities
536
Money Market Instruments 536, Bonds 537, Stock 539
Financial Markets
541
Understanding Stock Markets
543
The New York Stock Exchange 543, The Nasdaq Stock Market 544, Other U.S. Stock Markets 545, Foreign Stock Markets 545, ECNs and the Future of Stock Markets 545, Investor Participation in the Stock Markets 546
Financial Institutions
546
Commercial Banks 547, Savings Banks and Credit Unions 549, Nondepository Financial Institutions 550, Mutual Funds 551
The Role of the Federal Reserve System
551
Organization of the Federal Reserve System 551, Check Clearing and the Fed 552, Monetary Policy 552
Regulation of the Financial System
555
Bank Regulation 555, Government Regulation of the Financial Markets 555, Industry Self-Regulation 557
The Financial System: A Global Perspective
557
What’s Ahead
559
Summary of Learning Goals 559, Business Terms You Need to Know 561, Review Questions 561, Projects and Teamwork Applications 562, Web Assignments 562
Case 16.1 Emerging-Market Stocks: The New Leaders?
563
Case 16.2 Credit Unions Find a Silver Lining in the Financial Crisis
564
Video Case 16.3 New Harvest Coffee Goes Beyond Fair Trade
565 Contents
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Chapter 17 Opening Vignette HP Buys Palm: Win or Lose? Hit & Miss Apptio Calculates the Cost of Information Technology BusinessEtiquette Tips from LearnVest Solving an Ethical Controversy Executive Pay: Should Shareholders Decide the Salaries of CEOs? Going Green Intel Invests in U.S. Technology Hit & Miss Harvest Partners Grows Its Investments
Financial Management
566
The Role of the Financial Manager
568
Financial Planning
571
Managing Assets
572
Short-Term Assets 573, Capital Investment Analysis 574, Managing International Assets 575
Sources of Funds and Capital Structure
576
Leverage and Capital Structure Decisions 576, Mixing Short-Term and Long-Term Funds 578, Dividend Policy 578
Short-Term Funding Options
579
Trade Credit 579, Short-Term Loans 580, Commercial Paper 581
Sources of Long-Term Financing
581
Public Sale of Stocks and Bonds 581, Private Placements 582, Venture Capitalists 582, Private Equity Funds 582, Hedge Funds 585
Mergers, Acquisitions, Buyouts, and Divestitures
585
What’s Ahead
587
Summary of Learning Goals 587, Business Terms You Need to Know 589, Review Questions 589, Projects and Teamwork Applications 590, Web Assignments 590
Case 17.1 ConocoPhillips Divests to Return to Its Core
590
Case 17.2 Top Hedge Fund Managers Earn Record Paychecks
591
Video Case 17.3 Comet Skateboards Rides the Triple Bottom Line
592
Part 6 Greensburg, KS: So Much to Do, So Little Cash
594
Part 6: Launching Your Finance Career
595
Greensburg, KS: The Bumpy Road to Recovery
597
Greensburg, KS: What Lies Ahead?
598
APPENDIXES Appendix A
Business Law
Appendix B
Insurance and Risk Management
A-18
Appendix C
Personal Financial Planning
A-31
Appendix D
Developing a Business Plan
A-43
Appendix E
Careers in Contemporary Business
A-53
GLOSSARY
G-1
NOTES
N-1
NAME INDEX
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A-1
I-1
SUBJECT INDEX
I-14
INTERNATIONAL INDEX
I-30
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