Welcome

TECH 4090
Introduction to Technology
An Introduction Into The Foundations of Business

Class 3
Finish Chapter 2:: Social Responsibility
Chapter Three: Entrepreneurship, New Ven
Entrepreneurship, Ventures,
and Business Ownership

Contemporary Social Consciousness

• The Concept of Accountability
– With the critical significance of
addressing climate change and the need
for more sustainable business practices,
businesses are recognizing the strategic
importance of adopting a much more
responsible approach to doing business.
Responsibility Toward The Environment

• Air pollution
– Carbon monoxide
emitted by cars
contributes to air
pollution, as do smoke
and other chemicals
produced by
manufacturing plants.

– Innovative business practices and new

Technologies can be adopted to address these
issues

Responsibility Toward The Environment

• Water pollution
– For years,
businesses and
cities dumped waste
into rivers, streams,
and lakes with little
regard for the
consequences.

All citizens, corporate and otherwise, must take

action to correct these oversights
 Responsibility Toward
The Environment
• Land pollution
– Need to reverse the
destruction of forests
and trees
– Destruction of quality
of soil
– Toxic waste disposal
– Need for proper
People plant trees on Tree Planting
recycling Day across China.
Arbor Day occurs on March 12th

Approaches to Social Responsibility

Proactive Stance
a company actively seeks opportunities to contribute to the
well-being of groups and individuals in its social environment
 The United Nations Conference on
Trade and Development

Consumer Bill of Rights

The United Nations formalized eight rights,
and Consumers International adopted these
rights as a charter and started recognizing
March 15 as World Consumer Rights Day.

Consumer Bill of Rights

1. The right to safety
Products should cause no harm to their users if
such use is executed as prescribed

2. The right to be informed

Business should always provide consumers with
enough appropriate information to make intelligent
and informed product choices.
3. The right to choose
Consumers should have a variety of options provided
by different companies from which to choose
Consumer Bill of Rights
4. The right to be heard
4
The ability of consumers to voice complaints and
concerns about a product in order to have the issue
handled efficiently and responsively.
5. The right to satisfaction of basic needs
People have access to basic, essential goods and
services: adequate food, clothing, shelter, health care,
education, public utilities, water, etc.
6. The right to redress
Consumers to receive a fair settlement of just claims,
including compensation for misrepresentation, shoddy
goods, or unsatisfactory services.

Consumer Bill of Rights

7. The right to consumer education
Consumers should be able to acquire knowledge
needed to make informed choices about goods and
services, while being aware of basic consumer rights
and responsibilities and how to act on them.

8. The right to a healthy environment

The right to live and work in a work space or home
that is non-threatening to the well-being of present
and future generations.
 Socially Responsible
Sustainable Business Practices

Green Marketing
Green Marketing involves the promotion of
products and services which are safe for the
environment.
It involves:
• development and manufacturing
• promotion and distribution
• consumption, and disposal
of the products and services in a sustainable
fashion to help the environment or to cause
the least damage to nature.
Green Marketing Practices
• Using recycled and renewable material for
production.
• Use of green energy to produce products,
such as solar energy, geothermal energy
and wind energy.
• Reduce product packaging or use
ecofriendly packaging.
• Not using toxic materials, which are
harmful to the environment.
• Making products which are reusable as
well as recyclable.

Green Marketing
Green Marketing is all
about developing and
promoting products and d
services that fulfil
customer requirements, s,
in terms of quality,
performance,
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the environment.
 Green Marketing
Companies Get Creative
• Puma’s
P ’ “Cl
“Clever Littl
Litt
Little
Bag” changes the
idea of the shoebox
by wrapping
footwear in a
cardboard structure
with 65 percent less
cardboard.

• Puma expects to cut carbon dioxide emissions by

10,000 tons per year and water, energy, and
diesel use by 60 percent by using fewer materials

The Elements of Green Marketing

Table 2.1 The Elements of Green Marketing Page 52
• Production Processes Businesses, such as Ford Motors and General Electric, modify their production
processes to limit the consumption of valuable resources such as fossil fuels by increasing energy
efficiency and reducing their output of waste and pollution by cutting greenhouse gas emissions.
• Product Modification Products can be modified to use more environmentally friendly materials, a practice S.
C. Johnson encourages with its Greenlist of raw materials classified according to their impact on health and
the environment. Committed to only using the safest materials on this list, S. C. Johnson eliminated 1.8
million pounds of volatile organic compounds from its glass cleaner Windex.24
• Carbon Offsets are used by some companies that are committed to replenishing, repairing, or restoring
those parts of the environment that are damaged by their operations, especially those that produce carbon
dioxide (CO2). In 2007, Volkswagen began a program of planting trees in the so-called VW Forest in the
Lower Mississippi Alluvial Valley to offset the CO2 emissions of every car they sell.25
• Packaging Reduction, for example, reducing and reusing materials used in packaging products, is another
important strategy of green marketing, which Starbucks has pioneered. In 2004, the FDA gave the coffee
retailer the first-ever approval to use recycled materials in its food and beverage packaging. Starbucks
estimates that using cups composed of 10 percent recycled fibers reduces its packaging waste by more
than 5 million pounds per year.26
• Sustainability, using renewable resources and managing limited resources responsibly and efficiently, is an
important goal for any business pursuing a green policy. For example, Whole Foods Market is committed to
buying food from farmers who use sustainable agriculture practices that protect the environment and
agricultural resources, such as land and water.
 Beware!: Greenwashing

Greenwashing:- Beware
• Greenwashing is the process of conveying
a false impression or providing misleading
information about how a company's
products are more environmentally sound.
• Greenwashing is considered an
unsubstantiated claim to deceive
consumers into believing that a company's
products are environmentally friendly.
Greenwashing:- Beware

• Greenwashing can be seen in plastic water bottle

companies like Poland Spring, Evian and Deer
Park, that all have nature on their labels.
• Plastic water bottles are designed to be single-
use and are contributing to the massive plastic
waste crisis around the world.

We wonder what Zhong Shanshan,

the founder of Nongfu Spring is doing about this issue?
How Governments Influence
Business
• Legislation and Direct Regulation
– The establishment of laws and rules that
dictate what organizations can and
cannot do.
• Indirect Regulation
– Government can offer tax incentives for
Social Responsibility Initiatives

How Organizations Influence

Government
• Political Action Committees (PACs)
– special organizations created to solicit
money and then distribute it to political
candidates
• Lobbying
– the use of persons or groups to formally
represent an organization or group of
organizations before political bodies
Formal Organizational Dimensions
Formal organizational dimensions that can
help manage social responsibility are:
• Legal Compliance
– the extent to which the organization conforms
to local, state, federal, and international laws
• Ethical Compliance
– the extent to which the members of the
organization follow basic ethical (and legal)
standards of behavior
• Philanthropic giving
– the awarding of funds or gifts to charities or
other worthy causes

Evaluating Social Responsibility

Any business that is serious about social
responsibility must apply the concept of
control to social responsibility.

• Corporate Social Audit

– systematic analysis of a firm’s success in using
funds earmarked for meeting its social
responsibility goals
– social responsibility programs must be initiated
and supported by top management;
– ultimately, a social responsibility program
involves everyone in the organization.
Question to class
Give two examples of how an
organization can act in a socially
responsible way towards:
• 1) the environment
Environmentally friendly raw materials
Use environmentally friendly power sources

• 2) their employees
Ensuring a clean, bright and motivating work area
Offering positive training and career paths

Business Essentials
Twelfth Edition

Chapter 3
Entrepreneurship,
New Ventures, and
Business Ownership
Introduction
• In this chapter, we examine
– Key characteristics of entrepreneurial
personalities and activities
– Business plans
– Start-up decisions made by small
businesses
– Sources of financial aid available
– Trends in small business start-ups
– Key reasons for success and failure
among small businesses

What Is a “Small” Business?

• Small business (not so small)
– one that is independent (not part of a larger
business) and that has relatively little influence
in its market.
– depends on industry, but can have as many as
500 to 1,000 employees
• Small Business Administration (SBA)
– government agency charged with assisting
small businesses
 The Importance of Small Business
• Job Creation.
In the US, small businesses have accounted for
40 percent of all new jobs in the high-technology
sectors of the economy alone.
• Innovation.
Small business produces 16 times as many
patents per employee as large patenting firms.
• Contributions to Big Business.
Most products made by big businesses are sold to
consumers by small ones.

Entrepreneurship
A Mind-Set
It is an attitude and a set of skills that enable
people to courageously:
• identify and make the most of
opportunities,
• overcome and learn from setbacks, and
• succeed in a variety of settings
Entrepreneurship and Business
• Entrepreneur
– Person who accepts both the risks and
the opportunities involved in creating and
operating a new business venture
• Entrepreneurship the process of
seeking business opportunities

Some well-know “Entrepreneurs”

Zhong Shanshan,
the founder of Nongfu Spring Howard Shultz

Under Zhong's leadership, His aggressive expansion

the company grew to be the
largest bottled water maker
in China, as well as one of
the largest beverage
companies in the world.
We hope Nongfu Spring
practices Green Marketing
in Chinese markets has
been credited with
reconciling China’s tea
culture with coffee
consumption
 Some well-know “Entrepreneurs”

Xiaomi was founded in William Li is a Chinese

2010 in Beijing by Lei Jun
By 2017, Lei had donated
$1 billion to charity
‘Quality products at honest
pricing’ is almost everyone’s
need. Xiaomi has high-grade
products with cutting-edge
technology at reasonable prices.
business executive and
entrepreneur. He is co-
founder and CEO of the
electric car manufacturer NIO
Nio CEO William Li says,
"We want to provide better
product and service at
prices lower than Tesla."

Some well-know “Entrepreneurs”

Jeff Bezos Zhang Jindong

Suning Holdings Group,
Founder of Amazon, On June 6, 2016,
media proprietor, Zhang Jindong,
computer engineer, signed a contract to
and commercial purchase the
astronaut. majority stake in
Italian football club
Inter Milan
Entrepreneurial Characteristics
1. Resourcefulness
2. A concern for customer relations
3. A desire for independence
4. The ability to handle uncertainty
5. A desire for risk-taking
6. Belief in their vision and possibility of
success

Starting and Operating a New

Business
Entrepreneurs must make a number of
decisions when they start their business:
• whether to buy an existing business or to
start one from scratch.
• determine sources of financing needed
• when to seek advice from others.
• a well-crafted business plan.
Distinctive Competencies &
New Businesses
The distinctive competencies are aspects of a
business that the firm stands out from its
competitors in.
The distinctive competencies of new
businesses usually fall into three areas:
1. Identifying Niches in Established
Markets:
A niche is simply a segment of a market
that is not currently being exploited.

Distinctive Competencies & New

Businesses
2. Identifying New
2 N Markets:
Successful entrepreneurs excel at
discovering whole new markets (One way is
creating an entire new industry or
championing disruptive technologies).
3. First-Mover Advantages:
A first-mover advantage is any advantage
that comes to a firm because it exploits an
opportunity before any other firm does. The
ability to move quickly is key to taking
advantage.
The Business Plan
A well thought out business plan is
essential for any new business

• Business plan
– in the act of preparing this document, the
would-be entrepreneur is:
ƒ forced to develop the business idea on
paper and
ƒ consider all the details and strategies
required for a successful endeavour

Crafting a Business Plan – Three

Main Aspects
A business plan summarizes business strategy
for the new venture and shows how it will be
implemented.
1. Setting Goals and Objectives:
A business plan should discuss:
• the entrepreneur’s goals and objectives,
• the strategies used to obtain them,
• and how these strategies will be
implemented.
Crafting a Business Plan – Three
Main Aspects
2. Sales
2 S l F Forecasting:
i
The sales forecast requires that the
entrepreneur demonstrate:
• an understanding of the market,
• the strengths and weaknesses of existing
firms,
• and the means by which the new venture
will compete.
The sales forecast impacts many of the other
decisions regarding the business.

Crafting a Business Plan – Three

Main Aspects
3. Financial Planning:
3
This is the entrepreneur’s plan for turning
all activities into dollars.
• It shows how much money is needed to
open for business and
• how much is needed to keep it going
until it starts earning a profit.
 Starting the New Business – Three
Options
1. Buying an Existing Business:
• Existing businesses have already
proven their ability to attract customers
and to establish rapport with lenders,
suppliers, and the community.
• Most consultants recommend that
entrepreneurs buy existing businesses
because the odds of success are
greater.

Starting the New Business – Three Options

2. Franchising:
• A franchise agreement involves two
parties, a franchisee (the local owner)
and a franchiser (the parent company).
• Franchisees benefit from the parent
corporation’s experience and expertise.
3. Starting from Scratch:
• Though risks are usually greater, starting
from scratch does allow the entrepreneur
the satisfaction to grow an idea into a
successful business.
Franchising
• Advantages
– Proven business opportunity
– Access to management expertise
• Disadvantages
– Start-up costs
– Ongoing payments
– Management rules and restrictions

Franchising: Examples
 Starting from Scratch
1. Who and where are my customers?
2. How much will those customers pay for my
product?
3. How much of my product can I expect to
sell?
4. Who are my competitors?
5. Why will customers buy my product rather
than the product of my competitors?

Financing a Small Business

Having sufficient financing is very important

• Many sources for business financing are

available.
• Personal resources account for more than
two-thirds of all money invested;
• smaller portions of funding come from
banks, independent investors, and
government loans.
Financing a Small Business
• Personal resources
• Loans from family and friends
• Bank loans
• Venture capital companies
• Small-Business Investment Companies
(SBICs)

Financing a Small Business

• Venture Capital Company
– group of investors who invest money in
companies with rapid growth potential.
– Most of these firms do not lend money.
They invest it, supplying capital in return
for partial ownership
Financing a Small Business
• Investment Company (SBIC)
– government-regulated investment
company that borrows money from the
SBA (Small Business Administration) to
invest in or lend to a small business

Trends in Small-Business Start-Ups

• Emergence of E-Commerce
– The Internet provides fundamentally new
ways of doing business
• Crossovers from Big Business
– More businesses are being started by
people who have opted to leave big
corporations and put their experience to
work for themselves
Trends in Small-Business Start-Ups
• Opportunities for Minorities and
Women
– More small businesses are also being
started by minorities and women

• Global Opportunities
– Many entrepreneurs are also finding new
opportunities in foreign markets

Four Main Reasons for Failure

1. Managerial incompetence or inexperience.
• Some entrepreneurs put too much faith in
common sense, overestimate their own
managerial skills, or believe that hard work
alone ensures success.
2. Neglect.
• Some entrepreneurs try to launch ventures
in their spare time, and others devote only
limited time to new businesses.
• But starting a small business demands an
overwhelming time commitment.
Four Main Reasons for Failure
3. Weak control systems.
• Effective control systems keep a business on
track and alert managers to potential trouble.
• If your control systems don’t signal potential
problems, you may be in serious trouble
before you spot more obvious difficulties.
4. Insufficient capital.
• Some entrepreneurs are overly optimistic
about how soon they’ll start earning profits.
• In most cases, it takes months or even years.

Reasons for Success

1. Hard work, drive, and dedication.
• Spending the needed time and effort to make
it happen is essential.
2. Market demand.
• Careful analysis of market conditions can help
small-business owners develop effective
marketing strategies.
3. Managerial competence.
• Through training, experience, drawing on the
expertise of others, and working smart, help in
the successful management of start-ups
4. Luck.
Question to Teams
Your Team is Starting
a New Technology
Consulting Business
(You guide and
implement technology
solutions for your clients)

What are three factors that might mean

the difference between the success and
failure of your new start-up company?

Noncorporate Business Ownership

• Sole Proprietorship
– business owned and usually operated by one
person who is responsible for all of its debts
• General Partnership
– business with two or more owners who share in
both the operation of the firm and the financial
responsibility for its debts
Sole Proprietorship
• Advantages
– Freedom
– Simple to form
– Low start-up costs
– Tax benefits
• Disadvantages
– Unlimited liability
– Limited resources
– Limited fundraising capability
– Lack of continuity

Partnerships
• Advantages
– More talent and moneyy
– Relatively easy to form
m
– Limited liability for
limited partners
– Tax benefits
– More fundraising
capability
• Disadvantages
– Unlimited liability for general partners
– Disagreements among partners
– Lack of continuity
 Alternatives to General
Partnerships
• Limited Partnership
– Allows for limited partners who invest
money but are liable for debts only to the
extent of their investments
– General (or active) partners run the
business
• Master Limited Partnership
– Master partner has majority ownership
and runs the business; minority partners
have no management voice

The Corporate Entity

Most well-known
businesses are
corporations

Corporation
business that is
legally considered
an entity separate
from its owners and
is liable for its own
debts;
 Corporations
• Advantages Elon Musk Buying
– Limited liability TWITTER?
– Easier to raise funds
– Continuity
– Stronger fundraising
capability

• Disadvantages
– Can be taken over against the
he will of its management
– Double taxation of profits
– Complicated and expensive to form

Comparative Summary: Three

Forms of Business

Table 3.1 Pg 91 Comparative Summary: Three Forms of Business Ownership

Table 3.2
Types of
Corporations
pg 95

Managing a Corporation
• Defined by the firm’s bylaws, corporate
governance involves stockholders, the
board of directors, and corporate
officers.

• Corporate Governance
– roles of shareholders, directors, and
other managers in corporate decision
making and accountability
 Corporate Governance
• Stockholder (or Shareholder)
– owner of shares of stock in a corporation
• Board of Directors
– governing body of a corporation that reports to
its shareholders and delegates power to run its
day-to-day operations while remaining
responsible for sustaining its assets
• Officers
– top management team of a corporation

Shareholders
elect the Board,
who then select
CEO, who then
selects the
management
team etc.
Special Issues in Corporate Ownership
1. Joint Ventures and Strategic Alliances:
• When separate organizations share
ownership of what is essentially a new
enterprise, it is called a joint venture.
2. Employee Stock Ownership Plans (ESOPs):
• ESOPs allow employees to own a significant
share of the corporation through trusts
established on their behalf.
3. Institutional Ownership:
• Institutional investors include mutual funds
and pension funds that buy enormous blocks
of stock.

Special Issues in Corporate Ownership

3. Mergers and Acquisitions:
• A merger occurs when two firms combine to
create a new company; in an acquisition,
one firm buys another outright. Many deals
that are loosely called mergers are really
acquisitions.
4. Divestitures and Spin-Offs:
• A divestiture occurs when a firm sells off
unrelated and/or underperforming
businesses.
• When a firm sells part of itself to raise
capital, the strategy is known as a spin-off.
 Team Assignment One
Marked out of 50 (10% Final Mark)
Due by 10 pm, Monday September 5th .
Name format of answer file:
TeamName_Assignment_1

• The Assignment is posted as an Edmodo

Assignment (Also on D2L Brightspace)
• Only respond in that Edmodo Posting (or on
D2L)
• do not submit your files as a note or a
message or an email

Team Assignment One

Acceptable Softwares:
WORD, PPT, PDF
(convert any Pages files to PDF)
One file only per team. Your answer file should have a
cover sheet that indicates:
1. Assignment One
2. Team Name
3. List of team members with student numbers, and
for each member, a team “participation rating” out
of 5 for team cooperation (5 is high and indicates
a good level of cooperation).
 Team Assignment One

Your Team is going to start a new business

that will take advantage of your
competencies in both technology and
business expertise to give you a good
chance of success.

Answer the attached 10 questions:

Remember,
a Team is a special
type of group in
which the members s
share a common
objective or goal
So . . . . .
Work as a team
s
Enjoy the process
Have fun
Achieve your goal!