Business English
Business English
Business English
Think about it this way: In 2015 the labor force in the United States
contained over 158.6 million workers, according to the U.S. Bureau
of Labor Statistics. Similarly, the total area of the United States is
3,794,101 square miles. These are large numbers for such crucial
resources, however, they are limited. Because these resources are
limited, so are the numbers of goods and services we produce with
them. Combine this with the fact that human wants seem to be
virtually infinite, and you can see why scarcity is a problem.
Figure 1. Scarcity of Resources. Homeless people are a stark
reminder that scarcity of resources is real. (Credit: “daveynin”/Flickr
Creative Commons)
Think about all the things you consume: food, shelter, clothing,
transportation, healthcare, and entertainment. How do you acquire
those items? You do not produce them yourself. You buy them. How
do you afford the things you buy? You work for pay. Or if you do not,
someone else does on your behalf. Yet most of us never have enough
to buy all the things we want. This is because of scarcity. So how do
we solve it?
Visit this website to read about how the United States is dealing with
scarcity in resources.
Every society, at every level, must make choices about how to use its
resources. Families must decide whether to spend their money on a
new car or a fancy vacation. Towns must choose whether to put more
of the budget into police and fire protection or into the school system.
Nations must decide whether to devote more funds to national defense
or to protecting the environment. In most cases, there just isn’t
enough money in the budget to do everything. So why do we not each
just produce all of the things we consume? The simple answer is most
of us do not know how, but that is not the main reason. (When you
study economics, you will discover that the obvious choice is not
always the right answer—or at least the complete answer. Studying
economics teaches you to think in a different of way.) Think back to
pioneer days, when individuals knew how to do so much more than
we do today, from building their homes, to growing their crops, to
hunting for food, to repairing their equipment. Most of us do not
know how to do all—or any—of those things. It is not because we
could not learn. Rather, we do not have to. The reason why is
something called the division and specialization of labor, a
production innovation first put forth by Adam Smith, Figure 2, in his
book, The Wealth of Nations.
When the tasks involved with producing a good or service are divided
and subdivided, workers and businesses can produce a greater
quantity of output. In his observations of pin factories, Smith
observed that one worker alone might make 20 pins in a day, but that
a small business of 10 workers (some of whom would need to do two
or three of the 18 tasks involved with pin-making), could make
48,000 pins in a day. How can a group of workers, each specializing
in certain tasks, produce so much more than the same number of
workers who try to produce the entire good or service by themselves?
Smith offered three reasons.
Specialization only makes sense, though, if workers can use the pay
they receive for doing their jobs to purchase the other goods and
services that they need. In short, specialization requires trade.
You do not have to know anything about electronics or sound systems
to play music—you just buy an iPod or MP3 player, download the
music and listen. You do not have to know anything about artificial
fibers or the construction of sewing machines if you need a jacket—
you just buy the jacket and wear it. You do not need to know anything
about internal combustion engines to operate a car—you just get in
and drive. Instead of trying to acquire all the knowledge and skills
involved in producing all of the goods and services that you wish to
consume, the market allows you to learn a specialized set of skills and
then use the pay you receive to buy the goods and services you need
or want. This is how our modern society has evolved into a strong
economy.
The study of economics does not dictate the answers, but it can
illuminate the different choices.
Self-Check Questions
Review Questions
1. Give the three reasons that explain why the division of labor
increases an economy’s level of production.
2. What are three reasons to study economics?
1. Suppose you have a team of two workers: one is a baker and one
is a chef. Explain why the kitchen can produce more meals in a
given period of time if each worker specializes in what they do
best than if each worker tries to do everything from appetizer to
dessert.
2. Why would division of labor without trade not work?
3. Can you think of any examples of free goods, that is, goods or
services that are not scarce?
References
Glossary
division of labor
the way in which the work required to produce a good or service
is divided into tasks performed by different workers
economics
the study of how humans make choices under conditions of
scarcity
economies of scale
when the average cost of producing each individual unit
declines as total output increases
scarcity
when human wants for goods and services exceed the available
supply
specialization
when workers or firms focus on particular tasks for which they
are well-suited within the overall production process
Solutions
1. Scarcity means human wants for goods and services exceed the
available supply. Supply is limited because resources are
limited. Demand, however, is virtually unlimited. Whatever the
supply, it seems human nature to want more.
2. 100 people / 10 people per ham = a maximum of 10 hams per
month if all residents produce ham. Since consumption is
limited by production, the maximum number of hams residents
could consume per month is 10.
3. She is very productive at her consulting job, but not very
productive growing vegetables. Time spent consulting would
produce far more income than it what she could save growing
her vegetables using the same amount of time. So on purely
economic grounds, it makes more sense for her to maximize her
income by applying her labor to what she does best (i.e.
specialization of labor).
4. The engineer is better at computer science than at painting.
Thus, his time is better spent working for pay at his job and
paying a painter to paint his house. Of course, this assumes he
does not paint his house for fun!
ARTICLE 2
The 4 Major Business Organization Forms
Business organization is the single-most important choice you’ll make
regarding your company. What form your business adopts will affect
a multitude of factors, many of which will decide your company’s
future. Aligning your goals to your business organization type is an
important step, so understanding the pros and cons of each type is
crucial.
Sole Proprietorship
Disadvantages:
Partnership
Advantages of partnerships:
Disadvantages:
Corporation
Advantages of a corporation:
Disadvantages:
Advantages of an LLC:
Disadvantages:
Ownership is limited by certain state laws
Agreements must be comprehensive and complex
Beginning an LLC has high costs due to legal and filing fees
ARTICLE 3
Types of Managers - Principles of
Management
Managers are found at multiple levels in an organization. They may
lead an entire organization as Rose Marie Bravo did at Burberry; or
they may head functions, departments, or units.
At General Electric Jeffery Immelt has been the CEO since 2001.
Immelt has articulated a grand vision that includes pushing GE into
environmentally friendly technologies. Immelt is doing this because
he thinks it makes good business sense. He believes that tighter
environmental standards are inevitable, that environmentally friendly
technologies are also cost-efficient, and that customers will
increasingly demand them.
Members of the top management team help the CEO in all of this.
The team normally includes a chief financial officer (CFO), who is
responsible for the overall financing of the corporation. It may also
include a chief operating officer (COO), who makes sure operations
are run efficiently within the company; and in some high-technology
enterprises a chief technology officer (CTO) is responsible for
developing new technologies and products within the corporation.
FUNCTIONAL MANAGERS
FRONTLINE MANAGERS
They work in every part of the company— from solar plants in Spain
to drilling rigs in the North Sea and marketing teams in Chicago.
Their decisions, in aggregate, have an enormous impact on BP’s
performance. 13 Most successful managers begin their managerial
careers as frontline managers. In this job they encounter the realities
of management, which as we will see in the next section often differ
from their expectations.
ARTICLE 4
10 Characteristics of an Effective Manager
Leadership
Experience
Communication
Knowledge
Organization
If you aren’t organized in your position, there’s a good chance that the
employees you manage won’t be either. There are many resources
online that can inspire you to get organized. You can also buy a
personal planner or download an app on your phone that can remind
you of meetings, tasks you need to complete every day, etc.
Time Management
Reliability
Delegation
If you don’t know how to delegate projects and tasks, your role as a
manager will be a lot more difficult. Don’t be afraid to ask your
employees to help complete a task. You might think it’s easier to do
everything yourself, but this will add more time to your already busy
schedule, and you won’t be allowing your employees to do what they
were hired to do.
Confidence
Noun:
1. It cannot directly follow articles (a, and, the) or quantity words
(some, a lot, ten): The breathe was . . .
2. It cannot be pluralized: The breathes were fast and
complicated.
3. It cannot be used in the pattern: article + adjective + noun: The
noisy breathe...
The answer to all of these is 'no'. The word breathe is not a
noun.
Verb:
1. It can be stated in the third person singular verb form: He
breathes...
2. It can be formed with an ing ending: He is breathing.
3. It can be used with a modal: He must breathe to stay alive.
The answer to all these is 'yes'. The word breathe is a verb.
Adjective:
1. It cannot take the ending er: breather (there is a word breather,
but it's used this way: to take a breather = to take a short break or
rest from a task.) You cannot say "This air is breather than that
in Los Angeles.")
2. It cannot take the ending est: This air is the breathest in the
country.
3. It cannot follow the verb seems: The air seems breathe...
The answers to all these are 'no'. The word breathe is not an
adjective, nor is it a noun. Breathe is a verb.
Noun:
1. It cannot directly follow articles (a, and, the) or quantity words
(some, a lot, ten): The handsome was...
2. It cannot be pluralized: The handsomes arrived...
3. It cannot be used in the pattern: article + adjective + noun: The
smiling handsome walked...
The answer to all these is 'no'. The word handsome is not a
noun.
Verb:
1. It cannot be stated in the third person singular verb form: He
handsomes...
2. It cannot be formed with an ing ending: He is handsoming...
3. It cannot be used with a modal: He must handsome before
going on a date.
The answer to all these is 'no'. The word handsome is not a
verb.
Adjective:
1. It can take the ending er: handsomer
2. It can take the ending est: The man is the handsomest in the
county.
3. It can follow the verb seems: The man seems handsome...
The answer to all these is 'yes'. The word handsome is an
adjective.
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