Introduction to Business Foundation of Business and Economics

Introduction to Business Foundation of Business and Economics www. Assignment. Point. com

Course Aim This course is designed to introduce the students to the basic activities of business enterprises. The objectives of business, responsibilities, forms of ownerships, different functional areas of business are all to be covered. www. Assignment. Point. com

Topics to be covered Foundations Of Business & Economics Forms Of Business Ownership The Markets Starting & Running A Business Management Communications Marketing –An Overview The Marketing Mix Background Of Production Control www. Assignment. Point. com

Topics to be covered Organizing For Achievement Managing People Finance Management Science And Techniques An Aid To Decision Making and Control. Statistics Accounting Fundamentals Business and the Economy Business and the Society www. Assignment. Point. com

Why Study Business ? The Impact of Business Career Choice Business Ownership www. Assignment. Point. com

What is a Business ? An organization engaged in producing goods and services to make a profit. A nation’s resources are used to produce goods and services that will meet people’s needs and wants www. Assignment. Point. com

Goods & Services Goods : Tangible (commodities that have a physical presence) Services : Intangible (activities that benefit consumers or other businesses) EXAMPLES please? www. Assignment. Point. com

Needs & Wants Needs – Goods and services people must have simply to exist – food, clothing, shelter, medical care etc. Wants – Things people would like to have but do not absolutely need for survival – fashionable clothes, luxurious vacations etc. www. Assignment. Point. com

Business Today & Tomorrow The growing scarcity of resources The Importance of International Business The Change of Technology The need for Improved Productivity The increase importance of Business’s Social Responsibility www. Assignment. Point. com

Businesses may differ according to : SIZE ( one-man enterprise to the giant multinationals) TYPES OF OWNERSHIP (sole-trader, partnership, private/public companies, etc) Organization (the process in dividing up the tasks needed to run the business) www. Assignment. Point. com

What do all Businesses have in common ? Objectives Resources Functions Environment Management Communication www. Assignment. Point. com

Objectives of the Business Profitability Survival Prestige Growth Society www. Assignment. Point. com

Profit : 2 views Business profit = Revenue-Costs Business profit = Selling price-all costs of making and selling the product including tax Economic profit= subtracts the opportunity cost also. www. Assignment. Point. com

What is opportunity cost ? The cost of choosing to use resources for a purpose , which results in sacrificing the next best alternative for the use of those resources. Example: Elizabeth pays herself a salary of $ 9, 000 for operating her business. But she could have earned $ 20, 000 working for a large store. Her opportunity cost is $ 20, 000 - $ 9, 000 = $11, 000. www. Assignment. Point. com

Resources of a Business (factors of production) LAND (natural resources - e. g. minerals , wood, water, land ) LABOUR (physical & mental skills) CAPITAL (all manufactured things which are used to produce other goods and services) ENTREPRENEURSHIP (the group of skills and risk taking needed to combine the other three factors of production to produce goods and services) www. Assignment. Point. com

Functions of Business Production (all activities concerned with the creation or making the good) Marketing (product planning, packaging, pricing, advertising, etc) Finance (money to start, remain in operation etc) Control (accounting) People (human resource) Constraints (internal & external) Managing www. Assignment. Point. com

Management Functions : The term management describes all the activities required to acquire and organize the resources a business needs in order to produce the goods and services. Planning Organization Co-ordination Direction Control So what do you think does a manager do ? ? www. Assignment. Point. com

Joy Webb is a toolmaker and a good one. He has a great deal of pride in his job and has always enjoyed his work. Joy has worked for the same business since he began his apprenticeship thirty years ago. The boss has always treated him well. So he has never bothered to join a trade union. Three years ago the business began to run into trouble: an important raw material used in the production process was in short supply: the price rocketed. Then major competitors re-equipped with new technology that economised on the use of this material and reduced the need for skilled workers such as toolmakers. Joy did not worry too much at first, but became when the redundancy notice started to go out. www. Assignment. Point. com

Four major elements in any identified situation Conflict Change Interdependence Scarcity www. Assignment. Point. com

What is a System? System is an assembly of parts that are connected together in such a way as to achieve a particular objective. Each part of a system affects and is affected by the other parts and the change or removal of any part will affect the way in which the system operates. Examples…. In biology in the study of the circulation of the blood The physical structure of the universe The technology that makes up a system of communication. www. Assignment. Point. com

Some Vocabulary ENVIRONMENT : Anything outside a system which has an effect on the way in which it operates. SUBSYSTEM: An integral part of another system. OPEN SYSTEMS: All systems are open in their operation, i. e. they are affected by the behavior of other systems and the environment. INTERFACE: The point of contact between one system and another. INPUTS: The resources the system buys in. PROCESS: The activities that go towards achieving the objectives of the system. OUTPUTS: The result of the process. www. Assignment. Point. com

Economic System An economic system is the method society uses to allocate its resources (land, labor, capital and entrepreneurship) to satisfy its needs. What distinguishes one economic system from another is the control of the factors of production and the interaction of business, government and consumers. www. Assignment. Point. com

Capitalism is an economic system where the factors of production are in private hands. Freedom of Choice Freedom of Enterprise Competition. In this system the economic questions are: What is to be produced? How much will be produced? Who will produce it? How much will it cost? Who will get it? www. Assignment. Point. com

Some features Business enterprise are free to do business competitively. With minimal government regulation. Consumers purchase those goods are services that satisfy their needs and wants. Resources are shifted into the production of these goods and services. Things that do not satisfy consumers needs and wants are not produced. Business are free to produce as much of whatever goods and services as consumers will buy. www. Assignment. Point. com

Laissez -Faire A policy that encourages government to leave business and the economy alone. The government takes a laissez –faire, or hands –off approach and does not interfere in the economic system. www. Assignment. Point. com

Communism An economic system under which the government controls the factors of production. All the ecnomic decisions about production, distribution, consumption and property ownership are made by the government. It decides what will be produced, who will produce it, how many units will be made, how much it will cost and who will received it. Supply and demand competition have no influence in this system. Central government planners make all the economic decisions about production and resource allocation. www. Assignment. Point. com

Mixed Economy An economy in which both private and government production of goods and services occurs. The government usually plays a role in supplying defense, roads, education, pensions and some medical care. In the mixed economy, markets are generally free and competitive. www. Assignment. Point. com

Socialism is an economic system in which much ownership is private, but the government controls the operation and direction of basic industries. This control and direction are based on the belief that there are certain products and services that everyone should have. In essence, this means that these need to be controlled so that all people will have them –not just those people who have enough money. www. Assignment. Point. com

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