what is business parts of business

What is a ?

Glossary enterprise; entrepreneurship; barter; profit; loss; trade; organization; economy; producer; consumer;

exchange; goods; services; market; commodity; capital; labour; Specialization Occupation Demand supply

Chapter 1 What is Business?

Definitions of Business

Business has three dimensions of a meaning

A commerce An occupation An organization

Chapter 1 What is a Business?

Definitions of Business Business as a commerce is the process

that people produce, exchange and trade goods and services

Chapter 1 Types of Commrerce


Business as an occupation is the acquired set of specialized skills and abilities that allows people to create valuable goods and services



Business as an organization is the system of task and authority relationship that coordinates and controls the interactions between people so that they work toward a common goal


Chapter 1 What is Business?A business (also called a company, enterprise or

firm) is a legally recognized organization

designed to provide goods and/or services to

consumers.


Definitions of Business Business as a system is

a combination of business commerce, occupations, and organizations that produces and distributes the goods and services that create value for people in a society


Regardless of meaning there are four crucial ingredients or productive factors or resources of land, labor, capital and enterprise that are needed to profit from business

Factors of Production


Factors of Production These four productive factors or resources

of land, labor, capital and enterprise that are needed to profit from business and are limited in supply (scarcity)

A company must use them efficiently and effectively to produce goods and services

Efficiency A measure of how

well or productively resources are used to achieve a goal.

Effectiveness A measure of the

appropriateness of the goals an organization is pursuing and of the degree to which the organization achieves those goals.


The company’s business model not only outlines the plan for these resources but creates a competitive advantage in the value of its product and generates profitable sales revenue

Competitive advantage – the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than they do.

Chapter 1 Competitive advantage


Supply and Demand The forces of supply and demand

determine a product’s market price

Chapter 1 Business Objectives

Business objectives are the goals of business – what the business wants to achieve.

All businesses have their own objectives.

Chapter 1 Business Objectives

There are six major types of business objectives:

1. Survival, 2. Profit Maximization, 3. Growth, 4. Managerial Objectives, 5. Sales Revenue Maximization,6. Image and Social responsibility.

Major Types

Purpose and Functions of Business

Purpose of Business Businesses fulfill the needs and wants of

consumers. Consumers use goods and services Customers purchase goods and services

Businesses sell goods, services or both to consumers Goods—clothing, cars, computers, CDs Services—hairdresser, dry cleaner, lawn care,

babysitting

Motivation to start a business Profit motive—desire to make money; see

the opportunity to make money in the marketplace.

Opportunity to meet wants and needs of consumers

Opportunity to increase competition in the marketplace

Businesses are investment opportunities for individuals—future income

Functions of Business Accounting—recording and reporting

financial activity and transactions Examples

Paying bills Collecting money from customers Paying taxes Preparing employee payroll checks Reconciling bank statements Investing cash Purchasing inventory

Functions of Business

Management Makes sure that the entire

organization meets its goals and obligations

Effectively works with people in the organization

Uses available resources to accomplish the organizations’ goals

Functions of BusinessMarketing

Satisfies the needs and wants of consumers through exchange

Based on four “P’s”ProductPrice (establishing the price of the

product)Placement (placing the product in

attractive and convenient sales locations)

Promotion (advertising)

Functions of Business Information Technology

Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers)

ExamplesMaintains e-mail accountsMaintains software applicationsMaintains processing systemsMaintains hardware for all technology

used

Functions of Business

Operations Considered the “back office”

Involves behind the scenes paperwork required to complete all transactions

Found in both the service and the manufacturing sector

Functions of BusinessHuman Resources

Manages “people” relations within the company Helps workers develop the skills and knowledge

needed to be successful on the job Responsible for hiring and firing of employees Selects employee benefits and enrolls all

employees in the benefits (insurance, retirement, etc.)

Helps employees pursue educational opportunities

what is business parts of business

Education

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