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
Chapter 1 What is Business?
Business as an occupation is the acquired set of specialized skills and abilities that allows people to create valuable goods and services
Definitions of Business
Chapter 1 What is Business?
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
Definitions of Business
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.
Chapter 1 What is Business?
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
Chapter 1 What is Business?
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
Chapter 1 What is Business?
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.
Chapter 1 What is Business?
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
Chapter 1 What is Business?
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
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