PRODUCTION & BUSINESS

ORGANIZATION

PRODUCTION

Everything that we see around us is the result of production.

Every GOOD, PRODUCT or SERVICE is the consequence of production.

We can observe, as we delve further into the study of economics, that much of its ideas revolve around the concept of production.

THE CONCEPT OF PRODUCTION

We have studied the basic economic problem — that of scarcity — and with people’s unlimited wants and needs, that would indeed be a problem.

Economics have pointed to the power allocation of resources as the main solution to the problem. However, nothing could be allocated if it is not first produced.

Production of goods and services is the first stages in solving the problem of scarcity and makes possible the allocation of resources.

THE FACTORS OF PRODUCTION

includes arable land, forests and fields, any territory, and natural resources such as mineral and water resources that are used in production.

1. LAND

consists of all the machinery, equipment, and facilities that are used to produce goods or services.

2. CAPITAL

consists of physical and mental exertions, talents, and abilities provided people and workers towards the production of a goods or services

3. LABOR

is the skill of person in combining land, capital, and labor to come up with good or service which would benefits other people, and him or her personality.

4. ENTREPRENEURSHIP

BUSINESS ORGANIZATIO

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BUSINESS ORGANIZATION are needed to accomplish this task of production.

Individuals simply cannot perform the production of goods in large quantities in order to satisfy the wants and needs of general populations.

So why do we need business organizations and large firms to produce goods and services? This is because of the following reasons:

a) Business organizations can produce large quantities of goods and services that can sufficiently satisfy the demand of the large public, such as thousands of air conditioning units, or tons of bread.

b) Business organizations can gather enough resources to ensure continuous production over a period of time.

c) Business organization provide an efficient management of production.