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The Business Environment: Class 1 NotesTRANSCRIPT
The Business Environment
WEEK 1Lecturer: Walter-J Davis
A business is a decision making organization involved in the process of using inputs to produce goods and or services
Businesses exist to satisfy the needs and wants of people, organizations and governments
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The Nature of Business
Businesses exist additionally to ensure that social conditions can be improved not only for the business owner but for employees (internal customers), customers (external customers) and the indirect people they impact.
Examples we can use for discussion:
The Nature of Business
Businesses process inputs to create goods or services; these can be categorized into:
Physical Products- Consumer Goods- These are purchased by the general public and can be durable and non-durable….Capital Goods- which are purchased by businesses
Services- these are intangible offerings which are generally purchased by the general public and business.
Businesses contribute a “value added” that enhances the value of the inputs and produces profit for the business
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What Do Businesses Do?
Contribute to the GDP of a country’s economy
Assist in Poverty Alleviation
Create Employment
Create social and financial benefits for the communities they operate in both directly and indirectly
Raise the Corporate Brand Profile of the country
Assist in creating and setting benchmarks for international standards to be adopted in a country
What Additionally does Businesses Do?
Businesses produce by using factors of production and variances such as:
Land Labour Capital Enterprise Entrepreneurship
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How Do Businesses Produce
Profit: This is the positive difference between a company’s revenues and total cost.
Functions of Profit
Incentive to produce
Reward for risk takers
Encourages invention and innovation
Indicator of Growth
Source of finance to fund future growth http://www.slideshare.net/torithomas76/11-nature-of-busin
ess-activity-presentation
What Motivates Businesses?
Not-for-Profit Non-Governmental Organizations (NGO) Service Organizations Charitable Organizations Trade Organizations Lobby Groups Doner Funding Professional Bodies Clubs and Associations Learned Society's
Types of Businesses
All businesses to operate legally in any country must be bound by terms and conditions which make it legal, such as:
Registration of the Business
Certification of the Business
Tax Registration (Corporate and Individual)
The Business as a Legal Entity
Non-Corporate Sole Trader Partnerships (Ordinary and Limited)
Corporate Limited Liability (Private, Public, Limited By
Guarantee) Charitable
Classification of Registered Businesses
Examples of Legality for Businesses in Jamaica
INPUTS Land Labour Capital Scarcity of Resources Entrepreneurship
PRODCUES (Primary, Secondary, Tertiary) Tangible and Non-Tangible (Products and
Services)
The Economic View of The Firm