An activity of providing goods and services to fulfill customers’ needs and wants

An organized, profit- seeking approach to providing people with goods and services they want (Euthans F,Hodget)

A commercial or industrial entreprise, owned and organized to buy, sell ,manufacture, or provide product or services for a profit. (Steade and Lowry)

The composite of all business firms and their relationship to one another including the buyers, the public and society.

Objectives that a business hopes and plans to achieve

An end- state that the business is expected to achieve

GOAL SETTING – process of developing and committing a business to set an objective

Rovides direction and guidance for business

Help the firm to allocate resources Helps business to define corporate

culture Helps business managers to assess the

business performance

Long term goals Intermediate goals Short term goals

Vission Mission Objectives Purpose

Provide goods and services- Making raw material useful to customer- Creating new product- Creating an organized market Provide employment Helping increase growth rate Help protect environment

Def: mechanism which all resources are combined to produced and distribute goods and services

Economic: study of wealth Distribution of wealth relates to 3 basic

questions:- What?- How?- For whom?

Land (natural resources) Labour Capital Entrepreneurs

Capitalism Socialism Communism Mixed economy

Businesses changed due to environmental factors

Businesses to survive and grow – must adapt with changes in environment

Historical Natural /physical Political or Legal Social – Cultural Economic Technological International

Pure monopoly – e.g: TNB Oligopoly Monopolistic competition Pure/ Perfect competition

Sole proprietorship Partnerships Corporations Co-operative

Business owned and operated by one person with the profits motive

Easy to start Small in size Limited capital of the owner Eg: Bakery shop, laundry shop

Easy to set up Low cost of org. Financial advantages Freedom to manage and promptness of

action Personal incentives and satisfaction

Limited size Unlimited liability Limited life Limited management ability/

Difficulties of management

An association of two or more person Act as a co owner of the business for a

profit Legal basis is usually in written

document Also known as “article of partnership” Types of partnership:- General partnership- Limited partnership

Increase sources of capital and credit

Improve decision making potential

Possibilities for expansion and growth

Personal interest in business

Unlimited liability of partners

Managerial problems Lack of continuity Difficulty in resolving

conflict

Association of individual united for some common purpose and permitted by law to use a common name

Chartered by state and employ by many people

Separate legal entity by its owner

Private or business corporation

Public or government corporation

Open or close corporation Domestic and Alien

corporation

Limited liability of stock holders Continuity of life Ownership of Transfer Specialized management Large financial capability of growth

potential

Legal restriction on activities Cost and difficulty of org. Double taxation of earnings Lack of personal interest Lack of secrecy

Medication of corporation Business owned and operated for the

benefits of the members Gives service rather than profit Profit I the form of Patronage.

Owners are called members Limit to the amount and capital Share – only 1 vote for the members Patronage dividend paid in proportion Interest on their investment No salary received.