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

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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