Chapter 1
The Nature and Aims of Business
The Philippine Economy •
Always been saddled with Always wit h difficulties which appeared to be insurmoun insurmountable: table: • • • •
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Low productivity in the workplace Graft and corruption in the government Declining value of peso Unfavorable balance of trade
In spite of the great obstacles obstacles hampering the economic growth, the Philippine economy continues to slowly grow but it does not fare well if compared with other countries in the Far East.
The Philippine Economy •
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Business success has always always been associated asso ciated with economic growth. A major reason for business failure is the businessman’s businessman’ s lack of sufficient skills in
managing finance.
The Roles of Business •
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•
Business is largely responsible for bringing into the market a wide array of products and services which were not previously available. Business continues to provide mankind with the basic necessities lik l ike e food and shelter. Business entities are means to develop a countriess economy countrie economy..
Business Defined •
Business is any lawful economic activity concerned with the production and/or and/or distribution of goods or services for profit.
Kinds of Business •
Commerce
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Industry
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Services
Kinds of Business Business
Commerce
Trading
Buy and Sell
Merchandising
Industry
Marketing
Services
Genetic
Finance
Assembling of Goods
Extractive
Recreation
Grading
Manufacturing
Personal
Warehousing
Construction
Transportation
Insurance and
Kinds of Business Industry •
Genetic industries are businesses involved in agriculture, forestry, and fish culture.
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Extractive industries are businesses involved in the extraction of goods from natural resources which includes mining, lumbering, hunting, and fishing.
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Manufacturing industries are those which convert raw materials into finished products.
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Construction Construct ion industries consist of firms engaged in building infrastructures infrastructures like airports, seaports, dams, and highways.
Kinds of Business Services •
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Recreation (i.e. movie houses, television and radio stations, theater for for drama and stage presentations, etc.) Personal (i.e. restaurants, barber shops, transportations, hotels, tailoring shops, etc.) Finance (i.e. such as banks, insurance companies, investment houses, financing institutions, credit unions, savings and loans associations, etc.)
Objectives of Business •
Primary objective is for profit.
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Other goals could be: 1.
Political influence
2.
Family control of the business
3.
Community in involvement
Objectives of Business •
To survive and grow, businesses must attain the following objectives: 1.
The pr provision of of products an and se serv rviices to to th the community; The sa sati tissfact ctio ion n of pe perrso sona nall ob objjec ecti tiv ves li lik ke:
2. a. b. c.
3. 4.
Profits for owners Ade dequ qua ate sal salar arie iess and and co com mpe pens nsa ati tio on for for execu cuttiv ive es an and employees Psychi hicc inc incom ome e for for al all, l, in incclu ludi din ng pri pride de in wor ork, k, se secu currit ity y, recognition, and acceptance
Protec ecttion and enhance cem ment of the human and physicall resources of society physica Economy and effectivenes esss of operation
Next Meeting Readings Chapter 2 of Business Finance, Second Edition by Roberto G. Medina
Quiz Review on Chapter 1
Assignment 1. Why do persons engage in business? 2. How do you determine the feasibility of a business?