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Questions and Answers
What is one primary reason for exporting goods?
What is one primary reason for exporting goods?
Which of the following is NOT a positive value typically associated with Filipino entrepreneurs?
Which of the following is NOT a positive value typically associated with Filipino entrepreneurs?
Which organization is responsible for the registration of partnerships and corporations?
Which organization is responsible for the registration of partnerships and corporations?
What is a common reason for importing goods?
What is a common reason for importing goods?
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How does the value of 'Bahala na' reflect a trait of Filipino entrepreneurship?
How does the value of 'Bahala na' reflect a trait of Filipino entrepreneurship?
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What is the primary aim of a business?
What is the primary aim of a business?
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Which factor of production refers to natural resources?
Which factor of production refers to natural resources?
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What motivates employees in terms of profit?
What motivates employees in terms of profit?
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Which of the following is NOT a reason why people engage in business?
Which of the following is NOT a reason why people engage in business?
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According to Maslow's hierarchy of needs, which level corresponds to the desire for security?
According to Maslow's hierarchy of needs, which level corresponds to the desire for security?
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Which type of industry focuses on the conversion of raw materials into finished products?
Which type of industry focuses on the conversion of raw materials into finished products?
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What is the relationship between business and the economy?
What is the relationship between business and the economy?
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What is the difference between income and expenses called?
What is the difference between income and expenses called?
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Which economic system is characterized by private ownership and operation by individuals?
Which economic system is characterized by private ownership and operation by individuals?
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What type of economy involves the exchange of goods and services without the use of money?
What type of economy involves the exchange of goods and services without the use of money?
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During which economic phase do people primarily rely on farming as a means of livelihood?
During which economic phase do people primarily rely on farming as a means of livelihood?
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Which type of business ownership involves only one person managing the entire operation?
Which type of business ownership involves only one person managing the entire operation?
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What is the primary purpose of business registration?
What is the primary purpose of business registration?
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In which type of economy is there a combination of money and future payments for goods and services?
In which type of economy is there a combination of money and future payments for goods and services?
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Which phase of economic activity involves the largest social units and international dealings?
Which phase of economic activity involves the largest social units and international dealings?
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What aspect of a project feasibility study involves analyzing potential market challenges?
What aspect of a project feasibility study involves analyzing potential market challenges?
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Study Notes
Definition of Business
- Any activity involved in the production and distribution of goods and services
- Aims to meet the economic needs of consumers
- Objective is to eventually earn profits
- Satisfies consumer's basic and secondary needs
Relationship Between Business and the Economy
- The economy measures the health of a business.
- Businesses fuel the economy by providing jobs.
- Consumers and businesses work together to support one another.
- The economy dictates the level of demand for goods and services, which affects business.
Elements of a Business System
- Four factors of production:
- Land: natural resources
- Labor: people involved in the process
- Capital: wealth invested in the business
- Entrepreneur: the business owner
Profit Motive
- Difference between income and expenses
- Prime motivator in business
- Management perspective: Profit keeps the business viable
- Employee perspective: Profit provides fair wages and incentives.
Why People Engage in Business?
- Profit
- Power
- Service to the community
- Prestige
- Livelihood
- Social Approval
Hierarchy of Needs
- Abraham Maslow's theory on human needs
- Physiological or Biological: Essential need to survive
- Safety: Desire for security, stability or protection
- Social: Need for group belongingness, affection, love and friendship
- Ego or Self-Esteem: Need for self-recognition
- Self-Fulfillment: Need for the realization of personal ambition
Kinds of Business
- Industries: Conversion of raw materials into finished products, with the application of labor.
- Examples: Manufacturing industries
- Commerce: Buying and selling goods, moving them from production to consumption.
- Examples: Shopping malls, retail stores
- Service Enterprises: Satisfying customer needs and wants through services
- Public and Community Service: Transportation services, electricity providers
- Professional Service: Lawyers, accountants
Kinds of Economic Systems
- Capitalism: Owned and operated by private individuals (capitalists who provide capital)
- Socialism: Free enterprise system with government control and supervision (mixed economy)
- Promotes equality and balance in society
- Communism: The state owns and controls all economic activities
Phases of Economic Development
- Criteria for evaluating economic development:
- Means of Livelihood
- Extent of Economic Activity
- Medium of Exchange
Means of Livelihood
- Hunting and Fishing Phase: Relying on nature's bounty
- Pastoral Phase: Raising livestock
- Handicraft Phase: Developing skills to create items
- Agricultural Phase: Farming
- Industrial Phase: Manufacturing
Extent of Economic Activity
- Household Economy: Focusing on family needs
- Village Economy: Organized economic activity within a village
- National Economy: Broader economic activities at a national level
- International Economy: Global trade
Medium of Exchange
- Barter Economy: Exchanging goods and services without using money
- Money Economy: Using standardized money for payments
- Money and Credit Economy: Using credit to pay for goods and services at a later time
Legal Forms of Business Ownership
- Sole Proprietorship: Organized and managed by one person
- Partnership: Two or more people combine to operate a business
- Corporation: Legal entity separate and distinct from its owners, commonly owned by stockholders or shareholders
- Cooperative: A group of people working together to achieve specific goals
Project Feasibility Study
- Aspects to consider:
- Marketing
- Organization and Management
- Technical
- Financial
- Socio-economic
Starting a Business
- Consider starting a new business or buying an existing one:
- Nature and kind of business
- Availability of acquisition opportunities
- Personal biases
Business Registration
- Purposes:
- Establishing legal personality of the business
- Obtaining a permit to operate
- Complying with government requirements and programs
Security and Exchange Commission (SEC)
- Handles registration for partnerships and corporations
Bureau of Trade Regulation and Consumer Protection (BTRCP)
- Handles registration for single proprietorships
The Entrepreneur and the Manager
- Entrepreneur: Organizes and operates a business, often willing to take financial risks
- Manager: Responsible for controlling and running the business
Positive Values of a Filipino Entrepreneur
- Pakikipagkapwa tao: Human relation
- Bahala na/malakas ang loob: Strong-hearted
- Pakikipagsapalaran: Risk-taker
- Gaya-gaya: Imitation
- Utang na loob, hiya, awa, bayanihan: Principles of gratitude, shame, pity and community support
- Kasipagan: Industriousness
- Pagtitipid: Thrifty
- Pagtitiis: Enduring
- Pagtitimpi: Self-control
- Katapatan: Honesty
International Business Environment
- Exporting: Selling goods to another country
- Importing: Purchasing goods or services from a foreign company
Reasons for Exporting
- Large production volume required to reduce costs
- Seasonal and irregular demand in local markets
- Product life cycle
- Establishing goods in new overseas markets
Reasons for Importing
- Goods may be needed but unavailable locally
- Foreign goods may have prestige value
- Lower production costs in other countries
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Description
Test your knowledge on the definition of business, its relationship with the economy, and the essential elements of a business system. Additionally, explore the significance of the profit motive in the context of business operations. Ideal for students studying foundational business concepts.
