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Questions and Answers
What is one primary reason for exporting goods?
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?
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?
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What is the primary aim of a business?
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Which factor of production refers to natural resources?
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What motivates employees in terms of profit?
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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?
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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?
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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?
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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?
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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?
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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?
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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.
