Business Essentials Fourteenth Edition Chapter 1 PDF

Business Essentials Fourteenth Edition Chapter 1 The Business Environment Copyright © 2025 Pearson Education, Inc. All Rights Reserve...

Business Essentials Fourteenth Edition Chapter 1 The Business Environment Copyright © 2025 Pearson Education, Inc. All Rights Reserved The Concept of Business and Profit Business – organization that provides goods or services to earn profits Profits – difference between a business’s revenues and its expenses Copyright © 2025 Pearson Education, Inc. All Rights Reserved The External Environments of Business (1 of 3) External Environment – everything outside an organization’s boundaries that might affect it Copyright © 2025 Pearson Education, Inc. All Rights Reserved Figure 1.1 Dimensions of the External Environment Copyright © 2025 Pearson Education, Inc. All Rights Reserved The External Environments of Business (2 of 3) Domestic Business Environment—the environment in which a firm conducts operations and derives revenues Global Business Environment—international forces that affect a business and includes international trade agreements, international economic conditions, and political unrest Technological Environment—ways by which firms create value for their constituents Copyright © 2025 Pearson Education, Inc. All Rights Reserved The External Environments of Business (3 of 3) Political-Legal Environment—the relationship between business and government Sociocultural Environment—includes the customs, mores, values, and demographic characteristics of the society and determines the business standards that a society is likely to value and accept The Economic Environment—includes relevant conditions that exist in the economic system in which a company operates Copyright © 2025 Pearson Education, Inc. All Rights Reserved Economic Systems Economic system – a nation’s system for allocating its resources among its citizens Copyright © 2025 Pearson Education, Inc. All Rights Reserved Factors of Production (1 of 2) Labor (Human Resources) includes the physical and intellectual contributions people make while engaged in economic production and is also called human resources or human capital. Capital is the term used to describe the financial resources needed to operate a business. An Entrepreneur is a person who accepts the risks and opportunities entailed in creating and operating a new business venture. Copyright © 2025 Pearson Education, Inc. All Rights Reserved Factors of Production (2 of 2) Physical resources are tangible things that organizations use to conduct their business and include natural resources and raw materials. Information resources are data and other information used by businesses and include market forecasts, the specialized knowledge of people, and economic data. Copyright © 2025 Pearson Education, Inc. All Rights Reserved Types of Economic Systems (1 of 3) Planned Economy – an economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions Communism – a political system in which the government owns and operates all factors of production Socialism – A planned economic system in which the government owns and operates only selected major sources of production Copyright © 2025 Pearson Education, Inc. All Rights Reserved Types of Economic Systems (2 of 3) Market economy – individual producers and consumers control production and allocation by creating combinations of supply and demand Capitalism – a system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive Copyright © 2025 Pearson Education, Inc. All Rights Reserved Types of Economic Systems (3 of 3) Mixed market economy – features characteristics of both planned and market economies Privatization – process of converting government enterprises into privately owned companies Copyright © 2025 Pearson Education, Inc. All Rights Reserved Surpluses and Shortages Surplus – a situation in which quantity supplied exceeds quantity demanded Shortage – A situation in which quantity demanded exceeds quantity supplied Copyright © 2025 Pearson Education, Inc. All Rights Reserved Discussion on Oman’s Business Environment The business environment in the Sultanate of Oman is characterized by a mix of traditional commerce and modern industry. Oman's economy is majorly driven by the oil and gas sector, which has historically been the backbone of its economic development. The government has made significant efforts to diversify the economy through its Vision 2040 initiative, promoting sectors such as tourism, logistics, mining, fisheries, and manufacturing. Copyright © 2025 Pearson Education, Inc. All Rights Reserved  Oman has a diverse range of economic activities, reflecting its efforts to diversify its economy beyond oil and gas. Here are some key examples: A) Natural Gas Production B) Manufacturing- petrochemicals, cement and construction materials., food processing. C) Fisheries D) Logistics and transportation E) Mining F) Banking and financial services Copyright © 2025 Pearson Education, Inc. All Rights Reserved  The economic system in Oman is mixed market economic system. (i) Oman encourages private sector participation in the economy, with many industries open to private ownership. Sectors such as tourism, manufacturing, and services are largely driven by private enterprises. (ii) The Omani government retains significant control over key sectors, particularly oil and gas, which are critical to the country's economy. Major enterprises in these sectors are state-owned or have substantial government involvement. Copyright © 2025 Pearson Education, Inc. All Rights Reserved