2. What is business?
Business is largely responsible for bringing
into the market a wide array of products
which were not made available in the past.
Business maybe defined as all profit-seeking
activities and enterprises that provide goods
and services necessary to an economic
system
3. KINDS OF BUSINESS
Commerce – are engaged in buying and selling goods and services.
Industry – are mainly engaged in production.
a. Genetic Industries
b. Extractive Industries
c. Manufacturing Industries
d. Construction Industries
Services – is one, which sells service to the buyers.
a. Recreation
b. Personal
c. Finance
4. OBJECTIVES OF BUSINESS
• creation and distribution of a product or service;
• satisfaction of personal objectives like profits for
owners, salaries and other compensation for executives,
wages and other compensation for employees, psychic
income for all, including pride in work, security,
recognition, and acceptance;
• protection and enhancement of human and physical
resources of society; and
• economy and effectiveness of operation.
5. The Environment of Business Firms
Organization will succeed or fail depending on the
environment that confronts them. The manager of a
particular business organization is not entirely helpless. He
can do something about the environment or make some
adjustments in the organization. Managing the environment
requires a clear orientation and an understanding of factors
in the environment that affects business and the application
of the right strategies to harness these factors to a business
firm’s advantage.
6. The External Environment
• consists of elements outside the organization that are
relevant to business operations.
• plays important roles in business operations
7. The Main Function of the Business Firm
as transformer
as recipient
as provider
as recipient
8. Types of Elements in the External Environment
Direct Action Elements - directly influence the organization.
Indirect Action Elements - do not affect the organization
directly
10. The Direct Action Components of the External
Environment
Customers
Suppliers
Labor Supply
Competitors
a. Monopoly
b. Oligopoly
c. Pure Competition
Financial Institutions
Government Agencies
11. The Indirect Action Components of the
External Environment
Technological Variables
Economic Variables
Socio-Cultural Variables
Political-Legal Variables
International Variables
12. Matching The Organization With The
Environment
• Why do some organization thrive in certain
environments where others fail?
13. Types of Business Environment
Static – few forces in the environment are changing to affect
business.
Dynamic – when significant number of environmental forces
that affect business are changing.
14. Dimensions of Environmental Uncertainly
Complexity – refers to the number of different factors in the
environment such as information, capital, material, people, and
other organization.
Rate of Change in these Factors – are the factors in the external
environment change from time to time.
15. Designs of Business Organizations
Significant number of
forces are changing
the appropriate
organizationthe appropriate
organization
few forces are
changing
16. Designs of Business Organizations
Mechanistic Design – an organization with a mechanistic design
is deemed appropriate for a task that is routine and unchanging.
Organic Design – an organization with an organic design is
appropriate for a task that is non-routine and changing.
17. Survival Strategies in Uncertain Environments
Application of Coping Strategies– refers to the transformation
of a part or all of the organization to make its activities more
compatible with existing environmental conditions.
Adaption of Environmental Control Measures – refers to
management actions to identify and influence environmental
factors to obtain more positive effects on organizational
activities.
