This document provides an overview of an introductory business course. It defines business as commerce, occupation, and organization. The four factors of production are identified as land, labor, capital, and enterprise. Supply and demand determine market price, with demand increasing as price decreases and supply increasing as price rises. Specialization and the division of labor increase profits through the invisible hand of the market. Business organizations are created to reduce transaction costs and facilitate commerce through organizational structures.

1. Course:Course:
Introduction to BusinenssIntroduction to Businenss
3.00 Credit Hours, Fall 2013,3.00 Credit Hours, Fall 2013,
Undergraduate/Graduate ProgramUndergraduate/Graduate Program
Instructor: Qundeel Nawaz DodhyInstructor: Qundeel Nawaz Dodhy
Email: qundeel.nawaz@uogsialkot.edu.pkEmail: qundeel.nawaz@uogsialkot.edu.pk
Week 1Week 1
© www.uogsialkot.edu

3. Chapter One
What is Business?

4. 1. Differentiate the three meanings of business as
commerce, occupation and organization and identify
the four main kinds of productive resources.
2. Understand the forces of supply and demand
determine fair or market price.
3. Appreciate how a company’s business model is the
source of its competitive advantage and the difference
between profit and profitability
4. Recognize the way specialization and the division of
labor through the “invisible had of the market” lead to
increasing profit and wealth.
5. List the reasons why business organizations are
created to structure business exchanges and facilitate
business commerce.

5. Definitions of Business
 Business has three dimensions of a meaning
◦ A commerce
◦ An occupation
◦ An organization

7. Definitions of Business
 Business as a commerce is the process that
people produce, exchange and trade goods and
services

8. Definitions of Business
 Business as an occupation is the acquired set of
specialized skills and abilities that allows people
to create valuable goods and services

9. Definitions of Business
 Business as an organization is the system of
task and authority relationship that coordinates
and controls the interactions between people so
that they work toward a common goal

10. Definitions of Business
 Business as a system is a combination of
business commerce, occupations, and
organizations that produces and distributes the
goods and services that create value for people
in a society

11. Factors of Production
 Regardless of meaning there are four crucial
ingredients or productive factors or resources of
land, labor, capital and enterprise that are
needed to profit from business

12. Factors of Production
 These four productive factors or resources of
land, labor, capital and enterprise that are
needed to profit from business and are limited
in supply (scarcity)
 A company must use them efficiently and
effectively to produce goods and services

13.  Together, the cost of acquiring and using these
four resources to make and sell goods and
services determines a company’s operating
costs

14.  Owners/managers are the enterprise of the
business, while the people are the labor and the
capital buys materials, machinery
 The land may provide a specific location or a
URL in cyberspace. The land may provide a
specific location or a URL in cyberspace

15.  These resources allow for the creation of a
product and/or service that customers value a
price

16.  The company’s business model not only outlines
the plan for these resources but creates a
competitive advantage in the value of its product
and generates profitable sales revenue
 By reinvesting the profits the business increases
its capital and contributes to the wealth of the
owners

17.  All business activity is self-interested and
competitive, and this competition may benefit
people and society when it leads resources to
be employed in their most profitable use

18. Supply and Demand
 The forces of supply and demand determine a
product’s market price
 In turn, supply and demand are the result of
peoples’ subjective judgment of the value or
utility they will receive from supplying or
consuming a particular product

19. Law of Demand
 Reflects the usefulness or utility from that
product
 Given the price of a product or service, we
generally demand less quantity of it as the price
increases and demand more of it as the prices
decreases

20. Law of Supply
 Sellers are more willing to supply a product as
the price increases and less willing to supply as
the price decreases

21.  There is no rule of business that says all people
need profit from business commerce, nor they
will profit equally from the business system

22.  Some people or companies will always
ruthlessly pursue their self-interest and try to
cheat and defraud others

23.  Through the process of specialization and the
division of labor, business occupations develop
and increase the amount of goods and services
people can produce and trade

24.  Increasing specialization, through the invisible
hand of the market, leads to increasing
profitability and the generating of more capital
and wealth

25.  Through this “invisible hand” of the market, the
interaction of business commerce and
occupation determines the standard of living,
wealth, and prosperity of people, groups, and
society
 It also determines how profit will be shared
between people and groups in a society

26.  Business organizations are created to reduce
transaction costs, the costs that arise from
business commerce and from the process of
specialization and the division of labor

27.  Business organizations develop an
organizational structure, a set of task and
authority relationships, to reduce transaction
costs and increase profitability

28.  No rules exist that specify how the profit created
from business commerce or occupations will be
distributed or even who will receive it

29.  Your chance of pursuing a profitable occupation
that allows you to accumulate capital depends
on your ability to take part in the “great game of
business”