Entreprenuerial Management - Entr311: INDUSTRY - A Group of Business Firms Offering Similar Goods or

ENTREPRENUERIAL MANAGEMENT | ENTR311  INDUSTRY – a group of business firms offering similar goods or
PRELIM REVIEWER services.

CLASSIFICATIONS:
CHAPTER 1: BUSINESS IN GENERAL I. Agricultural
II. Manufacturing
CONCEPT OF BUSINESS & DEVELOPMENT OF BUSINESS CULTURE III. Trade
 BUSINESS – any activity involved in the production and IV. Construction
distribution of goods and services, aimed to meet the economic V. Government
needs of consumers with an objective of eventually earning
profit. ELEMENTS OF A BUSINESS SYSTEM
 Business is the evolutionary growth of various activities
developing from simple to complex system.
 All business organizations involve men and deal with men.
 By the nature of their operations, all business enterprises have
basic resources which are managed and developed under a
money-and-credit economy.
 Business primarily aims to satisfy the consumer’s basic and
secondary needs. It can be achieved through the use of
effective business marketing practices and strategies for
reasonable returns to compensate for the businessman’s
efforts and risk of loss.  Economics is the study of how a society produces and
 PROFIT is the main objective of business which distinguishes it distributes its desired goods and services. It deals with how
from charitable institutions and government agencies. society uses its resources to produce goods and services.
 These economic resources to produce are called FACTORS OF
RELATIONSHIP BETWEEN BUSINESS AND THE ECONOMY PRODUCTION – land, labor, capital, and the entrepreneur.
  LAND pertains to all natural resources, including timber.
Bas minerals, petroleum, and the land itself. (sources, raw
materials)
 LABOR refers to the physical and mental input of the people
who produce the goods and services. (sales force, personnel,
manpower)
 The ENTREPRENEUR or businessman buys and organizes these
three factors of production – land, labor, and capital to provide
goods and services. (management skills)
 CAPITAL – means to start up the business. (money)
ically, the role of business is to produce goods and services
which consumers need. THE PROFIT MOTIVE
 The business firm produces goods and services from the factors  PROFIT – the difference between the income an entrepreneur
of production provided by society. receives from the sale of his goods and services and the
 Consumers, in turn, buy these goods and services. expenses he incurs to produce them. (INCOME – EXPENSES)
 Business firm thus contribute to the country’s economic  PROFIT LOSS = EXPENSE IS GREATER THAN INCOME
growth.  BREAKEVEN = PROFIT = EXPENSES
 One measure of economic growth is the GROSS NATIONAL
PRODUCT (GNP), defined as the total market value of goods RESPONSIBILITY OF A BUSINESS ENTREPRISE
and services produced by a country in any given period.
 To produce goods and services, the business firm has to
purchase materials, components, or semi-finished goods from
other producers, thereby creating a demand for the outputs of
their business.
 Business has to pay wages to its personnel. These wages from
the income of the workers, who in turn buy foods, clothes and
other goods and services.
 A business firm co-exists and interrelates with other members
in the economic system. Some business firms manufacture the
same products or substitutes for others. When we combine
these firms as a group, we call them an industry.
 A business enterprise is a part of a larger economic system.
Other groups and individuals affect the way business is
managed. They are the owners of the business, employees
working for the enterprise, customers buying the goods and
services.
 The business company must also follow all government rules
and regulations, besides being a responsible corporate citizen in
the community, and abide by decisions of business
associations of which it is member.
 It the employees are unionized, the business company must
recognize the union and negotiate with it.
 A manager is employed to do a job and is directly responsible to
the board of directors elected by the shareholders, who own
the company.

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ENTREPRENUERIAL MANAGEMENT | ENTR311  INDUSTRY – a group of business firms offering similar goods or

PRELIM REVIEWER services.

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