Serenity Prayer

God grant me the serenity to accept the things I

cannot change;
Courage to change the things I can;
And wisdom to know the difference.
Living one day at a time;
Enjoying one moment at a time;
Accepting hardships as the pathway to peace;
Taking, as He did, this sinful world as it is, not as I
would have it;
Trusting that He will make all things right if I
surrender to His will;
So that I may be reasonably happy in this life;
And supremely happy with Him, forever and ever in

Introduction to
Business
The Philippine Business
Enterprise

What is Business?

- social process which involves the

assembly and utilization of
resources to produce goods and
services in order to satisfy the
needs of society. (Gitman)
- includes all profit-seeking
activities of enterprises that
provide goods and services

 Business involves production

and/or selling of goods and
services
A business enterprise is
organized to acquire profit,
the biggest profit if possible.
The purpose of business is to
create a customer and satisfy
him. (Drucker)

Goods
- refers to anything that provides
satisfaction to needs, wants and
desires of the consumer.
- Tangible products that contribute
directly or indirectly to the
satisfaction of human needs and
wants.
Ex: watches, tables,
photographs

Services
- Intangible economic activities
that also contribute directly
or indirectly to the
satisfaction of human needs
and wants.
Ex: Hairdressing, catering,
banking, telecommunications.

Profit
- the money that remains after a
firm deducts its expenses
related to producing and
marketing goods or services
from its revenues. The firm
receives money arising out of
sales, commissions, and the like.

Profit Maximization
is the long term goal of
creating customers and
maximizing their satisfaction
by selling quality goods, good
service and reasonable price.

Customer / Consumer

The one who demands goods

or services.
A person who buys goods and
services
One that utilizes economic
goods
Determines what a business is,
what he is buying, what he

Reasons why people go into business:

1.personal satisfaction
2.family involvement
3.independence and power
4.social activities
5.profit expectation

Business Basic Resources

1.
2.
3.
4.
5.

Men
Money
Machines
Materials
Methods

Economic System Models

Economic system - set of

economic institutions that
dominate an economy. Its
basic objective is to satisfy
the economic needs of the
people.

1. Capitalism
- the factors of production and
distribution are owned and
managed by private individuals.
Features:
Private property
Economic freedom
Free competition
Profit motive

2. Communism
- the factors of production and
distribution are owned and
managed by the state. It is a
command economy.
Features:
No one owns property privately
Government is the only producer
and seller
There are no economic freedoms

3. Socialism
- mixture of capitalism and
communism. Major industries
belong to the state while the
minor industries to private
individuals.

Basic Market Models

- are theoretical
frameworks for existing
firms and industries.

1. Pure competition
- is a market situation
wherein there is a large
number of independent
sellers offering identical
products. It is easy for sellers
to enter and leave the
market. No single seller or no
single buyer can influence the
prevailing market price.

2. Pure monopoly
- is a market situation wherein there
is only one producer or seller.
Goods and services are unique in
the sense that there are no close
substitutes. The monopolist
determines the market price since
he is the only supplier. It is
extremely difficult for new firms to
enter the market because of the
huge capital required.

3. Monopolistic
competition
- is a market situation where there
is relatively large number of
small producers or suppliers
selling similar but not identical
products. Products are
differentiated in terms of
advertising, packaging, services
and sales promotion.
Ex: banks, book publications,

4. Oligopoly
- is a market situation where there
are few firms offering standardized or
differentiated goods and services.
Usually there is a price agreement
among the oligarchs for their own
business interests.

Philippine Business Environment

Business Environment - refers

to the internal and external
factors that affect the
efficiency of a business
enterprise.

Internal business environment:

management
technology
facilities
financial incentives

External business environment:

peace and order

transportation, communication
and electrical facilities
monetary and fiscal policies
political, social and economic
conditions

The Role of the Government

assistance and control

protect consumers and other sectors of
society
extend financial and technical
assistance to marginal business
enterprises to ensure viability
provide the essential socio-economic
infrastructures in order to accelerate
business growth
supervise and regulate the activities of

Major areas of government regulation of business enterprise:

a.occupational safety
b.fair labor practices
c. consumer protection
d.pollution prevention
e.economic security

Introduction to
Business
Entrepreneurship

The Private Enterprise System and The Entrepreneur

The entrepreneur is the one assigned to

perform the lead role in making the
private enterprise system work.
It is inevitable that there will be shortages
in some types of goods and services,
which in turn results to some unsatisfied
need.
When an unsatisfied economic need is
recognized, the entrepreneur devises a
plan and designs an organization that will

Entrepreneurship

Entrepreneurship is the capacity

and willingness to develop,
organize and manage a business
venture along with any of its risks
in order to make a profit. (
www.businessdictionary.com)
The central point of
entrepreneurship is innovation.

Who is an entrepreneur?

An individual who takes risks

and invest resources to make
something unique or
something new, designs a
new way of making
something that already
exists, or creates new market.

 Any individual who creates a

new product or services is an
entrepreneur.
Those who introduce better
ways of doings things are also
entrepreneurs.

Qualities Of Entrepreneurs

Reasonable risk- taker.

Entrepreneurs enjoy challenges. But
they are careful and calculating.
Self- confident. Entrepreneurs have
strong faith in their abilities.
Hard working
Innovative. Entrepreneurs are
creative. They do things in new and
different ways.
Positive thinkers. Entrepreneurs are
positive thinkers. They think of success

Qualities Of Entrepreneurs

Leader. Entrepreneurs are leads by the

very nature of their functions. They are
people who are task- oriented are
achievers.
Leaders treat their fellowmen like
human beings. They respect human
dignity, and are aware of other human
needs like belongingness, security,
fulfilment, and love. Entrepreneurs do
not exploit their works or employees.
Instead, entrepreneurs promote the

Introduction to
Business
Forms of Business
Organization

Forms of Business Organization

Sole proprietorship
Partnership
Corporation
Cooperatives

Sole proprietorship
is a business organization owned
and usually operated by a single
individual. This is the simples types
of ownership. Business assets,
earnings and debts are assumed
by the owner. They are small
entities such as repair shops, retail
outlets, and service organizations.

Advantages:
Retentions of all the profits to the
owner, except those for government
in the form of taxes.
Ease of formation and dissolution in
terms of minimum legal requirements
like business registration and
licenses.
Ownership flexibility where the owner
can make decisions without
consulting others.

Disadvantages:
Unlimited financial liability because
there is no legal distinction between
the business and owner. Proprietor is
liable for all debts of the business up
to the extent of using personal funds.
Limitations of financial resources to
the owners personal funds, and
loadable amount.

Disadvantages:
Management deficiency, since the
manager is also the owner, he
performs a wide range of managerial
and operational activities.
Lack of long-term continuity which
maybe caused by death, bankruptcy,
retirement or change in personal
interests of the owner.

Partnership
is an association of two or
more persons who operate a
business as co-owners by
voluntary legal agreement.

Forms of Partnership:
General partnership is one in
which partners are liable for business
debts.
Limited partnership is composed
of a partner whose liability is limited
to the amount of capital contributed,
provided the partner plays no active
role in the business.

Types of partners:

General partner a partner whose

liability extends up to his personal
properties
Limited partner a partner who is
only liable to the extent of his
contribution to business.
Capitalist partner partner that
contributes money
Industrial partner partner that
provides management service.

Advantages:
Ease of formation.
Complementary managerial
skills.
Expanded financial capability

Disadvantages:
Unlimited financial abilityexcept in cases of limited
partners.
Interpersonal conflicts.
Lack of continuity.
Complexity of dissolution

Corporation
an artificial being created by
operation of law, having the right
of succession, and the powers,
attributes, and properties
expressedly authorized by law or
incidence to its existence.
Stocks shares or certificates of
ownership
Stockholders owners of stocks

 Corporation is a legal entity whose

assets and liability are separate from
those of its owners. Corporate
ownership is represented by share of
stock in the firm. Anyone who holds
one or more shares of a corporation
stock is considered a part-owner of
the business. Shares can usually be
both and sold on the open market.

Advantages:
Limited financial risks.
Specialized management
skills.
Expanded financial
capability.
Economies of larger-scale
production

Disadvantages:
Difficult to organize
Strictly regulated and
supervised by the government
Some corporations are socially
irresponsible
Formal and impersonal
employer-employee relationship

Cooperatives
a duly registered association of
persons, with a common bond of
interest, who have voluntarily joined
together to achieve a lawful common
social or economic end, making
equitable contributions to the capital
required and accepting a fair share of
the risks and benefits of the
undertaking in accordance with the
universally accepted principles of

Universally Accepted Principles Of

Cooperation Includes The Following:

1.Open and voluntary

membership
2.Democratic control
3.Limited interest on capital
4.Division of net surplus
5.Cooperative education
6.Cooperation with other

Objectives of cooperatives:

Encourage thrift and savings

among members
To generate funds and extend
credit to the members for
productive and provident
purposes
To encourage among members
systematic production and
marketing

Objectives of cooperatives:

To develop expertise and skills

among its members
To acquire lands and provide
housing benefits for the
members
To promote and advance
economic, social, and
educational status of the
members

Objectives of cooperatives:

To establish, own, lease or

operate cooperative banks,
cooperative wholesale and retail
complexes, insurance and
agricultural/industrial processing
enterprises, and public market.

Types of Cooperatives:

1. Credit cooperative promotes thrift

among members; create funds to
grant loans for productive and
provident purposes
2. Consumer cooperative - procures
and distributes commodities to its
members and non-members
3. Producers cooperative - undertake
joint production in agriculture and
industry

Types of Cooperatives:

4. Marketing cooperative engages in

the supply of production inputs to
members and markets their products.
5. Service cooperative undertakes
medical and dental care,
hospitalization, transportation,
insurance, housing, labor, electric
light and power, communication and
other services.
6. Multipurpose cooperative combines