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Chapter 1

The Nature and Aims of Business

The Philippine Economy


Always been saddled with difficulties which appeared to be insurmountable:
Low productivity in the workplace Graft and corruption in the government Declining value of peso Unfavorable balance of trade

In spite of the great obstacles hampering the economic growth, the Philippine economy continues to slowly grow but it does not fare well if compared with other countries in the Far East.

The Philippine Economy


Business success has always been associated with economic growth. A major reason for business failure is the businessmans lack of sufficient skills in managing finance.

The Roles of Business


Business is largely responsible for bringing into the market a wide array of products and services which were not previously available. Business continues to provide mankind with the basic necessities like food and shelter. Business entities are means to develop a countries economy.

Business Defined
Business is any lawful economic activity
concerned with the production and/or distribution of goods or services for profit.

Kinds of Business
Commerce Industry Services

Kinds of Business
Business Commerce Industry Services Trading Buy and Sell Merchandising Marketing Genetic Finance

Assembling of Goods

Extractive

Recreation

Grading

Manufacturing

Personal

Warehousing

Construction

Transportation

Insurance and Financing

Kinds of Business
Industry
Genetic industries are businesses involved in

agriculture, forestry, and fish culture. Extractive industries are businesses involved in the extraction of goods from natural resources which includes mining, lumbering, hunting, and fishing. Manufacturing industries are those which convert raw materials into finished products. Construction industries consist of firms engaged in building infrastructures like airports, seaports, dams, and highways.

Kinds of Business
Services
Recreation (i.e. movie houses, television and
radio stations, theater for drama and stage presentations, etc.) Personal (i.e. restaurants, barber shops, transportations, hotels, tailoring shops, etc.) Finance (i.e. such as banks, insurance companies, investment houses, financing institutions, credit unions, savings and loans associations, etc.)

Objectives of Business
Primary objective is for profit. Other goals could be:
1. 2. 3. Political influence Family control of the business Community involvement

Objectives of Business
To survive and grow, businesses must attain the following objectives:
1. 2.
a. b.
c.

The provision of products and services to the community; The satisfaction of personal objectives like:
Profits for owners Adequate salaries and compensation for executives and employees Psychic income for all, including pride in work, security, recognition, and acceptance

3.
4.

Protection and enhancement of the human and physical resources of society Economy and effectiveness of operation

Next Meeting
Readings
Chapter 2 of Business Finance, Second Edition by Roberto G. Medina

Quiz
Review on Chapter 1

Assignment
1. Why do persons engage in business? 2. How do you determine the feasibility of a business?

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