Business Administration Ing. Kateřina Maršíková, Ph.D. Department of Business Administration Faculty of Economics phone:

Literature - sources Lectures – ppt presentations Lectures – ppt presentations - Multiedu.tul.cz - Rydvalová, P., Maršíková, K. Small and Medium Enterprises - Introduction to Business

Subject requirements Semestr –credits - Semestr project (25 points) - Activity during the semestr (5 points) - Attandance Exam – written exam 70 points Exam – written exam 70 points

Form of the Project Written in MS Word – up to 10 pages Written in MS Word – up to 10 pages Title list – Name, title of the project, date, country Title list – Name, title of the project, date, country Content, pages numbering Content, pages numbering Literature – resources – Harward style of citation Literature – resources – Harward style of citation Theoretical part Theoretical part Practical part Practical part Conclusion Conclusion

Business environment Geographical Geographical Social Social Political and legal Political and legal Economic Economic Ecological Ecological Technological Technological Ethic Ethic Cultural Cultural

What means „ECONOMIC“ Availability and prices of factors of production (resources, which are used to produce goods and services) Availability and prices of factors of production (resources, which are used to produce goods and services) Tax burden of enterprises Tax burden of enterprises Economic growth, monetary conditions Economic growth, monetary conditions (macroeconomic growth, inflation, exchange rate, purchasing power of customers) Customers, suppliers, financial institutions

Do you know? Income tax of your country (PIT, CIT)? Income tax of your country (PIT, CIT)? - Natural person x legal entity- body (companies) - Inflantion - Unemployment - Value Added Tax - Average gross salary (wage)?

ECONOMICS Economics – a science concerned with law governing the economic life of siciety. Economics – a science concerned with law governing the economic life of siciety. - To meet human wants and needs with limited sources. - How, what and for whom.

Economy Complex of activities and subjects (firms, companies, state, individuals) concerned with the production, distribution, exchange and consumption of goods within a certain area. Complex of activities and subjects (firms, companies, state, individuals) concerned with the production, distribution, exchange and consumption of goods within a certain area.

Basic types of economies Command economy (centrally planned) Command economy (centrally planned) - Economic decision are made by goverment  Shortage x unsaleable commodities - It was typical for socialist countries

(Free market economy) Law of supply and demand Law of supply and demand Profitability Profitability

Supply – the goods being sold Supply – the goods being sold Demand – the interest of the buyers to purchase the commodities offered Demand – the interest of the buyers to purchase the commodities offered Market price – a figure determined by the relation between the supply and the demand Market price – a figure determined by the relation between the supply and the demand Equilibrium – point of intersection between supply and deman Equilibrium – point of intersection between supply and deman Competion – creates an inseparable conditions for the existence of any market Competion – creates an inseparable conditions for the existence of any market

Mixed economy Combines certain featues of pure market and command economic systems Combines certain featues of pure market and command economic systems Part of the production is governed by market laws, some firms are publicly owned Part of the production is governed by market laws, some firms are publicly owned

Transition economy Economy which are in the phase of transition from planned economy to an open-market system Economy which are in the phase of transition from planned economy to an open-market system Government stops interventing in many spheres of country´s life Government stops interventing in many spheres of country´s life Restitution, privatization, liberalization of prices etc. Restitution, privatization, liberalization of prices etc.

What is a market? An economic area specializing in the exchange of activities through an exchange of goods. An economic area specializing in the exchange of activities through an exchange of goods. Sellers x buyers  interaction (influence of prices and quantities) Sellers x buyers  interaction (influence of prices and quantities)

Market functions Gives the answer – what, how and for whom to produce Gives the answer – what, how and for whom to produce Helps to allocate scare resources Helps to allocate scare resources

Types of market Market of products and servises. Market of products and servises. Market of factors of production (land, capital goods and labour markets). Market of factors of production (land, capital goods and labour markets). Financial markets (money and capital market). Financial markets (money and capital market).

Competion Contest in the market by legal means: Contest in the market by legal means: - Lower production costs - Higher quality - Sale promotion - Competion has a positive impact, e.g. Quality improvements,upgrading of technical paremeters

Perfect competition - market situation, where there exists a large numbers of sellers and buyers - market situation, where there exists a large numbers of sellers and buyers Products are close substitutes and are replaceable Products are close substitutes and are replaceable No single firm is able to dominate the market No single firm is able to dominate the market

Imperfect competition At least one competitor is big and strong enough to influence the market price At least one competitor is big and strong enough to influence the market price - Cost advantage – lower prices - Barriers to competition – trademark, brand name - Insufficient information - Administrative measuers, government directives

Monopoly Oposite of perfect competition Oposite of perfect competition Only one producer with various advantages from such a position Only one producer with various advantages from such a position Monopoly power – to fix a price above the marginal costs Monopoly power – to fix a price above the marginal costs

Monopsony Market with only one buyer Market with only one buyer The buyer has ability to influence the market price The buyer has ability to influence the market price

Monopolistic competition Market with many producers Market with many producers Their product are differentiated – each of them can set their own prices and their production is kind of monopoly Their product are differentiated – each of them can set their own prices and their production is kind of monopoly

Tender Specific form of open competition Specific form of open competition Partners in tender submit proposal for contract on certain products Partners in tender submit proposal for contract on certain products The purpose of tender is to obtain a larger number of offers and the most suitable is selected The purpose of tender is to obtain a larger number of offers and the most suitable is selected

Trust and cartels Sometimes serious distortion of perfect competition Sometimes serious distortion of perfect competition Based on agreement with the aim of gaining competitive advantage over non-members Based on agreement with the aim of gaining competitive advantage over non-members OPEC- cartel dictating oil prices OPEC- cartel dictating oil prices

Enterprise, its objectives and functions What is business? - all the work involved in providing people with goods and services for a profit Profit - is the money left over from all sums received from sales after expenses, which have been deducted Enterprise - an independent subject, founded usually by entrepreneur on purpose to achieve some profit, which is usually the main objective of business