Overview of Business June 4, 2012
What Is…? Business – An organization that provides goods and services to earn profits Profit – The positive difference between revenues and expenses
Physical Resources LaborCapital Entrepreneurs Factors of Production Information Resources Knowledge workers Knowledge
Types of economies Planned Economy: An economic system in which the government owns and operates all sources of production
Planned Economy
Types of economies Planned Economy: An economic system in which the government owns and operates all sources of production Socialism is a planned economic system in which the government owns and operates selected sources of production Market Economy: An economic system in which buyers and sellers interact based on freedom of choice
“Circular Flow in Market Economy” OUTPUT MARKETS Goods Services INPUT MARKETS Labor Capital Entrepreneurs Physical Resources Information Resources HOUSEHOLDS Demand products in output markets Supply resources in input markets FIRMS Supply products in output markets Demand resources in input markets DEMAND DEMANDSUPPLY SUPPLY Copyright ©2003 Prentice Hall, Inc %!
Mixed Economies Planned and Market The economies of most countries include both planned and market elements Worldwide trend toward more market elements – Or is it?????
State Capitalism Post 2007 State capitalism – a system in which the state dominates markets primarily for political gain – autocratic states reap the benefits of capitalist enterprise while maintaining a vice- grip on political freedom “capitalism for the wealthy”
Supply & Demand Supply: The willingness and ability of producers to offer a good or service for sale Law of Supply: Producers will supply (offer) more of a product for sale as its price rises and less as its price drops But what makes the price rise????
Supply & Demand Drive the US Economic System Demand: The willingness and ability of buyers to purchase a good or service Law of Demand: Buyers will demand (purchase) more of a product as its price drops and less as its price increases
Demand & Supply Quantity of Pizzas Supplied $ Price of Pizzas Supply Curve Copyright ©2003 Prentice Hall, Inc $1.00
Demand & Supply $ Quantity of Pizzas Demanded Price of Pizzas Demand Curve Copyright ©2003 Prentice Hall, Inc
Demand & Supply Quantity of Pizzas per Week $ Price of Pizzas Demand Curve Supply Curve Equilibrium Price Copyright ©2003 Prentice Hall, Inc
Business cycle
Balance sheet recession
Recessions & Depressions Recession: Aggregate output declines, unemployment increases Depression: Severe and long-lasting recession
Productivity – The amount a system produces compared to the resources needed to produce it – typically measured as a ratio of output per labor-hour – Key to improving “standard of living”
Introduction to Business Studies
Marketing
Objectives and Strategy
Offshoring vs. outsourcing Human Resource Management
Supply Chain
What does “Made in the US” really mean?
Blue Springs, MS
Make/ModelDomestic-parts contentAssembly location Ford Taurus90 percentChicago Lincoln MKS85 percentChicago Toyota Sienna85 percentPrinceton, Ind. GMC Savana percentWentzville, Mo. Chevrolet Express percentWentzville, Mo. Buick Lucerne81 percentDetroit Chevrolet Malibu80 percentKansas City, Kan. Honda Odyssey80 percentLincoln, Ala. Toyota Avalon80 percentGeorgetown, Ky. Toyota Tundra80 percentSan Antonio Toyota Venza80 percentGeorgetown, Ky. Source: NHTSA, automaker data (2009 models)
Human Resources
Production/Operations Management
Accounting and Finance
External Influences