Dynamics of Business and Economics

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Chapter 1

• Dynamics of Business and Economics

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At the end of this session...

• Discuss the concept of business
• Understand Profit vs Not-for-profit
• Look at the Economic Foundation of Business
• Characteristics of a Free Enterprise System
• Nature of Competition
• Role of the Entrepreneur
• Business and You

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Business is..

• Define business in your own words and share your
  definition with 3 other students.
• __________________________________________________
  __________________________________________________
  ________________________________________

4
Some other definitions..

• Individuals/organizations who try to earn a
  profit by providing products that satisfy
  peoples needs (text)
• An organization that seeks to earn profits by
  providing goods and services (Griffin et al)
• The activity of buying and selling, trade
  (Websters Dictionary)

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Why do we study business?

• List 2 reasons why you are studying business and
  share them with 4 other students?
• How similar or different are the reasons
  identified by the group members?
• Can you agree on one reason that is common to
  everyone?

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Profit vs Not-for-profit

• Profit
• excess of revenues ( in) over expenses ( out)
• Not-for-profit or nonprofit
• organizations that may provide goods or services
  but do not have the fundamental purpose of
  earning profits

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In your small groups..

• There is no such thing as a Not-for- profit
  organization.
• Discuss this statement and decide whether you
  agree of disagree with it. Be prepared to defend
  your position.

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Activities of Business

• Owners
• put up money take risk
• Employees
• do the work
• Customers
• must be satisfied

• Finance
• resources to keep business going
• Marketing
• gather info on customer to make decisions
• Management
• coordination of employee efforts
• set/attain goals
• be aware of competition

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Economic Systems

• Communism
• The people own all the nations resources
• Socialism
• Government owns and operates basic industries
  individuals own businesses
• Capitalism
• Individuals own and operate most of the businesses

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Free-Enterprise Is it?

• Provides an opportunity for a business to succeed
  or fail on the basis of market demand.
• Efficiency vs Inefficiency
• Business rights
• right to own property and pass it on
• right to earn profit and use it accordingly
• right to make decisions on how to operate
• right to choose where to live/locate, what to
  buy, what to produce, what resources to use

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Economic Systems Distribute Resources

• What/how much needs to be produced to satisfy
  demand?
• How, who and with what resources will they be
  produced?
• How will they be distributed?

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Supply and Demand

• In the free enterprise system . .

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Nature of Competition

• Pure
• many small sellers with no one having a major
  influence on price
• easy to enter
• Monopoly
• only one business provides the product/service in
  a market
• impossible to enter

• Oligopoly
• few sellers with large portions of the market
  share
• hard to enter

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The Entrepreneur

• In your small groups, list the characteristics of
  an entrepreneur.

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Economic Vision

• Our economic vision for Newfoundland and Labrador
  is that of an enterprising, educated, distinctive
  and prosperous people working together to create
  a competitive economy based on innovation,
  creativity, productivity and quality.

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Importance of Small Business and Entrepreneurship

• Small business (under 100 employees) make up 95
  of Atlantic businesses
• 75 of these businesses have fewer than 5
  employees

• Small firms dominate in every sector
• business growth in Newfoundland at 2.5 vs
  national average of 5.2

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Business and You

• Using your list of characteristics of an
  entrepreneur, determine how you can use those
  characteristic to become an entrepreneurial
  student and improve the performance of your
  business (university).

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Questions ???

• Dont forget to visit your course website