Week 01 Understanding Business System And Environment

Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Understanding Business and Environment

Week 1

Content :

Concept of business, profit, and production

Exclusively prepared & presented by: Anna Riana Putriya e-mail: [email protected]

Environment

Jakarta, September 2008

Business environments

profit, and production

Economic systems


The concept of business & the concept of profit

• Business is an organization that provides goods or services to earn profits

• Profits represent the difference between a business’s revenues and its expenses

Content :



business’s revenues and its expenses profit, and production


What are factors of production?

Content : Resources used in the production of goods and services—labor, capital, entrepreneurs, physical resources and information resourcesConcept of business,





Factors of production

1. Labor / Human resources / Intelectual Capital

2. Capital

3. Entrepreneur

4. Physical resources

Content :



5. Information resources

Can you name any others ?



Economic systems around the world

Content :An economic system is a nation’s system for allocating

its resources among its citizens.


Economic systems


1. Planned Economy

Content : Relies on a centralized government

to control all or most factors of

production and to make all or most

production and allocation decisions.

The Kremlin is shown above.


Economic systems

The Kremlin is shown above.

What is Communism?

Planned economy in which the government

owns and operates all factors of production


2. Market Economy

Content :


Economic systems

Relies on individuals to control production and allocation decisions through supply and demand


Content :

Circular Flow in a Market Economy


Economic systems


3. Mixed Market Economy

Content : Features characteristics of both planned and market economies

• Privatization is the process of converting government enterprises into privately owned companies


Economic systems

owned companies

• Socialism is a partially planned system in which the government owns and operates selected major industries


The Laws of Supply and Demand

Content : The law of demand:Buyers will purchase (demand) more of a product as its price drops and less as its price increases.


Economic systems

The law of supply:

Producers will offer (supply) more of a product for sale as its price rises and less as its price drops.


Evolution in Business

Content :

Laissez-Faire &

Production Era Marketing Era

Global Era


Economic systems

Industrial Revolution

Laissez-Faire & Entrepreneurship Era

Global Era

Information & Internet Era


Organizational Boundaries

Content :That which separates the organization from

its environment




Dimensions of the External Environment

Content :




1. Economic environment

Content :• Economic Growth

– Aggregate Output and Standard of Living

– Gross Domestic Product (GDP) & Gross National Product (GNP)

• Purchasing Power Parity

– Productivity



– Balance of Trade

– National Debt• Economic Stability

– Inflation

– Unemployment

• Recessions and Depressions

• Global economy in 21st century


The global economy in the 21st century

Major forces driving the economy:

– The information revolution will continue to enhance productivity

across all economic sectors.

– New technological breakthroughs will create entirely new industries.

Content :


– Increasing globalization will create much larger markets while

fostering tougher competition among global businesses.



2. Socio cultural environment

Conditions including the customs, mores, values and demographic

characteristics of the society in which an organization functionsContent :




Customer Preferences and Tastes

• Customer preferences and tastes vary both across and within

national boundaries.

• Consumer preferences can vary widely within the same country.

• Consumer preferences and tastes change over time.

Content :


• Consumer preferences and tastes change over time.



3. Business environment

• Core competencies

• Outsourcing

• Viral marketing

Content :


• Viral marketing

• Business process management



thank you

Content :



thank you


Economic systems


Design

Week 01 Understanding Business System And Environment