This article tells you Do You Know About Business And Economic systems? How do manage the business and economic system to get success in our business and economic system and How Much Know about Business And Economic systems?
About the business:
The main objective of business is defined as [Individuals or organizations who try to earn a profit by providing products that satisfy people’s needs]. A business wants a profit by producing or providing products. The products satisfy people’s needs. The result of business efforts and operations are products.
Business skills provide an opportunity for a business to succeed or fail based on market demand. In a market enterprise system, there is survival of the fittest The companies that can efficiently manufacture and sell products will succeed, Inefficient businesses will fail.
Produce quality products + Operate efficiently and effectively + Be socially responsible and ethical =Profitable business
Business operations in Business and Economic systems
The owners put up resources to start and run the business. The resources come from money or credit. The employees are responsible for the work going on within the business. The owners can manage the business themselves or through employees (Managers).
The Chief executive of Bata Limited does not own the company but is an employee. He is responsible for managing all the other employees in a table way to earn a profit for investors or shareholders of Bata Limited. A business’s major role is to satisfy the customers who buy its product.
The business operates in an environment or a social setup. Other forces influencing the business and being influenced by the business are legal framework, Social framework, economic framework, etc outside the business itself. These frameworks are normally out of control of a business
The goal of the business and economic system:
The goal of business is to earn enough profit. The profit is the difference between the costs to make & sell a product and the sale value of the product. If a company spends $2.00 to make a product and sells it for $2.75, the business cams a profit of 75 cents.
Profit is the reward for risks a business take in providing products. All the organizations are not businesses. Nonprofit organizations, such as the ambulance service do not have the primary purpose of earning profits. They may provide goods or services but not for profit.
A business tries to want a profit by producing products. The products satisfy people’s needs. The products have tangible and intangible characteristics. The characteristic of the product satisfies peoples’ needs. We purchase a product for its benefits and satisfaction.
Organization Engagement in Business and economic system:
Organizations need financial resources and skills to fund, maintain and expand their operations. Other challenges for businesspeople include laws and regulations and doing business in an ethical and socially responsible manner.
Organizations need to adapt to economic, technological, and social changes to survive and thrive. The nonprofit organizations also engage in management, marketing, and finance activities to reach their goals.
To achieve profitability and maintain it a business must:
- Produce quality products
- Operate efficiently and effectively
- Be socially responsible and ethical
A business has responsibilities towards its stakeholders. The stakeholders are groups with a stake in the success and outcomes of a business eg. customers, employees investors and government regulators etc. The society at large is also a stakeholder as it is also affected by the business.
A fertilizer company producing fertilizer but polluting the environment is not caring for its stakeholders people residing near the production area. The people are negatively affected by the company.
Businesses are concerned about the effect of the production and distribution of their products on the environment.
To achieve profitability and maintain it a business must:
Example:
A KFC burger may be business revolve around some need of its products for.
Business Economic systems:
An Economic system is a system of Production resource allocation and distribution of goods and services within a society or a given geographic area. The economic system is a resource to allow us to make a product or provide services in our country or region. In this system, the distributions and resources allocations are required to make products and services. Economic Systems
Economic System types:
- Traditional system
- Market system
- Command system
- Mixed economic system
Free enterprise system:
The free-enterprise system. Many comes based on free enterprise Examples are the United States. Canada and Jap Many communist and socialist countries are using principles of free enterprise.
Several basic individual and business rights must exist for free enterprise to work These rights are:
1. They can also pass this property onto their heirs. This right motivates people to work hard and to buy property.
2 . They can also use the profits as they wish subject to the laws.
3. Individuals and businesses must have the right to make decisions. Although there is government regulation the philosophy is to permit maximum freedom.
Conclusion
Produce quality products + Operate efficiently and effectively + Be socially responsible and ethical =Profitable business Business operations The owners put up resources to start and run the business. Business Economic systems:
An Economic system is a system of Production resource allocation and distribution of goods and services within a society or a given geographic area. Economic Systems Economic System types: • Traditional system • Market system • Command system • Mixed economic system Free enterprise system: The free-enterprise system.
FAQs
What exactly does “business and economic system” mean?
A society’s or a specific geographic area’s system of production, resource allocation, and distribution of products and services is known as an economic system or economic order.
Why is the economy crucial to business?
Every company conducts business within the economy. Businesses make decisions about what goods to create, how to price them, how many people to hire, how much to pay them, how much to expand the firm, and so on based on their economic expectations.
What are the economics and how do they affect business?
The economy encompasses all actions carried out in a nation that are related to the production, usage, and distribution of products and services. Business operations are significantly impacted by the economy. Consumer spending has an impact on prices, investment choices, and the number of employees that businesses hire.