ch1 Flashcards
(30 cards)
DEFINITION OF BUSINESS
Goods:-
Services:-
Business can be defined as all human activities that satisfy human needs and wants geared towards making a profit.
-are physical products include both basic necessities andluxuries
are activities that help people or organizations without
directly creating a physical product.
Major Functions of Business
I. Business converts resources to useful goods and services
II. Business transforms input into output
III. Adds utility to outputs
Components of Business
Broadly, business can be classified categories:
I. Industry
II. Commerce
What is Industry?
- Industry is a collection of all businesses that perform similar operations to provide some general kinds of goods and services.
Types of Industry
-Primary industry include extractive and generic industry, whereas
-secondary industry include manufacturing and construction industries
1.Extractive, 2.generic, 3. Construction, 4. Manufacturing Industry
1-applicable to the discovery and use of natural resources
Example: fishing, hunting, mining, farming,
2-are engaged in reproducing and multiplying animals and species of plants with the aim of getting profit. Example:- Cattle breading, Poultry, breeding plants etc.
3.characterized by construction of roads, bridges, canals, dams,
4.converting raw materials into finished products or semi-finished products.
Manufacturing industry is subdivided into the following groups.
analytical, synthetic ,processing ,assembling Manufacturing industry
Manufacturing industry is subdivided into the following groups.
analytical, synthetic ,processing ,assembling, CONTNIOUS Manufacturing, SERVICE industry
WHAT IS COMMENCE
exchange process which ensures free movement and flow of goods from producer to consumers
A part of business which help to establish healthy contacts between producers and consumers by removing obstacles of place ,time, possession, finance, risk and others.
Commerce can be classified into two categories,
Trade can be divided into TWO what are they
1.TRADE :- the process of taking goods from the production center or procurement place TO consumer.
a. Wholesale trade:- Buying in large quantities from producer and sell to retailers in small quantities.
b. Retail trade:- Traders who engaged in selling goods in small quantities directly to the public.
Requisites for Success in a Business
controlling costs what is direct ,indirect, overhead costs.
in responding to changes what are innovation ,demand , competition, control
setting objectives
working with people
measuring and controlling costs
responding to changes
managmnent tecniques
what is buisness enviroment
Business environments are classified as internal and external environment what are they and explain the external env
is the collection of factors outside and inside the business system that influence the activities.
-The internal business environments
i. The market
ii. Suppliers
iii. Marketing intermediaries
The external business environments
are composed of forces outside and beyond the immediate control of the business firm. It includes the following forces:
I. Economic environment
II. Legal environments
III. Socio-cultural environment
IV. Physical environment
V. Technological environment.
what is A peak or boom
what Are recession contraction
A trough or depressions
is reached when the economy has produced the greatest amount of output.
–* output actually decreases(the rate of growth becomes negative)
* unemployment begins to rise
* the inflationary pressure on prices fades
–* unemployment tends to beat its peak
* production at it low point
* There is very little upward pressure on prices and in some cases there is downward pressure on prices (deflation).
what are The types of Economic System
The free-market system encourages entrepreneurs to risk their capital to own businesses.
Command economy does not encourage entrepreneurs the desire to risk their capital in order to generate profit.
II. Legal Environment
Why legislations have been enacted?
The legal environment is shaped by the interaction between businesses and government.
-to ensure the existence of free and fair competition among companies.
to protect consumers from unfair business practices.
what is Business law
legal system that provides for a smooth and orderly flow of business transactions
what is Business law
legal system that provides for a smooth and orderly flow of business transactions
Law of contracts:
A contract is a voluntary agreement between two or more parties to do or not to do something
Useful laws in business: the law of contract, lawof sales, the law of agency, the law of negotiable instruments, the law of
warrants and product liability, the law of trademarks, copyrights and patents, and the law of bankruptcy.
For a valid contract toexist, thefollowing requirementsmust bemet:
- Voluntary agreement:
* there is a mutual consent betweentheparties.* The buyer without being forcedmust accept agenuine offer unconditionally - Competent contracting parties:
Contracts with parties who are under legal age, insane, seriously intoxicated, or otherwise unable to understand the nature of the transaction are typically unenforceable.
3.Legal act:
* The subject of the agreement must not be in conflict with public policy - Consideration:
* Something of value, or consideration, must be received by the seller in exchange of what it gave to the buyer - Form of contract:
* Contracts may be written or oral. * Some contracts must be in written form to been forceable
Real property may be transferred by deed or lease in law of sale .
A deed actually transfers ownership to a new owner
A lease gives temporarycontrol of realproperty.
what is Agency
An agent is a person or company authorized to carry out business and enter into agreement son behalf of another person or company called the principal.
Law of Negotiable instruments The law specifies a negotiable instrument must have the characters in order to be transferable to anewowner, that is, to circulate much like cash.It must, for example, be written and properly signed.It must contain an unconditional promise to pay” either on demand or at a definite future date .Example: Checks
A warranty
Express warranties
is a legal assurance that goods or services being sold have certain characteristics
-often state that the seller will repair any defects or replace the merchandise if defects are found.
The main provisions of an implied warranty are that:
(a) The buyer is receiving ownership of the property and that the seller is authorized to sell
A trademark
Copyright
-is any word, name, symbol or device used to distinguish the product of one manufacturer from those made by others.For example, Pepsi Cola
-protects property created by the mind.
