Business Organization and Management
PRINCIPLES OF MANAGEMENT
REVIEW MATERIAL # RM2014-001
BUSINESS – is any activity involved in the production and distribution of goods and services, aimed to meet the economic needs of consumers with an objective of eventually earning profit.
ELEMENTS OF A BUSINESS SYSTEM Economics is the study of how society produces and distributes its desired goods and services. It deals how the society uses its resources to produce goods and services. These economic resources to produce are called factors of production. In includes land(materials), labor(manpower), capital(money), and entrepreneur.
WHY PEOPLE ENGAGE IN BUSINESS? People engage in business because of the following reasons: power, profit, service to the community, prestige, livelihood, social approval, etc.
Motivational factors can be clearly explained and directly linked with the theory postulated by Abraham W. Maslow (Hierarchy of Needs Theory).Presented below are the five needs of men that are satisfied continually in the following order:
1. Physiological or biological need – the need essentials for survival (food,clothing,water,shelter,sex, air, water)
2. Safety Need- the desire for security, stability, or protection
3. Social Need – the need for group belongingness,affection,love,and friendship
4. Ego / Self-Esteem need – the need for self-recognition or group satisfaction
5. Self-fulfillment need – the need for the realization of personal goal or ambition
The satisfaction of these needs of men can be properly explained by the use of a ladder.
KINDS OF BUSINESS
This classification is based on the nature of principal activity performed by the business enterprise:
1. Industries – involve in the conversion of raw materials into finished products
2. Commerce – involves in the process of buying and selling where the goods are moved from the point of production to the point of consumption.
3. Service enterprises – are primarily concerned with the satisfaction of the needs and
REVIEW MATERIAL # RM2014-001
BUSINESS – is any activity involved in the production and distribution of goods and services, aimed to meet the economic needs of consumers with an objective of eventually earning profit.
ELEMENTS OF A BUSINESS SYSTEM Economics is the study of how society produces and distributes its desired goods and services. It deals how the society uses its resources to produce goods and services. These economic resources to produce are called factors of production. In includes land(materials), labor(manpower), capital(money), and entrepreneur.
WHY PEOPLE ENGAGE IN BUSINESS? People engage in business because of the following reasons: power, profit, service to the community, prestige, livelihood, social approval, etc.
Motivational factors can be clearly explained and directly linked with the theory postulated by Abraham W. Maslow (Hierarchy of Needs Theory).Presented below are the five needs of men that are satisfied continually in the following order:
1. Physiological or biological need – the need essentials for survival (food,clothing,water,shelter,sex, air, water)
2. Safety Need- the desire for security, stability, or protection
3. Social Need – the need for group belongingness,affection,love,and friendship
4. Ego / Self-Esteem need – the need for self-recognition or group satisfaction
5. Self-fulfillment need – the need for the realization of personal goal or ambition
The satisfaction of these needs of men can be properly explained by the use of a ladder.
KINDS OF BUSINESS
This classification is based on the nature of principal activity performed by the business enterprise:
1. Industries – involve in the conversion of raw materials into finished products
2. Commerce – involves in the process of buying and selling where the goods are moved from the point of production to the point of consumption.
3. Service enterprises – are primarily concerned with the satisfaction of the needs and