LEARNING OUTCOME OF LECTURE 3 & 4:
* Investigate the economic, social and global environment in which organisations operate CONTENTS (Lecture 3):
Resource issues and types of economic system: basic economic problem, effective use of Resources; type of economic systems — command, free enterprise, mixed, including transitional economies, public and private sector initiatives; private finance initiatives.
Business Environment : We can divide the types of Business Environment into following categories.
External Environment : It is largely consisted of uncontrollable factors , which includes economic, political , social, technological, natural & international factors.
ECONOMIC ENVIRONMENT :
Business is a micro economic unit . Its market behaviour exhibits the business’ economic decisions. Economic Environment refers to all those economic factors which can affect in any way the functioning of the business itself. In todays firm we see economists working on the strategic levels as the contribution of economists towards the successful running of the business is unavoidable. BASIC ECONOMIC PROBLEMS:
‘ Economy refers to the sum total of economic activities undertaken by the people of an area with a view to earning their living.”TR Jane et al (P1) Economic Problem:
Human demands and needs are unlimited and resources are limited. It is not possible to satisfy each and every individual need , due to limited resources therefor we have to make choices as to how to make the optimum use of its scarce resources. It has to make decision as to how much should be allocated to the production of cars and how much to production of other metallic products. Therefore allocation of resources across its different uses can be classed as Economic Problem. Or Economic problem is the problem of choice or economical uses of scarce resources.
www.bized.co.uk cited 11/11/2010
Three Major Reasons Behind Economic Problems:
1. Unlimited Wants
2. Limited /Scarce Resources
3. Alternative use of Resources
Effective Use Of Resources:
Types of Economic System:
1. TR Jain , OP Khana (2009-2010):Business Economics