Matakuliah
Tahun
: J0712 - Pengantar Bisnis
: 2009
Understanding Business
Pertemuan 01
Understanding Business
•Outlines:
–The meaning of Business
–Production Factors in Business
–World Economic System
–Business Evolution
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The Meaning of Business and Profits
• Business is an organization that
provides goods or services to earn
profits
• Profits represent the difference
between a business’s revenues and
its expenses
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What Are Factors of Production?
• Resources used in the production of goods and
services:
•
•
•
•
•
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labor,
capital,
entrepreneurs,
physical resources and
information resources
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Factors of Production
 Labor (or Human resources) are the
physical and mental capabilities of people
as they contribute to economic production
 Capital are the funds needed to create
and operate a business enterprise
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Factors of Production
 Entrepreneur is an individual who accepts the
risks and opportunities involved in creating and
operating a new business venture
 Physical resources are tangible things
organizations use in the conduct of their
business
 Information resources are data and other
information used by business
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What is an Economic System?
 A nation’s system for allocating resources
among citizens.
 Assumes resources are scarce thus requiring
allocation.
 Market is mechanism for exchange between
Buyer/Seller
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Types of
World Economic Systems
Planned
Economies
Communism
Socialism
(Mixed Market)
Capitalism vs. Market
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Types of Economic System
 Planned economy 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.
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Types of Economic System
• Market economy relies on individuals to control
production and allocation decisions through supply and
demand
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Types of Economic System
 Mixed market
economy features
characteristics of both
planned and market
economies
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What Is Communism?
• Planned economy in which the government owns
and operates all factors of production
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What Is Capitalism?
• Market economy that provides for private ownership
of production and encourages entrepreneurship by
offering profits as an incentive
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Mixed Market Economies
• Privatization is the process of
converting government
enterprises into privately owned
companies
• Socialism is a partially planned
system in which the government
owns and operates selected major
industries
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Business Evolution
Production Era
Marketing Era
Laissez-Faire &
Entrepreneurship
Era
Global Era
Industrial Revolution
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Information &
Internet Era
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The Factory System and the Industrial
Revolution
• Major mid-18th century
change in production
characterized by a
shift to the factory
system, mass
production and the
specialization of labor
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Laissez-Faire and the Entrepreneurial Era
• Period during the 19th
century in which
improvements in the
U.S. banking system
and the nation’s
infrastructure and the
rise of the entrepreneur
on a grand scale were
hallmarks
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The Production Era
• Period during the early
20th century in which
U.S. business focused
primarily on improving
productivity and
manufacturing
efficiency
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The Marketing Era
• Post-World War II period
in which production
continued to increase,
technology advanced
and the standard of
living rose
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The Global Era
• Period throughout the 1980s in which the
continuation of technological advances in
production, computer technology,
information systems and communications
capabilities was experienced
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The Internet Era
Ways the Internet affects business:
1. The Internet will give a dramatic boost to trade in all
sectors of the economy.
2. The Internet will help to level the playing field between
larger and smaller enterprises regardless of their
products.
3. The Internet holds considerable potential as an effective
and efficient networking mechanism.
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