INTRODUCTION TO BUSINESS

Prof. Dr. Abdel Jaroshi

COURSE OBJECTIVES

At the conclusion of this course, students will have a better understanding of how a business operates in our modern political, social and
economic environment. Specifically, students will:
 Develop a basic understanding of the free enterprise system and other types of economic systems.
 Understand how business ethics apply to customers and other stakeholders in the business environment.
 Understand the basic forms of business ownership.
 Gain a basic understanding of international business and the complexities of operating in a global environment.
 Understand the basic functions of management and the skills required of managers working with different concepts of motivation.
 Be able to identify the objectives involved in Total Quality Management.
 Understand how a company utilizes human resource management to recruit, train, and retain employees.
 Develop an understanding of the marketing concept and the various elements of the marketing mix.
 Understand how businesses acquire and use capital.
 Understand the concepts of accounting and the analysis of financial statements.
COURSE CONTENTS

 Business administration and management

 Developing a business mindset
 Understanding basic economics
 Business ethics and CSR
 Business models and ownership
 Entrepreneurship and the SME environments
 Management roles, functions, and skills
 Organization and teamwork
 Production systems and employment management
 Marketing and PR
 Financial management and financial accounting
 Banking systems
WHAT IS BUSINESS ADMINISTRATION?

 The administration of a business includes the performance or

management of business operations and decision making, as well
as the efficient organization of people and other resources, to
direct activities toward common goals and objectives.
(Wikipedia)
WHAT IS BUSINESS ADMINISTRATION?

 Business administration is a wide field that incorporates many

types of management positions. From major corporations to
independent businesses, every operation needs skilled
administrators in order to succeed. Motivated, organized
personalities will thrive in business, where environments are often
high-powered.
https://www.allbusinessschools.com/business-administration/job-description
SET OF SKILLS FOR BUSINESS ADMINISTRATION

 In general, business administration covers management principles and practices such as the following:
o Communication.
o Organizational leadership.
o Resource management: people, money, time.
o Strategic planning.
o Business-oriented computer applications.
o Financial management.
o Business ethics.
SEE YOU NEXT WEEK.

TOPICS FOR NEXT WEEK

 Business formation (company formation)
 Type of business formation
TYPES OF BUSINESS FORMATION

Business formation (business structures) vary from one country to

another, this depends on the type and strength of the economy.
Business structure is also highly dependent on the ownership of the
business (government, private, partnership).
BUSINESS STRUCTURE IS DEPENDENT ON

Business structure depends on different factors, of which:

1. Number of owners
2. Type of owners (individuals, companies)
3. Size of business (financially, physically)
4. Taxation
OWNERSHIP/SIZE

Individual

Partnership

Corporation
BUSINESS STRUCTURES (US IRS)

 Sole Proprietorships
 Partnerships
 Corporations
 S Corporations
 Limited Liability Company (LLC)
SOLE PROPRIETORSHIPS

 A sole proprietor is someone who owns an unincorporated

business by himself or herself.

 Example: shop keepers/owners

PARTNERSHIPS

 A partnership is the relationship existing between two or more

persons who join to carry on a trade or business. Each person
contributes money, property, labor or skill, and expects to share in
the profits and losses of the business.

 Example: small service providers (cleaners, small businesses)

CORPORATIONS

 A large company or group of companies authorized to act as a

single entity and recognized as such in law.
S CORPORATIONS

 An S corporation, for United States federal income tax purposes, is

a closely held corporation that makes a valid election to be taxed
under Subchapter S of Chapter 1 of the Internal Revenue Code.
LIMITED LIABILITY COMPANY (LLC)

 A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use
different regulations, and you should check with your state if you are interested in starting a Limited
Liability Company.
 Owners of an LLC are called members. Most states do not restrict ownership, and so members may
include individuals, corporations, other LLCs and foreign entities. There is no maximum number of
members. Most states also permit “single-member” LLCs, those having only one owner.
 A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your
state’s requirements and the federal tax regulations for further information. There are special rules for
foreign LLCs.
OWNERSHIP

OWNERSHIP

FORMATION STRUCTURE
SEE YOU NEXT WEEK.

TOPICS FOR NEXT WEEK

 Economic Systems
ECONOMIC SYSTEM

Definition:
 An organized way in which a state or nation allocates its resources
and apportions goods and services in the national community.
http://www.businessdictionary.com/definition/economic-system.html
ECONOMIC SYSTEM

Definition:
 An economic system is an organized way in which a country allocates
resources and distributes goods and services across the whole nation or a
given geographic area. It is includes the combination of several institutions,
entities, agencies, decision-making processes and patterns of consumption
that make up the economic structure of a specific community. Hence it is a
type of social system.
 An economic system defines how all the entities in an economy interact.
Defining them today is much more complicated than it used to be. Ancient
systems were relatively simple – trade was carried out using barter and there
were very few treaties and rules of engagement.
https://marketbusinessnews.com/financial-glossary/economic-system-definition-meaning/
ECONOMIC SYSTEM
4 TYPES OF ECONOMIC SYSTEMS

1. Traditional Economic System

2. Command Economic System
3. Market Economic System
4. Mixed Economic System

More Reading:
https://quickonomics.com/four-types-economic-systems/
1) TRADITIONAL ECONOMIC SYSTEM

 A traditional economic system focuses exclusively on goods and

services that are directly related to its beliefs, customs, and
traditions. It relies heavily on individuals and doesn’t usually show
a significant degree of specialization and division of labor. In other
words, traditional economic systems are the most basic and
ancient type of economies.
2) COMMAND ECONOMIC SYSTEM

 A command economic system is characterized by a dominant

centralized power (usually the government) that controls a large
part of all economic activity. This type of economy is most
commonly found in communist countries. It is sometimes also
referred to as a planned economic system, because most
production decisons are made by the government (i.e. planned)
and there is no free market at play.
3) MARKET ECONOMIC SYSTEM

 A market economic system relies on free markets and does not allow
any kind of government involvement in the economy. In this system, the
government does not control any resources or other relevant economic
segments. Instead, the entire system is regulated by the people and the
law of supply and demand.
 The market economic system is a theoretical concept. That means, there is no
real example of a pure market economy in the real world. The reason for this
is that all economies we know of show characteristics of at least some kind of
government interference. For example, many governments pass laws to
regulate monopolies or to ensure fair trade and so on.
4) MIXED ECONOMIC SYSTEM

 A mixed economic system refers to any kind of mixture of a market and

a command economic system. It is sometimes also referred to as a dual
economy. Although there is no clear-cut definition of a mixed economic
system, in most cases the term is used to describe market economies
with a strong regulatory oversight and government control in specific
areas (e.g. public goods and services).
 Most western economies nowadays are considered mixed economies. Most
industries in those systems are privately owned whereas a small number of
public utilities and services remain in government control. Thus, neither the
private nor the government sector alone can maintain the economy, both play
a critical part in the success of the system.
ECONOMY IS THE CENTER OF SOCIETY
ECONOMIC FREEDOM

 Economic freedom is the fundamental right of every human to

control his or her own labor and property. In an economically free
society, individuals are free to work, produce, consume, and invest
in any way they please.
https://www.heritage.org/index/about
https://www.heritage.org/index/country/turkey
Explore more countries:
- Read about: USA, UK, Russia, China, Japan, India, UAE, Kuwait, Germany
MID TERM EXAM

OPTION 1
Multiple Choice Questions

 30 MCQs with 25 to be answered

 You should answer 25 questions only, any additions will not be
considered and only the first 25 questions will count
 Each question will be granted 2 points
 1 correct answer = 2 points, 1 wrong answer = 0 points
 No calculators, no phones… Just you and a pen.