WEEK 1-CONCEPT OF BUSINESS & ii.

Manufacturing
DEVELOPMENT OF BUSINESS iii. Trade
iv. Construction
MANAGEMENT for FILIPINOS
v. Government
CONCEPT OF BUSINESS & DEVELOPMENT
ELEMENTS OF A BUSINESS SYSTEM
OF BUSINESS CULTURE
BUSINESS
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.
- The evolutionary growth
of various activities
developing from simple
to complex
RELATIONSHIP BETWEEN BUSINESS AND
THE ECONOMY
THE PROFIT MOTIVE
PROFIT
the difference between the income
an entrepreneur receives from the sale of
his goods and services and the expenses he
incurs to produce them.
INCOME – EXPENSES = PROFIT
RESPONSIBILITY OF A BUSINESS
ENTREPRISE

INDUSTRY
- a group of business firms offering similar
goods or services.
CLASSIFICATIONS:
i. Agricultural
WHY DO PEOPLE ENGAGE IN BUSINESS? ➢ (e.g., SM, Rustans, National
Bookstore, Webster, etc.)

iii. SERVICE ENTREPRISE

➢ primarily concerned with the

satisfaction of the needs and wants
of the consumers.
➢ Subdivided into:
a. Public and community service
(MERALCO, motion pictures)
b. Professional or trade services
(CPA, Lawyers, Consultant)

KINDS OF BUSINESS CRITERIA IN CLASIFFYING PHASES OF

ECONOMIC DEVELOPMENT
Business activity may be divided into three
kinds:
i. Industry A. MEANS OF LIVELIHOOD
ii. Commerce 1. Hunting and Fishing Phase
iii. Services Our ancestors did not breed nor
domesticate animals.
2. Pastoral Phase
i. INDUSTRIES
creation of groups and the presence
of a large number of livestock have made
➢ involve the conversion of raw
man settle in an area for a longer period of
materials into finished products or
time.
goods.
3. Handicraft Phase
➢ industrial group can be divided into
a period of medieval guild or
extractive industries: farming,
associations of artisan engaged in the
fishing and mining.
same trade. Items or objects were made by
➢ (e.g., Nokia, Honda, San Miguel,
skilled and trained manual laborers.
Shell, Pure foods etc.)
4. Agricultural Phase
continuous process to supply food
ii. COMMERCE
5. Industrial Phase
use of power and machines which
➢ involves the process of buying and
led to mass production
selling where the goods are moved
from the point of production to the
point of consumption
C. MEDIUM OF EXCHANGE COMPARATIVE ATTRIBUTES OF BUSINESS
OWNERSHIP
1. Barter Economy
direct exchange of goods for goods,
services for services, goods for services or
services for goods.
2. Money Economy
Money is anything which is
characterized by its general acceptability,
it redeemability in precious metal, or public
acceptance in any institution using it
3. Money and Credit Economy
Credit is the power to obtain
economic goods and services in exchange
for the promise to pay the agreed
equivalent at some future time.
LEGAL FORMS OF BUSINESS OWNERSHIP
1. Sole Proprietorship
a form of business ownership
organized and managed by only one person. START A NEW BUSINESS OR BUY AN
2. Partnership EXISTING ONE?
a business organization where two “IT DEPENDS”
or more persons contribute money,
property, or talent to carry on a business.
a. Limited partner – limited liability 1. Nature and kind of business
b. General partner – unlimited liability trading = better buying a company
3. Corporation restaurant = new marketing
an artificial being created by the approach
operation of law, having the rights of
succession and the powers, attributes and 2. Availability of opportunities for
properties expressly authorized by law or acquisition
incident to its existence. classified advertisement for
opportunities such as banks and other
financial institutions or companies being
sold.

3. Personal biases
your own satisfaction
THE ENTREPRENEUR AND THE MANAGER 3. PAKIKIPAGSAPALARAN
Entrepreneur risk-taking
➢ Conceives an idea out of his own
4. GAYA-GAYA
visualization then turn the idea to
inclination to learn and adjust to
reality.
new ways
Manager
5. UTANG NA LOOB, HIYA, AWA,
➢ Usually employees in the business
BAYANIHAN
enterprise, though some may
become shareholders or partners support
6. KASIPAGAN
POSITIVE VALUES OF A FILIPINO
7. PAGTITIPID
ENTREPRENEUR
8. PAGTITIIS
1. PAKIKIPAGKAPWA TAO
covers concern for: 9. PAGTITIMPI
hiya = loss of face
pakikisama = togetherness 10. KATAPATAN
pakikibagay = adjusting or
adapting to other people
WEEK 4: THE NATURE OF SMALL BUSINESS
malasakit = concern
utang na loob = debt of WHAT IS A SMALL BUSINESS?
gratitude
1. Market share approach, small business
amor propio = self esteem
may be defined as one which is
bayanihan = cooperative
independently owned and operated and
spirit
which is not dominant in its field of
operation. The term “independently
➢ a value favorable to
owned” means ownership is by a private
entrepreneurship because it is
individual, a partnership, or a corporation.
against any form of exploitation.
The term “not dominant” indicates that a
Entrepreneur does not cheat his
small business does not control a sizable
customers
share of its market.
2. BAHALA NA 2. Total assets approach for example, the
Magna Carta for small Enterprises (R.A.
in situations where we are not sure of
6977) indicates that the government
our ability to accomplish things, we let
prefers this approach because it simplifies
the fate decide the outcome and do the
formulation and implementation of policy.
best we can believing that GOD has a
compassion
With the assets value bracket assigned to
small business, it is inevitable that all
enterprises having total assets value at P1.5
million and below will be classified as
“microenterprises”.
One of the disadvantages of the total assets
approach is that asset values are affected
by inflation. After so many years, inflation
alters the nominal value of business assets
and what may be previously considered
small business may no longer be classified
as such.
From the point of view of business
management, the market share approach in
defining small business is more appropriate.
This is so because the target market share is
an objective more basic another objective.
Figure 3 illustrates the kind of business
according to size.
TYPES OF SMALL BUSINESSES
1. MANUFACTURING
A manufacturing business is one involved in
the conversion of raw materials into
products needed by society. Examples of
small business engaged in manufacturing
are: bakeries, tricycle sidecar assembly
shops, bagoong manufacturers, restaurants,
and others.
2. SERVICES
Services business are those that provide
service in one way or another.
They may be further classified into the
following:
1. Business services – provide service to
other business. Examples are accounting
firms, janitorial service firms, security firms,
collection agencies, and the like;
2. Personal services – provide service to the
person. Examples are tutoring services,
massage parlors, voice lesson, among
others;
3. Repair service – provide repair services
to owner of various machinery and
appliances. Examples are auto repair shops,
watch repair shops, plumbing services, and
others;
4. Entertainment and recreation – includes
movie houses, resorts, billiard pool centers,
and the like;
5. Hotels and motels; and
6. Education services – include Montessori
schools for children, high school,
correspondence schools, among others
3. WHOLESALING
Wholesaling refers to the activities of
persons or establishments which sell to
retailers and other merchants, and/or to
industrial, institutional, and commercial
users, but who do not sell in large amounts
to final consumers.
4. RETAILING
Retailing covers all activities involved in the
sale of goods and/or services to the final
consumers. The bulk of retailing activities
are performed by small business. Examples
are retail drugstores, fast food shops,
appliance stores, and others.
5. GENERAL CONSTRUCTION FIRMS
General construction firms are those
engaged in the construction of buildings
whether for private individuals or firms, or components, or even labor, which they
for the government. Many of them perform cannot economically produce. The small
subcontracting jobs for the bigger businesses per-form this task for them.
contractors such as installing electrical
4. Distribution of products and services of
facilities and sewerage.
other businesses – Some manufacturers do
CHARACTERISTICS OF SMALL BUSINESS not have the ability to distribute their
products and services. Many small
Small businesses have their own distinctive
businesses assume this role for them.
characteristics. They are the following:
5. Supporters of government – Small
1. Independent management – The owner
businesses support the government with
is also the manager.
the taxes they pay, as well as performing
2. Small capital requirement – Small other functions.
business requires only small capital and this
6. Providers of employment – A large
can be supplied by a single or a few
proportion of the labor force are employed
individuals.
by small businesses.
3. Mostly local operation – Small business
ADVANTAGES OF OPERATING A SMALL
usually operates in a certain locality
BUSINESS
although there are cases when the market
is not confined to a local area. An individual has various options to
improve his economic lot. They are the
ECONOMIC IMPORTANCE OF SMALL
following:
BUSINESS
1. Be an employee;
Small businesses play an important role in
the development of our economy. They 2. Be a professional; or
assume the following functions (Figure 4):
3. Be a small business operator (SBO).
1. Providers of economic opportunities for
An employee enjoys a fixed working
entrepreneurs – People who do not feel
schedule like 8:00 A.M. to 5:00 P.M. They
comfortable as employees have the option
pay he receives, however, is limited and
of engaging in small business operation.
dependent to a large extent on industry
2. Providers of products and services to norms and financial capacity of the
consumers – The production of many company. In some firms, the employee’s
products and services is oftentimes not pay depends on the whims of the owner
feasible with big and medium business
SMALL BUSINESS AND ITS IMPORTANCE TO
operation. These limited opportunities are
THE ECONOMY
naturally fitted for small businesses.
1. Opportunity to gain control over his own
3. Suppliers of products and services to
destiny,
other businesses – Some businesses require
raw materials, semifinished parts, finished
2. Opportunity to reach his full potential,
3. Opportunity to reap unlimited profits,
and
4. Opportunity to make a contribution to
society and receive recognition for his
efforts
A professional may generate higher income
through the effective practice of his
profession. A physician, for example, may
set his clinic in a certain area and proceed
to treat patients for a free. His income,
however, is limited by the number of
patients he attends to every day as he
cannot delegate his skill to others. In
addition, although he is useful to the
community, his desire to provide
employment to more people is severely
limited by the nature of his work. At most,
he can employ four persons as assistants.
The last option is small business operation.
Although entrance requirements are not as
difficult as the first two options, it does not
mean this option is easier to put into
practice. A small business operator keeps
long working hours and absorbs whatever
damages that happen as a result of his
faulty decision-making. However, he is
afforded the following benefits:
DISADVANTAGES OF OPERATING A SMALL
BUSINESS
Although certain advantages accrue to the
small business operator, these are certain
disadvantages that must be considered.
These are the following:
(1) Uncertainty of income;
(2) Risk of losing your entire capital
investment;
(3) Lower quality of life until the business
gets established;
(4) Complete responsibility;
(5) Having to serve undesirable customers;
(6) Paperwork and other chores; and
(7) Long hours and demanding work
condition.
WEEK 5 ENTREPRENEURIAL PERSONALITY
THE ENTREPRENEUR’S PERSONALITY
Every person has a personality that is
unique and different form others. Each
personality type has a corresponding type
of job that fits it. A certain personality,
however may fit in more than one type of
job, although the level of fitness will be
different with each job.
WHAT IS PERSONALITY?
Personality refers to the pattern of
characteristics that distinguishes one
person from another. It includes the
person’s traits, values motives, genetic
blueprints, attitudes, emotional reactivity,
abilities, self-image, intelligence, and visible
behavior patterns.
PERSONALITY ACCORDING TO HOLLAND
1. Realistic – prefers activities involving
aggressive behavior, and physical exertion,
i.e., farming/mining
2. Investigative-prefers to be analytical,
curious, methodical and precise i.e.,
crime/arson investigator
3. Artistic- expressive, nonconforming,
original and introspective i.e., songwriter/
novelist/book writer
4. Social – enjoys working with others and 10. Innovative- allows the business
in to purposely avoids systematic activities. enterprise to flourish
i.e., social worker
MOTIVATIONS TO BECOME
5. Enterprising – enjoys verbal activities to ENTREPRENEURS
influence others and attain power and
➢ Desire to be one’s own boss
status i.e., manager/ entrepreneur ➢ Desire for financial rewards
6. Conventional- enjoys systematic ➢ Desire to create one’s own job security
manipulation of data, filing of records, or ➢ Desire to improve one’s quality of life
producing materials, i.e., accountant/
finance manager
CHARACTERISTICS OF ENTREPRENEURS
1. Drive- pursues his chosen course without
relenting even in the face of adversity;
attempts until he succeeds
2. Thinking ability- solving problems and
making decisions; can see through maze of
information or disinformation
3. Human relations ability– relationships
with customer, employee and third party
with interest in the firm
4. Ability to communicate- ability to
understand and be understood
5. Technical knowledge- performance of
major and minor tasks

6. Reasonable risk taker- not conservative

but also not gamblers
7. Self-confident- person’s belief in his
ability
8. Goal setter- goals direct one person to
specific target, encourages one to exert
higher efforts, encourages persistence, and
fosters creation of strategies and action
plan
9. Accountable- takes responsibility of what
happens in the firm