LESSON #1 CONTEMPORARY ECONOMIC
ISSUES FACING THE FILIPINO
ENTREPRENEUR
INVESTMENT: A DETERMINANT OF
INCOME
Investment
• Is a process of building up capital
stock, or the expenditure which
determines the income and
production in the economy.
• Also refers to the value of
machinery, plants, and buildings that
are bought by firms for production
purposes
• Investment is the capital
expenditure on the purchase of
physical assets such as plant,
machinery, and equipment (also
known as fixed investment) and
stocks (also known as inventory
investments)
Investment Expenditure
• Investment expenditure means
capital spending.
• It is mainly derived from
accumulated savings and other
sources external to the circular
flow; it does not come from current
income and consumption.
WHY IS INVESTMENT ESSENTIAL TO THE
ECONOMY?
• Current business income serves
current business needs.
• The surplus may not be sufficient to
finance even a fraction of
investment spending. Instead, a
business may borrow the savings of
the economy, which households
likewise do, e.g., for housing
construction.
• Investment, therefore, requires that
a portion of current consumption be
forgone (i.e., saved) to free up
resources which can be used to
finance investment.
INVESTMENT IS CLASSIFIED INTO TWO
TYPES:
1. FIXED INCOME INVESTMENT
• Investors are aware that there
are risky investment options. For
investors who are averse to risk
fixed income investments are the
best option since these
investments are guaranteed to
have a lower risk of losses.
• Fixed income investments (FIIs)
are investments that provide
fixed periodic sources of income
over a certain period of time
Examples:
1. Government securities like treasury
bonds, treasury bills and notes
2. Corporate bonds (which have
higher interests compared to
government securities)
3. Special deposit accounts offered by
the Bangko Sentral ng Pilipinas
(BSP)
4. Foreign currency time deposits
2. VARIABLE INCOME INVESTMENT
• Are forms of investment that are
suitable for risk tolerant
individuals.
• In VIIs, returns are not fully
guaranteed and money or
resources invested may also not
be fully recovered. The reason
for this is that the returns from
variable income investments are
strongly influenced by economic
situations and the behavior of
financial markets.
Examples:
1. Business ownerships in the form of
equities
2. Company stocks
3. Investment fund shares that have a
high level of liquidity since they can
be easily converted to cash
Investments and Interest Rates
• Interest rates play a key role in
increasing capital stock, which in
turn affect investments.
• There is a negative or inverse
relationship between investment
and interest rate.
The higher the interest rate, the lower the
quantity of investments; the lower the
interest rate, the higher the quantity of
investments
WHAT IS INTEREST RATE? WHAT IS ITS ROLE
IN INVESTMENTS?
In economics, interest is used in two ways.
1. It can be the price of the credit,
which is often referred to as
loanable funds
2. It can also be the return that the
capital earns as an input in the
production process
Interest rate represents the cost of using or
borrowing money.
Loanable funds refer to the amount of
money lent out by a lender to a borrower,
for which the borrower will pay an interest
rate to the lender for the use of that fund.
Interest as the return on capital can be
illustrated in the case of a printing press
owner who decides to buy additional
equipment which costs Php10,000.
• After a year, he earns Php1,000 for
using the equipment in his
business. The Php1,000 is
Equivalent to a 10-percent interest
rate on the capital which is the
equipment.In this case, interest is
the return earned by the capital as
an input in the production process.
DETERMINANTS OF INVESTMENTS
Fluctuations and changes in interest rates
have a significant influence on
investments.
Determinants of investments
1. Future me expectations – reflect
plans to change production capacity.
As expectations change, anticipating
future returns from investments, the
investment demand curve shifts to
the right. On the other hand, if there
are expectations of lower profits, the
investment demand curve shifts to
the left.
2. Level of Economic Activity – When
GDP is high, the level of production
increases. This boosts demand for
capital and encourages higher
investments. When household
incomes increase, consumption also
goes up, which further leads to a rise
in aggregate demand.
3. Technological Change – With
changes in technology, demand for
capital will have to
4. Increase in order to keep up with
these important developments.
5. Public Policy – Public policies in the
form of granting incentives to firms
can significantly affect the demand
for capital, thereby increasing
investments. Investment tax credits
and tax holidays can encourage
investments in a country.
RENTALS
Rent
• It is typically refers to the use of
property for a certain amount
• It is the price paid for the use of land
and other natural resources or
factors of production that is in fixed
supply.
• Rent has been traditionally
associated with land, which is a fixed
factor of production.
• The concept of economic rent
applies to economic factors, not just
land.
• Economic rent is a payment in excess
of opportunity costs. According to
David Ricardo, an influential British
classical economist in early 1800s,
rent is a surplus of revenue over
cost, which arises due to differences
in the level of usability of the land.
• The scarcity of land becomes the
concept of rent.
WHAT RENT ON LAND?
Rent on Land
• Land is one of the most common
type of investments aside from
owning shares, cash, and securities.
• In order to analyze how the price for
the use of land is determined, we
must look at the supply of land and
its level of demand.
• Since the supply of land is perfectly
inelastic, the level of demand is
Labor Supply
what determines the rent on land.
• Since supply of land is fixed, demand
becomes the determinant of rent.
• Aside from renting the land out, the
owner of the land can also opt to
sell the land at a higher price to earn
a profit.
HOW IS THE DEMAND FOR LAND
DETERMINED?
Economic rent also relies on productivity
differences.
WHAT IS MARKET CLEARING?
Several determinants indicate the
productiveness of the land:
a. Products grown on the land
• The location attribute of the land
can also be considered for its
demand
b. Prices of other resources
which are combined with
the land
• City areas have higher land rents
than remote areas with difficult
access to transportation and
communication.
DETERMINANTS OF MARKET WAGE RATES
A basic principle of economics is the notion
that the price or value of goods, services,
and even resources, such as labor, is
EQUILIBRIUM WAGES
determined by the behavior of demand and
supply.
Labor Demand
• The demand for labor is similar to
the demand for a good, and thus
generally follows the law of
demand.
• The wage, which is the price of
labor, is plotted in the y-axis of the
graph, and the quantity of labor,
which can be expressed by the
number of employment available in
the market, is plotted in the x-axis.
• Similar to the law of demand, when
the price of labor increases, the
related quantity of labor decreases,
which makes the price of labor
inversely related to the quantity of
labor. This means that employers
will hire more people when wages
go down.
• It follows the principle of the law of
supply, which says that if the price of
labor .Increases, then the supply of
labor also increases, and vice versa.
• As wage increases, more people will
enter the labor market and compete
for higher-paying jobs. But if wages
decline, there will be fewer people
• looking for jobs and competing for
these lower wages.
• When the labor demand and supply
meet at a certain wage and quantity
of workers, an equilibrium is
reached. This point of equilibrium is
called the market clearing.
• It is where firms may hire an
employee at the existing wage rate
and people who would like to have
that wage rate would be able to do
so.
• However, as this is a competitive
labor market, even though there is
an identified market clearing,
employers and employees may leave
the labor market, as firms may want
to pay lower wages or workers may
wish to earn higher wages.
o When jobs are safe and easy,
we can assume that the
wages they pay are average.
Most People want to
have such jobs.
o As the job becomes more
difficult and dangerous,
workers naturally require a
higher wage to do such work.
 o Compensating Differential is
the difference in wages that
arise to offset the
nonmonetary characteristics
of different jobs
Ex. People who work in coal
mines or on night shifts usually
receive a compensating
differential to make up for the
unpleasant nature of the job.
EQUILIBRIUM IN A COMPETITIVE LABOR
MARKET
• In a perfectly competitive labor
market, firms and workers are free
to enter and exit the market. This
makes the equilibrium allocation of
workers to firms efficient.
• How the workers fit the firm
maximizes the total gains that
workers and firms accumulate by
trading with each other.
• A competitive equilibrium leads to
an efficient allocation of resources.
MINIMUM WAGE
• Minimum wage is the lowest
allowed wage paid to workers by
virtue of legislation and government
policies.
• This is a form of government
intervention to alleviate poverty and
income inequality in terms of
rendering job services.
• The effects of minimum wages may
in principle differ between
industries in which employers do
and do not have control over the
wage rates they pay for the labor of
a given skill and application
• Minimum wage is set primarily to
protect workers from abusive
employment practices.
• A decent minimum wage is actually
a useful tool in addressing wide
disparities in wage distribution.
TAXES
Taxes are the lifeblood of the government.
• Without taxes, the government will
not be able to provide services to its
people, such as public works, health,
education, defense and police
protection, and social services.
• Hence, taxation is necessary for the
government to be able to finance its
expenditures.
Taxation is the act of levying tax so that the
sovereign, through its law-making body,
can raise income to defray the necessary
expenses of the government.
• It is an inherent power of the state
to demand enforced contributions
from the people for public purposes
.
• Hence, tax is a levy imposed by the
government on the income, wealth,
and capital gains of persons or
businesses, on spending on goods
and services, and on properties.
Taxes are used by the government for a
variety of purposes
a. Raising revenue to cover
government expenditures on
the provision of social
services such as education,
health, and public
infrastructure as well as the
salaries and benefits of
public servants;
b. As an instrument of fiscal
policy in regulating the level
of total spending (or
aggregate demand) to
stabilize the economy;
c. Altering the distribution of
income and wealth;
d. Controlling the volume of
imports into, and sometimes
exports of certain goods out
of, the country.
TYPES OF TAXES
1. Direct taxes are taxes levied by
government on the income and
wealth received by households and
businesses to raise government
revenue and to act as an instrument
of fiscal policy.
• Individual income taxes are taxes
that are levied on households. These
are taxes on particular persons
• Corporate income taxes are taxes on
businesses. Take note that
 corporations are legal entities that taxation regime. These basic principles are
assume an independent personality. generally referred to as Adam Smith’s
Thus, if a corporation earns a profit, Canons of Taxation. These include:
it must pay a corporate income tax.
1. Adequacy. Taxes should be just
This is considered direct tax.
enough to generate revenue
2. Indirect taxes are taxes levied by
required for the provision of
government on goods and services
essential public services like health,
to raise revenue and to act as an
education, and national defense
instrument of fiscal policy. Observe
and police protection.
that these are not taxes on people
2. Broad basing. Taxes should be
but on goods and services that
spread over as wide as possible to all
people purchase and consume.
sectors of the population or
a. Value-added tax (VAT) are
economy to minimize individual tax
taxes included on goods and
burden.
services
3. Compatibility. Taxes should be
b. Excise taxes are taxes
coordinated to ensure tax neutrality
included on certain products
and meet the overall objectives of
3. Progressive taxes are taxes that
good governance.
place greater burden on those best
4. Convenience. Taxes should be
able to pay and put little to no
enforced in a manner that facilitates
burden on the poor.
voluntary compliance to the
• The best example of a progressive
maximum extent possible.
tax is the individual income tax
• For most taxpayers today, the more Basic principles are generally referred to as
they earn, the higher percentage Adam Smith’s Canons of Taxation.
they pay for tax
5. Earmarking . Tax revenue from a
• In terms of the average tax rate,
specific source should be dedicated
people in higher income brackets
to a specific purpose only when
pay a substantially higher average
there is a direct cost-and-benefit link
tax rate than those in the lower
between the tax source and the
brackets.
expenditure, such as the allocation
4. Proportional taxes are taxes that
of motor users’ tax for road
place an equal burden on the rich,
maintenance.
the middle class, and the poor. In
6. Efficiency. Tax collection efforts of
other words, taxes are levied at a
the government should not cost an
constant rate as income rises.
inordinately high percentage of tax
5. Regressive taxes are taxes that fall
revenues.
more heavily on the poor than on
7. Equity. Taxes should equally burden
the rich. Under this taxation
all individuals and entities in similar
structure, taxes are levied at a
economic circumstances.
decreasing rate as income rises.
8. Neutrality. Taxes should not favor
• This form of taxation takes a greater any one group or sector over
proportion of tax from a low-income another and should not be designed
taxpayer than from a high-income to interfere with or influence
taxpayer. individual decision-making.
• Indirect taxes such as the VAT or 9. Predictability the collection of taxes
excise taxes on certain products are should reinforce their inevitability
regressive when taken as a and regularity
proportion of total net income. 10. Restricted exemptions. Tax
BASIC PRINCIPLES OF TAXATION exemptions must only be done for
specific purposes (e.g., to
The basic principles of taxation refer to key encourage investment) and within a
concepts that guide governments in limited period.
designing and implementing an equitable
 11. . Simplicity. Tax assessment and
determination should be easily
understood by an average taxpayer
LESSON # 2Tools in Evaluating a Business
Key factors that must be considered in
analyzing the industry
1. Geographic area
2. The size outlook of the industry.
3. Description of the product.
4. The buyers have to be identified.
5. The regulatory environment.
6. The need to identify the leading
7. Factors that will affect the growth of
the business.
The SWOT analysis
• The SWOT analysis was created in
the 1960s by business gurus,
Edmund P. Learbed. C. Roland
Chrjstensen, Kenneth Andrews, and
William D. Book.
• It is analytical framework that can
help a company meet its challenges
and identify new markets.
• The frame work can help identify the
business’s risks and rewards.
• It is also a means of identifying the
internal and external forces that may
affect the business.
Strengths
• Those potential factors that make a
firm more competitive than its direct
competitors.
Weaknesses
• Both potential limitations and
defects ingrained in an organization
and/or weak factors relative to
direct competitors.
Opportunities
• Future factors that allow the
organization to improve its relative
competitive position.
Threats
• Those future factors that reduce the
firm’s relative competitive position.
Internal factors that can be shown
1.Financial resources such as money and
sources of funds for investment.
2. Physical resources, such as the company’s
location, facilities, machinery, and
equipment.
3. Human resources consisting of
employees.
4. Access to natural resources, trademarks,
patents and copyrights
5. Current processes such as employee
programs, department hierarchies and
software systems, sales and distribution
capabilities, marketing programs.
Analysis Process
1. Detect strategic issues
2. Determine the strategy
3. Implement and monitor strategy
Porter’s Five Forces of Competitive Position
Analysis
Porter’s Five Forces
• It was developed in 1979 by Michael
E. Porter of Harvard Business School
as a framework or a guide for
assessing and evaluating the
competitive strength and position of
a business organization.
• These five forces help in identifying
if new products or services are
potentially profitable.
• Once the area where power lies is
identified, then areas of strength can
be pinpointed and exploited,
solutions to weaknesses may be
proposed, and possible mistakes
avoided.
1. Supplier Power
• The magnitude of the cost of
switching from one supplier to
another is likewise a factor such
that when cost of switching is high,
buyers of suppliers would prefer to
stick it out with one supplier, thus
giving the supplier the power of
raising prices.
2. Buyer Power
• The smaller the number of buyers in
the market, the greater is the power
enjoyed by the buyer. Likewise, the
more important an individual buyer
 is to the organization, the greater his
power is.
Porter’s Five Forces
3. Number of competitors
• If competitors are numerous and 1. Supplier Power
offer basically similar products and 2. Buyer Power
services, the market will be less 3. Number of competitors
attractive. 4. Possibility of substitution
4. Possibility of substitution 5. Possibility of new entrants
• When it is easy to substitute
Business Plan
products in a market, it is expected
that buyers will switch to • Goals and mission of the business
alternatives in case of price • Difference of your business to other
increases. business
5. Possibility of new entrants • Target consumer or client (Target
• When new investors enter a market, Market)
the share of the participants in the • Projected competition
market will be divided among more • Kinds of products and services to be
people and will therefore decline, offered
thus, eroding profits. • Ways and strategies to increase sales
Importance • SWOT Analysis
• Porter’s Five Forces
• To understand the factors affecting • December 9 Soft Copy of Complete
profitability in a specific industry and Business Plan
can help to form decisions on • December 15 Presentation of
whether or not to enter a specific Business Plans (PPT presentation)
industry, whether or not increase • 15 minutes assigned per group to
capacity in a specific industry, and present
also for developing competitive
strategies.

Business Plan LESSON #3 PRINCIPLES, TOOLS AND

TECHNIQUES IN CREATING A BUSINESS
• To understand the factors that may
affect the business that you are
about to put up, use the SWOT WHAT IS A BUSINESS?
Analysis and the Porter’s Five Forces
of Competitive Position Analysis. Business

• A business is an organization or
enterprising entity engaged in
commercial, industrial, or
professional activities.
• Businesses can be for-profit entities,
or they can be non-
profit organizations that operate to
fulfill a charitable mission or further
a social cause.
• The term “business” also refers to
the organized efforts and activities
of individuals to produce and sell
goods and services for profit.
TYPES OF BUSINESS STRUCTURES
SOLE PROPRIETORSHIP
 • The word “sole” implies “only”, and 5. Ease of formation and closure
“proprietor” refers to “owner” • Entering business with minimal legal
formalities
• Sole trader is the person who carries • Least regulated form of business
business exclusively by and for
himself LIMITATIONS

• Ownership and management of the 1. Limited resources

business by a single individual • Limited to his/her personal savings and
borrowings from others
• Hence, a sole proprietor is the one
2. Limited life of a business concern
who is the only owner of a business • In the Eyes of the law the proprietorship
and the owner are considered one and the
FEATURES
same
1. Ease of formation 3. Limited managerial ability
• Assume the responsibility of varied
• No legal formalities
managerial tasks such as purchasing,
• No requirement of registration or selling, financing, etc.
payment of fee
PARTNERSHIP
Ease of retiring in case of failure
• “the relation between persons who have
2. Liability agreed to share the profit of the business
carried on by all or any one of them acting
• Unlimited liability
for all.”
• Owner is personally responsible for
payment of debts FEATURES
3. Sole risk bearer and profit recipient 1. Formation
• Risk of failure of business is borne all • A legal agreement wherein the terms and
alone conditions governing are specified
• Points out that the business must be lawful
• Receives all the business profits
and run with the motive of profit
which become a direct reward for • Two people coming together for charitable
his risk bearing purposes will not constitute a partnership
4. Control
• The right to run the business and
make all decisions lies absolutely 2. Liability
• Unlimited, Personal assets may be used for
with the sole proprietor.
repaying debts
5. No separate entity 3. Risk bearing
• In the eyes of the law, no distinction • Share losses in the same ratio
is made between the sole trader and 4. Decision making and control
his business. • Share amongst themselves the
responsibility of decision making and
6. Lack of business continuity
• Control of day-to-day activities
• Death, insanity, imprisonment, 5. Continuity
physical ailment or bankruptcy of • Death, retirement, insolvency or insanity of
the sole proprietor will have a direct any partner can bring an end to the
effect on the business and may even business
6. Membership
cause closure of the business.
• Minimum number of members is two
MERITS • Maximum number, in case of banking
industry is ten and in case of other
1. Quick decision making
businesses it is twenty
• Enjoys considerable degree of freedom in 7. Mutual agency
making business decisions
• Business carried on by all or any one of the
2. Confidentiality of information
partners acting for all
• Information is kept confidential
• Not bound to publish firm’s account MERITS
3. Direct incentive
1. Ease of formation and closure
• Directly reaps the benefits
• An agreement between the prospective
• Maximum incentive to the sole trader to
partners
work hard
• No compulsion with respect to registration
4. Sense of accomplishment
of the firm
• Personal satisfaction involved in working for
2. Balanced decision making
oneself
Partners can oversee different functions according to 1. GENERAL PARTNERSHIP
them areas of expertise

3. More funds
• Involves two or more owners carrying out a
• Capital is contributed by several partners
business purpose
4. Sharing of risks
• Share equal rights & responsibilities in
• Reduces the anxiety, burden and stress on
connection with management of business
individual partners
5. Secrecy • Any individual partner can bind the entire
group to a legal obligation
• Not legally required to publish its accounts
and submit its reports • Each individual partners assumes full
responsibility for all the business debts &
LIMITATIONS obligation.

1. Unlimited liability
2. LIMITED PARTNESHIP
2. Limited resources

• Restriction on the number of partners

• Allows each partner to restrict his or
• Capital investment is usually not sufficient
her personal liability to the amount of
to support large scale business operations
his or her business investment.
4. Possibility of conflicts
• Not every partner can benefit from his
• Difference in opinion on some issues may
limitation ( at least one participant
lead to disputes
must accept general partnership status)
• Decisions of one partner are binding on
other partners CORPORATION
5. Lack of public confidence
A corporation is a business in which;
• A partnership firm is not legally required to
publish its financial reports or make other A group of people acts together as a single entity;
related information public
Most commonly, owners of a corporation
TYPES OF PARTNERS are shareholders who exchange consideration for
the corporation’s common stock.
1. Active partners
• Contributes capital
• Participates in the management of the firm
Incorporating a business releases owners of the
• Shares its profits and losses
financial liability of business obligations; however, a
Liable to an unlimited extent to the creditors of the corporation has unfavorable taxation rules for the
firm owners of the business.

2. Sleeping or dormant partner FEATURES

• Do not take part in the day-to-day activities
1. Control
• Everything else same as active partners
• Undertaken by the Board of Directors
3. Secret partner
• The directors hold a position of immense
• Association with the firm is unknown to the
significance as they are directly
general public
accountable to the shareholders for the
4. Nominal partner
working of the company.
• Allows the use of his/her name by a firm
2. Common Seal
• Does not contribute to its capital
• Company’s approval through a common
• Does not take active part in managing the
seal
firm
• Common seal is the engraved equivalent of
• Does not share its profit or losses
an official signature
• Liable, like other partners, to the third
3. Risk Bearing
parties, for the repayments of the firm’s
• Borne by all the share holders to the extent
debts
of their shares

MERITS

1. Limited liability
• Only the assets of the company can be used
to settle the debts, leaving the owner’s
personal property free from any charge.
2. Transfer of interest
• Shares can be easily sold or converted into
cash when required.
3. Perpetual existence
TWO TYPES OF PARTNERSHIP
• Not effected by death
 4. Scope for expansion
• Large financial resources
5. Professional management
• Company can afford to pay higher salaries
to specialists and professionals
• Leads to balanced decision making as well
as greater efficiency in the company’s
operations
LIMITATIONS
• Complexity in formation
• Lack of secrecy
• Impersonal work environment
• Numerous regulations
• Delay in decision making
• Oligarchic management
• Conflict in interests
SHAREHOLDERS
Features:
• Shares are like partners who have invested
in the company.
• If company gains profit, profit is
distributed in the form of dividends to
shareholders
• In case of loss, nothing is taken from
shareholders
TYPES OF BUSINESS ORGANIZATIONS
FRANCISE
• Owners, or “franchisors”, sell the rights to their
business logo, name, and model to third party
retail outlets, owned by independent, third
party operators, called “franchisees“
o To invest in a franchise, the franchisee
must first pay an initial fee for the
rights to the business, training, and the
equipment required by that franchise.
Once the business begins operating,
the franchisee will generally pay the
franchisor an ongoing royalty payment,
either on a monthly, quarterly, or
annual basis. This payment is usually
calculated as a percentage of the
franchise operation’s gross sales.
o The franchisee will not have as much
control over the business as he or she
would have over their own business
model but may benefit from investing
in an already-established, name brand.
LEASING
• A legal document outlining the terms under
which one party agrees to rent property from
another party.
• A lease guarantees the lessee (the renter) use
of an asset and guarantees the lessor (the
property owner) regular payments from the
lessee for a specified number of months or
years.
• Both the lessee and the lessor must uphold the
terms of the contract for the lease to remain
valid.
MANAGEMENT CONTRACT
A Firm enters a contract with one or a few local
manufacturers to get certain components or goods
produced as per its specifications
Contract manufacturing, also known as Outsourcing
Can take three major forms:
o Production of certain components
o Assembly of components into final
products
▪ Complete manufacture of
the products
ADVANTAGES
• Goods produced on a large scale without
requiring investment in setting up
production facilities.
• No Investment risk.
• Products manufactured or assembled at
lower costs.
• Local manufacturer also gets the
opportunity to get involved with
international business and avail incentives.
LIMITATIONS
• Local firms might not adhere to production
design and quality standards.
• Local manufacturer in the foreign country
loses his control over the manufacturing
process.
• The local firm producing under contract
manufacturing is not free to sell the
contracted output as per its will.
COOPERATIVE
• Cooperatives are people-
centered enterprises owned, controlled and
run by and for their members to realize
their common economic, social, and cultural
needs and aspirations.
• Cooperatives bring people together in a
democratic and equal way.
• Whether the members are the customers,
employees, users or residents, cooperatives
are democratically managed by the ‘one
member, one vote’ rule.
• Members share equal voting rights
regardless of the amount of capital they put
into the enterprise.
BUSINESS SIZES

• Business sizes range from small owner-

operated companies, such as family
restaurants, to
multinational conglomerates such as
General Electric.
• Larger businesses may issue corporate stock
to finance operations. In this case, the
company is publicly traded and has
reporting and operating restrictions.
• Alternatively, smaller businesses may
operate more independently of regulators.
• SMALL SCALE BUSINESSES
1,5000.001 – 15,000,000 TOTAL ASSETS
• MEDIUM SCALE INDUSTRIES
15,000,001 – 60,000,000 TOTAL ASSETS
• LARGE SCALE INDUSTRIES
60,000,000 AND ABOVE TOTAL ASSETS

BUSINESS ORGANIZATIONS

• The term business organization describes

how businesses are structured and how
their structure helps them meet their goals.
• In general, businesses are designed to focus
on either generating profit or improving
society.
• When a business focuses on generating
profits, it is known as a for-profit
organization

SOCIAL ENTERPRISE

• A social enterprise or social business is

defined as a business that has specific social
objectives that serve its primary purpose.
• Social enterprises seek to maximize profits
while maximizing benefits to society and
the environment.
• Their profits are principally used to fund
social programs.