Business is a combination of war and

sport.
•-ANDRE MAUROIS
Imagine a world without a business
• If the school cafeteria did not exist, you would have to cook your
own food for lunch in school.
• If car manufacturers did not exist, you would have to build your
own vehicle to get from one place to another.
• If farmers did not sell their crops, you have to toil the land, plant
your crops, and harvest them so you would have food to eat.

• Imagine making your own soap, toothpaste, shampoo, and cloths;

or cutting your our own hair, producing your own medicine, and
diagnosing your own illness. These are just some of the things
that the business organization to do make your life easier.
BUSINESS ORGANIZATIONS-exist to
serve consumers’ needs, and in return, they
make profits when people patronize their
products and services. They are some an
important component of the modern society
as they contribute to the economy’s
growth, provide products for consumptions,
and offer employment to the people.
PRODUCTS
 Tangible
 Intangible
Businesses need to earn profits in
order to stay in the market.
Two types of Business Organization
 Profit Organization
 Nonprofit Organization – formed for
specific purpose (e.g., to assist victims
of domestic violence, to promote
animal welfare, or to care for the
elderly) to serve common good of the
puclic.
RECITATION
If you were to choose a nonprofit
organization to support,, which would it
be? What is its advocacy/ how did you
come up with your choice? Why do you
want to support your chosen nonprofit
organization?
FORMS OF BUSINESS
ORGANIZATION
 Sole Proprietorship
 Partnership
 Corporation
 Cooperatives
BUSINESS ORGANIZATION and the
ECONOMY
Economic conditions affect how
businesses fare in the market. Changes in
the economic and the political system
can have an impact on certain industries
or the whole business system.
ECONOMICS – is the study of how
resources used in the production of
goods and services are distributed for
consumption within a social system.
DIFFERENT ECONOMIC SYSTEM
 Capitalism
 Communism
 Socialism
DEFINITION
Capitalism – In capitalism, individuals own and operate
the majority of businesses that provide goods and
services. Also known as a free enterprise, capitalism
can be pure or modified. In a pure capitalism, or a
free-market system, all economic decisions are made
without government intervention. In a modified
capitalism, the government intervenes and regulates
businesses to some extent (e.g., laws, regulations, and
policies)
Communism – According to Karl Marx,
communism is a society in which the people,
without regard to class, own all the nation’s
resources. In his ideal society, everyone
contributes according to each person’s ability and
people receive goods and services based on their
needs. The government determines the goods and
services needed by the citizens, as well as the
production and distribution of goods and services.
Socialism – In socialism, the government owns
and operates basic industries, but individuals own
most businesses. Socialism’s core benefit is
supposed to be social equality. Central planning
determines production and distribution of goods
and services, while individual businesses provide
other goods and services based on consumer
demand and availability of resources.
BUSINESS OWNERSHIP
CAPITALISM – Business are owned and operated
by individuals and corporations.
COMMUNISM – Businesses are owned and
operated by the government.
SOCIALISM – Major industries are owned and
operated by the government; small businesses are
owned by individuals.
COMPETITION
CAPITALISM – Competition is encouraged by
market forces and government regulations
COMMUNISM – There is no competition as the
government owns and operates businesses.
SOCIALISM – Competition is restricted in major
industries owned and operated by the government
but is encouraged in small businesses.
PROFITS
CAPITALISM – Individuals keep profits and decide
on how to use them.
COMMUNISM – Profits go to government.
SOCIALISM – Profits from government-owned
enterprises go to the government; small business
owners reinvest profits.
PRODUCT AVAILABILITY AND PRICE
CAPITALISM – Prices of products are determined
by supply and demand, and consumers enjoy a
wide selection of products.
COMMUNISM – Prices of products are high with
limited choices of goods and services.
SOCIALISM – Prices of products are determined
by supply and demand, while consumers have
some choices of products.
EMPLOYMENT OPTIONS
CAPITALISM – There are unlimited choices of
career for everyone.
COMMUNISM – Most people work in the
government, with a little option in choosing a
career.
SOCIALISM – Many people work in the
government, with some options inn choosing a
career.
ASSIGNMENT:
What do you think is the ideal economic system?
Explain your choice. Cite also the advantages and
disadvantages of your chosen economic system.
FREE ENTERPRISE – Gives an opportunity for
business organizations to succeed or fail based on
the demand of the market. Consumers can freely
choose to pay for goods and services that they
want. Businesses that can efficiently produce,
distribute, and market their products will most
likely succeed, while those that do not offer what
consumers seek may fail.
There are certain rights that individuals and
business organizations must have in order for the
free-enterprise system to work.
1. RIGHT TO OWN PRIVATE PROPERTY.
Individuals must have the right to own property
and be able to pass it on to their heirs. This right
motivates people to work hard so they can afford
to buy properties.
2. RIGHT TO OWN A BUSINESS AND KEEP ALL
PROFITS – Individuals and business organizations
must have right to earn profits and be able to use the
profits as they wish, within the limits of the society’s
laws, principles, and values.
3. RIGHT TO FREEDOM OF COMPETITION –
Individuals and business organizations must have the
right to make decisions on how to operate businesses
and compete with other businesses within the limits
of the laws, principles, and values.
4. RIGHT TO FREEDOM OF CHOICE – Individuals
must have the right to choose the career to
pursue, the place to live in, the goods and
services to purchase or take advantage of, and
other benefits that are necessary for their
business. Business organizations must have the
right to choose the location of their business, the
goods and services to offer, and the resources to
use in the production process among others.