INTRODUCTION TO

BUSINESS AND By Dimuth Rubesinghe

SERVICES Class 1

MANAGEMENT
AN INTRODUCTION TO
BUSINESS
Business
is the organized effort of individuals to produce and sell, for a profit, the
goods and services that satisfy society’s needs.
The general term business refers to all such efforts within a society.
A Business is a particular organization, such as a Theatre or a Store.
To be successful, a business must perform three activities. It must be
organized, it must satisfy needs, and it must earn a profit.
DOES IT NEED TO BE
ORGANIZED?
MATERIAL
Raw materials
Buildings, Machinery

E.g. Eggs , Flour, baking powder

Bakery and Oven

HUMAN RESOURCE
Labour - the people who furnish their labour to the business in return for wages

E.g. bakers , security staff, front of house staff, cleaning staff, accountants, managers
and supervisors.
FINANCIAL RESOURCE
Financial Resource - is the money required to pay employees, purchase materials,
and generally keep the business operating.

Operational expenses

Capital expenses.
INFORMATIONAL RESOURCES
is the resource that tells the managers of the
business how effectively the other three resources are being combined and used

defined as the data and information used by an organization, for both managerial
and operational tasks.
TYPES OF BUSINESSES
Service Businesses – Haircuts, Legal advice, Education, Spa treatments,

Manufacturing Businesses – Computers, baskets, Tvs, cars

Marketing Intermediaries – Supermarkets, online resellers, importers and distributors

THE PURPOSE OF THE
BUSINESS
To make Money?

Satisfy the Wants / Need of its customers.

Discuss 5 needs and respective wants – e.g. Need food – want a Chicken Kottu

What is the most important goal for a business?

Vision / Mission
MAKING PROFIT
Revenue
Costs of the goods sold
Other expenses
Net profit
Loss
ECONOMIC SYSTEMS
Economics is the study of how wealth is created and distributed. By wealth, we
mean “anything of value,” including the goods and services produced and sold by
business.

The fundamental Economic Problem – Scarcity.

Unlimited needs of the populous and limited resources.
ECONOMIC SYSTEMS
individuals, businesses, governments, and society must make decisions that reflect
what is important to each group at a particular time.
Business firms, governments, and to some extent society face the same types of
decisions. Each group must deal with scarcity when making important decisions.
MICRO VS MACRO
ECONOMICS
Micro Macro
Study of economic decisions by Individuals and National and Global economy
businesses
Elasticity, supply price demand, utility, production National income, Unemployment, Inflation, Taxes,
interest rates, Monetary and fiscal policy
Monetary policy refers to central bank activities
that are directed toward influencing the quantity of
money and credit in an economy. By
contrast, fiscal policy refers to the government’s
decisions about taxation and spending. Both
monetary and fiscal policies are used to regulate
economic activity over time
FACTORS OF PRODUCTION
Land and Natural Resources

Labour

Capital

Entrepreneurship
CAPITALISM
Capitalism - is an economic system in which individuals own and operate the majority
of businesses that provide goods and services

society’s interests are best served when the individuals

within that society are allowed to pursue their own self-interest

E.g. the only way a small-business owner who produces

shoes can increase personal wealth is to sell shoes to customers, hire more workers, create jobs,
improve products. The role of government should be limited to providing defense against foreign
enemies, ensuring internal order, and providing infrastructure and education
COMMAND ECONOMIES –
SOCIALISM
Socialism - key industries are owned and controlled by
the government. Land, buildings, and raw materials may also be the property of the
state in a socialist economy. Depending on the country, private ownership of smaller
businesses is permitted to varying degrees.
COMMAND ECONOMIES -
COMMUNISM
basic four economic questions are answered through centralized government plans.
Emphasis is placed on the production of goods and services the government needs
rather than on the needs of consumers.
Remaining example – North Korea.
PRODUCTIVITY
Efficiency + Effectiveness = Productivity.
productivity is
the average level of output per worker per hour.

An increase in productivity results

in economic growth
ASSESSMENTS
Individual Poster Presentation (50%)
Students create posters to “market” their knowledge of management concepts,
operational control systems, and any problems management may face while
operating a services enterprise.
Part 2: Students must verbally defend their posters and explain the importance of the
content illustrated. They need to be able to highlight the concepts within 10 minutes
ASSESSMENTS
Group Report Portfolio (50%) 2,000-words
In groups, students are assigned to create a report that focuses a particular service
sector. Sectors range from Restaurant, Hotel, Resort, Airline, Tourism Agency, or the
Heritage sector etc.
Students need to then select a particular organization within that sector and provide a
portfolio of strategic examples used by the company’s managing directors to
maintain a competitive advantage.
QUESTIONS
What would be the purpose of a business?
What is the role profit plays in the business?
What are the 4 types of required resources?
Give 5 examples for raw materials required for a hotel business.
Would a 5 star hotel be considered mostly a Manufacturing business or a service business?
What is known as the fundamental economic problem?
What is the difference between macro and Micro economics
What are the four factors of production
What type of economic system does the socialist republic of Sri Lanka have?
What two factors affect productivity?