Pengantar Bisnis English

Introduction to Business Lecturer:

Asep Hendrasyah, M.Pd, Faculty of Business and Management Department of Management

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What Is Business? An organization that provides goods and services to earn profits (Ebert & Griffin, 2005) A business is an enterprise that provides products or services desired by customers. (Jeff Madura, 2004)

Profits: The positive difference between revenues and expenses 2

Economic Systems Around the World

Economic System A nation’s system for allocating its resources among its citizens

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Factors of Production Labor

Capital

Information Resources

Entrepreneurs

Physical Resources 4

Factors of Production Natural Resources Materials supplied by nature (such as land, water, mineral deposits, and trees)

Labor (or Human Resources) Physical and mental capabilities of people as they contribute to economic production

Capital Funds needed to create and operate a business enterprise 5

Factors of Production Entrepreneur Person who starts a new business or makes the decisions that expand a small business

Physical Resources Tangible things organizations use in the conduct of their business

Information Resources Data and other information used by a business 6

How Are Factors of Production Allocated? Planned Economy: „

An economic system in which the government owns and operates all sources of production

Market Economy: „

An economic system in which buyers and sellers interact based on freedom of choice

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Circular Flow in a Market Economy

Figure 1–1

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Capitalism: A Fundamentally Market-Based Economy Individuals Choose: Where to work What to buy How much to pay

Producers Choose: Who to hire What to produce How much to charge

Government Governmentsupports supportsprivate privateownership ownership and andencourages encouragesentrepreneurship entrepreneurship

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Mixed Economies: Planned and Market The economies of most countries include both planned and market elements. Worldwide trend is toward more market elements.

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Socialism: Mixed Economy Socialism „

A planned economic system in which the government owns and operates selected sources of production

Privatization: „

The process of converting government enterprises into privately owned companies

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Private Enterprise System Four Key Elements: Private Property Rights Freedom of Choice Profits Competition

Individuals are free to pursue their own interests without government restriction.

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Competition Competition motivates businesses to produce their products better or cheaper

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Degrees of Competition Pure Competition Market or industry characterized by numerous small firms producing an identical product

Monopolistic Competition Market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors

Oligopoly Market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products

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Degrees of Competition Monopoly Market or industry in which there is only one producer, which can therefore set the prices of its products

Natural Natural Monopoly Monopoly Industry Industry in in which which one one company company can can most most efficiently efficiently supply supply all all needed needed goods goods or or services services

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Degrees of Competition

Table 1–1

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Understanding Economic Performance KEY CONCEPTS Business Cycle Aggregate Output Standard of Living Gross Domestic Product (GDP) Gross National Product (GNP)

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Evaluating Economic Systems Nearly every economic system has three broad goals: „

Stability

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Full Employment

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Growth 18

Economic Goals Stability Condition in which the balance between the money available in an economy and the goods produced in it are growing at about the same rate

Inflation Phenomenon of widespread price increases throughout an economic system

Recession Period characterized by decreases in employment, income, and production

Depression Particularly severe and long-lasting recession 19

Economic Goals Full Employment Everyone who wants to work has an opportunity to do so

Unemployment Level of joblessness among people actively seeking work

Knowledge Workers Skilled employees in high-tech industries

Growth Increase in the amount of goods and services produced by a nation’s resources

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Assessing Economic Performance Gross National Product (GNP) The value of all goods and services produced by an economic system in a year regardless of where the factors of production are located

Real Gross National Product (real GNP) Gross national product adjusted for inflation and changes in the value of a country’s currency

Gross Domestic Product (GDP) The value of all goods and services produced in a year by a nation’s economy through domestic factors of production

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Assessing Economic Performance Productivity Measure of economic growth that compares how much a system produces with the resources needed to produce it

Balance of Trade

The difference between a country’s exports to and imports from other counties

Budget Deficit

Situation in which a government body spends more money than it takes in

National Debt

Total amount that a nation owes its creditors 22

Three Major Forces of Business 1. The information revolution will continue to enhance

productivity across all sectors of the economy, but most notably in such information-dependent industries as finance, media, and wholesale and retail trade. 2. New technological breakthroughs in such areas as biotechnology will create entirely new industries. 3. Increasing globalization will create much larger markets while also fostering tougher competition among global businesses; as a result, companies will need to focus even more on innovation and cost cutting.

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Projected Trends & Patterns 1. The economy will maintain strong and consistent growth rates, perhaps exceeding 3 percent per year. New technological breakthroughs in such areas as biotechnology will create entirely new industries. 2. Inflationary surges and large budget deficits will become less likely. 3. Countries that encourage free trade, innovation, and open financial systems will prosper. 4. The most successful businesses will be those that are able most effectively to master new technologies and keep abreast of their competitors. 24

Lessons to Remember Successful businesses do not require a great invention. „

Many focus on making life more convenient for customers.

Some business ideas will fail—but entrepreneurs can learn from failures and make revisions.

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Impact of Technology Technology defined „

Knowledge or tools used to produce products and services

Information technology „ „ „

Represents over 1/3 of the growth in U.S. output Reduces cost of producing products Workers in technology industries earn more than workers in other industries.

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Impact of Technology E-business or e-commerce „

Use electronic communications to produce or sell products and services Š Sales to individual customers Š B2B e-business: transactions between a business and its

suppliers Š Generates $301 billion in revenue and creates 1.2 million jobs each year

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Successful E-Businesses Started out small Created to sell a product or service that was not offered by competitors Transformed how traditional firms conducted business „ „ „ „

Improved communication with customers Improved information flow Improved efficiency Complemented traditional business operations

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E-Business Examples Amazon „ „

Online seller of books, music and other products Low overhead costs allow price discounting

Yahoo! „

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„

Internet search engine and the most visited site on the Web Offers variety of services - free email, web page hosting, custom-designed start-up pages Generates revenue by selling advertising

eBay „

Online auction service 29

Key Functions of Business Human Resources Management „

Means by which employees and other resources are used by the firm

Marketing „

Means by which products and services are developed, priced, distributed, and promoted to customers

Finance „

Means by which firms obtain and use funds for their business operations

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Key Functions of Business Accounting „

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Summary and analysis of the firm’s financial condition Used to make various business decisions

Information systems „

Information technology, people, and procedures that provide appropriate information to make effective decisions

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How Business Decisions Affect a Firm’s Earnings

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Reference: Ebert & Griffin, 2005, Business Essential, 5th ed., Prentice Hall Inc. Jeff Madura, 2004, Introduction to Business, 3rd ed., South-Western.

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