ITB Lectures
Transcript of ITB Lectures
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Intro. ToBusiness
What is a business ?
An organization that provides goodsand services to earn a profit
The activity of providing goods andservices to earn a profit
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Intro. ToBusiness
How does a business operate ?
Input Process Output
INPUT
Factors of Production
Natural Resources/ Land
Labour
Capital
Entrepreneur
Information Resources
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Intro. ToBusiness
How does a business operate ?
PROCESS
Operations of a business
Purchasing
Inventory
Production
Distribution
Marketing - Sales
Finance - Accounting
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Intro. ToBusiness
How does a business operate ?
OUTPUT
Realization of Profits
Demand Satisfaction / Need Fulfillment
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Intro. ToBusiness
How does a business operate ?
Natural Resources
Agricultural Land
Mining
Water Resources
Air Resources
Sunlight
Rain
..
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Intro. ToBusiness
How does a business operate ?
Labour
Physical
Intellectual
Also called Intellectual Capital
Q) Which Labour is paid highly bysociety?
Physical IntellectualPresentation
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Intro. ToBusiness
How does a business operate ?
Capital
The funds needed to create and operate a
business enterprise
Sources: Investments, Revenues, Assets
Forms: Funds, Assets, Equipment,Building,
Machinery
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Intro. ToBusiness
How does a business operate ?
OUTPUT
Realization of Profits
Demand Satisfaction / Need Fulfillment
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Intro. ToBusiness
How does a business operate ?
Entrepreneur
Individual or group of individuals who
start and operate a business
Knowledge, skills, technical expertise
Willingness to take a risk
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Intro. ToBusiness
How does a business operate ?
Information
Knowledge of what is required to start,operate, manage, grow, compete
Information Sources, InformationSystems
E.g Investments, Stock Market, NewProducts, New Markets, New Ideas
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Intro. ToBusiness
Where does a business operate ?
Economy
How does anEconomy work?
Economic System
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Intro. ToBusiness
Economic System
Three major Economic Systems
3. Socialist/Communist EconomicSystem
5. Market based Economic System
7. Islamic Economic System
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Intro. ToBusiness
Economic System
Based on three philosophies / Ideologies
3. Socialist/Communist Economic System
Socialism
Everything is owned by the people and allresources (factors of production) will beutilized to benefit all the citizens equally anddistributed equally as well
Communism
Everything is owned by the state and the statewill manage, distribute, utilize the resourcesfor the benefit of its citizens
SOCIAL WELFARE
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Intro. ToBusiness
Economic System
Three major Economic Systems
3. Market based Economic System
Capitalism
Individuals have complete freedomof ownership and they can own as
much as they want. Thegovernment will not intervene inmarkets whatsoever and thereare no restrictions on owningcapital
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Intro. ToBusiness
Economic System
No restrictions on Capital productionand ownership
All resources would be distributedthrough market mechanisms
Capital can produce as much capitalas desired
FREEDOM OF
OWNERSHIP
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Intro. ToBusiness
Economic System
3. Islamic Economic System
Basic Philosophy
Allah is the owner of everything (factors ofproduction) and whatever a person holds is aTrust which he/she is answerable for at the dayof judgement.
Caretaker (Rab ul maal)
All resources should be utilized for the benefit ofeveryone. System of Zakat, Ushr, Sadaqat, Baitul Maal (Central Deposition)
State/Community is responsible to provide basicsustenance to its citizens
People have freedom of ownership but with theunderstanding that it is a trust and they are