Intro.

To
Business
What is a business ?

An organization that provides goods

and services to earn a profit

The activity of providing goods and

services to earn a profit
 Intro. To
Business
How does a business operate ?

Input Process Output

INPUT
• Factor’s of Production
• Natural Resources/ Land
• Labour
• Capital
• Entrepreneur

• Information Resources
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Business
How does a business operate ?

PROCESS
• Operations of a business
• Purchasing
• Inventory
• Production
• Distribution
• Marketing - Sales
• Finance - Accounting
 Intro. To
Business
How does a business operate ?

OUTPUT
• Realization of Profits
• Demand Satisfaction / Need Fulfillment
 Intro. To
Business
How does a business operate ?

Natural Resources
• Agricultural Land
• Mining
• Water Resources
• Air Resources
• Sunlight
• Rain
• …………………………………………..
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Business
How does a business operate ?

Labour
• Physical

• Intellectual
• Also called Intellectual Capital

Q) Which Labour is paid highly by

society?
Physical Intellectual
Presentation
 Intro. To
Business
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
 Intro. To
Business
How does a business operate ?

OUTPUT
• Realization of Profits
• Demand Satisfaction / Need Fulfillment
 Intro. To
Business
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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Business
How does a business operate ?

Information

• Knowledge of what is required to start,

operate, manage, grow, compete

• Information Sources, Information

Systems

E.g Investments, Stock Market, New

Products, New Markets, New Ideas
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Business
Where does a business operate ?

Economy

How does an
Economy work?

Economic System
 Intro. To
Business

Economic System

Three major Economic Systems

3. Socialist/Communist Economic
System

5. Market based Economic System

7. Islamic Economic System

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Business

Economic System

Based on three philosophies / Ideologies

3. Socialist/Communist Economic System

Socialism
Everything is owned by the people and all
resources (factors of production) will be
utilized to benefit all the citizens equally and
distributed equally as well
Communism
Everything is owned by the state and the state
will manage, distribute, utilize the resources
for the benefit of its citizens
SOCIAL WELFARE
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Business

Economic System

Three major Economic Systems

3. Market based Economic System

Capitalism
Individuals have complete freedom
of ownership and they can own as
much as they want. The
government will not intervene in
markets whatsoever and there
are no restrictions on owning
capital
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Business

Economic System

• No restrictions on Capital production

and ownership
• All resources would be distributed
through market mechanisms
• Capital can produce as much capital
as desired

FREEDOM OF
OWNERSHIP
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Business

Economic System

3. Islamic Economic System

Basic Philosophy
Allah is the owner of everything (factors of
production) and whatever a person holds is a
Trust which he/she is answerable for at the day
of judgement.
• Caretaker (Rab ul maal)
• All resources should be utilized for the benefit of
everyone. System of Zakat, Ushr, Sadaqat, Bait
ul Maal (Central Deposition)
• State/Community is responsible to provide basic
sustenance to its citizens
• People have freedom of ownership but with the
understanding that it is a trust and they are