MGT211 Midterm Short Notes by VU Topper RM

Lecture 01

Business:

Any activity to earn profit.
The word “business” is derived from the term “busyness.”

Entrepreneurship

A phenomenon in which a person searches for an opportunity and try to avail it.

Components of business

Industry
Commerce

Industry

Conversion of raw material into finished goods.
This is a form utility.

Types of Industry

Primary Industry

Extractive Industry _ Extraction of underground resources.
Genetics _ People doing business by changing genes.

Types of industries

Secondary Industry

Construction _ Construction of buildings, roads, bridges etc.
Manufacturing _ Conversion of raw material into final goods.
Services _ Banking, consultancy, accountant, Lawyer, Interior decorator, designer, music composer etc.

MGT 211 Short notes · Lecture 1 to 22 ·
Commerce

All those activities which start from the warehouse of the manufacturer to the buyer.

Types of commerce

Trade

Trade means buying and selling

Aid to trade
Institutions that are meant and build to assist and support the trading process.

Factors of production

Labor _ People working in an organization.
Capital _ Amount invested by investor in the business.
Entrepreneurship _ Management ability of the people who are running the business.
Physical Resources _ Land, labor, building, vehicles, machinery etc.

Economic System

A system for allocation of resources.

Types of Economic Systems

Planned Economy
Free market Economy

Types of environmental forces

External Forces

Factors found outside an organization.
These factors are not controllable by the organization.

Types of environmental forces

Internal Forces

Factors within the organization.
These are controllable by the organization.

SWOT Analysis

Strengths
Weaknesses
Opportunities
Threats

Lecture 02

External Factors

Economy of the country
Per capita income of the country
General employment or unemployment
Economic Growth
Exchange rate
Inflation rate

Demographic factors

Demographic factor is a study of population
Population brings customers.
Population tells the size of market and nature of customers.

Total Population

Population Distribution

Distribution on the basis of gender
In Pakistan female population is further divided into two categories:
Household Women
Working Women

Population growth rate

The rate at which population of an area increases/decreases.

Political and Legal factors

Political Factors

Preference and priorities of the Government
Attitude of the Government towards Exports
Government taxation policy

Legal factors

Laws related to Health
Laws related to Imports and Exports
Laws related to Taxation
Laws related to Packing
Laws related to Child Labor
Laws related to Labor Union

Technological Factors

Business people have to pace with the technological advancements.

Socio cultural Factors

Religion

Followers of one religion have influence over the buying behavior of the society.

Natural Factors

Act of God
Natural factors are out of our control
Business people will develop product considering natural resources

Lecture 03

Sole Proprietorship:

Sole Proprietorship is that type of business which is owned by one person.

Advantages of Sole Proprietorship

Freedom in formation
The easiest to establish
Individuals are allowed to decide without interference of any other person.
Easier to transfer the ownership of the business
People wholly solely enjoy the ownership of the business and profits