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Business Fundamentals
Introduction to Business
A business is an organization or entity that engages in commercial, industrial, or professional
activities to produce goods or provide services for profit
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The primary purpose of a business is to meet the needs and wants of customers by offering
goods or services, thereby generating profits
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Role of Business in Society
Economic Growth: Businesses drive economic development by producing goods, providing
employment, and contributing to the GDP
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Community Development: Successful businesses contribute to community growth by investing
in infrastructure and social services
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Business Functions
1
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2
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3
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4
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Types of Business Organizations
1
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Advantages:
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Full control and decision-making authority
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Direct claim on profits
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Limited access to capital
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2
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Types of Partnership
● General Partnership: a business arrangement where two or more individuals share
ownership, responsibilities, and liability for the business's operations and debts
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Advantages:
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Combined skills and resources
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Easier access to capital
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Partners are jointly liable for debts (in a general partnership)
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3
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Advantages:
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Limited liability for shareholders
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Perpetual existence, even if ownership changes
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More regulations and higher administrative costs
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4
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Advantages:
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Limited liability protection
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Fewer formalities compared to a corporation
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More complexity than a sole proprietorship or partnership
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Understanding customer needs and
preferences is critical to success
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Competitors: Competitor analysis helps businesses adapt strategies to gain a
competitive edge
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Public: Local communities, media, and other public groups that may affect a company's
reputation and success
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Political and Legal Environment: Government regulations, trade policies, and political
stability are critical for business operations
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Socio-cultural Environment: Demographic changes, lifestyle shifts, and cultural
attitudes shape market demand and consumer behavior
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Corporate Social Responsibility (CSR) and Ethics
Corporate Social Responsibility (CSR)
CSR refers to a business's obligation to act in ways that benefit society, beyond its financial and
operational interests
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Types of CSR Initiatives
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Environmental Responsibility: Reducing waste, pollution, and carbon footprint
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Philanthropy: Donating money, products, or services to charitable causes
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Business Ethics
The study of moral principles that guide behavior in business
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Reduces the risk of legal issues and enhances long-term profitability
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Key Ethical Practices:
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Transparency and honesty in communication
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Fair treatment of employees and customers
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Contracts

A legally binding agreement between two or more parties
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Breach of contract can lead
to lawsuits and financial losses
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Intellectual Property (IP)

Legal rights that protect creations of the mind, such as inventions, literary works, and
trademarks
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3
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Ensures fair treatment of workers and compliance with
regulations, reducing the risk of lawsuits and penalties
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Regulations and Compliance
Laws and standards set by governments and industry bodies that businesses must follow
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Examples: Health and safety regulations, environmental laws, tax laws, and consumer
protection laws
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Helps maintain a positive reputation
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