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5 views

lecture 1

Uploaded by

Nimra Noor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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THE PRIVATE

ENTERPRISE
SYSTEM
WHAT IS BUSINESS
• A business is a legally recognized organization
designed to provide goods or services, or both, to
consumers, businesses and governmental entities.
• The term "business" has at least three usages,
depending on the scope — the singular usage to
mean a particular company or corporation, the
generalized usage to refer to a particular market
sector, such as "the music business" and compound
forms such as agribusiness, or the broadest meaning
to include all activity by the community of suppliers
of goods and services.
TYPES OF
BUSINESSES
• Private
• Public
• Publically owned
• Crown Corporations
• Cooperatives
• Not for profit or non profit (NPO)
ECONOMIC SYSTEMS
• Every society develops a system for
making decisions about how it will use its
resources
• These economic systems must answer
the following questions:
• What goods and services will be produced?
• How will these goods and services be
produced?
• How will these goods and services be
distributed to the consumer?
PRIVATE ENTERPRISE
SYSTEM
• A Private Enterprise is an entity that operates
under the ownership and management of
individuals that freely decided to develop a
given business idea. Its freedom from
government intervention is what makes it
different from a government institution
• Individuals and groups own or control the
economic resources – human and natural
resources and capital goods – to produce goods
and services
FUNCTIONS OF PRIVATE
ENTERPRISES
• Employment: Private firms employ a major portion
of the skilled resources and hence act as the
backbone of employment services in many nations
• Development: Although government companies
focus on national development, this sector’s role in a
country’s development often goes understated.
When private firms develop industrial areas, plants,
and job-hubs, they also develop the areas around
them.
• Better Goods and Services: The sector is
responsible for providing essential goods and
services at a competitively low cost. The lack of
monopoly has made these amenities accessible to
most country citizens.
.
FUNCTIONS OF PRIVATE
ENTERPRISES
• Welfare: Private firms have always stepped in the
time of need. May it be a disaster or a virus outbreak,
they have come up with various solutions to serve
the citizens to end their woes.
• CSR: Corporate Social Responsibility (CSR) has been
a result of this. CSR is a mandatory practice for
private firms as it ensures that they give back to
society in terms of welfare
• Innovation: The intense competition forces the
companies to develop newer technologies and ways
to cut down resource wastage. Also, to satisfy the
customers better, companies create innovative
products and services that have improved the quality
of life.
CHARACTERISTICS OF
PE’Z
• Characteristics include:
• Freedom in the marketplace
• Private property
• Limited government control
• Competition
• The profit motive
• Price-directed system
• Still, unemployment, poverty, and
unequal distribution of wealth occur in
the private enterprise system
WEAKNESSES
• While the private enterprise system is the most
productive in the world, it does have some negative
aspects, or disadvantages
• Production drops when sales are low; companies may
lay off workers or go out of business; results in periods
of unemployment
WEAKNESSES
• Poverty has not been eliminated
• Property and income are not distributed equally; some
own a lot, others own nothing
• In a private enterprise system, individuals and groups
(rather than the government) own or control the
economic resources

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