The Nature and Aims of Business

The Philippine Economy

Although most Filipinos dream of affluence, it seems to be one that is impossible to
attain. This is so because the Philippine economy has always been saddled with
difficulties which appeared insurmountable.
Some of the more serious concerns affecting Philippine economic development:

Low productivity in the workplace

Graft and corruption in the government

Declining value of the peso

Unfavourable balance of trade

In spite of the great obstacles hampering economic growth, the Philippine economy
continues to grow, albeit very slowly. Moreover, the Philippine economy does not fare
well in comparison with other countries situate in the Far East.
Business success has always been associated with economic growth. Adequate
capital, however, is a prerequisite to the existence of business firms. Since this is so,
business success is highly dependent on the availability of capital. Apart from
availability, however, its proper management is a key ingredient in the survival and
growth of business.
Studies indicate that a major reason for business failure is the businessmans lack of
sufficient skills in managing finance. This alone provides us with enough reason
to study business finance!

The Role of Business

Under the free enterprise system, the growth of the economy lies in the ability of
private individuals to achieve economic objectives. The quest for profit is usually
undertaken by engagement in business activities.
Under the system, firms are free to compete with each other. This atmosphere
makes possible the offering of new or improved products and services to the society.

Business is largely responsible for bringing into the market a wide array of products
and services which were not previously available.

Profit-making has been adapted as a measure to motivate enterprising persons to

engage in business.

What is a business?
-

Any lawful economic activity concerned with the production and/or distribution of
goods or services for profit. (Medina)

An organization or economic system where goods and services are exchanged for
one another or for money. (businessdictionary.com)
the activity of buying and selling goods and services (Cambridge dictionary)

Business is an economic activity, which is related with continuous and regular

production and distribution of goods and services for satisfying human wants.
(kalyan.blogspot.com)

Kinds of Business
Business may be classified in several ways. As to the nature of the principal activity
performed, it consists of three main divisions:

Commerce

Industry

Services

Commerce

Business firms which are engaged in the buying and selling of goods and
services are classified as those falling under commerce. Also included are
trading, merchandising, and marketing.

Examples are supermarkets, dry goods stores, sari-sari stores, and even
peddlers.

Industry

Those that are mainly concerned with production. Goods produced are those
which may be intended for ultimate consumption and which are called
consumers goods, or those which are intended for use of business and
industry and which are called producers goods.

It may be further classified into:

Genetic

Extractive

Manufacturing

Construction

Genetic Industries

Involved in agriculture, forestry, and fish culture

Extractive Industries

Involved in the extraction of goods from natural resources.

Mining, lumbering, hunting, and fishing

Manufacturing Industries

Construction Industries

Those which convert raw materials into finished products

Firms engaged in building infrastructures like airports, seaports, dams,

highways, etc. Those involved in the construction of dwelling houses are
included.

Services

Recreation

Personal

Finance

Etc

Objectives of Business

A business is established primarily for profit. At times, however, short-term and longterm profits are sacrificed in order to attain other goals such as:

Political influence

Family control of the business

Community involvement

To survive and grow, businesses must attain the following multiple objectives:

Provision of goods and services to the community

Satisfaction of personal objectives (profits for owners, adequate compensation

for executives and employees, psychic income for all including pride in work,
security, recognition, and acceptance)

Protection and enhancement of the human and physical resources of society

Economy and effectiveness of operation