Principles of Business

Factors of production in an economy

Factors of production in an economy is define as input resources used in the production of goods and services to earn economic profit. There are four major categories of factors of production. They are classified into: land, labour, capital and enterprise. These factors can be further classified into labour, machine, money like human made resources, and the material factors based on the four broad classes of management.

The word, ethics

The word, ethics can be said to be accepted set of principles regarded as moral by an organization to distinguish what is good from bad. Individual’s ethics are determined by three factors categorized as: individual, organizational and legal factors. Legal factors are set of standards defined specific for organization and vary from one body to another. Organizational factors are set of determinants that influence participation habit such as commitment such as policy statements. Personal factors are termed to include personal morals, peer influence, and life experiences among other factors.

When making decision, who are the stakeholder that a business has to consider?

There exist numerous stakeholders that a business should put into consideration in decision making process. These can be classified into two primary groups: external and the internal stakeholders. Internal stakeholders have a direct involvement in business directly. Unlike internal stakeholders, external stakeholders have indirect involvement with the business. The internal shareholders include employees, managers and the business owners. On the other hand, external stakeholders include suppliers, creditors, the society, government, shareholders, and customers. Putting stakeholders into consideration when making decision in any business would help understand what impact the decisions would have both positive and negatively on stakeholders. Decision should therefore be made to involve all stakeholders.

Why are small business important in the U.S economy?

A small business by definition is an enterprise independently driven, owned and can exert minimal influence in its own industry, and usually termed to have less than five hundred employees. Small businesses play significant role in the economy of U.S in several ways. For example, small business help in job creation to the owners, and employed labor (Acs, 1999). Through small businesses in the U.S economy, a lot of innovation have been championed and driven by small enterprises. Furthermore, the small businesses in the U.S have played a significant role in providing opportunities for many U.S citizens (especially women and the minorities) to achieve financial independence (Acs, 1999, p. 17).

What are the advantages and disadvantages of globalization?

The process of globalization is defined as a process that involves exchange, integration and the interaction between governments, people, and private entities worldwide. The process of globalization is mainly manifested through capital flow, technology transfer, migration, and cultural exchange among others. Globalization process is associated with both positive and negative effects as highlighted below (Bigman, 2002, p.27).

Pros

Economic globalization is associated with better and increased products availability, increased competition, increased chances of diversity in retail and production markets that contribute significantly to an economic growth. Also, cultural globalization would effect on adaptation of global business culture to local business environments as well as instant information access from all over the world.

Cons

Despite having a significant number of positive effects on an economy, globalization can impact negatively culturally, politically and economically in an economic system. For example, globalization has resulted into struggle and competition for market by involved countries. Globalization has resulted into tight bargaining power between multinational companies vis-à-vis the local governments (Bigman, 2002). In addition, there is a high likelihood of commodity-based culture of the consumer to spread as well as the problem of cultural homogenization.

What are the advantages and disadvantages of centralized organizational structure?

Centralized organization structures are under certain conditions advantageous. For example, in a centralized structure, there is a centralized authority that will always have a broader picture of how other organization subunits are managed, making the central unit optimal. Central organization structure is effective for running small enterprises (International Society for Performance Improvement & MyiLibrary, 2010). In a system where the apex management lacks maximum trust and confidence on the lower employees, a centralized organization structure is beneficial as decision would be made centrally and involve all stakeholders. However, in case of large organization system, centralized organization structure can be termed not to favor operational efficiency. Moreover, suppose lower level employees have information that can better operational performance, it would be better to dispatch information in a decentralized system, hence making central structure an obstacle to performance because senior managers will always get tied up in information that exists at the lower levels (International Society for Performance Improvement & MyiLibrary, 2010).

What are the basic differences between management and leadership?

There is often the usual confusion that arise when trying to understand who and what leadership and management entails. The primary difference between a leaders and manager that leaders have got individuals who follow then, while managers have got individuals who work for them. Successful leadership entails getting to people to understand you, believe and trust in ones’ vision and accept to work hand in hand with one to help him\/her achieve goals. Management on the other hand is core on administration of authority to ensure that every day-to-day activities run efficiently.

References

Acs, Z. J. (1999). Are Small Firms Important? Their Role and Impact. Boston, MA: Springer US.
Bigman, D. (2002). Globalization and the developing countries: Emerging strategies for rural development and poverty alleviation. Wallingford, Oxon, UK: CABI Pub. in association with the International Service for National Agricultural Research.
International Society for Performance Improvement., & MyiLibrary. (2010). Handbook of improving performance in the workplace: Volume 2. San Francisco: Pfeiffer.