Study Guide on Organizational Principles

Nature of Business and Organizational Environment

In this study guide, the first dimension focuses on organizational principles in business. It covers various aspects such as the nature of business, internal organizational environment, establishing a business, and legal aspects of business. It delves into essential business concepts and definitions including enterprise, entrepreneurship, barter, profit, trade, organization, economy, producer, consumer, goods, services, market, commodity, capital, labor, and specialization.

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Development of Instruments of Exchange

Throughout history, the evolution of commerce has led to the development of various instruments of exchange. Initially, people engaged in direct production or subsistence economy, producing goods for basic needs. As trade expanded, barter systems emerged, but faced challenges like the double coincidence of wants and divisibility of goods. To address these issues, the concept of money was introduced using items like shells, gold, and eventually modern forms of currency. Today, money includes not just physical notes and coins but also digital forms like credit cards, debit cards, electronic transfers, and e-commerce.

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Reasons and Functions of Starting a Business

Starting a business can be driven by various reasons such as financial independence, being one's own boss, self-fulfillment, addressing unmet needs, redundancy, or poor job prospects. Businesses serve functions like providing goods and services, creating job opportunities, supporting social activities through sponsorship, generating profits, and contributing to economic growth.

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