CHAPTER 1: INTRODUCTION TO BUSINESS ECONOMICS

Semestre 3                                                                                                                     Septembre 2017

ANGLAIS DES AFFAIRES

Examen final (2 crédits pour le CM) : QCM de 30 questions de cours en lien avec les fiches objectifs et 10 questions de compréhension écrite.

Travail personnel : lire les « fiches objectifs » avant chaque cours, relire régulièrement les notes de CM, lire la presse anglophone, regarder films, séries, émissions et écouter la radio en anglais.

Aller voir le site http://www.breakingnewsenglish.com .

CHAPTER 1: INTRODUCTION TO BUSINESS ECONOMICS

1. Definition of business economics

It's a field of economics. Economics is a social science that's studies the economy. Economy is the system and economics is the study of this system.

> Analysis of the factors contributing to the diversity of organisational structures.

> The relationships of firms with labour, capital and markets.

> Changes in the world economy have a deep impact on businesses.

> Businesses economics:

>> Analysis of businesses:

The environment in which they operate.

The decisions they make.

The effects of these decisions (on their customers, competitors and on the national or event international economies).

> Business organisation, management, expansion and strategy:

>> The significance of the organisational structure.

>> How and why firms expand.

>> The relationships between the firms and its employees.

>> The relationships between the firms and its customers.

>> The providers of capital.

1. The concept of firm

The firms produce goods or services, they always produce something. A firm is always organized.

> Deliberate organisation for productive purposes

This term raises notions of control, ownership, coordination and also processes of decisions making and risks taking.

> A firm is a business enterprise run by one person or a multinational corporation. All firms ar difference in term of organization, size and autonomy.

>> Using inputs in order to make outputs.

INPUT is a component of production (example: Raw Materials, labour and money).

Significate “facteurs de production”.

OUTPUT is amount, quantity of something who is product by a person, a machine, a firm, a country…

Significate “la production”.

Input cost money whereas outputs make money.

Output (> Revenue earned) – Input (> Cost incurred) = Profit

Objective: Maximum profit, in order to maximise profits. The manager needs to take decision.

>> Types of output

>> How to produce and a what price

>> Techniques of production

>> Workers

>> Suppliers

Business decisions >>> internal considerations + external environment

1. The external environment

It refers to influences which affects the business activities in all aspects of production and consumption.

1.  The immediate environment

It refers to influences with an immediate effect on day decisions.

We find: - Suppliers                                 - Consumers

           - Labor Markets                         - Competitors

           - Financiers                                 - Trade unions...

1. The contextual / Business environment

We refer to influences with a more general effect and this influence come not from only local or national sources but already come from international sources.

> We can identify various influences on this contextual environment.

• Political (Firms are directly Affected by the actions and decisions of the government)

        Example: The ban of smoking in publics places influence the Smoking Industries.

• Economics: The raising of Raw Materials, the market entry of a new competitor, changes in foreign businesses.

It includes 2 dimensions: Macroeconomic and microeconomic environment

• Social / Cultural Factors: Working conditions, the length of the working day, unequal opportunity of different groups of people

• Technological: The technological change that has been taking place over the past decades has had a deep impact on the way firms produce communicate and sell their products. Example: The growth of the online shopping.

• Environmental: More and more firms tend to develop and eco-friendly approach of business, try a greener approach of the business because the costumers are more and more environmentally aware. A green image can be very useful in generating finances from investors and very useful to getting subsidies from governments.

• Legal: Products safety standards, price regulation, laws preventing collusions in order to regulating the competition.

Whatever, the influence of business environment the decisions made by firms are always related to the processes of production and consumptions and they are closely related to the notion of market.

1. What is a market?

The market is an exchange mechanisms where the buyers and sellers are brought together.

A market refers to any situations in which someone who wants to buy and someone who wants to sell come together to make an exchange.

The exchange mechanism could be: - Face to face (physically meet)

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