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Entrepreneurship

Entrepreneurship. Economic Setups. Introduction. When visiting a supermarket, the list of items for sale is endless… But when compared with what is produced all over the world the list is insignificant Different markets which cater for all needs and wants imaginable. Resources.

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Entrepreneurship

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  1. Entrepreneurship Economic Setups (C) Krystle Attard 2013

  2. Introduction • When visiting a supermarket, the list of items for sale is endless… • But when compared with what is produced all over the world the list is insignificant • Different markets which cater for all needs and wants imaginable (C) Krystle Attard 2013

  3. Resources • Landand Labour(workforce) • Capital: money invested in the business • Capital = (Assets– Liabilities) • HRM: Human Resource Management • HCM: Human Capital Management (C) Krystle Attard 2013

  4. People Management • Manpower planning • Recruitment • Training • Motivation • Industrial Relations • Employee Evaluation • Retain talented people • Assign additional responsibility to jobs • More in depth than HRM HRM HCM (C) Krystle Attard 2013

  5. Opportunity Cost • Resources are scarce… • OpportunityCost: the cost (as a lost benefit) of the forgone products after making a choice • E.g. The opportunity cost of working additional hours is having less leisure time (C) Krystle Attard 2013

  6. The Three Decisions The Consumption Decision • Who decides what to produce The Production Decision • Who decides how it is to be produced The Distribution Decision • For whom to produce it (C) Krystle Attard 2013

  7. The Four Economic Setups Four principal economic models • Subsistence Economy • FreeMarket Economy • Planned/Command Economy • Mixed Economy (C) Krystle Attard 2013

  8. Subsistence Economy • Applicable for environmentalists • Relies heavily on natural resources • Production=consumptionfor the population • Concept of wealth is non-existing (C) Krystle Attard 2013

  9. Free Market Economy • Freedom of enterprise and choice • No government intervention in services • Maximum self interest • Demand/supply balance • Competition-oriented • Unequal distribution of wealth and resources (C) Krystle Attard 2013

  10. Planned/Command Economy • The State controls all business processes • A central role for the common good • Less chance of consumer exploitation • Less wasted resources • Fair distribution of wealth • Limited choices and quality • Lack of incentives to risk takers (C) Krystle Attard 2013

  11. Mixed Economy • A mixture of Free and Planned economy • Government intervention • Strategic planning and incentives • Stable prices • Healthy Balance of Payments • Steady economic growth (C) Krystle Attard 2013

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