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Unformatted text preview: ion is to help users make decisions about economic help users make decisions about economic activities.
activities. 26 3. Compare the main types of
organisations and explain their purpose.
An organisation is a g ro up o f p e o p le wh o wo rk to g e th e r to d e ve lo p , p ro d uc e , a nd o r d is trib ute g o o d s o r s e rvic e s .
Why do organisations exist?
Goals are too complex, too large or too expensive to be achieved without cooperation. 27 Organisations differ as to the types of goods and services they offer Organisations differ as to the types of goods and services they offer (and if “profit” is a goal). Hybrids (eg., retail +
service) ACCT1101 will be confined to
business organisations 4. Describe how businesses create value
A common purpose of organisations: to transform
resources from one form to another (goods and
What resources? Any: natural, physical and financial
resources, management skills, labour, information… 29 Because resources are in scarce supply they should be used
Who decides the allocation of scarce resources used and
produced by organisations?
produced Markets perform an allocation function and competition
determines the amount and value of resources available for
Market is any location or
process that permits
resources to be bought and
How? The price paid for a resource is the measure of value placed on the
item in a competitive market.
30 Let’s briefly consider the different types of
markets organisations compete in…
Input Markets Financial Markets – for financial resources Supplier Markets – for resources needed to
produce goods and/or services
Output Markets Product Markets – for goods and services which
determines the prices of goods and services
available to customers All markets allocate scarce resources.
31 What is the purpose of the transformation of resources?
To create value
How value is created?
Value is created when resources in existing form are transformed to
another more valuable form.
If the transformation of resources meets a
need of society
because more people are better off after the
transformation than befor...
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