Capital Factor Of Production

Factor Of Production

All four factors of production categories are important to the production of goods used in the wants-and-needs-satisfying process that keeps human beings alive from one day to the next and makes living just a little more enjoyable. Land provides the basic raw materials that become the goods. Labor does the hands-on work. Capital is the tools that makes the job easier. And entrepreneurship organizes the entire process. 

Capital

Capital has two economic definitions as a factor of production. Capital can represent the monetary resources companies use to purchase natural resources, land and other capital goods. Monetary resources flow through a nation’s economy as individuals buy and sell resources to individuals and businesses.

Continue

Labor Factor Of Production

Labor

Labor represents the human capital available to transform raw or national resources into consumer goods. Human capital includes all able-bodied individuals capable of working in the nation’s economy and providing various services to other individuals or businesses. This factor of production is a flexible resource as workers can be allocated to different areas of the economy for producing consumer goods or services. Human capital can also be improved through training or educating workers to complete technical functions or business tasks when working with other economic resources.

Continue

Land Factor Of Production

Land

Land is the economic resource encompassing natural resources found within a nation’s economy. This resource includes timber, land, fisheries, farms and other similar natural resources. Land is usually a limited resource for many economies. Although some natural resources, such as timber, food and animals, are renewable, the physical land is usually a fixed resource. Nations must carefully use their land resource by creating a mix of natural and industrial uses. Using land for industrial purposes allows nations to improve the production processes for turning natural resources into consumer goods.

Continue

Organization‏ Factor Of Production

Factor Of Production

All four factors of production categories are important to the production of goods used in the wants-and-needs-satisfying process that keeps human beings alive from one day to the next and makes living just a little more enjoyable. Land provides the basic raw materials that become the goods. Labor does the hands-on work. Capital is the tools that makes the job easier. And entrepreneurship organizes the entire process. 

Factors of Production – Organization (Enterprise)

Organization (Enterprise): Organization of Enterprises means to plan a business, to start it and run it. It means to bring the factors i.e. land, labour and capital together to undertake a business or production process.

Organization implies not only running the business but also shouldering the loss, if any. The man who undertakes all this work is called as organizer or Entrepreneur.

Importance of Organization (Enterprise): 

Now a day, organization is very important as Production process has become too much complicated one. A small happening in the country or abroad influences the business. The organization if done properly the production process will not hamper. Hence proper planning and execution of business is necessary. In view of this the job of organizer becomes very important. Therefore whole time devotion of organizer is required for successful business. The other factors land is possessed by land owner, capital is possessed by capitalist and labourer is only ready to offer. They lay scattered hence these three needs to he combined and It is the job of organizer. Thus, organization would absent perhaps there would not be any production.

Functions of organizer (Entrepreneur): 

The following are the function of organizer.

1) Initiation: (Enterprise)

Taking the review of situation and availability of resources organizer initiates a business or production. Here planning of business is undertaken.

2) Organization: (Enterprise)

Organizer now combines the land, labour and capital resources and starts the business or production.

3) Direction and supervision: 

During the course of production proper direction and timely supervision is required. Thus, organize executes the business in a proper way.

4) Control: (Enterprise)

Organizer is keeping watch on changing situation. Because of changes in situation in respect of marketing, Govt. decision, etc. will hamper the business. Therefore control is also important.

5) Risk taking: (Enterprise)

Risk means uncertainty. It may be physical or market risk. The business can not be always in profit. Sometimes losses are required to accept. Risk taking is therefore becomes an important function of an organizer.

6) Innovation: (Enterprise)

A successful organizer is always innovative. He can introduce new method or commodity in the production process or in business.

CAPTITAL

LABOUR

LABOR

ORGANIZATION

Continue