The Factors of Production and Business

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Reynaldo Balingit

Ms . A . Skoog

Introduction to Business 110

06 February 2006

Article Review- The Factors of Production and Business

Living in the modern hectic world , we all can witness how rapidly our social , cultural , and technological environment changes , and the rate of change seems to be only accelerating . However , this pace of change and development is perhaps nowhere so much evident as in the field of modern business . Indeed , today for business to be successful means to be able to quickly react to any new trends

in the world economy , to be able to anticipate emergence of such new trends , and , as the highest level of business fortune , to be able to form new trends and standards in the first place . But , as it has always been the case in the past , to realize numerous opportunities contemporary business equally , and even more so needs to pay an adequate attention to factors which define the prospects of its development , and enable it to fully implement its production potential . To put it in worldly terms , contemporary business has to assign to different factors of production right priorities , and use inputs which would help it achieve effectiveness and smoothness of operation . One of such basic important factors is capital , which can be broadly defined as financial , informational , physical , technological and other resources necessary for production

To see how different components of the factor of capital can cooperate in the real world , we may turn our attention to the article in the recent edition of "Forbes , which reports about a mutual plan of Sony and Samsung to build their second joint plant for manufacturing of LCD panels . This article is actually centered on the concept of the capital resources , as the

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main idea behind the plans of two large corporations is to merge their financial , informational , and technological capitals within the field of the LCD technology to obtain a larger mutual benefit than they would get separately . As a matter of fact , Sony and Samsung already operate a joint plant to which each party had contributed significant funds from their financial capitals . Their plant , which by now represents the transformation of financial capitals of the companies into their real capital , is a high-tech production facility which is fully exploiting the technological and informational aspects of such a factor of production as capital . Indeed , this is a good example of a case when an application of technology leads to creation of new products , as even the existing plant is already producing novelty types of LCD panels , and the planned factory will introduce their next generation . At the same time the newer technology will enable companies to streamline the production of the existing types of LCD panels , which will improve products made on their basis and will reduce prices , thus making them more competitive on a constantly growing market

However , the mentioned advantages could be achieved by Sony and Samsung separately , so what else compelled those companies to cooperate Apparently , it...