Pob

• functional area, in the sense of business, refers to grouping individuals on the basis of the role or purpose each performs in the organisation


  Production Production is the processes and methods used by producers to transform inputs such as raw materials, semi-produced goods and even ideas, information or knowledge into goods and services.

  Marketing refers to all the processes involved in promoting and selling goods or services in the most profitable and efficient manner. It includes market research and advertising, as well as the actual selling to the customer.
• Finance is the "lifeblood" of business
• Finance is essential for businesses to operate and grow
• Without adequate financing, businesses cannot invest in new products, expand operations, or hire new employees
• Finance is necessary for managing day-to-day operations, paying bills, and managing cash flow
• Finance plays a critical role in decision-making, as businesses must consider the financial implications of every action they take
• Finance is a vital component of any successful business
• Businesses need to have a solid understanding of finance and financial management
• Functions of management:

  • Planning: preparing for the future by setting overall goals and objectives for the business
  • Organizing: ensuring workers have what they need to meet goals
  • Directing: giving clear instructions to workers
  • Controlling: supervising and checking activities to ensure instructions are followed
  • Coordinating: ensuring departments work together towards success
  • Delegating: assigning tasks to subordinates
  • Motivating: creating a desire to achieve goals with effort
  • Evaluating: assessing work performance to improve future performance
• Responsibilities of Management:

  • Owners/investors: maximize efficiency and create surpluses, reinvest profits, provide regular reports
  • Employees: provide safe working conditions, facilities, good communication, interpersonal relations, compensation, promotion opportunities
  • Customers: provide quality goods/services, affordable prices, good customer relations, after-sale service, product education
  • Society: avoid social costs, educate community on safety, donate to community efforts
  • Government: adhere to laws/rules, pay taxes, follow standards
• Forms of Business Organizations:

  • Sole trader
  • Partnerships
  • Joint Stock Companies (including conglomerates and multinational corporations)
  • Cooperatives
  • State corporations and nationalized industries
  • Government departments
  • Local and municipal authorities
• Sole Trader:

  • Owned by one person who provides capital
  • Easy to start with few legal requirements
  • Owner manages business and makes final decisions
  • Profits not shared, unlimited liability
  • Advantages: easy to start/manage, small capital needed, quick decision-making, personal customer contact, flexibility
  • Disadvantages: difficult to access capital for expansion, unlimited liability, long hours, lack of continuity
• Partnership:

  • Formed by 2-20 persons for profit
  • Partners share profits/losses, have equal say, bear liability for debts
  • Partnership Deed outlines guidelines for operation
  • Types: General Partnership, Limited Partnership
  • Advantages: easy to form/manage, more capital available, shared workload, informed decision-making
  • Disadvantages: all partners liable for mistakes, slower decision-making, limited life
• Joint Stock or Limited Liability Companies:

  • Association of persons who contribute capital for business operation
  • Separate legal entity from owners
  • Types: Private Limited Companies, Public Limited Companies
  • Advantages of Private Limited Company: separate entity, more capital, shared responsibility, continuity
  • Disadvantages of Private Limited Company: limited access to funds, slower decision-making, annual financial report publication
• Public Limited Company:

  • Funding through borrowing and offering shares to the public
  • Shareholders have limited liability
  • Types of shares: Ordinary Shares, Preference Shares, Debentures
  • Advantages: raise large capital, easier to borrow, achieve economies of scale, continuity
  • Continuation of Public Limited Company information is missing
• Advantages of Joint Stock Companies:

  • Build confidence in investors
  • More likely to achieve economies of scale due to large-scale operations
  • Ensures continuity of the business
  • Risk is spread over many shareholders
  • No restriction on the transfer of shares
• Disadvantages of Joint Stock Companies:

  • Can lose touch with customers and workers
  • More difficult to manage
  • Over expansion can lead to diseconomies of scale
  • Have to publish financial accounts every year in the newspaper
• • Statement of Nominal Capital:
  • Shows registered capital and share division
  • Declaration:
  • Confirms all requirements of the Companies Act have been met
  • Certificate of Incorporation:
  • Gives the company the right to start business
• Formation of Joint Stock Company:

  • Memorandum of Association:
  • States external relationship of the company with the outside world
  • Includes company name, address, objectives, limited liability statement, capital, and shares
  • Requires a statement of association by minimum 2 signatories
  • Articles of Association:
  • Outlines internal rules and regulations
  • Includes names of directors, voting rights, meeting procedures, profit sharing, borrowing limits, and auditing rules
  • List of First Directors:
  • Names of first directors listed with consent to take up shares
• Advantages of Conglomerates:

  • Diversification of business for further profits
  • Additional assets create security
  • Companies can draw on each other's resources for economies of scale
• Disadvantages of Conglomerates:

  • Subsidiaries are hard to monitor when production is diverse
  • Some managers may resent external control
• Advantages of Multinational Corporations (MNCs):

  • Provide jobs in host countries
  • Generate more taxes for the home country
  • Develop idle resources in other countries
  • Offer high levels of training to employees
  • Bring in foreign currency to pay off debts
  • Introduce new technology
• Disadvantages of Multinational Corporations (MNCs):

  • Profits are repatriated to headquarters
  • Reduce national ownership of industries
  • Closure due to host government policies can impact operations
  • Relocation of locals due to operations
• Characteristics of Franchises:

  • Bear parent company's name and goodwill
  • Licensed by parent company
  • Receive assistance in marketing, training, and professional advice
  • Pay royalties to parent company for product/service usage
• Advantages of Franchises:

  • Easily recognizable by travelers
  • Provide a ready-made business opportunity
• Disadvantages of Franchises:

  • Restricted in the line of products offered
• Types of Cooperatives:

  • Producers/Farmers cooperatives
  • Buyers Cooperatives
  • Retail/Consumer Cooperative
  • Financial Cooperatives
  • Marketing Cooperative
• Principles of the Cooperative Movement:

  • Membership open to adult members with a small fee
  • Controlled by contributing members
  • Contribution to share capital required
  • Profits belong to members and distributed fairly
  • Emphasis on education for efficiency
  • Registration with Registrar of Cooperative Societies
• Advantages of Cooperatives:

  • Employment creation
  • Members are owners with decision-making power
  • Resources pooled by members
  • Loans offered at low interest rates
  • Dividends received on shares
• Disadvantages of Cooperatives:

  • Not focused on profit-making
  • May suffer from poor management
  • Shortage of capital can hinder growth
• Production is the conversion of raw materials into output for selling, sometimes involving assembling parts
• Products must be made to the highest quality and standards required
• Products must be produced in the quantity required
• Products must be made available to customers at an affordable cost
• Mass production means producing goods in very large quantities using automated methods
• Features of mass production include standardization, mechanization, and division of labour and specialization
• Responsibilities of the Production Manager include coordinating planning of production activities, keeping production records, estimating production costs, and liaising with other departments
• Finance responsibilities include purchases and sales, payment of salaries and wages, budgeting, and overall control of income and expenditure
• Marketing Manager responsibilities include marketing research, advertising, distribution network supervision, and after-sale services
• Personnel Manager responsibilities include recruitment, training, benefits coordination, and industrial relations assistance