unit 1

• Business activity


  • Output production: Provision of goods and services
  • Consumption of goods and services
  • Utilisation of resources: land, labour, capital, entrepreneurship
  • Business functions: production, marketing, human resources, financial control
• Influence of external factors

  • Government laws, changes in consumer preferences, competitive actions
• Profit motive


  Businesses aim to generate profits, with entrepreneurs seeking financial gain from their ventures
• Consumer goods


  • Smartphone
  • Magazine
  • Crisps
  • Handbag
  • Computer Game
• Services (consumer goods)


  • Healthcare
  • Banking
  • Air travel
  • Education
  • Garden design
• Producer goods


  • Delivery van
  • Office furniture
  • Tools
  • Sugar cane
  • Tractor
• Services (producer goods)


  • Market research
  • Insurance
  • Software design
  • Industrial cleaning
  • Printing
• Needs


  Requirements essential for human survival. Failure to satisfy needs can result in human death.
• Wants


  Desires beyond basic survival needs. Contribute to overall well-being and satisfaction.
• Scarcity of resources


  Finite resources available to businesses are limited, leading to constraints on production and allocation
• Purpose of business activity

  • Private enterprise
  • Social enterprise
  • Public enterprise
• Private enterprise


  Privately owned by individuals or groups, primary objective is to generate profit for the owners
• Social enterprise


  Non-profit organisations that exist for reasons other than profit, such as social or community benefit
• Public enterprise


  Organisations owned by central or local government, provide essential goods and services to address market failures
• Business stakeholders


  • Owners
  • Employees
  • Customers
  • Suppliers
  • Local community
  • Government
• Owners (small businesses)


  Often owned by individuals, families, or small groups of people, referred to as entrepreneurs
• Owners (larger businesses)


  Owned by shareholders, who invest capital in the business by purchasing shares
• Customers


  Individuals or entities that purchase goods and services from businesses, expect good quality products and services at fair prices
• Employees' needs


  • Training
  • Working conditions
  • Fair pay and benefits
  • Job security
  • Opportunities for promotion
• Managers


  Responsible for overseeing various departments, leading teams, problem solving, decision making, dispute resolution, motivating workers, collaborating with owners, resource management, accountability
• Financiers


  Individuals or entities that provide funding to businesses in the form of loans or investments, have a financial stake in the success of the business
• Suppliers


  Businesses that provide raw materials, components, commercial services, and utilities to other businesses, require prompt payment and regular orders
• Local community


  Businesses provide employment opportunities and economic benefits, but may also face criticism and concerns from the community
• Government


  Businesses provide jobs, generate wealth, contribute taxes, and partner with the government for economic development
• Change in the business environment

  • Strength of competition
  • Economic climate
  • Government legislation
  • Population trends
  • Demand patterns
  • World affairs
  • Social factors
• Adaptation to change


  Businesses must produce goods and services that meet evolving consumer needs, have clear objectives, recognize opportunities, and be flexible and agile
• Importance of clear objectives

  Motivation for employees and owners, strategic direction, performance assessment
• Financial objectives


  • Survival
  • Profit
  • Sales
  • Market share
  • Financial security
• Non-financial objectives


  Goals not directly related to financial gain, such as environmental sustainability, social responsibility, employee well-being, customer satisfaction, and community engagement
• Social objectives


  Businesses in the public sector prioritize objectives aimed at enhancing human well-being and providing quality public services
• Social enterprises


  Not-for-profit organizations with a mission to improve human and environmental well-being
• Corporate Social Responsibility (CSR)


  Businesses aim to improve social responsibility by considering the needs of stakeholders beyond profit, such as providing employment, reducing pollution, and contributing to local community development
• Public services focus


  • Reducing costs
  • Improving public safety
  • Contributing to environmental sustainability and community well-being
• Social enterprises


  Not-for-profit organizations, including charities and cooperatives, with a mission to improve human and environmental well-being
• Social enterprise example


  • Gathering and distributing used textbooks to schoolchildren in developing countries to enhance education quality
• Corporate Social Responsibility (CSR)

  Businesses aiming to improve social responsibility by considering the needs of stakeholders beyond profit
• CSR initiatives


  • Providing employment opportunities for local residents
  • Implementing measures to reduce pollution and minimize environmental impact
  • Engaging in community outreach programs
• Happiness and Satisfaction


  Many business owners establish their ventures with the belief that they will experience greater happiness and satisfaction compared to traditional employment
• Risk-Taking and Success


  Business owners often thrive on taking risks and witnessing the success of their ideas
• Hobby Transformation


  • Fitness enthusiasts becoming personal trainers
  • Individuals with baking interests starting wedding cake businesses