Business and Mangement

A business is any organisation that uses resources to meet the needs of customers by providing a product or service they demand.They identify the needs of consumers or other firms. Inputs of the business in order to produce outputs Business produce consumer goods consumer services and capital goods.Consumer goods are physical and tangible goods for customers in the general public.Consumers services are non tangible goods. Like hotels.Capital goods are goods used by industry to aid in production of other goods and services. Factors of productions are business inputs needed by business to produce goods or services. 4 main inputs:  Land-  Renewable and non-renewable resources of nature.  Labour- Skilled labour make up the workforce of the business.  Capital- Finance needed to set up a business and pay for its continuing operations as well as all of the man-made resources used in production.  Enterprise- Driving force of business. Provides managing, decsion-making, co-ordinating role.  Most business have 4 main funcional departments. 1. Marketing: Department resposible for making decsions such as pricing, how and where to promote it and sell it.2. Finance: Department responsible for monitoring the flow of finance in and out of business, accounts, and providing finacial info. 3. Human Resource Mangement: Identifies the workforce needs, recruits, selects and trains staff and provide motivation. 4.Operations Mangement: Ensuring adequate resources are availble for production and maintaing production. SECTORS OF INDUSTRY 1. Primary sector: Extracting natural resources, farming, fishing and oil extraction2. Secondary Sector: Firms that manufacture and process profucts from natural resources. Computers, baking and clothing3. Tertiary Sector: Provides services to consumers. Retailing, transport and hotels. 

Types of Organisation. Private sectors comprises businness owned and controlled by indivuduals. Public sector comprises organisations accountable to and controlled by local government. A mixed economy are resources are owned and controlled by both private and public sectors. Free market economy are resources owned largely by the private sector with very little state intervention. Command economy are resources are owned, planned and controlled by state.  Public Sector objectives: 1. ensuring supplies2. preventing private monopolies3. maintaining employement4. maintaining environment standardsPRIVATISATION: the sale of public sector organisations to the private sectorSTARTING A BUSINESS:An entrepreneur is someone who take the fincial risk of starting and managing a new business. They have an idea, invested some own saving/capital, responsible for mangement, okay with possible risks. 6 qualties they should have include; INNOVATIVE, COMMITMENT, MULTI SKILLED, LEADERSHIP SKILLS, BELIEF IN ONESELF, RISK TAKER. WHY START A BUSINESS?1. losing a job2. desire for independence3. more money4. own bossPROBLEMS WITH START UPS 1. Competition2. Building a customer base3. Lack of record keeping 4. Lack of working capital 5. Poor mangement skills6. Changes in business environmentSole trader is a business in which one person provides the permanent finance and in return has full control of the business and is able to keep all profits. They have unlimited liabilty yet no legal formalities. A partnership is a business formed by two people or more to carry a business together with shared profits and shared responsibilites. A limited liability is  the only liability or potential loss a share holder has if a company fails. Amount invested into company. Private limited companies are small or meduim sized that are owned by shareholders who are often members of the same family. Do not sell shares to the public. A shareholder is a perosn owning shares in a limited company. A share is a certificate confirming part ownership of a company. A public limited company is often a large business with the legal right to sell shares to general public. A public corporation is a business enterprise owned and conrolled by the state. A non profit is any organisation that has aims other than profit which is usually made up of volunteers. A NGO is a organisation with no representation of government. A pressure group is organisation created by people with a common interest to change business or governments. Social enterprise is a business with mainly social objective that reinvests most of its profits into benefiting society. Which have 3 obejectives called triple bottom line: Economic, Social and Environmental. 3 types of PPPGovernment fundedPrivate sector funded Government directed but with private sector finance and mangement. Private Finance Initiativeinvestment by Private sector organisations in public sector projects. 

COORGANISATIONAL OBJECTIVES The importance of Objectives and Overall aims Direction-> Every business should have an aimControl-> Control of staff to achieve aimRevsion-> Compare outcome, reviewing th success of a company Mission vs. Vision Statements Mission- where we are at the moment, Present, Internal & External       Vision- Sets out future, External   ROLE OF MISSION AND VISION STATEMENTS: Arugements in favor: Quick info to external stake holders, Motivate employees, Guide employee behaviour, Establish external belief about the company  Criticsed of being: Too vague & general, just a PR exercise, Impossible to analyyze, Lacking in specific detail Corporate Strategic Objectives: What-  Broadly defined targetsWhy-   Achieve overall aim of the whole organisationHow-  Achievable, measurable and communicated SMARTSpecific        Measurable      Achievable     Realistic & Relevant     Time- specificCOMMON CORPORATE  SRATEGIC OBJECTIVES Profit Maximation, Profit Statisficing, Growth, Increasing market share, Survival, Profit Maximation (all)-  Producing at the level of output where the greatest postive difference between total revenue & total costs is achieved Profit Satisficing (small)- Achieve enought profit to satisfy owners & therefor priortise objective or aims Increasing Market Share (long)- Retailers stock and promote the best selling shares. Retailers profit margins can be reduced. Effective promotional campaigns. Corporate Social Responsibility- Consideration of sociey by taking responisbility of action on customers, employees and environment.  Maximising short-term sales revenue: Benefits both owners & manager & staff but if achieved by reducing prices actual profit might fallMaximising Share-holder value: mainly plcs increase share price and divends. Shareholders interest above others. Potential Objectives Conflicts: Growth vs profit, Short term vs long, stakeholders.Factors Determining Corporate Objectives: Corporate culture, Size & legal form, Public and private sector businesses TACTICAL OR OPERATIONAL OBJECTIVESWhat: Short term goals for each departmet or divsion set by senior departmen or divsion management Why: Set to ensure co-ordinations between all divsions, consistency with srategic corporate obejectives ad adequate resources are provided to allow for successful acheivement of objectives Ethics: moral guidelines that determine decsion making Ethical code: document detailing a company's rules on staff behaviour that must be followed by all emplyeesLong term benefits: Fine costs reduction, good publicity, attract growing numbers of ethical customers, more likely to be awarded government contracts, attraction of well qualified staff Short term expenses: Ethical and Fairtrade supplies are costly, not taking bribes can mean loss of sales, limiting advertising to children might lower sales, no fixed prices mean lower prices, paying fair wages raises costs Environmental audit: asseses the impact of a businesses impact on the enviromentSocial audit: an independent ereport on the impact a business has on society. Pollution levels, health and safety record. CHANGES IN CORPORATE RESPOSIBILITY1. CHANGES IN SOCETIAL NORMS2. CHANGES IN CORPORATE STRATEGIC OBJECTIVE3. CHANGE IN PUBLIC ATTITUDES TOWARDS FIRMS SOCIAL RESPONSBILITIES. 

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CHAPTER 2

Chapter 3