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Unit 1: Business Organization And Environment (1.1: Introduction to…
Unit 1: Business Organization And Environment
1.1: Introduction to Business Management
Role Of Business
Produce Consumer Goods
Consumer goods are physical and tangible goods sold to publics
Non-Durable Consumer Goods
Durable Consumer Goods
Provide Consumer Services
Costumer Services are non-tangible products that are sole to publics such as insurance services, transportation and hotel accomodations
Produce Capital Goods
Capital goods are physical goods that are used by industry to aid in the production of other goods and services
Business "Inputs"
Labour
Manual and skilled labour make up the workforce of the business
Capital
Consist of finance needed to set up a business and pay for its operations as well as man-made resources used in production. Also including capital goods
Land
Land itself including renewable and non-renewable resources of nature
eg: crude oil and coal
Enterprise
The driving force of the business. Provides managing, decision making, and coordinating role
Business Function
Finance and Accounts
Responsible to monitor the flow of finance into and out of the business
Marketing
Responsible for market research and for analysing the results of such research so that consumer wants can be correctl fulfilled
Human Resource Management
Manage human resources to help the business achieve its overall aims by identifies the workforce needs of the business, recruits, selects and trains appropriate employees and many more
Operation Management
Responsible for ensuring adequate resources are available for production, maintaining production and quality levels of the products
Economic Sectors
Secondary Sector
Industries that manufactures product from natural resources
Tertiary Sector
Firms that provide services to consumers and other business
Primary Sector
Industries that extract natural resources
Quaternary Sector
Firms that focused on information technology business and information service providers
Starting a Business
Entrepreneur
Someone who takes financial risk of starting and managing a new venture
Intrapreneur
Someone within a corporation who takes direct responsibility for turning an idea into a profitable finished product
Impact of Enterprise on Business
Economic Growth
Firms' Survival and Growth
Employment Creation
Innovation and Technological Change
Problems Faced by Start-ups
Lack of Finance and Working Capital
Lack of Record-keeping
Poor Management Skills
Competition
Changes in Business Environment
1.2: Types of Organization
Sectors
Private Sector
Comprises business owned and controlled by individuals or group of individuals
Public Sector
Comprises organizations accountable to and controlled by local government
For-Profit Organization
Partnership
A business formed by two or more people to carry on a business together, with shared capital investment and shared responsibilities
Limited Company
Private Limited Company
A small to medium-sized business that is owned by shareholders who are often members of the of the same family. This company cannot sell shares to the general publics.
Public Limited Company
A limited company, often a large business with the legal right to sell shares to general publics.
Sole Traders
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 the profits
For-Profit Social Enterprises
Cooperatives
A group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically
Microfinance Institution
A type of banking service provided to unemployed or low income earners who would otherwise struggle to gain external income
Social Enterprise
A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximising returns to owner
Public-Private Partnership (PPP)
Private sector-funded
Often involves large sums of capital investments, the government is released from the financial burden. Once the assets have been paid for and constructed, they are then managed and controlled by government department, which pays rent or leasing charge to the private sector businesses that constructed the project
Government-directed but with private sector finance and management
Private sector funding and some private sector management control of public projecs
Government Funded
The government provides all or part of funding, but the organization is managed by a private business that uses private sector methods and techniques to control it
Non-Profit Social Enterprise
Any organization that has aims other than making ad distribution topic and which is usually governed by a voluntary board
Non-Governmental Organizations (NGO)
A legally constituted body with no participation or representation of any government which has specific aims and purpose
Charities
An organization set up to raise money to help people in need or to support causes that require funding
Terms used in these units
Limited Liability
The only liability or potential loss a shareholders has if the company fails is the amount invested in the company, not the total wealth of the shareholder
Unlimited Liability
The owner needs to pay the debts using his/her own personal assets
Innovative
Commitment and self-motivation
Multi-skilled
Risk-taker
Leadership skills