Notesale: Turn your study into money

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AO2

The main business functions and their roles:
- human resources
- finance and accounts
- marketing
- operations

AO2

Primary, secondary, tertiary and quaternary sectors

AO2

The nature of business activity in each sector and the impact of sectoral change on business activity

AO2

The role of entrepreneurship and intrapreneurship in overall business activity

AO2

Reasons for starting up a business

AO2

Common steps in the process of starting up a business or an enterprise

AO2

Problems that a new business or enterprise may face

AO2

The elements of a business plan

AO2

Businesses
A business is an organisation involved in the
production of goods and/or the provision of services
...
g
...
This process
generates outputs (also known as products)
...
Examples include oil
extraction, car manufacturing and road construction
...

Business sectors
Primary sector refers to businesses involved in
cultivation or extraction of natural resources, e
...

farming, mining, quarrying, fishing and forestry
...
Goods are physical
products, e
...
cars, books and food
...
g
...



Secondary sector is concerned with the construction
and manufacturing of products
...
g
...



Quaternary sector businesses are involved in
knowledge-based activities that generate and share
information, e
...
ICT and research organisations
...
e
...
g
...


Main business function
Human Resources (HR): responsible for managing
personnel
...



Tertiary sector refers to the provision of services to
customers
...


Entrepreneurship and intrapreneurship

Finance and accounts: records and reports financial
documentation to comply with legal requirements
...
They
take risks and exploit opportunities for profits
...
It ensures products sell through activities
such as market research, test marketing, advertising
and branding
...
They work in an
entrepreneurial capacity, with authority to create
products or processes for the organisation
...



Business plan refers to the document that sets out the
business idea, its goals and objectives and other
details of how the business will operate (such as its
marketing, operations and finance)
...


Customers are the people or organisations that buy
the product
...
2 Types of organisations
Distinction between the private and public sectors

AO2

The main features of the following types of for-profit (commercial) organisations:
- sole trader
- partnerships
- companies / corporations

AO3

The main features of the following types of for-profit social enterprises:
- cooperatives
- microfinance providers
- public-private partnerships (PPP)

AO3

The main features of the following types of non-profit social organisations:
- non-governmental organisations (NGOs)
- charities

AO3

Private and public sectors
The private sector is run by private individuals and
businesses, e
...
sole traders and companies
...
g
...


State-owned enterprises are organisations wholly
owned by the government
...


Partnerships are private sector business owned by
2-20 people (partners)
...


Deed of partnership is legal contract signed by the
partners
...


A company (or corporation) is a business owned

by shareholders
...


A private limited company is a business owned by
shareholders with limited liability but whose shares
cannot be bought by or sold to the general public
...

For-profit social enterprises
Social enterprises are revenue-generating business
with core social objectives
...


Cooperatives are for-profit social enterprises set up
and run by their members
...


Public-private partnerships occur when the
government works together with the private sector
...


Charities are non-profit social enterprises that provide
voluntary support for good causes, such as protection
of animals and the environment
...


An initial public offering (IPO) occurs when a
business sells part of its business to shareholders on a
stock exchange for the first time
...


Unlimited liability is a feature of sole traders and
ordinary partnerships who are liable for all monies
owed to their creditors, even if this means selling
personal possessions to pay their debts
...
3 Types of organisations
Vision statement and mission statement

AO2

Aims, objectives, strategies and tactics, and their relationships

AO3

The need for organisations to change objectives and innovate in response to changes in internal and
external environments

AO3

Ethical objectives and corporate social responsibility (CSR)

AO1

The reason why organisations set ethical objectives and the impact of implementing them

AO3

The evolving role and nature of CSR

AO3

SWOT analysis of a given organisation

AO3 AO4

Ansoff matrix for different growth strategies of a given organisation

AO3 AO4

Vision and mission statements
A vision statement is an organisation’s long-term
aspirations, i
...
where it ultimately wants to be
...


Corporate social responsibility (CSR) is the
conscientious consideration of ethical and
environmental practices related to business activity
...


An ethical code of practice is the documented beliefs
and philosophies of an organisation
...
They are a
general statement of a firm’s purpose or intentions
...
SMART objectives are specific,
measurable, achievable, realistic and time constrained
...


Tactics are the short-term plans of action that firms
use to achieve their objectives
...
Morals are concerned with what is considered
to be right or wrong, from society’s point of view
...



Strengths

SWOT Analysis

Weaknesses

Opportunites

Threats

SWOT analysis is an analytical tool used to assess the
internal strengths and weaknesses and the external
opportunities and threats of a business decision, issue
or problem
...
4 Stakeholders
Interests of internal stakeholders

AO2

Interests of external stakeholders

AO2

Possible areas of mutual benefit and conflict between stakeholder’s interests

AO3

Stakeholder conflict

External stakeholders
External stakeholders of a business are individuals
and organisations not part of the organisation but have
a direct interest in its activities and performance, e
...

customers, suppliers, pressure groups and the
government
...
This can lead to arguments and tension
between the various stakeholder groups
...
g
...


• Employees

• Managers and directors





• Shareholders (stockholders)

1
...


AO3

PEST, PESTLE or other variations of STEEPLE can be
used in an exam or in the Internal Assessment task if
necessary
...


Social

Political

• Growing support for environmental protection

• Increasingly flexible workforce


• Political stability

• Fiscal policy and taxes


• Migration and multiculturalism


• Monetary policy


• Ethical business practice

• Language barriers

• Corruption

• Interest rates

Technological

Legal

• New working practices -> increased productivity


• Government intervention


• Quicker product development

• Job creation/losses


• Consumer protection

• Employee protection


• New products and new markets


• Competition protection


• Technology is not always reliable or secure

• Social and environmental protection

Economic

Ethical

• Inflation (continual rise in level of prices in economy)

• Unemployment rate


• Stakeholder engagement

• Recruitment and employment ethics


• Gross domestic product

• International trade


• Customer ethics

• Social responsibility


• Protectionist measures

• CSR benefits

Environmental
• Negative impacts on the natural environment

• Reputation at risk

• Weather and seasonal changes

• Health scares and epidemics

1
...
Average fixed costs
decline continuously with larger levels of output
...
Unit costs are likely to eventually rise as a firm
grows due to a lack of control, coordination and
communication
...



A strategic alliance is like a joint venture but the
organisations remain separate entities
...



• Feasibility study

• Partnership assessment


• Forward vertical integration occurs with the
merging of a firm operating at a later stage in the
production process, e
...
a book publisher merges
with a book retailer
...
g
...



Franchise refers to an agreement between a franchisor
selling its rights to other businesses (franchisees) to
allow them to sell products under its name in return for
a fee and regular royalty payments
...
g
...



Globalisation

• Conglomerates provide a diversified range of
products and operate in different industries
...



Joint ventures
A joint venture combines the contributions and
responsibilities of two different organisations in a
shared project by forming a separate legal enterprise
...
MNCs can
experience:


• Synergy


• Increased customer base


• Spreading risk

• Entry to foreign markets


• Cheaper production costs

• Economies of scale


• Relatively cheap


• Protectionist policies


• Competitive advantages

• Exploitation of local knowledge

• High success rate

Other

• The ability to spread risks






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