Business Management
Unit: 1
Key:
Topic
SUBTOPIC
Definition
Formula
1.1 Introduction to Business Management
.Businesses exist to satisfy the needs and wants of their customers by selling goods and services, usually in return for profit.
THE ROLE OF BUSINESSES IN COMBINING HUMAN, PHYSICAL AND FINANCIAL RESOURCES TO CREATE GOODS AND SERVICES
*A business - A decision-making organisation established to produce goods and/or provide services.
*Goods - Physical products (e.g. food, clothes, furniture, cars and smartphones).
*Services - Intangible products (e.g. haircuts, tourism, public transport, banking, insurance education, and healthcare).
Factors of production
Land: These are natural resources needed to produce goods and services.
A. e.g. water, timber, sand, minerals, metal ores, plants and animals).
Labour: This refers to human effort used to produce goods and services.
Capital: This refers to non-natural (or man-made) resources used in the production process.
A. e.g. tools, machinery, motor vehicles, physical premises, and infrastructure).
Entrepreneurship: This refers to the knowledge, skills and experiences of individuals who have the capability to manage the overall production
process.
*Customers - The people or other businesses that purchase goods and services.
*Adding value - The process of producing a particular good or service that is worth more than the cost of the resources used to produce it.
BUSINESS FUNCTIONS AND THEIR ROLES
.In order to provide goods and services, businesses carry out a number of functions.
.In large organisations, there is scope for these functions to be split into departments:
- human resources
- finance and accounts
- marketing
- operations management
,Human Resources
*Human Resources - The function that handles all aspects relates to the workforce.
.It involves all aspects of business operations related to staff (personnel) within an organisation.
Finance and Accounts
*Finance and accounting - Function of an organisation refers to the responsibility for ensuring that the business
has sufficient funds in order to conduct its daily operations.
Marketing
*Marketing - Identifying the needs and wants of customers so that the business can provide goods and services to meet these requirements and
desires, usually in a profitable way.
Operations Management
*Operations Management - The process of making goods and providing services from the available resources of a business to meet the needs and
wants of its customers.
PRIMARY, SECONDARY, TERTIARY AND QUATERNARY SECTORS
The primary sector
*Primary sectors - refers to business activity involved with the extraction of natural resources.
.For example:
- metal ores and coal have to be mined
- oil and natural gas have to be drilled from the ground
- rubber needs to be extracted from trees
.Examples of primary sector output include:
- Agricultural farming (crops)
- Extraction of oil and gas
- Fishing
- Hunting
- Mining
.Primary sector output is the predominant sector in less economically developed countries (LEDCs) or low-income economies.
The Secondary Sector
*Secondary sector - Refers to business activity involved with the manufacturing or construction of finished products.
.It encompasses transforming primary sector output into finished goods, ready for sale or use by the consumer.
.For instance plastics need to be made from using oil
.Examples of secondary sector production include:
- Car manufacturing
- Carpentry
- Construction
- Engineering
- Food processing
.Secondary sector output is the predominant sector in economically developing countries or middle-income economies (MICs).
, The Tertiary Sector
*Tertiary sector - Refers business activity that involves providing services to customers.
.Examples of tertiary sector businesses include:
- Advertising
- Banking
- Catering
- Distribution
- Education
- Health care
The Quaternary Sector
*Quaternary sector - Refers to business activity involving the creation or sharing of knowledge and information.
.Examples of production activities in the quaternary sector include:
- Information and communications technology (ICT)
- Management consultancy
- Research and development (R&D)
.The added value is extremely high in the quaternary sector.
THE ROLE OF ENTREPRENEURSHIP AND ENTREPRENEURSHIP
Entrepreneurship
*Entrepreneurship - the traits of individuals who run their own business(es).
.They are often described as visionaries.
.A visionary is an entrepreneur who has the foresight and driving force behind an organisation’s growth and development.
.Entrepreneurs share some common sought-after characteristics and skills:
- Creativity
- Effective communicator
- Planner
- Teamwork
- Decisiveness
- Flexibility and open-mindedness
Intrapreneurship
*Intrapreneurship - the traits of individuals who work for an organisation (so are not self-employed) but act as entrepreneurs.
REASONS FOR STARTING UP A BUSINESS
Money: Perhaps the key driving force for a person to start their own business is the ambition or motivation to earn profit for themselves.
Autonomy: Many people set up their own business to be their own boss, rather than working for someone else.
Challenges: Some people are driven by personal challenges. They enjoy the satisfaction of achieving what they perceive to be greatness and striving
for self-actualisation.
Passions: Some entrepreneurs want to pursue their personal passion/interest and turn this into a business opportunity.
Family ties: For some entrepreneurs, running their own business is part of a family tradition. Their parents or grand-parents owned/created the
business and now their son wants to carry on being a business.
Unit: 1
Key:
Topic
SUBTOPIC
Definition
Formula
1.1 Introduction to Business Management
.Businesses exist to satisfy the needs and wants of their customers by selling goods and services, usually in return for profit.
THE ROLE OF BUSINESSES IN COMBINING HUMAN, PHYSICAL AND FINANCIAL RESOURCES TO CREATE GOODS AND SERVICES
*A business - A decision-making organisation established to produce goods and/or provide services.
*Goods - Physical products (e.g. food, clothes, furniture, cars and smartphones).
*Services - Intangible products (e.g. haircuts, tourism, public transport, banking, insurance education, and healthcare).
Factors of production
Land: These are natural resources needed to produce goods and services.
A. e.g. water, timber, sand, minerals, metal ores, plants and animals).
Labour: This refers to human effort used to produce goods and services.
Capital: This refers to non-natural (or man-made) resources used in the production process.
A. e.g. tools, machinery, motor vehicles, physical premises, and infrastructure).
Entrepreneurship: This refers to the knowledge, skills and experiences of individuals who have the capability to manage the overall production
process.
*Customers - The people or other businesses that purchase goods and services.
*Adding value - The process of producing a particular good or service that is worth more than the cost of the resources used to produce it.
BUSINESS FUNCTIONS AND THEIR ROLES
.In order to provide goods and services, businesses carry out a number of functions.
.In large organisations, there is scope for these functions to be split into departments:
- human resources
- finance and accounts
- marketing
- operations management
,Human Resources
*Human Resources - The function that handles all aspects relates to the workforce.
.It involves all aspects of business operations related to staff (personnel) within an organisation.
Finance and Accounts
*Finance and accounting - Function of an organisation refers to the responsibility for ensuring that the business
has sufficient funds in order to conduct its daily operations.
Marketing
*Marketing - Identifying the needs and wants of customers so that the business can provide goods and services to meet these requirements and
desires, usually in a profitable way.
Operations Management
*Operations Management - The process of making goods and providing services from the available resources of a business to meet the needs and
wants of its customers.
PRIMARY, SECONDARY, TERTIARY AND QUATERNARY SECTORS
The primary sector
*Primary sectors - refers to business activity involved with the extraction of natural resources.
.For example:
- metal ores and coal have to be mined
- oil and natural gas have to be drilled from the ground
- rubber needs to be extracted from trees
.Examples of primary sector output include:
- Agricultural farming (crops)
- Extraction of oil and gas
- Fishing
- Hunting
- Mining
.Primary sector output is the predominant sector in less economically developed countries (LEDCs) or low-income economies.
The Secondary Sector
*Secondary sector - Refers to business activity involved with the manufacturing or construction of finished products.
.It encompasses transforming primary sector output into finished goods, ready for sale or use by the consumer.
.For instance plastics need to be made from using oil
.Examples of secondary sector production include:
- Car manufacturing
- Carpentry
- Construction
- Engineering
- Food processing
.Secondary sector output is the predominant sector in economically developing countries or middle-income economies (MICs).
, The Tertiary Sector
*Tertiary sector - Refers business activity that involves providing services to customers.
.Examples of tertiary sector businesses include:
- Advertising
- Banking
- Catering
- Distribution
- Education
- Health care
The Quaternary Sector
*Quaternary sector - Refers to business activity involving the creation or sharing of knowledge and information.
.Examples of production activities in the quaternary sector include:
- Information and communications technology (ICT)
- Management consultancy
- Research and development (R&D)
.The added value is extremely high in the quaternary sector.
THE ROLE OF ENTREPRENEURSHIP AND ENTREPRENEURSHIP
Entrepreneurship
*Entrepreneurship - the traits of individuals who run their own business(es).
.They are often described as visionaries.
.A visionary is an entrepreneur who has the foresight and driving force behind an organisation’s growth and development.
.Entrepreneurs share some common sought-after characteristics and skills:
- Creativity
- Effective communicator
- Planner
- Teamwork
- Decisiveness
- Flexibility and open-mindedness
Intrapreneurship
*Intrapreneurship - the traits of individuals who work for an organisation (so are not self-employed) but act as entrepreneurs.
REASONS FOR STARTING UP A BUSINESS
Money: Perhaps the key driving force for a person to start their own business is the ambition or motivation to earn profit for themselves.
Autonomy: Many people set up their own business to be their own boss, rather than working for someone else.
Challenges: Some people are driven by personal challenges. They enjoy the satisfaction of achieving what they perceive to be greatness and striving
for self-actualisation.
Passions: Some entrepreneurs want to pursue their personal passion/interest and turn this into a business opportunity.
Family ties: For some entrepreneurs, running their own business is part of a family tradition. Their parents or grand-parents owned/created the
business and now their son wants to carry on being a business.
