Business studies Term 1

Business Notes Term 1
Micro Environment

 The micro environment is the business itself.
 It is also known as the internal environment.
 Businesses have full control over the micro environment

Components

Vision and mission

VISION

 Describes what a business wants to achieve in the long term.

MISSION

 Describes the reason for a business’s existence.

STRATEGY

 Describes how a business will achieve its goals.

GOALS AND OBJECTIVES

 Translates the vision and mission into performance targets.
 A deadline for the achievement of each goal.

Organisational culture

 How things are done in a business.
 Includes aspects like employee’s dress code and how employees address
each other.
 Organisational culture is also influenced by the culture of employees.

Management and leadership

Managers and leaders are responsible for making sure that a business achieves
its goals.


- Managers

,  A manager holds a particular position in a business, e.g. financial
manager.
 A person can only be a manager if there is a vacant managerial position
in a business.
 A manager gives instructions to subordinates and checks that these tasks
are carried out.
 A manager has the authority to tell subordinates what to do

- Leader

 A leader does not necessarily hold a managerial position – any employee
can be a leader.
 A leader emerges when there is a need for leadership in a group-
leadership is a characteristic.
 A leader is usually part of a team and helps to perform tasks.
 A leader usually inspires team members to perform.

Organisational structure

 A business’s structure refers to how employees in a business are
organised.
 The structure explains the responsibility and displays the authority of
each manager.
 A traditional business structure is in the form of a pyramid that indicates
the different levels of power in a business.
 However, the current trend is to form wider structures where more
power is given to subordinates.

Organisational resources
Organisational resources refer to all the resources that a business uses to make
sure that it operates efficiently.

 Businesses need capital resources, human resources, natural resources,
and entrepreneurial resources.
 These resources are also called the four factors of production.
 Each factor of production has its remuneration, which can be explained
as the “payment” for that particular factor of production.



Capital resources- Money that is invested in a business so that the business
can acquire capital goods, for example, land, buildings, and equipment.

,(Interest)
Human resources- The work people do to produce products and services,
called labor. (Salaries and wages)

Natural resources- All natural assets used to produce products and services,
for example, water, coal, and gold. (Rent)

Entrepreneurial resources that combine the above-mentioned factors of
production in such a way that the business becomes operational and
profitable. (Profit)

Business Function

Administration Function

Responsibilities:

 Collecting data and information
 Handling data and information
 Managing information
 Office practice
 Information technology

Handling data and information:

Correspondence All communication to and form a
business, whether oral or written.
Copying and duplicating  Information must be copied so
that it is available to managers.
 Some information is confidential
and should be handled carefully.

Filing and storing  Correspondence and records such
as financial statements, accounts,
employee payslips and marketing
figures must be sorted and filed.
 This information must be stored
for future reference.

Indexing  File the same type of information
together.

,  Index this information in terms of
importance, date, or nature.
 This will make the process of
finding information much easier.

Handling of mail  Deliver mail to managers to
ensure a quick response.

Distribution of information to  Information must be distributed
management to managers so that they can
identify opportunities and
respond to threats.


Accounting Records
Must be kept to:

 Keep record of all business
transactions.
 Set financial statements.

Statistics  Involves the collection and
interpretation of raw data.
 Enables managers to identify
trends and to make informed
decisions about the future of a
business.

Budgets  Estimates how much money a
business will spend and receive
during a particular financial year.
 Different kinds of budget include:
o Marketing budget
o Human resource budget
o Production budget
o Corporate social investment
budget