Business Activity (Objectives, Types of Organisation, Factors of Production, Primary Secondary and Tertiary Activity, Judging Success)

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Preview of Business Activity (Objectives, Types of Organisation, Factors of Production, Primary Secondary and Tertiary Activity, Judging Success)

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Specification ­ What you need to know for this topic!
(Revision Notes Start on Next Page)
1 Business
activity and the
changing
environment
This section
examines the
objectives of
businesses, the
business
environment
and the criteria
for judging
success. The
focus is on the
importance of
clear business
objectives and
on how the
business
environment
provides
opportunities
for, and
imposes
constraints
upon, the
pursuit of those
objectives.
Content Explanation of content
1.1 An understanding of the importance of clear business
Objectives objectives and that business organisations have a
variety of objectives such as wealth creation,
survival, market share, profitability and that these
objectives are closely related to each other.

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An understanding of the legal forms of business
Types of organisation and how their objectives might differ.
organisation Thus will include an understanding of sole traders,
partnerships, limited liability companies and business
franchises. An understanding of the factors which
influence choice of form of ownership including
ownership, control, sources of finance, use of profits,
stakeholders, privatisation, shareholdings.
An understanding of public sector organisations and
how they contrast with businesses which trade in
goods and services for profit.
1.…read more

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Objectives
Aims
Aims are the overall goals that a business seeks to achieve. For example,
`to be the world leader', `to provide products of the highest quality'
Mission Statement
The Mission Statement is a written statement to the stakeholders, of
the overall aims of the business and the purpose of its existence.
Every business either in the public or private sector should have a
mission statement.
Purposes of a Mission Statement
It incorporates aims into words.
It outlines the ultimate reason for the business.…read more

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Time-based ­ a deadline is set for achieving the objective
Why Set Objectives?
Objectives give business a clearly defined target
Plans can then be made to achieve these targets
Can help motivate employees
Enables business to measure progress towards to its stated aims
BUSINESS EXPLANATION
OBJECTIVES
SURVIVAL A rather more basic objective in a business is survival. This
may be important to a new business for the first few
important months.…read more

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PROVIDING A Providing a service may be closely linked to making a
SERVICE profit ­ the better the service, the more customers will
be attracted and so profits will grow. For some
businesses, however, providing a service may be the
objective, even if it means making less profit. This may
be important in businesses that see customer satisfaction
as being a high priority.…read more

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The UK is a mixed economy. This is made up of the private sector and
the public sector:
Private sector = this includes all the businesses that are owned by
private individuals.
Public sector = this includes organisations owned and run by the
government.
Private Sector
· There are four basic forms of business ownership in the private
sector.
· These will be either unincorporated or incorporated businesses.…read more

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Soletraders are their own boss, Sole traders carry all the risk and
they have independence responsibility
They are likely to be better Raising more money is often hard
motivated because they are
working for themselves
Soletraders are easy to set up, Can be difficult to expand the
and no formal paperwork is business
needed
The owners keep all of the profit Personal possessions are all put to
risk if the business would fail, due
to unlimited liability
Closing the sole trader business
· When the…read more

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Why Partnerships?
The main reason is usually to expand the business by an increase in
capital or to gain specialist skills that are required for the business to
develop
The aims of a partnership are usually similar to a sole trader i.e. profit,
survival, stability and people may enter into a partnership for a number
of reasons.
Who owns a partnership?
The business is owned by the partners equally e.g.…read more

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Deed of partnership
A deed of partnership is a legally binding agreement between the
partners who are in business together. It describes how the partnership
will be run and the rights and duties of the partners themselves.
It's not necessary to have a deed of partnership in order to set up a
partnership, but it's a good idea, as it will help to avoid
misunderstandings and disputes between partners in the future.…read more

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Extra partners bring extra All the partners could face
capital financial ruin for one partners
mistake
New Partners - New Ideas Unlimited liability means that
the partners will be liable for
any debts
Business can gain professional
help through taking on a
qualified partner.
Private Limited Company
Private limited companies must have the letters Ltd (Limited) after their
name, e.g. Dyson Appliances Ltd.
A private limited company can start up with just one share of 1p in share
capital.…read more

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