Business studies GCSE

Revision notes for business and people part two of the OCR buiness studies GCSE

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Types of Business Activity

  • There are three sectors of the economy:
    Primary - The first stage of production, the extraction of raw materials and natural resources.
    Secondary - The second stage of production, where raw materials are manufactured into different products.
    Tertiary - The third stage of production, where are service is provided for customers.
  • The sectors are interdependant - one cannot produce without work done in another sector.
  • Employment in the primary and secondary sectors in the UK is declining, while employment in the tertiary sectors is increasing.
  • Added value - The secondary business is adding value to the original raw material, then the tertiary sector adds value by making it available to the customer.
  • Raw materials have been used up resulting in the closing of mines.
  • The use of macherinery has replaced jobs, workers are expensive business will reduce its numbers of workers whenever possible.
  • Foreign competition means the businesses in Britain cannot produce as cheaply as other countries.
  • Goods that were once manufactured in Britain are now manufactured over seas.
  • Many tertiary jobs are connected to the rise in population eg. health and education.
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Business Objectives and the role of stakeholders

  • Different types of business will have different objectives.
  • Business objectives will vary according to the business and the situations it finds itself in.
  • Objectives will change as the business develops.
  • Objectives can be in conflict.
  • Each business will have a lareg number of different stakeholders.
  • The reasons why stakeholders are interested in a business will differ.
  • Stakeholders may have conflicting interests in business.
  • Mission statement - A brief summary of the main objectives a business or organisation has.
  • Satisficing - Means that a business will make enough profit to enable it to meet its needs and not make as much profit as possible.
  • Dividend - A payment made to shareholders from the profits made by a public or private limited company.
  • Market share - This is the amount of a market that a business controls. measured by a percentage.
  • Private sector - The part of business activity owned by private individuals. Includes sole proprietors, partnerships and private and public limited companies.
  • Public sector - The part of business activitycontrolled by local and central government. Including health, education, fire service, police and the post office.
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Organisation, growtrh and location of business


  • All businesses must operate as one of the four main forms of business organisation.
  • Setting up a business as a sole proprietor is very simple.
  • Some of the disadvantages of the sole proprietor form of bisuness organisation can be ocercome by taking a partner.
  • Setting up as an incorperated for of business can be expensive.


  • There are advantages and disadvantages of all types of business organisation. Firms can grow through emrgers, take-overs or internal expansion.


  • There are a large number of location factors:
    Regional development agencies - Give grants to encourgae inward investment, Grants for small business start-ups, organising training and Improving infrastructure.
    Local Government - Giving grants, promoting the area, creating industrial parks of technology parks.
  • Not all location factors will affect all types of business.
  • Some types of business are not affected by location factors.
  • Consider how the factors affecting location may change as the business changes and develops.
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Sole proprietors and partnerships

  • There are two different types of unincorperated business organisation.
  • Some businesses are ideal for a particular type of business organisation.
  • There are advantages and disadvantages of different types of organisation
  • A deed of partnership will give details on how the partenrship is to operate.
  • Deed of partnership - A legal agreement frawn up between the partners of the business stating the responibilities of partners, for instance, how profits and losses are to be shared; how the business is to operate.
  • LLP - A limited liability partnership. This is a new form of busienss organisation which trades as a partnership bbut with limited liability.
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Private and public limited companies

  • There are two different types of incoperated business orgaisation - public limited companies (PLC's) and private limited companies.
  • Some businesses are ideal for a particular type of business organisation.
  • There are advantages and disadvantages of  different types of business organisation.
  • Raising capital through the sal of shares is a key feature of a public limited company (PLC).
  • Regestrar of companies: Person responible in the United Kingdom for maintaining records relating to the activities of private and public companies.
  • Certificate of incorperation: Legal document issued by the Regestrar of Companies allowing a business to trade as a limited liability business.
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