Nature of business and objectives

Nature of business activity, types of organization, private sector business,non-profit and non-governmental organizations, organization and objectives, ethical objectives, co-operate social responsibility. 

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The nature of business activity

  • Business- organization that combines inputs in processes to create outputs
  • Entrepreneur- owner/manager of a business that brings together the other factors of production and undertakes risk by introducing new ways of making old products or new products in the hope of making a profit
  • Primary Sector- cultivation of natural goods eg agriculture, fishing, mining
  • Secondary Sector- manufacture of goods eg house building, car companies, ship building
  • Terciary- distribution of goods and provision of services eg banks, transport 
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De-industrialization

  • De-industrialization- number of people in primary sector has decreased since the INDUSTRIAL REVOLUTION, numbers working in secondary sector has decreased since the 1960's. These changes in economic structure is DE-INDUSTRIALIZATION.
  • Finance-more people in terciary sector= more wages needed and more money to recruit primary and secondary workers.
  • HR- less workers=less HR employees needed
  • Marketing- more advertising needed for primary and secondary job vacancies.
  • Operations Management- less operation managers will be needed because there will be less primary and secondary workers to manage.
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Economic Structure

  • Service Based- decrease in primary secondary workers, more importing,decreased worforce available for businesses in first 2 sectors.
  • Move from primary to secondary- primary sector firms need to invest in machinery and will see a decrease in job candates from school and their quality.
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Private Sector Businesses

Sole trader- unlimited liability, controlled and owned by 1 person, need to register the business with the TAX AUTHORITIES (HER MAJESTY'S REVENUE AND CUSTOMS) long hours, hard work, need to be multi-skilled.

Partnership- DEED OF PARTNERSHIP, owned and controlled by 2-20 people, deed must follow the laws of the PARTNERSHIP ACTS and set out the rules by which the partnership will operate, easier to set up than a sole trader, unlimited liability unless the owners have taken advantage of the LIMITED PARTNERSHIP ACT (some partners have limited liability but the majority must have unlimited liability), must pay a REGISTRATION FEE through a solicitor.

Company- owned by SHAREHOLDERS, controlled by BOARD OF DIRECTORS, set up is hard as you need a MEMORANDUM OF ASSOCIATION ( set up by a solicitor)= includes: objevtives of the business, amount of share capital to be raised, voting rights of the shareholders. THE ARTICLES OF ASSOSIATION- info on the day-to-day running of the business. Memorandum of association and articles of association must comply with THE COMPANIES ACT. You must sign a STATUTORY DECLARATION to say you understand all of the COMPANY ACTS present and future. All documentation must be registered with teh COMPANY'S HOUSE, most directors also have shares, business has a SEPERATE LEGAL IDENTITY, specialize more than sole traders or partnerships, business functions have seperate DEPARTMENTS, shareholders have LIMITED LIABILITY.

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Types of Organization

Public Sector                                                               Private Sector

Owned and controlled by the government. Owned and controlled by private businesses.

Profit based

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Organization and Objectives

Vision Statement

(aspirational statement of what an organization would like to achieve in the long term future. It is a guide for future actions)

Mission Statement

(written declaration of a businesses core purpose and focus which remains unchanged)

Aims

(is something that will help a business's mission)

Objectives

(goal or target that will help to achieve an aim can be STRATEGIC OR OPERATIONAL)

Strategies

(somthing that will help a business achieve its objectives)

Tactics

(help business achieve their strategies)

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Ethical Objectives

Ethics are a set of values and beliefs which influence how individuals, groups and societies behave.

Ethical objective- statement concerning what a business should or should not be doing ethically. Helps them to achieve their aims

Help to:

  • Increase sales and market share
  • Self-satifying
  • Sense of duty
  • Improve reputation

Influenced by

  • stakeholders
  • co-operate culture
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Economic Structure

  • Service Based- decrease in primary secondary workers, more importing,decreased worforce available for businesses in first 2 sectors.
  • Move from primary to secondary- primary sector firms need to invest in machinery and will see a decrease in job candates from school and their quality.
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