Understanding the nature and purpose of business


Why businesses exist 

  • Businesses create employment = Bringing in employment enables people to earn incomes and to benefit from being able to purchase a range of goods and services
  • Businesses create wealth = Businesses paying taxes means the goverment is able to use this monety in a variety of ways, including building schools and power stations
  • Businesses create new products = Businesses can enrich the lives of people in the UK by creating new goods and services 
  • Businesses enhance a countrys reputation = Can help establish and maintain a countrys reputation for being innovative and forward looking 

Types of businesses 

  • Primary - Argiculture, forestry, fishing, mining abd quarrying, oil and gas extraction
  • Secondary - Manufacturing, construction and the supply of electricity, gas and water
  • Tertiary - The supply of services, for example hotels, catering, transport, education and health - over time the tertiary sector has supplied an increasing proportion of production (measured by GDP) in the UK while manufacturing businesses have become relatively less important 

The relationship between missions and objectives 

  • Mission statements - reflects the organisations values, financial goals, benefits of the business to the community and how consumers are to be satisfied 
  • Aims - Long term plans which a business's objectives are derived; these are…


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