Business Notes
Contents
Section 1: Business in Contemporary Society 4
Section 2: Business Information and ICT 44
Section 3: Decision Making in Business 84
Section 4: Internal Organisation 128
Section 1: Business in Contemporary Society
The role of business in society
Everyone in our society has ‘wants’. Some wants are for things like food, clothing and shelter while others are for entertainment, leisure, travel and so on. Taking everybody in society together, there are millions of wants. To satisfy these wants we make use of (or consume) goods and services. If suitable goods and services were not available, we would not be able to satisfy our wants. This is why business activity is important: because it is through business activity that goods and services are provided.
A definition of business activity is any kind of activity that results in the provision of goods and services which satisfy human wants.
Goods are tangible while services are intangible. Goods sold to the general public are often referred to as consumer goods. Consumer goods may be classified as durable goods like cars, washing machines, or personal computers; or non-durable goods like sweets, drinks, newspapers. Durable goods can be used regularly over a long period of time while non-durable goods are consumed over a short period, usually soon after they are bought. Examples of services are going to the hairdresser, being served in a restaurant, or visiting a doctor.
Goods and services can be described as the outputs of business activity. In order to produce these outputs, business makes use of resources, also called factors of production. Factors of production are classified into four categories:
• land (i.e. all natural resources, from mineral deposits to the site of a factory)
• labour (i.e. all human resources)
• capital (i.e. all resources which have been made by labour, such as machinery and other equipment)
• enterprise (i.e. organising the other factors
Section 1: Business in Contemporary Society 4
Section 2: Business Information and ICT 44
Section 3: Decision Making in Business 84
Section 4: Internal Organisation 128
Section 1: Business in Contemporary Society
The role of business in society
Everyone in our society has ‘wants’. Some wants are for things like food, clothing and shelter while others are for entertainment, leisure, travel and so on. Taking everybody in society together, there are millions of wants. To satisfy these wants we make use of (or consume) goods and services. If suitable goods and services were not available, we would not be able to satisfy our wants. This is why business activity is important: because it is through business activity that goods and services are provided.
A definition of business activity is any kind of activity that results in the provision of goods and services which satisfy human wants.
Goods are tangible while services are intangible. Goods sold to the general public are often referred to as consumer goods. Consumer goods may be classified as durable goods like cars, washing machines, or personal computers; or non-durable goods like sweets, drinks, newspapers. Durable goods can be used regularly over a long period of time while non-durable goods are consumed over a short period, usually soon after they are bought. Examples of services are going to the hairdresser, being served in a restaurant, or visiting a doctor.
Goods and services can be described as the outputs of business activity. In order to produce these outputs, business makes use of resources, also called factors of production. Factors of production are classified into four categories:
• land (i.e. all natural resources, from mineral deposits to the site of a factory)
• labour (i.e. all human resources)
• capital (i.e. all resources which have been made by labour, such as machinery and other equipment)
• enterprise (i.e. organising the other factors