Nature of Business Activity
1.1 Nature of Business Activity
Factors of Production
Land … all the natural resources
Labour … all the human effort (physical and mental)
Capital … the manufactured resource used in the production process
Enterprise … the unique ability certain people have in organising factors of production
Combining the factors
Labour Intensive Capital Intensive
Division of Labour and Job Specialization
Benefits Increased Production Lower Costs Efficiency Standardization Employment is increased Disadvantages Products are similar/standardized Increased interdependance Small business cannot compete Boring repetitive work
Division of Labour and Job Specialization
Business Functions
Functions of Business
Marketing Finance Human Resource Management Operations Management Relationships between them
Marketing
Responsible for Market research and analysis Pricing Promotion How to sell and distribute
Finance
Monitors the flow of finance in and out of the business Keeps and analyzes financial accounts Provides financial information to management
Human Resource Management
Identifies the workforce needs of business Recruits Selects and trains Creates motivational systems Handles employment contracts Deals with redundancy or redeployment of staff
Operations Management
Responsible for adequate resources being available for production Maintains production levels Maintains quality levels In charge of production efficiency
Business Activity
Business Sectors
3 types of business sectors Primary Secondary Tertiary As economies develop in countries, business sectors tend to gravitate from primary to tertiary changing the economic structures of countries.
Primary … raw materials and natural resources are extracted
Primary Sector
First stage of the production process Extraction of natural resources:
• Mining • Fishing • Forestry • Agricultural
Factors of Production
Land … all the natural resources
Labour … all the human effort (physical and mental)
Capital … the manufactured resource used in the production process
Enterprise … the unique ability certain people have in organising factors of production
Combining the factors
Labour Intensive Capital Intensive
Division of Labour and Job Specialization
Benefits Increased Production Lower Costs Efficiency Standardization Employment is increased Disadvantages Products are similar/standardized Increased interdependance Small business cannot compete Boring repetitive work
Division of Labour and Job Specialization
Business Functions
Functions of Business
Marketing Finance Human Resource Management Operations Management Relationships between them
Marketing
Responsible for Market research and analysis Pricing Promotion How to sell and distribute
Finance
Monitors the flow of finance in and out of the business Keeps and analyzes financial accounts Provides financial information to management
Human Resource Management
Identifies the workforce needs of business Recruits Selects and trains Creates motivational systems Handles employment contracts Deals with redundancy or redeployment of staff
Operations Management
Responsible for adequate resources being available for production Maintains production levels Maintains quality levels In charge of production efficiency
Business Activity
Business Sectors
3 types of business sectors Primary Secondary Tertiary As economies develop in countries, business sectors tend to gravitate from primary to tertiary changing the economic structures of countries.
Primary … raw materials and natural resources are extracted
Primary Sector
First stage of the production process Extraction of natural resources:
• Mining • Fishing • Forestry • Agricultural