Unit 29

1. Unit 29 THE BUSINESSENVIRONMENT LO1 - Know the range of different businessesand their ownership

2. LO1 - Assessment Criteria

3. Assessment Criteria P1, P2, M1, D1 • This unit will help the learner to have an understanding of the range of different businesses that can exist in an economy. Learners will discover the different purposes that such organisations can have and the different forms of ownership that can exist. They will also be able to appreciate the role of the different stakeholders involved in such businesses. • Learners will have an understanding of the different ways in which businesses are organised to achieve their purposes and they will also be able to appreciate that businesses can have a variety of different aims. • This unit will also help the learner to have an understanding of the way in which the wider environment can impact on businesses in terms of both the economic environment and the political, legal and social framework in which businesses operate. • P1 - Learners could write a newspaper article that describes the type of business, purpose and ownership of two contrasting businesses. • Guidance: It would be advisable for the tutor/learner to choose the two businesses to be compared carefully. Businesses that are very different may lead to a meaningless comparison. Ideally, the two businesses chosen should have some similarities but have sufficient differences to allow learners to progress to the merit and distinction requirements. • M1 - Learners will need to analyse the reasons for the differences in ownership of the two contrasting businesses. • D1 - Learners will need to evaluate the impact that a change in the legal structure might have on a business • P2 - Learners could create a report that describes the different stakeholders, both internal and external, who can influence the purpose of the two contrasting businesses.

4. LO1 - Know the range of different businesses and their ownership • Learners should be encouraged to focus on businesses that they are already familiar with or have an interest in, such as through part-time employment, work experience or as customers. The two businesses must offer a contrast, so careful consideration should be given when choosing. For example, the contrast might be the sector that the business operates in; one could be in the primary or secondary sector and the other could be in the tertiary sector. Alternatively, the contrast could be between a business in the private sector and one in the public or voluntary sector. This could provide a good opportunity for group work, with perhaps different groups investigating different businesses in the local area and using the information they find to produce wall charts or posters to build up a visual map of the local business environment. • Learners should be able to distinguish between internal stakeholders, such as employees and owners, and external stakeholders, such as customers and suppliers. They should examine the influence of the different stakeholders on the businesses, especially in terms of the possible conflicts of interest between different stakeholders. It might be useful if learners focused on particular issues that illustrated such conflicts. The use of local newspaper articles highlighting local issues, such as planning applications, could be used to stimulate discussions about the impact on two contrasting businesses and how their different stakeholders might feel. Alternatively different stakeholders could be invited to talk to the learners.

5. LO1 - Know the range of different businesses and their ownership - Markets • Throughout this project you will be dealing with two businesses which will be your examples. You need to choose 2 different businesses that have something in common, business sector, purpose, audience, and it needs to be companies you can talk about from prior experience and capable of being researches in terms of function, stakeholders and economic climate influences. • These businesses need to something that can be seen from research, they can be local or global as long as the second company has something in common. Task 1 - P1.1 – Describe and explain the purpose, history and function of 2 businesses from any sector that have commonality.

6. LO1 - Know the range of different businesses and their ownership - Markets • Not all businesses are huge multinational corporations that deal with customers all over the world, some are small organisations just dealing with local customers. Companies can operate within the local, national, international or global market. • These markets will have an impact on the current and future of the businesses in terms of funding, government support, bail-outs, legal ramifications and ownership, all of which we will go into more detail later. Task 2 - P1.2 – Explain with examples the term ‘Business Markets’ Task 3 - P1.3 – Explain the different markets/areas that businesses can operate in (give examples) - Click on the links below for additional information Task 4 - M1.1 – Show evidence of the market that your two chosen businesses deal in and describe what it means to them to be in that market.

7. LO1 - Know the range of different businesses and their ownership - Purpose The purpose of every business is not just to make money though money drives their growth and recognition. Some people see this as their aim, to make money, to grow, and make money, to help others, and make money, to make better goods, to make money. Business purpose if the overriding aim of a company. For instance schools are a business, they are there to educate, money allows them to do this. Hospitals are there to heal, money allows them to keep the doors open. Task 5 (P1.5) – Explain in your own words the term ‘Business Purpose’ Task 6 (P1.6) - Explain the different business purposes (give examples) - Click on the links below for additional information Task 7 - M1.2 - Show evidence of the business purposes that your 2 chosen businesses focus on (justify your arguments)

8. LO1 - Know the range of different businesses and their ownership – Sector Whether a company is profit or non-profit, Public Limited or Privately owned, Charity or Supplier, it will belong to one of three Business sectors, it either sources goods or a service (Primary), prepares goods or a service (Secondary) , or sells goods or service (Tertiary). It is possible to be a member of all three categories like Shell, or two like Nike but there are political, social, ethical and commercial implications in all three sectors that need to be addressed by businesses that make them different. Task 8 - P1.7 – Explain in your own words the term ‘Business Sectors’ Task 9 - P1.8– Explain what each of the business sectors mean (give examples) - Click on the links below for additional information Task 10- M1.3 – Show evidence of the business sector that your 2 chosen businesses deal in

9. LO1 - Know the range of different businesses and their ownership – Owner Any type of business can be categorised within the Public, Private or Voluntary/Charitable sectors. Task 11 - P1.09 – Explain in your own words the term ‘Business Ownership’ - Click on this link for additional information Task 12 - P1.10 – Explain the different ways that companies can be owned (give examples) - Click on the links below for additional information Task 13 - M1.4 – Show evidence of the type of business ownership that your 2 chosen businesses focus on

10. LO1 - Know the range of different businesses and their ownership – Change • When a company decides to change ownership from something as simple as a partnership becoming a single owner company through a buyout, a private owned company being bought out by a larger company into a share owning corporation, or a Franchise going independent, a lot of legal issues and business functions will change along with it. • For example when Unilever bought Ben and Jerry’s, a well known Partnership, the status of the company changed considerably. The Partnership became part of a share agreement. Ben and Jerry had a place on a board of Directors and decisions became negotiated. Click here. • Similarly when Bodyshop, a well known environmentally friendly, ethos, environmental and ethically friendly driven company was bought by L’Oreal, things changed. See here. • When Lloyds TSB was rescued to the degree of a 95% bailout, there should have been a change in ethos and business practice but large payments were still made to managers and underhand practices were still known to be happening. See here. Task 14 – D1.1 – Using examples, discuss the impact that a change in ownership can have on business functions and practice with companies. Task 15 – D1.2 – Using your companies as examples, discuss the impact a change in ownership might have on business functions and practice in terms of the extent of liability and limitations to operation.

11. LO1 - Know the range of different businesses and their ownership – Stakeholders Stakeholders are people or groups who can affect (influence) or are affected by the organisation • They can be seen as being either Internal or External to the organisation, or both! Task 16 - P2.1 – Explain in your own words the term ‘Stakeholder’ Task 17 - P2.2 – Explain the different types of stakeholders available (give examples) • Identify and Discuss how the different types of groups might have different agendas with regards to what they want from the business Task 18 - P2.3 – List and explain the different stakeholders that exist for your two chosen businesses. Identify the influence they have on the functions of the business.

12. Task List Task 1 - P1.1 – Describe and explain the purpose, history and function of 2 businesses from any sector that have commonality. Task 2 - P1.2 – Explain with examples the term ‘Business Markets’ Task 3 - P1.3 – Explain the different markets/areas that businesses can operate in. Task 4 - M1.1 – Show evidence of the market that your two chosen businesses deal in and describe what it means to them to be in that market. Task 5 (P1.5) – Explain in your own words the term ‘Business Purpose’ Task 6 (P1.6) - Explain the different business purposes (give examples) Task 7 - M1.2 - Show evidence of the business purposes that your 2 chosen businesses focus on. Task 8 (P1.9) – Explain in your own words the term ‘Business Sectors’ Task 9 (P1.10) – Explain what each of the business sectors mean (give examples) - Click on the links below for additional information Task 10 - M1.3) – Show evidence of the business sector that your 2 chosen businesses deal in

13. Task List Task 11 - P1.12 – Explain in your own words the term ‘Business Ownership’ Task 12 - P1.13 – Explain the different ways that companies can be owned (give examples) - Click on the links below for additional information Task 13 - M1.4 – Show evidence of the type of business ownership that your 2 chosen businesses focus on Task 14 – D1.1 – Using examples, discuss the impact that a change in ownership can have on business functions and practice with companies. Task 15 – D1.2 – Using your companies as examples, discuss the impact a change in ownership might have on business functions and practice in terms of the extent of liability and limitations to operation. Task 16 - P2.1 – Explain in your own words the term ‘Stakeholder’ Task 17 - P2.2 – Explain the different types of stakeholders available (give examples) Task 18 - P2.3 – List and explain the different stakeholders that exist for your two chosen businesses. Identify the influence they have on the functions of the business. Task 19 - P2.4 – Discuss the Investment and Return of different stakeholders that exist for your 2 chosen businesses. Task 20 - P2.5 – Discuss with evidence the conflicts that might or have arisen with your 2 chosen businesses.