Business Management – higher Business enterprise

1. Business in Contemporary Society The Role of Business in Society Business Management – higherBusiness enterprise

2. Business Activity • Everyone in our society has ‘wants’. • eg: food, clothes, shelter, entertainment, travel… • To satisfy these wants we make use of (consume) goods and services. • If suitable goods and services were not available, we would not be able to satisfy our wants. • It is through business activity that goods and services are provided. • Therefore a definition of business activity is any kind of activity that results in the provision of goods and services which satisfy human wants.

3. Goods & Services • 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. • Egsof services are going to the hairdresser, being served in a restaurant, or visiting a doctor.

4. 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.

5. Factors of Production • 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 of production and taking the risk of producing goods or services in advance of them being sold). • In summary, then, business activity involves using resources to produce goods and services which people require in order to satisfy their wants.

6. Wealth Creation • Business activity can be described as ‘wealth-creating’. • This is because the term ‘wealth’ is used to refer to the amount of goods and services, or output available – the more goods and services that exist the greater the amount of wealth. • In this sense, then, wealth is not money as such but the total of goods and services which can be given a monetary value.

7. Markets • Finally, goods and services are sold in markets. • These exist where goods and services are exchanged between consumers and producers. • Egsof markets are the housing market, the market for snack foods, and the financial services market.

8. Cycle of Business

9. Sectors of Industrial Activity • Primary sector- businesses involved in taking natural resources from the land, that is, agriculture and extractive industries egcoal mining. • Secondary sector- those businesses which use resources to make or build their products, iemanufacturing and construction firms. • Tertiary sector- the firms which provide services rather than goods. Egbanking and hairdressing, where a service is performed for a customer but no goods change hands, transporting goods, and acting as an intermediary between manufacturer and customer.

10. Countries tend to go through three stages of development. • Firstly they are dominated by the primary sector, as is the case in less developed countries (and was true of the UK up until the Industrial Revolution 200 years ago). • Secondly, experienced by the UK from around 1800 until the middle of the 20th century, secondary sector industries such as steel, car manufacturing and shipbuilding are the most important. • Lastly, the tertiary sector becomes the largest and fastest growing, both in terms of output and employment.