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HIGHER BUSINESS MANAGEMENT

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The course

3 units

Unit 1 – 3 topics (BICS; Decision Making; Info &IT)Unit 2 – 2 topics (marketing and operations)

– 2 topics (finance and human resources)

Plus Internal Organisation- only assessed externally

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RESOURCES

Textbooks Slides Your notes if you wishAdditional notes from meKU question and case study booklets Past papers Me

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The Role of Business in Contemporary Society

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TOPICS IN THIS CHAPTER

Role of Business in SocietyTypes of businessesObjectivesEntrepreneursStakeholdersFinance and AdviceGrowthChanges in the business environmentImpact of changes

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TESTING

Test at end of this chapter

NAB before October week (on first 3 chapters)

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WHAT IS ABUSINESS

Business is concerned with meeting needs and wants of people and groups in society.

An organisation set up to achieve objectives.

May not have “profit” as an objective

The output of business activity is the goods and services we want.

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Wealth Creation

Businesses pay our wages and allows us to buy goods and services.

The higher the number of businesses in a country the wealthier the citizens are.

The wealth of a country is measured by how many goods and services it provides (GDP)

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Cycle of business

WANTS- People in society have wants

IDENTIFICATION OF WANTS - business recognise that these wants could be satisfied by the production of goods and serviced

PRODUCTION - Businesses combine inputs to produce an output of the required good or service

CONSUMPTION AND SATISFACTION - goods and services made available to consumers who are satisfied

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Factors of production

Businesses need resources in order to produce goods and services

Land – Natural resources that the business might useLabour – staff employed in the organisationsCapital – tools, equipment usedEnterprise – the entrepreneur organises the other 3 factors of production

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SECTORS OF INDUSTRIAL ACTIVITY

PRIMARY – agriculture and extractive industries

SECONDARY – manufacturing and construction

TERTIARY – service industries

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Questions Chapter 1 pages 3 - 6 Topic – The role of business in society

1. Explain the term “business”. (2)2. Explain what is meant by “wealth creation” (3)3. Describe the cycle of business. (1)4. Distinguish between goods and services. (1)5. Describe the factors of production (8)6. Distinguish between production and consumption of

goods and services (1)7. Describe the 3 sectors of industrial activity. Give an

example for each sector. (6)8. Explain the effects of “de-industrialisation” (3)

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Solution

1. Explain the effects of “de-industrialisation” (3)

Answer:The main effects of de-industrialisation are:• A significant decrease in manufacturing jobs and

output.• A Significant increase in jobs in the tertiary sector.• A rise in imports of manufactured goods.• Changes in educational/training provision to meet the

needs of the tertiary sector.

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EXAM STYLE QUESTION

DESCRIBE THE ROLE OF BUSINESS IN SOCIETY, RELATING YOUR ANSWER TO:

Wealth creationSatisfaction of wants

(4)

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SOLUTION

Businesses produce goods and services to meet needs and wants.Consumers then buy the goods or services so that they obtain the things that they want.This creates wealth for the business organisation, their employees and their shareholders.Consumers then have money to spend from their wages and salaries and want other goods and services. This cycle continues.