People in BusinessUnit 1

Explain the differences between commercial and non-commercial businesses

List and explain the stakeholders, with examples of each

Explain what interest groups are Explain the different types of relationships that

can occur between the stakeholders in business List and explain the key elements in a contract

At the end of this topic you will be able to...

Commercial v non-commercial businesses

A commercial business is one which has the aim of making a profit, e.g. Dunnes Stores, Ryanair, Apple

A non-commercial business is an organisation which exists for some other reason than making a profit, i.e. to provide a service e.g. charity (Focus Ireland), state agency (FÁS)

Stakeholders

An entrepreneur is a person who spots a gap in the market, takes the initiative to set up a business and takes the risk involved in setting up in business

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Too

Entrepreneurs

People or organisations that provide support services to the business

Examples: Financial institutions provide accounts, loans,

etc. Insurance companies provide insurance cover Solicitor provides legal advice Electricity companies provide the business

with power

Service Providers

Turn raw materials into finished products They enter into contracts with suppliers They try to make a profit by keeping costs

low and prices competitive Example – Glanbia turns milk into yoghurt

and cheese

Producers

Provides the raw materials required by producers

They compete with other suppliers for contracts by offering inducements, e.g. discounts, credit, prompt delivery or free delivery

Example – dairy farmer

Suppliers

Can effect businesses by the decisions they make, e.g. laws, taxes, etc.

Government

Investors provide finance or funding for a business

In exchange, they expect a return on their money

The greater the risk they take, the greater the return the expect

Examples of investors include shareholders, banks, venture capitalists , the Government

Investors

Make or sell the goods and services for the business in exchange for payment of a wage or a salary

Employees

Hire employees to perform various tasks

Employers

A consumer is a person who buys goods and services for their own use

Consumers

Consumer v Customer?

Interest groups represent the interests, views or goals of the various stakeholders

They achieve results by applying pressure or lobbying decision makers

Example: Society of the Irish Motor Industry (SIMI) successfully lobbied the Government to extend the scrappage scheme in for cars.

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What are Interest Groups?

IBEC – Irish Business and Employers Confederation

ICTU – Irish Congress of Trade Unions CAI – Consumers’ Association of Ireland IFA – Irish Farmers Association LVA – Licenced Vintners Association ITAA – Irish Travel Agent’s Association INOU – Irish National Organisation for the

Unemployed

Examples of Interest Groups

Relationships between a business and its stakeholders can be either co-operative or competitive

A co-operative relationship occurs when they work together towards a common goal in a mutually beneficial way (win-win)

A competitive relationship occurs when both parties want the same thing but only one of them gets it (win-lose)

Business Relationships

Employees work in teams Employees and employers agree on wages

and work conditions Producers listen to feedback from their

customers Investors give funding to entrepreneurs who

keep them informed and rewarded

Co-operation within a business

Two or more companies may form a strategic alliance

They will share skills, ideas, costs and profits Example: General Motors and Citroen jointly

developed the Opel Corsa and Citroen C3 cars

Co-operation between businesses

Employees compete with other employees for promotion

Employees look for increased wages but employers want to keep costs to a minimum

Competition within businesses

Two producers or service providers may compete on prices, e.g. Ryanair and Aer Lingus

Consumers benefit from lower prices

Competition between businesses

In this topic you have learned about:Commercial and non-commercial businessesStakeholdersInterest groupsCo-operative and competitive relationships in business

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