Business environment

Purpose of business activity

To satisfy the needs and wants of people, whilst aiming to make a profit

Business function

The tasks requiring specific knowledge and skill that are carried out by the various departments to achieve goals of the business

Why does a business need different function

Its to ensure different tasks can be managed effectively because different tasks require different skills. Allows the employees to specialize, making the business more efficient.

General management

responsible for planning, organizing, leading and controlling the business to achieve its goals

Top management

Makes bid decisions and sets the overall direction of the business

Focus of top management

Long term goals

Middle management

Turns top managements plans into specific actions

Manages departments and employees

Focus of middle management

Medium term goals

Lower management

Manages day-to-day work and employees

Makes sure tasks are completed properly

Focus of lower management

Short term/ day to day operations

Purchasing function

Responsible for buying all the resources, materials, and supplies needed to produce goods and ervices

Production function

Processes raw materials into finished products to satisfy customers needs and wants

Production + Purchasing

Purchasing ensure the business has the resources it needs for production to turn those resources into finalized goods/services to be available for customers

Marketing function

Process of promoting and selling products or services to customers

Public relations function

The process of building and maintaining a positive relationship and reputation between a business and the public

Public relations and marketing

Marketing attracts customers and promotes the product, while public relations builds a positive image with public to buy off marketings advertisements

Human resources function

Function of managing a businesses employees

HRs role in recruitment

Finds and hires the right employees for the business

HRs role in training

Teaches the new employees the skills and knowledge they need to do their jobs well

HRs role in wellbeing

They make sure employees feel safe, healthy, supported and satisfied at work

Finance

Manages business money and financial records

Finance role in decision making

Provides info about the business’s money

Administration

Manages info, records, and day to day organisation of a business

Administration role in decision making

Provides managers with accurate info and record to help make informed decisions

Administration role in operations

Organizes documents, schedules, communication and information to help run the business smoothly everyday

Finance role in operations

ensures there is enough to pay for the business’s daily expenses. Ensures the business can financially do what is asked of it

How all functions work together to achieve objectives

Each function specializes in different task while communicating and coordinating with each other. Allows the business to use its resources effectively

Coordination

ensuring all functions work together towards the same goal

Communication

Sharing info between function

Why coordination and communication in important for success

Prevents mistakes

Ensures everyone knows what they are doing

Helps business use time and money efficiently

Allows for problems to be identified and solved quickly

Business objective

They are the stated measurable targets of how to achieve business goals

Nature of business objectives

What the business objectives are like

Short term or long term

Goals they want to achieve

Importance of business objectives

Gives the business direction

Helps mangers make decisions

Helps functions coordinate

Helps employees understand what they are working towards

Why might business objectives change

Depends on the circumstances the business is in, whether they are fighting to survive or aiming to grow

Common successful entrepreneur qualities

Innovative

Risk taker

Leader

Business enterprise

Businesses creating and selling goods and services

Role of business enterprise in the development of a country

Creates employment

Tax revenue for govts

Exports give country money

Business profits gives people income

Added value

The difference between the selling price and the cost of resources to make a product

Ways to add value

Increase quality

Make packaging more attractive

Add a unique selling point

Adding value

Means increasing the worth of a product or service so customers are willing to pay more for it than the businesses cost to make it

Stakeholder

A person or group that has an interest in, or is affected by a business

Objectives as the owner in terms of being a stakeholder

Make profit and increase the value of the business

Objectives as the employees in terms of being a stakeholder

Get good wages and have a good job secuirity

Objectives as the customers in terms of being a stakeholder

receive good quality products

Objectives as the suppliers in terms of being a stakeholder

Make sales and receive payments on time

Objectives as the Government in terms of being a stakeholder

Receive taxes

Objectives as the community in terms of being a stakeholder

Have jobs, safe environment and economic benefits

Triple bottom line objective

Means a business looks at three objectives not just profit: Profit, people, planet

Quadruple bottom line objectives

Adds a fourth objective onto triple bottom line - acting ethically and contributing positively to the wider community

Importance of triple and quadruple bottom line objectives

Helps a business:

• think about their long term impact

• improve their reputation

• Build better relationships with stakeholders

• Make responsible decisions

Corporate social responsibility (CSR)

Adopting responsible/ethical behaviors throughout a business that considers social, economic and environmental impacts

Why CSR can be a business objective

Businesses may aim to:

Protect the environment

treat people fairly

support the community

Importance of CSR

Improves businesses reputation

Builds customer and employee loyalty

Improve stakeholder relationships

Business ethics

Moral principles and values that guide how a business behaves and makes decisions

How business ethics differ from CSR

Ethics = doing the right thing

CSR = taking responsibility for your actions