People in Business

Ch 1

Entrepeneur

• A person who takes a risk to set up a business

• Two types of risk: financial and personal

• Possible reward of profit

Investor

• Gives money to an entrepeneur

  Money is needed to set up a business

• Investor expects return on their investment:

  money paid back with interest.

  share in the company and will recieve a dividend from the profits

Employer

• Hires employees to work for them and pays them a salary or wage

• Responsibility of providing a safe and suitable work environment

• Pays fair wage and deducts PAYE and PRSI

Employee

• Works for an employer in return for a salary or wage

• Protected by employment law, e.g. minimum wage

• Intrepeneur: may give ideas to employer to improve the business

Manager

• Entrepeneur may hire a manager to run business for them

• Arrange’s the business’ resources, making decisions to achieve the entrepeneurs goal’s for the company.

• Management Roles: HR, CEO, Liason

Producer

• Manufactures products to sell to consumers

• Use raw materials from a supplier to create a finished product

• Secondary economic sector

• 4 Factors of Productions:

  • Land

  • Labour

  • Capital

  • Enterprise

Supplier

• Sells finished or partially finished stock to a business

• Can be raw material to create products, or finished stock for a company to resell

• E.g. Insomnia Coffee Company buys coffee beans from one supplier, but may buy Innocent Smoothies from another for resale

Service Provider

• Offer services businesses need to run

  • E.g. electricity, heat, light, broadband.

  • Proffessional services e.g. accountants or solicitors

• Company e.g. Just Eat delivers food for restaurants for a fee

• Tertiary economic sector

Consumer

• Buys goods and services sold by a business for their own personal use

• Can help entrepeneurs by taking part in market research, giving info on what they want from a product

• E.g. a consumer buys a can of Coke in Tesco

Government

• Sets laws and rules for businesses that pay tax

• Offers support through agencies, e.g.

  • Local Enterprise Office

  • Enterprise Ireland

  • IDA

• Businesses pay tax on profits to Government, who use it to develop infrastructure, e.g. roads or schools

Interest Groups

• Groups of people with a common objective/viewpoint

• They lobby decision makers to promote the interests of their members

  • Lobbying is a deliberate effort to influence the decision making process (e.g. Government)

  • Methods include: Protests, negotiation, boycotting, info campaigns, legal action

  • e.g. Trade Unions

Co-operative Relationships

• win-win relationship, mutually beneficial for both parties.

• E.g. Purchasing Manager and Supplier

  • A purchasing manager may ask for the credit period to be extended when they are experiencing cash flow problems

  • If the supplier incresases the credit period, they will win, as they are building customer loyalty for future sales

  • The purchasing manager also wins, as they will have some time to raise enough cash to pay off their debts and will not face penalties or bankruptcy

Competitive Relationships

• Win-Lose relationship: one party benefits at the expense of another

• E.g. Employer and Employee

  • Employees want higher wages because the cost of living has increased

  • they negotiate a higher wage, they will increase their income

  • but the employer will face higher wage costs.

Benefits of Competitve Relationships

• Decreased prices for consumers

• Increased range of products

• Improved quality

• Better customer service

Elements of a Legal Contract

• Agreement

• Consideration

• Legality of Form

• Consent to Contract

• Capacity to Contract

• Legality of Purpose

• Intention to Contract

Agreement

• There must be an offer and acceptance

Consideration

• Something of value must pass between both parties to a contract for it to be legally valid

• E.g. money

Legality of Form

• Some contracts must be drawn up in a certain manner in order to be legally valid

• E.g. a bank loan for a house must be in writing and signed by both parties

Remedies for Breach of Contract

• Specific Performance

• Financial Compensation

• Rescind the Contract

Consent to Contract

• Both parties must enter the contract voluntarily

Capacity to Contract

• Legal ability to contract

• Someone under 18, bankrupt, mentally ill, or under the influence of drugs or alcohol would NOT have the capacity to contract

Legality of Purpose

• The contracts actions must be legal

• e.g. if a drug dealer didn’t provide the correct amount of drugs, the user could not sue them in court

Intention to Contract

• Both parties must be aware they are etering a legally binding contract

Ways a Legal Contract Can Be Terminated

• Frustration

• Performance

• Agreement

• Breach

Frustration

• An unforseen event that prevents the original terms of the contract to be carried out

• E.g. Death or bankruptcy

Performance

• When both parties fulfil the agreed terms in the contract

Agreement

• When both parties agree to end the contract early before its completion

Breach

• If one party breaks their contractual obligations, they are in breach

Specific Performance

• The court orders the party in breach to carry out their contractual obligations

Financial Compensation

• The judge may order damages in the form of money to the injured party

Rescind the Contract

• The court may order that both parties effectively return to the position they were in before the contract