IB Business Management SL - 1.1. Business activities

Role of business

To combine human, physical and financial resources to create goods and services.

Business activity

Businesses combine different input factors to produce outputs as goods or services, which can be consumed by customer.s

Factors of production

Land, labor, capital, enterprise

Land

The place where business is located

Labor

The physical and mental human effort used in the production process

Capital

It can be financial (money used to set up the business) or physical (machinery and tools used in production)

Enterprise

The entrepreneur develops an idea, and then organizes other resources to carry out the business activity

Business functions

Operations management, marketing, Human Resources management, and finance.

Operations management

Changing natural resources into a product or the supply of the service.

Marketing

Identifying and satisfying consumer needs

Human Resources management

Managing the workforce in the organization

Finance

Responsible for the control of money flow in a business.

Primary production sector

The cultivation and extraction of natural resources from the earth

Secondary production sector

The manufacturing, processing and construction of products by transforming the raw materials produced in the primary sector

Tertiary production sector

The provision of services

Needs

What a person needs to have to survive

Wants

What a person wishes to have

Goods

Physical products

Services

Intangible products

Client

Person who buys the product

Consumer

Person who uses the product