IB biz 1.1-2

Factors of Production

Resources used to produce goods and services. The four main factors are Land, Labor, Capital, and Entrepreneurship.

Land

Natural resources such as minerals, forests, and water.

Labor

Human effort and work.

Capital

Man-made resources used to produce goods, including machinery, buildings, and tools.

Entrepreneurship

The ability to organize the other factors of production and take risks.

Operations

Responsibilities include production of goods/services, quality control, and supply chain management.

Finance

Responsibilities include managing money, budgeting, and financial reporting.

Marketing

Responsibilities include promoting products/services, conducting market research, and managing customer relations.

Human Resources

Responsibilities include managing employees, training, and establishing workplace policies.

Key activities of Operations

Manufacturing, service delivery, and inventory management.

Key activities of Finance

Accounting, investment decisions, and securing funding.

Key activities of Marketing

Advertising, pricing strategies, and product development.

Key activities of Human Resources

Recruitment, compensation, and employee development.

Intrapreneur

Employee who develops innovative ideas within an existing organization

Entrepreneur

Person who starts and runs their own business, taking on financial risks

Business Sectors

Categories of businesses based on ownership and purpose

Public Sector

Government-owned or controlled organizations

Private Sector

Businesses owned by individuals or groups, not the government

Publicly Held Company

Company whose shares can be bought by the general public on stock exchanges

Public Limited Company (PLC)

UK/European term for a company that offers shares to the public

Cooperatives

Business owned and operated by its members for mutual benefit

Functional Areas of Business

Operations, Finance, Marketing, and Human Resources

Operations Department

Production of goods/services, quality control, supply chain management

Finance Department

Managing money, budgeting, financial reporting, investment decisions

Marketing Department

Responsible for promoting and selling products or services

Public Schools

Example of a public sector organization

Military

Example of a public sector organization

Postal Services

Example of a public sector organization

Local Stores

Example of a private sector organization

Corporations like Apple or Nike

Examples of private sector organizations

Microsoft

Example of a publicly held company

Amazon

Example of a publicly held company

Tesco PLC

Example of a public limited company

BP PLC

Example of a public limited company

REI

Example of a cooperative

Land O'Lakes

Example of a cooperative

Credit Unions

Example of a cooperative

Back

Promoting products/services, market research, customer relations

Human Resources department

Managing employees, training, workplace policies, recruitment

Cooperative

Business owned and operated by its members for mutual benefit

Impact of cooperatives on the community

Create local jobs, keep profits in the community, support community projects, use democratic decision-making

Impact of cooperatives on customers

Often provide better prices, give members a say in products/services, focus on quality rather than just profit

Impact of cooperatives on workers

Workers may be member-owners, more democratic workplace, profits shared among members, often better working conditions