Business studies

## 🏢 Public Sector

- Businesses: Owned or run by the government.

- Provision: Provide collective goods and services (infrastructure) to people.

- Examples:

- Education

- Health care

- Water and sanitation

- Police service

- Municipalities

- Funding: Funded by taxes.

- SARS: In charge of tax collection.

- Taxation: The more you make, the more they tax.

## 💼 Private Sector

- Businesses: Established by private entrepreneurs.

- Aim: Satisfy customer needs and wants and make money.

- Capital: Entrepreneurs provide capital to start the businesses (own or borrowed).

- Competition:

- Customers get better quality products

- Lower prices

## ⚙ Economic Sector

- Primary Sector: Businesses that extract raw material from earth (e.g. farming).

- Secondary Sector: These businesses manufacture (factory or construction).

- Tertiary Sector: These businesses buy and sell goods (shops etc).

- Quaternary Sector: These are intellectual activities (education).

- Quinary Sector: These are the higher rate of society.

## 📜 Business Concepts

- Definition: Refers to the specific processes that add value in an economic sense and/or in the particular country in which it operates.

- Characteristics of a Successful Business:

- Strong leadership

- Create a competitive advantage

- Satisfy the needs and wants (e.g. food, clothing, shelter)

- Use resources sustainably

- Responsible, accountable, and transparent

- Honor as a corporate citizen

- Means the business cares and gives back to society

- Do social & environmental campaigns

## 🎯 Important Business Objectives

- Survival: Business has vision, mission, and goals

- Profitability and growth: Higher wealth

- Productivity and efficiency: Maximum output with minimum input

- Competitive: Having an edge over important competitors

- Employee development & relationships: Employees are valuable assets.

- Business trends: Must keep up with trends (e.g. online shopping apps, websites) = Technological Development

- Accountable and ethical: Businesses must be accountable and ethical.

- Care: Businesses should take care of their profits, people, and the environment.

## 🏛 Business Environment

- Internal:

- Control

- Micro

- Includes all factors 'inside' the business

- e.g. equipment, machinery, employee

- External:

- No control

- Market

- Macro

- e.g. customers, competitors

- Includes all outside factors

- Social forces, economic factor

- Micro Environment: Business functions + Resources + Business Policy + Business Structure + Business Culture

- Traditional Functional Areas:

- General Management

- Purchasing

- Administration

- Marketing

- Public Relations

- Human Resources

- Financial

## 🏢 Formal vs Informal

- Formal:

- Location: Set location (usually)

- Tax: Pay tax

- Informal:

- Location: No set location

- Tax: Don't pay

## ⚖ SOE

- SOE: State Own Enterprise

- Definition: The legal status of possessing some item being in whole or part by the government.

- Legal entity: Undertaking commercial activities as a state asset.

# Business Studies Review Guide

## 👩‍💼 General Management

- **Top Management:** Part of top management.

- **Mission and Goals:** Create the various mission, goals, strategy.

## ⚙ Manager Roles

- **Planning:**

- Must have a back-up plan.

- Entailing more planners.

- **Organizing:** Managers must organize the factors of production properly.

- Land, labor, capital, entrepreneurship.

- **Leading:** Managers must be effective leaders.

- **Controlling:** Managers must be able to compare results with actual standards.

- **Coordination:** Managers must make sure there is synergy (teamwork) between the departments.

- **Decision-making:** Managers must make good, unbiased decisions.

- Able to solve problems.

- **Delegation:** Distribution of work duties, authority, responsibility should be given to the right employee.

- **Discipline:** Managers must be fair and consistent.

- Consequences must be clear.

- A code of conduct should be in place.

- **Motivation:** Managers must be encouraging.

- Should provide monetary (money) and non-monetary (e.g. rewards)

## 🏢 Business Functional Areas

- **Purchasing:** They buy the goods and source the business needs and must choose reliable suppliers.

- **Production:** They make the goods.

- Must make sure the goods are safe, reliable and of good quality.

- **Marketing:** They collect process and store info.

- **Promotion:** They do the advertising and have to know the target market well.

- **Public Relations:** They try to create a good image for the business.

- **Human Resources:** They do the hiring, firing, disciplining.

- They must know the labor laws.

- **Financial:** They do the budgeting and payments.

- **Risk Management:** Manage things that could go wrong in a business.

- E.g. insurance, movement of goods, fire, theft.

- **Management Info. Systems (MIS):** They measure the businesses has required technology.

## 💰 Resources

- **Entrepreneurship**

- **Human Resources / Labour**

- **Capital**

- **Raw Material / Land**

## 📜 Business Policy

- Documents containing rules, guidelines, etc.

- For employees.

- E.g. Code of conduct policy

- Plagiarism

## 🏛 Business Culture

- Refers to beliefs and values in the business.

- These values and beliefs are what direct or the stakeholders or business.

## 📈 Structure (Organogram)

- CEO

- Head of Products, Head of Marketing, Head of Purchasing

- Employees

- Displays the different positions in the workplace.

- Displays channels of communication in a workplace.

## 🌍 Market Environment

- **Suppliers:**

- Businesses are very dependent on suppliers.

- Strong relationships are required.

- Suppliers have power when they are the supplier.

- **Consumers (Customers):**

- These are the only suppliers people who buy and/or use the products services.

- Customers have more power however there are lots of competitors.

- Trends must be followed.

- **Competitors:**

- A business needs to create a competitive advantage.

- E.g. better quality, prices, service, location.

- **Strategic Alliances:**

- This is when two or more businesses join forces.

- E.g. Engen and Total

- **Intermediaries:**

- These are also known as "middle men".

- E.g. A designer might decide to sell the clothes in an established boutique the boutique is the intermediary.

- **NGO:**

- This is a Non-governmental Organization (NGO).

- They uplift the community and the environment.

- E.g. SPCA, Gift of the Givers.

- **Industry Regulators:**

- They provide guidelines for

businesses.

- E.g. Insurance Ombudsman, South African Bureau of Standards (SABS)

# Business Environment

## 🌎 Macro Environment (P.E.S.T.L.E)

- External environment - no control.

- **Political Factors:**

- Corruption

- Elections

- Climate

- No control

- **Economic Factors:**

- Inflation rates

- Exchange rates

- Interest rates

- **Social Factors:**

- Unemployment

- Poverty

- Lack of education

- Bonds

- **Technological Factors:**

- Outdated tech

- Websites

- Online shopping

- **Legal Factors:**

- Laws

- Tax laws

- Labor laws

- Debts

- **Environmental Factors:**

- Pollution

- Global warming

- Needs

- 3 R's (Reduce, Reuse, Recycle)

## 🏢 Business Environment

- **Micro Environment:** Control.

- **Market Environment:** No control, but influence.

- **Macro Environment:** No control.

## ⚔ SWOT Analysis

- Only Strengths and Weaknesses

- **Strengths:** Something a business is doing well, e.g., good leadership. Internal and external.

- **Weaknesses:** Something the business needs to work on, e.g., poor location. Internal and external.

- **Opportunities:** Something the business can take advantage of, e.g., strategic alliances.

- **Threats:** Something that can cause a business to fail, e.g., competitors, looting.

## 🎯 SWOT analysis & PESTLE elements

- Only Opportunities and Threats

- Only contributing elements