Maths and Science
THE NATURE OF BUSINESS\n\n* Enterprise: Defined as a business or company set up with the specific objective of making a profit.\n* Entrepreneurship: The ability and willingness to organize the factors of production (land, capital, and labour) and take on the financial risks of a business venture in hopes of making a profit.\n* Barter: THE exchange of goods for other goods without the use of money.\n* Profit: The excess of revenue or income over expenses.\n* Loss: The outcome when business expenses exceed the income generated.\n* Trade: The action of buying and selling goods and services.\n* Organization: A structured entity formed to achieve specific goals.\n* Economy: The total composition of economic activities occurring within a country.\n* Producer: An individual or entity that creates goods or provides services.\n* Consumer: The final purchaser and user of products or services.\n* Exchange: The act of giving or taking one thing in return for another.\n* Goods: Tangible physical items that fulfill human wants or needs.\n* Services: Intangible activities or benefits provided to satisfy needs.\n* Market: Any situation or mechanism that brings buyers and sellers together to interact and exchange goods or services.\n* Commodity: A raw material or primary agricultural product that can be bought and sold.\n* Capital: The factor of production comprising man-made resources used to produce further goods or services.\n* Labour: The aggregate of all human physical and mental effort used in the creation of goods and services.\n* Specialization: A situation where an individual or firm focuses on performing a specific task or producing a specific good that they do best.\n* Automation: The use of machines in a series of linked operations without human intervention.\n* Capitalist: An individual who owns or controls the factors of production in a free market economy.\n* Nationalization: The process by which the government takes over the ownership and control of privately owned firms.\n* Privatization: The transfer of a business, industry, or service from public to private ownership and control.\n* Bureaucracy: A system of government or business involving complex procedures and paperwork.\n* Division of Labour: The process of dividing a job into a number of different tasks until the whole process is completed.\n\n# INSTRUMENTS OF EXCHANGE AND PAYMENTS\n\n* Barter: Direct exchange of goods for goods.\n* Bills of Exchange: A non-interest bearing, written order used in international trade that binds one party to pay a fixed sum of money to another party at a fixed date.\n* Credit Cards: A standard-size plastic token with a magnetic stripe holding a machine-readable code. It acts as a convenient substitute for cash or cheques. Holders draw on a credit limit approved by the issuer (bank/store) and must usually pay within 30 days to avoid interest.\n* Electronic Transfer: The movement of money from one account to another electronically.\n* Tele-banking: The provision of banking services via telephone.\n* E-commerce: Conducting business and trade using electronic devices (internet, computer, ATM, ipod, kindle) without paperwork.\n* Cheques: A written document ordering a bank to pay a specific amount of money from the drawer\'s account to a payee.\n* Money Order: Also known as a bank money order, used for overseas payments, stating the amount and name of the recipient.\n* Bank Draft: A document drawn by one bank on another; types include sight drafts and bills of exchange.\n* Telegraphic Money Transfer: An instruction sent via telegram advice to the receiver\'s financial institution for a fee.\n* Bank Transfer: Direct movement of funds between bank accounts.\n* Money and Mobile Wallet: Digital applications or systems for storing and transferring funds (M-money).\n\n# THE EVOLUTION OF WANTS AND THE BARTER SYSTEM\n\n* Ancestral Satisfaction: Early ancestors satisfied needs directly from nature. Food came from plants and animals (often uncooked), while clothing, shelter, and tools were sourced from the environment.\n* Subsistence Economy: An ancient economic system where wants were satisfied directly from nature. People migrated in search of food and water. Over time, groups became specialized (e.g., corn, cattle, fish), leading to surpluses and the need for exchange.\n* Bartering System: The direct and immediate exchange of goods for goods to satisfy wants.\n* Features of Bartering: Included direct exchange, immediate transaction, and direct satisfaction of wants.\n* Advantages of Bartering: Allows individuals to enjoy a variety of goods, encourages division of labour, and functions without the use of money.\n* Limitations of Bartering:\n * Double Coincidence of Wants: Both parties must possess what the other wants and be willing to exchange.\n * Rate of Exchange: Difficulty in determining the correct quantity of one item acceptable for another.\n * Indivisibility: The inability to divide certain items (like a cow) to get a smaller portion of another item (like corn).\n * Store of Wealth and Value: Many items lose value over time, making them poor stores of wealth.\n\n# BUSINESS FUNCTIONS AND RESPONSIBILITIES\n\n* Definition of Business: An organization formed by a person or group using resources to provide goods or services with a view to making a profit.\n* Core Functions:\n * Production of goods and services.\n * Creation of goods and services.\n * Profit generation.\n * Providing for the needs of the community.\n * Contributing to economic growth.\n* Business Responsibilities:\n * Economic: Saturating needs/wants and stimulating economic growth.\n * Financial: Paying wages to employees and providing returns on investment.\n * Political: Acting as a pressure group for government lobbying and operating democratically.\n * Social: Protecting the environment, championing ethics, and being a corporate citizen.\n* Reasons for Establishing a Business: Financial independence, meeting public needs, self-sufficiency, being one\'s own boss, and profit-making.\n\n# MONEY: FEATURES AND FUNCTIONS\n\n* Definition: Money is any commodity accepted as a measure of value and a medium of exchange.\n* Features of Money:\n * Acceptable by the community.\n * Relatively scarce.\n * Easily divisible.\n * Homogenous (each unit looks alike).\n * Durable and portable.\n* Types of Money:\n * Commodity Money: Barter items, gold.\n * Representative Money: Receipts for gold, cheques.\n * Near Money: Credit cards, treasury bills.\n * Fiat Money: Legal tender sanctioned by the government.\n* Functions of Money:\n * Medium of Exchange: Simplifies trade.\n * Standard of Value: Sets the price for goods.\n * Store of Value: Can be saved for the future.\n * Means of Deferred Payment: Allows earning at one time and spending later.\n\n# TYPES OF BUSINESS ORGANIZATIONS AND LEGAL STATUS\n\n* Limited Liability: A legal device where company owners are only liable for debts equivalent to their investment.\n* Unlimited Liability: A legal status where business members are liable for all debts of the organization.\n\n## Sole Trader\n* Definition: A person who has total responsibility for managing their own business.\n* Features: Inexpensive to set up, financed by the owner, personal service, and efficient decision-making.\n* Advantages: Easy formation, independence, simple structure, personal control, secrecy, and high commitment.\n* Disadvantages: Limited sources of finance, lack of specialized staff, reliance on owner\'s health, unlimited liability, lack of leisure, and limited technology.\n\n## Partnerships\n* Definition: An association of 2 to 20 persons operating for a common profit goal.\n* Types of Partnership:\n * Ordinary Partnership: Profits and losses shared as agreed.\n * Limited Partnership: The partner only loses their specific investment; requires at least one ordinary partner.\n* Key Characteristics: Regulated by the Partnership Act and the Partnership Deed (a document setting rights and profit/loss divisions). Capital is provided by partners as agreed.\n* Partnership Deed Content: Names of partners, nature of business, capital amounts, profit/loss division, interest on capital/drawings, salaries, voting rights, and methods for determining goodwill.\n* Advantages: Easy to form, more capital available, specialization in management, and shared workload.\n* Disadvantages: Generally unlimited liability, possible disagreements, slower decision-making, concentrated risk, and lack of continuity upon death/retirement.\n* Sleeping Partner: One who provides capital but does not take an active role in running the business.\n\n## Companies (Limited Companies)\n* Definition: An incorporated entity separate from its owners. It can enter contracts, make legal claims, and face legal claims.\n* Private Limited Company: Consists of 2 to 50 members (typically family and friends). Shares are not easily transferable. Enjoys limited liability and continuity.\n* Public Limited Company (PLC): An incorporated company that offers shares to the public. Must have at least 7 shareholders. Capital is obtained from shareholder equity.\n* Advantages of PLCs: Easy access to capital, limited liability, shares quoted on stock markets, economies of scale, and spread of risk.\n* Disadvantages of PLCs: Costly/time-consuming legal requirements, public accounts, slow decision-making, and potential lack of human element.\n* Documents for Incorporation:\n * Memorandum of Association: Contains company name (with word \"LIMITED\"), address, objectives, liability statement, and authorized share capital.\n * Article of Association: Contains procedures for meetings, rights of directors, election procedures, borrowing powers, and dividend procedures.\n * Prospectus: (Public companies only) An invitation to the public to buy shares, detailing value and conditions.\n * Statement of Authorized, Registered or Nominal Capital: The maximum amount the company is authorized to raise.\n * Certificate of Incorporation: Issued by the Registrar of Companies after all documents are approved.\n\n## Co-operatives\n* Definition: Businesses formed and operated by members in a common bond (originated in 1844 by Rochdale Farmers).\n* Principles: Open membership, democratic control, limited interest on capital, and dividend distribution.\n* Management: Governed by an elected Board of Management/Directors at an AGM.\n* Levels: Primary (individual), Secondary (group), Tertiary (federation).\n* Advantages: Resource pooling, shared decision-making, no profiteering, and low interest rates on loans.\n* Disadvantages: Potential poor management, lack of capital, and slow decision-making.\n\n## Conglomerates and Multinationals\n* Conglomerates: A group of companies operating in different industries (e.g., transport, tourism, oil). Benefits include spread of risk and economies of scale. Disadvantages include difficulty in analysis and friction in authority.\n* Multinational Corporations (MNCs): Networks of firms operating in multiple countries (e.g., Shell, Toyota). Created through direct foreign investment. Advantages include employment and foreign exchange. Disadvantages include capital flight and environmental harm.\n\n## Other Business Forms\n* Holding Company: Formed solely to hold shares in other companies.\n* Franchise: A right sold by a franchiser to a franchisee to sell goods under the franchiser\'s name (e.g., KFC). Franchisee pays royalties.\n* Joint Venture: Cooperation between a foreign and domestic company.\n* State Corporations: Independent organizations set up by government legislation to carry out services (aim to break even, not profit).\n* Nationalized Industries: Formerly private firms taken over by the government (government is the sole shareholder).\n\n# ECONOMIC SYSTEMS AND SECTORS\n\n* Private Sector: Part of the economy owned and controlled by private individuals; aim is profit.\n* Public Sector: Part of the economy financed by taxes and operated by the government; aim is to provide services at low prices.\n* Types of Economic Systems:\n * Subsistence Economy: Production for survival; direct production from nature.\n * Free Market (Capitalist): Private individuals control the economy; driven by consumer demand. Advantages include efficiency; disadvantages include inequality and monopolies.\n * Planned (Socialist/Controlled): Government plans and controls all factors of production and sets prices. Advantages include resource direction and even distribution; disadvantages include bureaucracy and lack of incentives.\n * Mixed Economy: Combines elements of free market and planned economies (common in the Caribbean).\n\n# STAKEHOLDERS IN BUSINESS\n\n* Stakeholder: Any individual or organization with an interest in a business.\n* Owners: Provide capital, goods/services, and employment; seek profit.\n* Employees: Perform duties punctually, efficiently, and ethically.\n* Employers: Pay taxes, provide employment, and pay wages.\n* Consumers: Provide a market, follow the law, and pay taxes.\n* Government: Makes laws, promotes fair trades, and monitors prices/quality.\n\n# INTERNAL ORGANIZATIONAL ENVIRONMENT\n\n## Functional Areas of Business\n* Production Function: Transforming raw materials into goods (e.g., coconuts to soap). Involves scheduling, quality control, and warehousing.\n* Marketing Function: Identifying and satisfying customer wants profitably. Involves market research, pricing, publicity, and after-sales service.\n* Financial Function: Controlling money and accounts. Involves receipts, payments, and advising management.\n* Human Resource Function: Employee welfare, recruitment, training, promotion, and discipline.\n* Research and Development: Conducting consumer/financial research and feasibility studies.\n\n## Organizational Structure\n* Definition: The hierarchical way a business is organized for efficiency.\n* Types of Structure:\n * Entrepreneurial/Line: Suited for small businesses; clear top-to-bottom authority.\n * Product/Geographical/Market Segment: Organized by specific outputs or regions.\n * Functional: Organized by departments (marketing, finance, etc.).\n * Matrix: A combination of traditional structures.\n * Committee: Decisions are made collectively.\n* Concepts of Authority:\n * Line Authority: Direct authority over subordinates.\n * Staff Authority: Specialist assistance/advisory roles without direct line authority over workers.\n * Functional Authority: Direct responsibility within a specialist function only.\n* Chain of Command: The order in which authority flows; superior and subordinate roles.\n* Span of Control: The degree of supervision (narrow or wide).\n* Formal vs. Informal Structures: Formal follows rules and hierarchy; informal satisfies social needs without strict rules.\n\n## Management and Leadership\n* Functions of Management: Planning, Directing, Organizing, Controlling, Coordinating, Delegating, and Motivating.\n* Principles of Management: Unity of direction, Scalar chain, Unity of command, Order, Equity, Discipline, Remuneration, and Esprit de corps.\n* Motivational Theories:\n * Maslow\'s Hierarchy: Physiological, Safety, Social, Self-esteem, and Self-actualization.\n * McGregor\'s Theory X: Average person dislikes work, needs control.\n * McGregor\'s Theory Y: Average person enjoys work and seeks responsibility.\n * Herzberg\'s Two-Factor Theory: Motivators (achievement, recognition) vs. Hygiene factors (salary, working conditions).\n* Leadership Styles:\n * Autocratic (Authoritarian): Dominant, makes decisions alone. Suited for military/police.\n * Democratic (Participative): Shared responsibility and two-way communication.\n * Laissez-faire: Minimal guidance; staff work on their own (suited for Universities).\n * Charismatic: Inspires through personality.\n* Qualities of a Good Leader: Knowledge, dedication, efficiency, integrity, and good communication skills.\n\n## Teamwork\n* Definition: Joint action where individual interests are subordinated to the efficiency of the group.\n* Characteristics: Clear goals, competent members, collaborative climate, and high standards.\n* Advantages: Better ideas, higher quality output, shared information, and security.\n* Disadvantages: Unequal participation, limited creativity, longer processes, and conflict.\n\n## Communication and Conflict Resolution\n* Communication Profile: Sender -> Message -> Means -> Receiver.\n* Importance: Transmitting info, preventing delay, and cutting costs.\n* Methods: Oral (meetings, interviews), Written (memos, reports), Visual (graphs, charts), External (email, fax, satellite).\n* Conflict Resolution Strategies:\n * Employers: Lock out, suspension, pay cut, scab labour, termination.\n * Employees: Work to rule, sick out, strike, picket, go slow.\n * Organizations: Mediation (impartial third party), Arbitration (independent officials outside court), Litigation (court of law).\n* Management Information System (MIS): A computer-based or manual procedure providing timely information for decision-making. Benefits include saving time/money and increasing competitiveness. Challenges include setup costs and human error.\n\n# ESTABLISHING A BUSINESS AND RESEARCH\n\n* Roles of an Entrepreneur: Conceptualizing, planning, accessing funds, organizing, operating, bearing risk, and evaluating performance.\n* Steps in Setting Up a Business: Conceptualization -> Research -> Resource Identification -> Business Plan -> Funding -> Operation.\n* Research Process: Choose topic -> Focus project -> Design study -> Gather data -> Analyze -> Interpret -> Inform.\n* Sources of Information: Primary (first-hand data) and Secondary (books, reports, internet).\n* Regulatory Practices: Taxation (VAT), licenses, quotas, health certificates, and Bureau of Standards certificates.\n* Sources of Capital: Loans, personal savings, Angel investors (affluent individuals), Bootstrapping (credit cards), and Venture capital.\n* Collateral: Security pledged for a loan (land, vehicles, stocks).\n* Business Plan: Document describing how a business will achieve goals. Includes Operational Plan, Marketing Plan, and Financial Plan.\n* Feasibility Study: Preliminary investigation into the potential benefits and risks of a project.\n\n# THE LEGAL ASPECT OF BUSINESS\n\n## Contracts\n* Definition: A legally binding agreement between two or more persons. Requires Offer and Acceptance.\n* Features of Valid Contracts: Offer and acceptance, Form or Consideration, Capacity of parties, Legality, Possibility, and Genuineness of consent.\n* Types of Contracts:\n * Simple: Oral, written, or implied.\n * Specialty: Requires a deed (signed, sealed, delivered).\n * Record: Results of court judgments.\n* Offer and Invitation to Treat: An offer is a specific undertaking; an invitation to treat is a statement of price (e.g., an auction bid or display).\n* Discharge of Contract: Performance, Breach, Impossibility (Legalization), Lapse of time, Mutual agreement, Merger, or Death.\n* Remedies for Breach: Compensatory damages, specific performance, injunctions, and rescission.\n\n## Documentation in Trade\n* Letter of Enquiry: Requesting price/info from suppliers.\n* Quotation: Supplier\'s reply detailing commodity/service costs.\n* Invoice: A bill sent by the supplier containing quantity and price.\n* Credit Note: Corrects overcharges or returned goods.\n* Debit Note: Increases the amount owed (undercharges).\n* Bill of Lading: Document of title for shipping goods by sea.\n* Air Waybill: For goods transported by air.\n* Certificate of Origin: Proof of the commodity\'s country of origin.\n* Manifest: Summary of all bills of lading on a ship.\n\n## Insurance and Assurance\n* Insurance: Based on the likelihood of an event; aims to make good losses. Risks are pooled.\n* Assurance: Based on an event bound to happen (death).\n* Principles of Insurance:\n * Utmost Good Faith (Uberrimae Fidei): Full disclosure by both parties.\n * Indemnity: Restoring the insured to their former position (no profit from loss).\n * Insurable Interest: One must suffer a financial loss from the event.\n * Proximate Cause: The cause of damage must be the insured risk.\n * Subrogation: The insurer takes the rights of the insured after payout.\n * Contribution: Shared loss between multiple insurance companies.\n* Types of Insurance: Whole Life, Endowment, Marine (Hull, Cargo, Freight), Motor (Comprehensive vs. Third Party).\n\n# PRODUCTION AND PRODUCTIVITY\n\n* Levels of Production: Subsistence (survival), Domestic (local), and Surplus (export).\n* Factors of Production: Land (renewable/non-renewable), Labour (human effort), Capital (fixed, working, financial, social), and Entrepreneurship.\n* Productivity Formula: .\n* Industry Linkages:\n * Backward Linkages: A secondary production sector depends on primary production for input (e.g., sugar depends on cane).\n * Forward Linkages: Primary production gives rise to a secondary sector (e.g., oil production leads to refining).\n* Cottage Industry: Small firms using simple technology, often based at home (e.g., handicrafts, jams).\n* Automation vs. Mechanization: Automation is machine-linked without human touch; mechanization replaces human/animal labour with machines.\n* Labour Intensive vs. Capital Intensive: Labour intensive uses more humans; capital intensive uses more machines and computerization.\n\n# MARKETING AND THE MARKETING MIX\n\n* Marketing Mix (4 Ps): Product, Price, Place, Promotion.\n* Market Structures:\n * Perfect Competition: Numerous sellers, identical products, price takers.\n * Monopoly: Single supplier, no close substitutes, high barriers to entry.\n * Oligopoly: A few large producers (Pure vs. Differentiated).\n * Monopolistic Competition: Many sellers with differentiated products.\n* Pricing Strategies: Cost-based, Penetration, Psychological, Predatory, and Limit pricing.\n* Demand and Supply: Law of Demand (price up, demand down); Law of Supply (price up, supply up). Equilibrium is where demand equals supply.\n* Promotion Methods: Advertising (Informative, Persuasive, Comparative, Reminder), Public Relations, Sales Promotion (coupons, free samples, loss leaders), and Personal Selling.\n* Consumerism: Rights include the right to be heard, informed, choose, and have redress. Responsibilities include seeking info and respecting the environment.\n\n# LOGISTICS AND TRANSPORTATION\n\n* Logistics: Transporting and storing goods from origin to destination.\n* Chain of Distribution: Producer -> Wholesaler -> Retailer -> Consumer.\n* Wholesaler Functions: Breaking bulk, acting as intermediary, warehousing, and offering credit.\n* Types of Transport:\n * Road: Flexible, door-to-door, fast over short distances.\n * Rail: Economical for bulk over long distances.\n * Air: Fastest, reduces damage risk, but expensive and limited cargo size.\n * Sea: Most economical for large bulk, covers world access.\n\n# BUSINESS FINANCE AND GOVERNMENT ROLE\n\n* Financial Institutions: Central Bank (banker to government, regulates monetary policy), Commercial Banks, Credit Unions, Insurance Companies, and Building Societies.\n* Cheque Types: Bearer, Order, Open, Crossed, Post-dated, Stale, and Traveller\'s.\n* Stock Market: A market for buying/selling shares. Participants include Jobbers (wholesalers), Brokers (intermediaries), Bulls (expect prices to rise), Bears (expect prices to fall), and Stags (apply for shares to flip for profit).\n* Government Role: Makes laws, collects taxes, plans development, and protects citizens.\n* Taxation Types:\n * Progressive: Higher income pays higher proportion.\n * Regressive: Represents a larger proportion of a poor person\'s income.\n * Direct Tax: Income Tax, Corporate Tax.\n * Indirect Tax: VAT, Customs Duty, Excise Duty, Stamp Duty.\n* International Trade: Exchange of goods between countries. Visible trade (tangibles like machinery) vs. Invisible trade (services like tourism).\n* Balance of Trade (BOT): Visible Exports minus Visible Imports.\n* Balance of Payments (BOP): All financial transactions between a country and the world. Includes visibility and invisibility surpluses or deficits.\n\n# ACCOUNTING AS A PROFESSION\n\n* Definition: Selecting, classifying, and summarizing financial data. Bookkeeping is the actual recording of that data.\n* Ethical Principles: Integrity, Objectivity, Confidentiality, Professional competence and due care, and Professional behaviour.\n* Qualities of a Professional: Honesty, accuracy, thoroughness, and reliability.\n* Emerging Roles: Environmental accountant, E-commerce specialist, and Accounting software developer.\n* Inappropriate Behaviour: Fraud, tax evasion, and misuse of client information.\n\n# QUESTIONS AND DISCUSSION\n\n* Identify two means of communication: Meetings and Memorandums.\n* Identify two barriers to communication: Jargon and Physical disabilities.\n* Outline two strategies for effective communication: Clear channels and two-way flow.\n* Needs satisfied through employment: Economic, social, psychological, and physiological.\n* What should a banker consider for a loan? Collateral, credit history, and purpose of loan.\n* Describe management responsibility to customers: Providing info on goods and good customer service.", "title": "The Nature of Business: Comprehensive University Study Notes"}
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