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1. Introduction to Business

The term ‘business’ includes many different types of organisation, from a part-time window-cleaner to a multinational company such as General Motors, employing thousands of people in many different countries. Businesses are not just commercial or privately-owned firms — nationalised industries and Government agencies also act according to business principies, producing and supplying goods and services.
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2. Types of Business Organisation

Businesses can be classified into two types: private sector and public sector, owned by private individuais and the Govemment respectively.
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3. Information and Decision-making

The terms data and information are often used interchangeably, but this is rather loose usage. In simple terms, data may be defined as basic facts which need processing in order to be of any practical use.
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4. Finance

All firms need finance to stay in business. The finance required may be divided into two categories:
  • fixed capital for purchasing assets such as buildings, vehicles and equipment;
  • working capital for running costs such as wages, materials and rent.
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5. Accounting

All firms have to keep financial records, which serve various purposes, as illustrated in Figure 5.1. Accounts are used for management and control of the organisation, providing information such as:
  • which customers/products are most profitable;
  • which products/departments consume the most working capital;
  • when the organisation may need to borrow;
  • which products are most frequently returned because of faults;
  • whether the firm can afford new investment.
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6. Production

Production means creating goods and services which satisfy people’s needs. It is sometimes used in the narrow sense of manufacturing production (making goods in factories). However, a bus-driver or a disc jockey is also involved in production because they provide services which fulfil consumer needs. Some of the activities described below are usedmainly or solely in the manufacture of goods, but others such as quality control and purchasing are as vital in service industries.
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7. Marketing

There are many different definitions of marketing, each with a slightly different emphasis. The most commonly quoted in the UK comes from the Institute of Marketing;
“the management process responsible for identifying, anticipating and satisfying consumer requirements profitably”
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8. The Marketing Mix

Having formulated its marketing objectives, a business has to decide on the appropriate marketing mix. The marketing mix is often referred to as the ‘4 Ps’:
Product — the type of good or service produced, such as size, quality, design and packaging.
Price — this includes discounts, credit terms and special offers.
Promotion — products have to be advertised and brought to customers’ attention.
Place — how and where products are sold, such as through shops or direct to customers; this is often referred to as distribution.
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9. Internal Organisation

One of the most commonly-quoted divisions of the functions of management was by Henri Fayol in General and Industrial Administration (1916). Fayol listed five basic functions;
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10. Personnel Management

Personnel management is defined by the Institute of Personnel Management as concerned with:
“recruiting and selecting people; training and developing them for their work; ensuring that their payment and conditions of employment are appropriate, where necessary negotiating such terms of employment with trade unions, advising on healthy and appropriate working conditions; the organisation of people at work, and the encouragement of relations between management and work people.”
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11. Industrial Relations

Industrial relations (sometimes referred to as employee relations) is a general term for the processes by which the managers of an organisation discuss pay and working conditions colIectively with its workers and their representatives.
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12. The Economic Framework

Any economic system has to solve the problem of scarcity of resources. This means that all resources such as land, raw materials, labour and machinery are limited in supply.
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13. The External Environment of Business

As well as internal influences such as workers and owners, the managers of a business are subject to the influence of outsiders such as the general public, pressure groups and outside agencies. These groups place differing demands upon the firm.
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14. Coursework

Examination coursework is part of some A Level Business Studies syllabuses for several reasons:
  • it allows you to investigate a topic at length;
  • the pressure of the exam room is removed;
  • it encourages you to work with others;
  • approached properly, it can be great fun and motivate you to produce good work;
  • it develops skills such as interpretation of data which are tested in written examination papers.
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