A comprehensive summary of all the theory needed to ace your BusMan module. Use the slides to highlight which sections are most important to go in-depth and you're guaranteed a pass.
, Business Management
113
Chapter 1:
The Environment of Business
1
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,Business definition:
• The organized effort of individuals to produce and sell, for a profit, the
products and services that satisfy society’s needs
• To be successful, a business must perform 3 activities:
1. Be organized
2. Must satisfy needs
3. Must earn a profit
The organized effort of individuals:
For a business to be successful, it must combine four kinds of resources:
1. Material
2. Human
3. Financial
4. Informational
Material resources:
Includes raw materials used in the manufacturing process and buildings and
machinery.
Human resources:
People who furnish their labour to the business in return for wages.
Financial resources:
Money required to pay employees, purchase materials, keep the business operating.
Informational resources:
Tells the manager how effectively the other three resources are being combined and
used.
HUMAN
RESOURCES
MATERIAL BUSINESS INFORMATION
RESOURCES AL RESOURCES
FINANCIAL
RESOURCES
2
DOPE NOTES dopenotes.co.za
, Businesses can be organized into three types:
1. Manufacturing businesses:
Process various materials into tangible goods.
2. Service businesses:
Produce services.
3. Marketing intermediaries:
Buy products from manufacturers and then resell them.
Satisfying needs:
• The ultimate objective of a business is to satisfy the needs of its customers –
this will lead to a successful business
• When a business loses sight of their customers’ needs, they are likely to
struggle
Business profit:
• A business receives money (sales revenue) from its customers in exchange
for goods or services. It must also pay money to cover the expenses of doing
business.
• The profit is what remains after all business expenses have been deducted
from the sales revenue
• A loss is when the expenses are greater than the sales revenue
• A business cannot operate at a loss for an indefinite period of time. If some
specific actions are not taken to eliminate losses, a firm may be forced to file
for bankruptcy protection.
• STAKEHOLDERS:
All the different people who are affected by the policies and decisions
made by an organization (and who can affect the business)
• Many believe profit is the bottom line for a business, but it is important to be
concerned with the firm’s social responsibility record
• Profit earned by a business becomes the property of its owners and is
therefore the reward business owners receive for producing goods and
services that consumers want.
• Everyone else (employers, suppliers, lenders) must be paid before the
owners.
Typical test and exam questions:
1.1) Identify and describe the four main resources of a business (8)
1.2) Refer to the case study... Which resource is [person] struggling with? (2)
2.1) Discuss the concept of stakeholders and use examples (5)
2.2) Are some stakeholders more important than others? (5)
3
DOPE NOTES dopenotes.co.za
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