Lecture notes
BUSSINESS ENVIOURMENT
- Institution
- OCR
PROVINDING IN DEPTH REVIEW OF WHAT IS BUSSINES , WHAT ARE ENTREPRENEURS
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1.Plums stands for: profit distribution, the liability (limited or unlimited), management and control, andsources of finance available. Let's go through each of these elements for sole traders, partnerships,
private limited companies, and public limited companies. Profit Distribution Private limited companies
and public limited companies have limited liability, meaning their liability is limited to their investment
in the company. Private and public companies differ in their management and control. Private limited
companies are less likely to have external control compared to public limited companies. Management
and Control Sole traders have full management and control of their business, but they can also
outsource specialist services. Partnerships and private limited companies have shared management and
control. Public limited companies have a board of directors who manage and control the company.
Sources of Finance Community companies that have access to the stock exchange can generate massive
amounts of finance, but there is a risk of takeover. Public limited companies can generate enormous
amounts of finance within the community but not on the stock exchange.
2. Businesses typically consist of four main sections as they grow: operations, human resources,
marketing, and finance. These are considered internal factors and are commonly tested in GCSE
Business exams, particularly in the HUA stream where operations is the main focus.Additionally,
businesses are also impacted by external factors that come from outside the organization. While a good
is a tangible product, such as an iPhone or a toy, a service is an intangible process that still has
environmental implications. In fact, the concept of carbon footprint is becoming an increasingly
prominent issue in the business world and economy at large.Wishing you good luck on your exams!
3. An entrepreneur is an individual who takes on risk in the hopes of gaining a reward, although success
is not guaranteed. For instance, 90% of restaurants fail within the first three years of business. The
primary reward for an entrepreneur is usually profit; however, sometimes the business may be set up to
benefit society as a whole. Having certain qualities is essential to becoming a successful entrepreneur.
To begin with, one must be organized and have a strong work ethic. It's also necessary to be a risk-taker
and make educated decisions that weigh the potential rewards against the risks.
4. An entrepreneur is someone who takes a calculated risk with the hope of gaining a reward.
Typically, this reward is monetary profit, but the risk of losing money is always present. Why do
entrepreneurs take on this risk? There are several reasons:They may see potential for greater
profits by running their own business, rather than earning a salary as an employee.They may
desire independence and the ability to be their own boss.They may be unable to find employment
with their current skills and qualifications, so they choose to start their own business instead.
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