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The document provides a full package of comprehensive and detailed study notes for Unit 1 of the IB Business and Management syllabus, including content for both SL & HL. This document includes graphs, tables, and many examples as well as some end ...
Business and Management
Unit 1- Business Organization and Environment
,Topic-1.1
1.1 Introduction to Business Management
Concept:
The role of businesses:
Businesses exist to create profit and value. This is done by taking in inputs and using them to
create outputs that are worth more than the cost of the inputs.
Outputs include goods and services that satisfy consumers needs.
Customers will the demand the goods and services which the business receives profit from,
allowing the business to continue operating.
(Some businesses ‘destroy’ value, as the value / price of their output does not cover the cost of
the inputs they use. This can result in business failure → can lead to business shutting down.
Goods and services are classified as :
1. Consumer goods :
The physical and tangible goods sold to general public.
This includes durable goods ( goods that do not wear out quickly ) and non-durable
goods ( goods that wear out quickly such as foods ‘ consumables’ )
2. Consumer services:
Non-tangible products sold to public. Such as insurance services / accommodation.
3. Capital goods:
Physical goods used by industry in production of other goods or/and services .
,Business inputs / Factors of production :
( C.E.L.L.)
Capital- finance needed to set up a business, pay for continuing operations and man made
resources used in production. ( financial resources )
Capital goods are purchased goods to aid in the production of consumer goods or services. On
a balance sheet they are known as assets.
These include: machines , factories , offices and vehicles.
Enterprise- Combination of other production factors to create a unit that is capable of
producing goods and services. This is generally provided by risk-taking individuals
(entrepreneurs).
e.g
Land- All natural resources. Renewable and non-renewable of nature. ( physical resources )
e.g coal, crude oil and timber.
Labor- All human resources. Manual and skilled labour that make up the workforce of a
business. ( human resources )
e.g house cleaning services
, 1.1.2
Main Business Functions :
Human resource management
HR management identifies workforce and recruitment needed in a business.
- Ensures that employees are properly compensated
- Trains employees terminates contracts.
- guarantees company treatment of employees applies to laws.
Finance and accounts
Responsible for monitoring the flow of finance into and out of the business.
- Provide financial information to senior management + other departments
- Determine pricing strategies → ensure business is profitable.
- Keep track of accurate accounts (records) of business activity
Marketing
Process of interesting and persuading clients and customers in purchasing / investing into goods
and services.
- Promotion of goods and services
- Determining wants and needs into marketing strategy
Operations management
administration of business practices to create the highest level of efficiency possible within an
organization to maximize profits.
- People in operations ensure products are produced and services delivered at lowest
cost, according to quality standards expected by customers.
Summary:
- Operations to determine whether and at what cost changes in production can be made.
- Finance and accounts to determine how much finance will be required to implement the
changes
- HR to determine if new or differently skilled workers will be required and how they can
be recruited or trained.
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