Business in contemporary society
Role of business in society
Wealth creation
production and consumption of goods and services
satisfaction of wants, sectors of activity
Types of business organisations
Ownership
Control
For the undernoted types of
business
Finance
Objectives for different types of
organisation

Sole trader

Partnership

private limited company (Ltd)

public limited company (plc)

voluntary organisations

public organisations eg Council
Must be able to relate the objective to the type of
organisation eg public sector orgs want to provide a service, a
plc wants to maximise profit
Profit maximisation, survival, sales maximisation, growth,
social responsibility, managerial objectives, provision of a
service
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Role of enterprise and the
entrepreneur
What is an entrepreneur
Factors of production
Franchises
Risk taking
Innovation
Stakeholders
What is a stakeholder
Relate types of stakeholders to different types of
organisation
Describe the influence of a stakeholder on an organisation –
how can they influence the organisational objectives and
behaviour
Factors affecting the operation
of business
Sources of finance and sources of assistance eg local
enterprise companies (LECs)
Identify appropriate source of finance for each type of
organisation and be able to describe the source of finance –
ad and disadvantages
Methods of growth — horizontal and vertical integration,
diversification, merger and take-over, de-merger, divestment
Factors which can cause change: internal - changes in costs,
development of new products; external - changes in demand,
changes in technology, changes in taxation, changes in the
competitive market, changes in national and EU legislation
Importance of change to business, for example, the need to
respond to internal and external pressures; the need to
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ensure survival
Business as a dynamic activity
PESTEC
Be able to describe PESTEC and say how it impacts upon an
organisation
Business Information and ICT
Sources of information
Need to be able to describe the different sources
Primary, secondary, internal, external
Explain the costs and benefits of each sources and give
relevant examples
Types of information
Qualitative and quantitative
Written, oral, pictorial, graphical, numerical
ICT in business
Uses of ICT — hardware and software, for example, decision
making. Monitoring and control, decision making, measuring
performance, identifying new business opportunities
Costs and benefits of ICT, for example, more rapid decisions,
staff training
Awareness of current legislation, for example, data
protection, computer misuse act
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Decision making in business
Decision making
The nature of decision; types of decision: strategic, tactical
and operational, role of managers
Decision making model
Role of managers, need for decisions to fit with
organisational objectives, influence of stakeholders on
decisions, for example, shareholders and AGM, government
and taxation; ways in which stakeholders exert influence, for
example, voting, pressure groups
Strengths, weaknesses,
opportunities, threats (SWOT)
analysis
Development of SWOT analysis, drawing conclusions from a
SWOT analysis, justification of conclusions
Problems of structured models
Time, ability to collect all information; problems of
generating alternatives, lack of creativity
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Internal organisations
Grouping of activities
Functional activities of
organisations
Forms of organisational structure
Be able to explain what the groupings are and the
advantages and disadvantages of each
 Function
 product/service
 customers
 place/territory
 technology
 line/staff
Know what each functional area does
Marketing, human resource management, finance, operations,
research and development
Be able to explain what each is
Advantages and disadvantages of each
Give examples of each
Hierarchical, flat, matrix, entrepreneurial, centralised and
decentralised
Size, technology, market, product – factors which influence
the choice of structure and grouping of activities
Aspects of organisational
structure
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Organisation charts, span of control, formal and informal
structures, awareness of organisation culture, changes in
structure, for example, de-layering, downsizing; the role and
responsibilities of management
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Marketing
Marketing
Role of marketing in organisations – relate to sectors of
economy
Terms - niche marketing, market share, market growth
market led v product led
The marketing mix
Place, including distribution channels be able to describe each
unit in the channel and give advantages and disadvantages of
different methods for different products and organisations
Price - pricing strategies
Product/service – product life cycle, innovation, extension
strategies
Promotion - promotional strategies, advertising, offers,
promotional activities
What would be used, when and why
Target markets
Market segmentation – methods
What is a target market
Advantages of using segmentation
Market research
Field and desk research
Describe each and be able to give types ie survey and taste
test
Advantages and disadvantages of each
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Operations
Operations
Role and importance of operations in organisations
Distribution and delivery
Stock – just in time or holding stock – advantages and
disadvantages
Methods of transport – which is best for which type or
product and why
Types of operations
Job, batch, flow – be able to describe each and give examples
Quality
Quality control
Benchmarking
Quality circles
Quality management
Quality assurance
Hallmarks
Staff training
Quality inputs
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Human Resources
Human resource management
Role and importance of human resources in organisations
Changing pattern of employment
within organisations
Current trends, for example, use of part-time and casual
staff, core labour force within organisations
Reasons why it has changed over the years
Impact on business adapting to changes – good and bad
Recruitment and selection
Recruitment cycle
Know difference between recruitment and selection
Recruitment down to application received then switches to
selection
Documents what are they? job analysis, job description,
person specification,
internal and external sources of recruitment – examples and
ad/disad of each
Tests –w hat are they and ad/disad of each
Training and development
Training – on the job, off the job, apprenticeship, induction –
what is each and ad/dis ad of each
Reasons for training and development, for example,
flexibility, upgrading skills
Costs and benefits to the organisation
Appraisal – what is it and why do it? Costs and benefits
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Employee relations
Main institutions: ACAS, employers’ associations, employee
organisations
Processes: negotiation, consultation, arbitration
Management of employee relations, for example, works
councils
Methods of industrial action
Legislative requirements
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An awareness of legislation relating to equal opportunities,
employment and health and safety
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Finance
Finance
Role of the finance function in organisations
Payment of wages and salaries, payment of accounts,
maintenance of financial
Financial information
Purpose of trading, profit and loss account and balance sheet,
budgets
Purpose of ratios
Need to know what they are and what they are used for
Users of information
Management, owners, creditors, employees, citizens
Uses of information
Controlling costs and expenditure, decision making,
monitoring performance
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