Y/502/5408
THE BUSINESS
ENVIRONMENT
LO1 - Know the range of different businesses
and their ownership
Learning Outcome (LO)
The learner will:
1
2
Know the range of
different businesses
and their ownership
Understand how
businesses are
organised to achieve
their purpose
Pass - The assessment criteria are
the pass requirements for this unit.
The learner can:
P1
Describe the type of business,
purpose and ownership of two
contrasting businesses
P2
Describe the different
stakeholders who influence
the purpose of two
contrasting businesses
P3
Describe how two businesses
are organised
P4
Explain how their style of
organisation helps them to
fulfil their purposes
3
Know the impact of
the economic
environment on
businesses
P5
Describe the influence of two
contrasting economic
environments on business
activities within a selected
organisation
4
Know how political,
legal and social
factors impact on
business
P6
Describe how political, legal
and social factors are
impacting upon the business
activities of the selected
organisations and their
stakeholders
Scenario
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Criteria
Criteria
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Merit - For merit the
evidence must show that, in
addition to the pass criteria,
the learner is able to:
78
Distinction - For distinction
the evidence must show that, in
addition to the pass and merit
criteria, the learner is able to:
M1
Analyse the type of
business, purpose
and ownership of two
contrasting
businesses
D1
Evaluate the effect of a
selected business
changing its ownership
status
M2
Analyse the impact of
changes in demand
and supply on a
selected business
D2
Evaluate to what extent a
selected business is
likely to be affected by
changes in the economic
environment
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This unit will help the learner to have an understanding of the range of different businesses that can
exist in an economy. Learners will discover the different purposes that such organisations can have
and the different forms of ownership that can exist. They will also be able to appreciate the role of
the different stakeholders involved in such businesses.
Learners will have an understanding of the different ways in which businesses are organised to
achieve their purposes and they will also be able to appreciate that businesses can have a variety of
different aims.
This unit will also help the learner to have an understanding of the way in which the wider
environment can impact on businesses in terms of both the economic environment and the political,
legal and social framework in which businesses operate.
P1 - Learners could write a newspaper article that describes the type of business, purpose and
ownership of two contrasting businesses.
Guidance: It would be advisable for the tutor/learner to choose the two businesses to be compared
carefully. Businesses that are very different may lead to a meaningless comparison. Ideally, the two
businesses chosen should have some similarities but have sufficient differences to allow learners to
progress to the merit and distinction requirements.
M1 - Learners will need to analyse the reasons for the differences in ownership of the two
contrasting businesses.
D1 - Learners will need to evaluate the impact that a change in the legal structure might have on a
business
P2 - Learners could create a report that describes the different stakeholders, both internal and
external, who can influence the purpose of the two contrasting businesses.
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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78
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Learners should be encouraged to focus on businesses that they are already familiar with
or have an interest in, such as through part-time employment, work experience or as
customers. The two businesses must offer a contrast, so careful consideration should be
given when choosing. For example, the contrast might be the sector that the business
operates in; one could be in the primary or secondary sector and the other could be in
the tertiary sector. Alternatively, the contrast could be between a business in the private
sector and one in the public or voluntary sector. This could provide a good opportunity
for group work, with perhaps different groups investigating different businesses in the
local area and using the information they find to produce wall charts or posters to build
up a visual map of the local business environment.
Learners should be able to distinguish between internal stakeholders, such as employees
and owners, and external stakeholders, such as customers and suppliers. They should
examine the influence of the different stakeholders on the businesses, especially in
terms of the possible conflicts of interest between different stakeholders. It might be
useful if learners focused on particular issues that illustrated such conflicts. The use of
local newspaper articles highlighting local issues, such as planning applications, could be
used to stimulate discussions about the impact on two contrasting businesses and how
their different stakeholders might feel. Alternatively different stakeholders could be
invited to talk to the learners.
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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Throughout this project you will be dealing with two
businesses which will be your examples. You need to
choose 2 different businesses that have something in
common, business sector, purpose, audience, and it needs
to be companies you can talk about from prior experience
and capable of being researches in terms of function,
stakeholders and economic climate influences.
 These businesses need to something that can be seen
from research, they can be local or global as long as the
second company has something in common.
Task 1 - P1.1 – Describe and explain the purpose, history and
function of 2 businesses from any sector that have
commonality.

Purpose
Scenario
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Criteria
Criteria
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Audience
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Products
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History
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Rivals
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Not all businesses are huge multinational corporations that deal
with customers all over the world, some are small organisations
just dealing with local customers. Companies can operate within
the local, national, international or global market.
 These markets will have an impact on the current and future of
the businesses in terms of funding, government support, bailouts, legal ramifications and ownership, all of which we will go
into more detail later.
Task 2 - P1.2 – Explain with examples the term ‘Business Markets’
Task 3 - P1.3 – Explain the different markets/areas that businesses
can operate in (give examples) - Click on the links below for
additional information

Local
National
International
Global Markets
Task 4 - M1.1 – Show evidence of the market that your two chosen
businesses deal in and describe what it means to them to be in that
market.
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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The purpose of every business is not just to make money though
money drives their growth and recognition. Some people see this as
their aim, to make money, to grow, and make money, to help others,
and make money, to make better goods, to make money. Business
purpose if the overriding aim of a company. For instance schools are a
business, they are there to educate, money allows them to do this.
Hospitals are there to heal, money allows them to keep the doors open.
Task 5 (P1.5) – Explain in your own words the term ‘Business Purpose’
Task 6 (P1.6) - Explain the different business purposes (give
examples) - Click on the links below for additional information
Make a Profit
Supply of products
Free Goods or Service
At Cost
and/or services
Difference between profit and not-for-profit organisations
Below Cost
Task 7 - M1.2 - Show evidence of the business purposes that your 2
chosen businesses focus on (justify your arguments)
Scenario
Scenario
Criteria
Criteria
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Whether a company is profit or non-profit, Public Limited or Privately
owned, Charity or Supplier, it will belong to one of three Business sectors, it
either sources goods or a service (Primary), prepares goods or a service
(Secondary) , or sells goods or service (Tertiary). It is possible to be a
member of all three categories like Shell, or two like Nike but there are
political, social, ethical and commercial implications in all three sectors that
need to be addressed by businesses that make them different.
Task 8 - P1.7 – Explain in your own words the term ‘Business Sectors’
Task 9 - P1.8– Explain what each of the business sectors mean (give
examples) - Click on the links below for additional information
Primary
Secondary
Tertiary
Task 10- M1.3 – Show evidence of the business sector that your 2 chosen
businesses deal in
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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Any type of business can be categorised within the Public, Private or
Voluntary/Charitable sectors.
Task 11 - P1.09 – Explain in your own words the term ‘Business
Ownership’ - Click on this link for additional information
Task 12 - P1.10 – Explain the different ways that companies can be
owned (give examples) - Click on the links below for additional
information
Public
•
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Private
Government Departments
Government Agencies
•
•
•
•
•
•
Voluntary/Charities
•
Private Limited Company
Public Limited Company
Sole Trader
Partnership
Franchises
Worker Cooperatives
Charitable trusts
Task 13 - M1.4 – Show evidence of the type of business ownership
that your 2 chosen businesses focus on
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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When a company decides to change ownership from something as simple as a
partnership becoming a single owner company through a buyout, a private owned
company being bought out by a larger company into a share owning corporation,
or a Franchise going independent, a lot of legal issues and business functions will
change along with it.
 For example when Unilever bought Ben and Jerry’s, a well known Partnership, the
status of the company changed considerably. The Partnership became part of a
share agreement. Ben and Jerry had a place on a board of Directors and decisions
became negotiated. Click here.
 Similarly when Bodyshop, a well known environmentally friendly, ethos,
environmental and ethically friendly driven company was bought by L’Oreal,
things changed. See here.
 When Lloyds TSB was rescued to the degree of a 95% bailout, there should have
been a change in ethos and business practice but large payments were still made
to managers and underhand practices were still known to be happening. See here.
Task 14 – D1.1 – Using examples, discuss the impact that a change in ownership can
have on business functions and practice with companies.
Task 15 – D1.2 – Using your companies as examples, discuss the impact a change in
ownership might have on business functions and practice in terms of the extent of
liability and limitations to operation.

Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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Stakeholders are people or groups who can affect (influence) or are
affected by the organisation
◦ They can be seen as being either Internal or External to the
organisation, or both!
Managers /
Shareholders (I)
Customers (E)
Suppliers (E)
Employees (I)
Trade Unions / Employer Local and National
Government (Local
Owners (I)
Associations (E)
Communities (E)
and Central) (E)
Task 16 - P2.1 – Explain in your own words the term ‘Stakeholder’
Task 17 - P2.2 – Explain the different types of stakeholders available
(give examples)
◦ Identify and Discuss how the different types of groups might
have different agendas with regards to what they want from
the business
Task 18 - P2.3 – List and explain the different stakeholders that
exist for your two chosen businesses. Identify the influence they
have on the functions of the business.
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
11
22
3 3 4 4 5 5 6
67
78
89
10
9
11
10
1211 13 12 14
1315 1416
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15
18
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Task 1 - P1.1 – Describe and explain the purpose, history and function of 2
businesses from any sector that have commonality.
Task 2 - P1.2 – Explain with examples the term ‘Business Markets’
Task 3 - P1.3 – Explain the different markets/areas that businesses can
operate in.
Task 4 - M1.1 – Show evidence of the market that your two chosen
businesses deal in and describe what it means to them to be in that market.
Task 5 (P1.5) – Explain in your own words the term ‘Business Purpose’
Task 6 (P1.6) - Explain the different business purposes (give examples)
Task 7 - M1.2 - Show evidence of the business purposes that your 2 chosen
businesses focus on.
Task 8 (P1.9) – Explain in your own words the term ‘Business Sectors’
Task 9 (P1.10) – Explain what each of the business sectors mean (give
examples) - Click on the links below for additional information
Task 10 - M1.3) – Show evidence of the business sector that your 2 chosen
businesses deal in
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
11
22
3 3 4 4 5 5 6
67
78
89
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9
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1211 13 12 14
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Task 11 - P1.12 – Explain in your own words the term ‘Business Ownership’
Task 12 - P1.13 – Explain the different ways that companies can be owned (give
examples) - Click on the links below for additional information
Task 13 - M1.4 – Show evidence of the type of business ownership that your 2 chosen
businesses focus on
Task 14 – D1.1 – Using examples, discuss the impact that a change in ownership can
have on business functions and practice with companies.
Task 15 – D1.2 – Using your companies as examples, discuss the impact a change in
ownership might have on business functions and practice in terms of the extent of
liability and limitations to operation.
Task 16 - P2.1 – Explain in your own words the term ‘Stakeholder’
Task 17 - P2.2 – Explain the different types of stakeholders available (give examples)
Task 18 - P2.3 – List and explain the different stakeholders that exist for your two
chosen businesses. Identify the influence they have on the functions of the business.
Task 19 - P2.4 – Discuss the Investment and Return of different stakeholders that
exist for your 2 chosen businesses.
Task 20 - P2.5 – Discuss with evidence the conflicts that might or have arisen with
your 2 chosen businesses.
Scenario
Scenario
Criteria
Criteria
Tasks
Tasks
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3 3 4 4 5 5 6
67
78
89
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1211 13 12 14
1315 1416
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