Principles of Business Project
Kevoughn Clarke
Grade: 10T
Group: 1
Principle of business
The types of economics system
TYPES OF ECONOMIC SYSTEM
Traditional Economic System:
OTHER NAMES
Another name for the traditional economic system is the subsistence
Economy or Pre-Industrial Economy.
DESCRIPTION
 In a traditional economic system, economic activities are primarily
based on customs, traditions, and barter systems. This system is
often found in agrarian and tribal societies, where people produce
what they need to survive and trade or exchange goods within their
community. There is minimal use of money, and decisions about
what to produce and how to distribute resources are guided by
long-standing cultural norms and practices.
Example of Countries
Some regions in Sub-Saharan Africa, parts of rural Asia, and indigenous
communities worldwide still adhere to traditional economic systems.
Command Economic System
OTHER NAMES
Another name for the command economic system is the planned
Economy or Socialist Economy.
DESCRIPTION
 In a command economic system, the government or a central
authority control and directs economic activities. The state
typically owns or controls the means of production and distribution
of goods and services. Prices, production quotas, and resource
allocation are determined by central planning authorities. This
system is often associated with socialism or communism.
Example of Countries
North Korea, Cuba, and the former Soviet Union (prior to its
dissolution) are examples of countries that historically operated under
command economic systems.
Free Market Economic System
OTHER NAMES
Another name for the free market economic system is the capitalist
Economy or Laissez-faire Economy.
DESCRIPTION
 In a free market economic system, economic activities are driven
by market forces, with minimal government intervention. Private
individuals and businesses own and control the means of
production. Prices, production, and resource allocation are
determined by supply and demand. Competition is a key feature,
and individuals have the freedom to buy, sell, and invest as they
see fit.
EXAMPLES OF COUNTRIES
The United States, Canada, the United Kingdom, and many Western
European countries operate under variations of free market economic
systems. These countries are often referred to as capitalist or market
economies.
Mixed Economic System
OTHER NAMES
Another name for the mixed economic system is the Dual
Economy or Hybrid Economy.
DESCRIPTION
 In a mixed economic system, elements of both market-driven and
government-controlled economies coexist. While private
individuals and businesses play a significant role in economic
activities, the government also intervenes to varying degrees to
regulate and support the economy. This intervention may include
social welfare programs, infrastructure development, and
regulations to ensure fair competition.
EXAMPLES OF THE COUNTRIES
Many developed and developing countries operate under mixed
economic systems. For example, the United States, Sweden, and India
have mixed economies, but the degree of government intervention and
the specific policies in place vary significantly.
THE ROLES AND RESPONSIBILITY OF THE
FUNCTIONAL AREAS OF A BUSINESS
PRODUCTION
Role
The production department is responsible for manufacturing and
delivering the company's products or services efficiently and in
accordance with quality standards.
Responsibilities:
 Manufacturing: Overseeing the actual production process,
including procurement of raw materials, assembly, and quality
control.
 Capacity Planning: Ensuring that production capacity meets
demand and optimizing resource utilization.
 Inventory Management: Managing stock levels to prevent
overstock or understock situations.
 Cost Control: Monitoring production costs and optimizing
processes for efficiency.
 Quality Assurance: Implementing quality control measures to
maintain product quality and safety.
MARKETING
Role
The marketing department is responsible for promoting the company's
products or services, understanding customer needs, and creating
strategies to attract and retain customers.
Responsibilities
 Market Research: Gathering and analyzing data on consumer
preferences, market trends, and competition.
 Product Development: Contributing to the development of
products or services based on market research and customer
feedback.
 Promotion and Advertising: Creating marketing campaigns,
advertising, and branding efforts to reach the target audience.
 Sales and Distribution: Developing sales strategies and distribution
channels to make products or services available to customers.
 Customer Relationship Management (CRM): Building and
maintaining positive relationships with customers to ensure
satisfaction and loyalty.
FINANCE
Role
The finance department manages the company's financial resources,
budgeting, and financial planning.
Responsibilities:
 Budgeting: Creating and managing the company's budget,
including revenue and expense forecasts.
 Financial Reporting: Preparing financial statements, reports, and
analysis for internal and external stakeholders.
 Capital Management: Handling investment decisions, capital
acquisition, and capital allocation.
 Risk Management: Identifying and mitigating financial risks,
including credit, market, and operational risks.
 Tax and Compliance: Ensuring compliance with financial
regulations and handling tax-related matter
HUMAN RESOURCES
Roles
The HR department is responsible for managing the workforce and
ensuring that the organization has the right talent to achieve its
objectives.
Responsibilities:
 Recruitment and Hiring: Attracting, interviewing, and onboarding
new employees.
 Training and Development: Organizing training programs to
enhance employee skills and development.
 Compensation and Benefits: Managing salaries, benefits, and
incentive programs.
 Employee Relations: Handling workplace conflicts, grievances,
and promoting a positive work environment.
 Performance Management: Implementing performance appraisal
systems and providing feedback to employees.
RESEARCH AND DEVELOPEMENT
Role
The R&D department is responsible for innovation and improving
existing products or services.
Responsibilities:
 New Product Development: Researching and developing new
products or services to meet market demands.
 Technology Innovation: Staying up to date with emerging
technologies and applying them to improve products or processes.
 Testing and Quality Assurance: Ensuring that new products or
processes meet quality and safety standards.
 Intellectual Property Management: Protecting and managing
patents, trademarks, and copyrights.
 Market Analysis: Analyzing market trends and consumer feedback
to guide product development.
ROLES AND RESPONSIBILITY OF STAKEHOLDERS
Stakeholders in business activities are individuals or groups who have an
interest or concern in the company's operations and outcomes.
1. Shareholders/Owners:
Role
Shareholders or owners are the individuals or entities that have invested
capital in the business, typically by purchasing shares or ownership
stakes.
Responsibilities:
 Providing initial and ongoing capital investment.
 Participating in shareholder meetings and voting on major
company decisions.
 Expecting a return on their investment, typically in the form of
dividends or capital appreciation.
 Monitoring the company's financial performance and overall
health.
 Electing or appointing members of the board of directors.
 Holding management accountable for the company's performance.
 Participating in shareholder advocacy or activism to influence
corporate policies.
Customers
2. Role
Customers are the individuals or organizations that purchase products or
services from the business.
Responsibilities:
 Paying for products or services.
 Providing feedback on product quality, customer service, and
overall satisfaction.
 Influencing the company's reputation through word-of-mouth
recommendations or online reviews.
 Providing feedback on products or services to help improve quality
and features.
 Meeting their financial obligations by paying invoices or bills
promptly.
 Advocating for fair pricing and transparency in product/service
offerings.
3. Employees:
Role
Employees are the people hired by the company to perform various
roles and functions.
Responsibilities:
 Fulfilling their duties and contributing to the company's success.
 Adhering to company policies and procedures.

Providing input and feedback to improve work processes and
workplace conditions.
 Adhering to ethical and professional conduct in the workplace.
 Continuously improving their skills and knowledge to contribute to
the company's growth.
 Reporting workplace issues, safety concerns, or ethical violations
to management.
4. Suppliers:
Role
Suppliers are individuals or companies that provide the business with
necessary raw materials, components, or services.
Responsibilities:
 Delivering goods and services in a timely manner.
 Ensuring the quality and reliability of their products or services.
 Negotiating terms and pricing agreements with the company.
 Maintaining open and transparent communication with the
company regarding product availability, pricing, and delivery
schedules.
 Ensuring the quality and safety of products or services provided.
 Assisting in cost reduction efforts, such as optimizing supply chain
efficiency.
 Adhering to ethical and responsible business practices in their own
operations.
5. Government and Regulatory Bodies:
Role
Government agencies and regulatory bodies oversee and enforce
compliance with laws and regulations affecting the business.
Responsibilities:
 Enforcing and interpreting laws and regulations that pertain to
industry.
 Conducting inspections, audits, and investigations to ensure
compliance.
 Levying fines or penalties for violations of legal requirements.
 Providing guidance and interpretation of complex regulatory
requirements.
 Auditing and monitoring business compliance with laws, codes,
and standards.
 Offering support for businesses through grants, incentives, and
industry-specific initiatives.
6. Community and Society:
Role
The community and society at large are stakeholders concerned with the
social and environmental impact of business on the local and global
community.
Responsibilities:
 Expecting the business to be a responsible corporate citizen and
contribute positively to the community.
 Advocating for sustainability, ethical practices, and social
responsibility.
 Holding the company accountable for its impact on the
environment and society.
 Engaging in community outreach, philanthropy, and corporate
social responsibility initiatives.
 Advocating for sustainable and environmentally friendly business
practices.
 Participating in public-private partnerships to address societal
challenges.
LIST OF TEN CAREERS IN BUSINESS
Accounting
A person who works in the field of accounting is known as an
accountant. Accountants are responsible for managing financial records,
preparing tax returns, and ensuring that a company's financial
transactions are accurate and compliant with accounting standards.
Marketing Management
Marketing Managers oversee the development and execution of
marketing strategies, including advertising, promotions, and market
research, to promote a company's products or services.
Financial Analyst
Financial Analysts assess the financial health of a company by analyzing
financial data, trends, and market conditions to provide insights for
investment decisions.
Human Resources Manager
HR Managers oversee recruiting, training, and managing employees, as
well as implementing policies and procedures related to personnel and
labor laws.
Sales Representative
Sales Representatives are responsible for selling a company's products
or services to customers, often by identifying leads, presenting solutions,
and closing deals.
Management Consultant:
Management Consultants provide expert advice to organizations on
business strategies, processes, and operations to improve efficiency,
solve problems, and achieve specific goals.
Entrepreneur:
Entrepreneurs are individuals who start and manage their own
businesses, taking on financial and operational responsibilities to bring
their business ideas to life.
Supply Chain Manager:
Supply Chain Managers oversee the end-to-end supply chain process,
including procurement, logistics, and inventory management, to ensure
the efficient flow of goods or services.
Financial Planner:
Financial Planners help individuals and businesses manage their
finances by creating comprehensive plans for investments, retirement,
taxes, and estate planning.
Business Analyst:
Business Analysts bridge the gap between business needs and
technology solutions by identifying, analyzing, and documenting
business requirements to improve processes and systems.
TABLE OF CONTENT
Types of economic system......................................... 2-5
The roles and responsibility of a the functional
areas of a business.....................................................6-10
Roles and responsibility of stakeholders.................11-16
List of ten careers in business...................................17-19
Ethical and legal issues in establish a business........20-21
Consequences of unethical and legal practices.........22-23
ETHICAL AND LEGAL ISSUES IN ESTABLISHING A
BUSINESS
Ethical Issues
Honesty and Transparency:
Ethical business practices require honesty and transparency in all
dealings. Failing to disclose information or engaging in deceptive
practices can harm relationships with customers, employees, and
investors.
Fair Treatment of Employees:
Treating employees fairly and with respect is an ethical imperative.
Discrimination, harassment, or unfair labor practices can lead to legal
consequences, damage the company's reputation, and erode employee
morale.
Environmental Responsibility:
Businesses must consider their environmental impact and strive for
sustainability. Failure to do so can result in environmental harm,
regulatory penalties, and reputational damage.
Corporate Social Responsibility:
Ethical businesses often engage in philanthropic activities and
community support. Neglecting social responsibility can lead to public
backlash and harm the company's image.
Legal Issues in Business
Business Structure and Registration:
Choosing the right legal structure (e.g., sole proprietorship, partnership,
corporation) and properly registering the business is essential. Failure to
do so can result in legal liability, tax issues, and financial penalties.
Contractual Obligations:
Businesses enter contracts for various purposes, and failing to fulfill
contractual obligations can lead to lawsuits and financial damages.
Intellectual Property:
Protecting intellectual property, including patents, trademarks, and
copyrights, is crucial. Infringing on the intellectual property of others
can result in legal action and financial penalties.
Labor and Employment Laws:
Complying with labor and employment laws is vital. Violations can
lead to employee lawsuits, fines, and regulatory sanctions.
Consequences of Unethical and Legal Practices
Financial Consequences:
Unethical practices, such as fraud, can lead to fines, legal fees, and
financial penalties. Legal violations may also result in court-ordered
restitution.
Reputational Damage:
Unethical behavior or legal violations can severely damage a company's
reputation, leading to a loss of customers, investors, and business
partners.
Legal Liability:
Engaging in illegal practices may lead to legal liability for the company
and its employees, potentially resulting in criminal charges, civil
lawsuits, and imprisonment.
Loss of Trust:
Unethical or illegal behavior erodes trust among stakeholders, including
customers, employees, and investors. Trust is often difficult to rebuild
once lost.
Regulatory Scrutiny:
Legal violations can trigger regulatory investigations and sanctions,
potentially impacting the company's ability to operate in certain
industries.