Business in Contemporary Society
Student Activities
Activity 1
What are the three sectors of industry? Describe each, giving an example of a
local firm from each sector, and suggest three objectives for each firm.
How has the importance of each sector of industry changed over the past
twenty years?
Activity 2
Your friend tells you she wishes to become a self-employed hairdresser.
Describe two types of business organisation she might establish to achieve
this aim, pointing out at least two advantages and two possible disadvantages
of each.
Activity 3
Suggest at least three reasons why a local authority might find it cheaper to
contract out the provision of school meals to a profit -making organisation
rather than provide them itself.
Activity 4
How might the objectives of an NHS hospital differ from those of a private
hospital?
Activity 5
Give at least three examples of stakeholders in two different types of
organisation and suggest three reasons why their aims might conflict.
Activity 6
Read the case study below and then answer the questions which follow.
Ellygance
The little town of Dollar nestling in the Ochil Hills was an ideal location for Elly
Parks. Over the years she had built up a steady flow of income from going round
people’s houses giving them facials, pedicures and manicures. When a small
decorator’s shop on the main street became available for rental, Ellen jumped at the
chance to establish her presence right in the town centre.
Dollar’s population of 4,000 was quite affluent and there was no other beauty salon
in the area. Glasgow and Edinburgh, important centres for picking up new products
and ideas, were within an hour’s drive, and Stirling and Dunfermline could be
reached within twenty minutes.
Elly’s customers all encouraged her and promised to support her in her new
premises. Dave, her husband, was a signwriter and enthusiastically embarked on
creating a colourful design, displaying the name ‘Ellygance’ surrounded by daisies
for the shop front. Meanwhile Elly’s mum and dad painted all the walls and put up
a curtain dividing the front of the shop from the ‘treatment room’ at the back.
Her bank manager agreed to lend her £1,000 and she borrowed a further £5,000
from her parents. Elly was pleased about this as she did not want to share the
ownership of the firm. Three days after opening with a glass of sparkling wine for
anyone who came into the shop for a look, Elly was visited by the Environmental
Health Officer. He explained that special regulations regarding hygiene applied to
premises where treatments such as electrolysis were offered. This would involve
Elly spending a further £5,000 to upgrade the premises which w ere only rented
anyway. Reluctantly Elly decided to abandon her plans for more sophisticated
services and to revert to offering the basic treatments she had formerly done in
people’s homes. Naturally she had to increase her prices quite a bit to cover th e
extra costs of rent, rates and insurance on the premises.
Six months after the grand opening Elly and Dave drank the final glass of ‘bubbly’ as
they closed the door on the salon for the last time and put the key through the
letterbox. ‘I can’t understand what went wrong,’ Elly said sadly. ‘Where did all the
customers go?’
1.
Suggest at least three objectives which Elly is likely to have had in setting up
her business.
2.
What type of business did Elly set up? Suggest three reasons for her choosing
this form of business organisation.
3.
In which sector of industry was Elly operating? How has that sector of
industry changed in terms of importance in the past decade?
4.
Describe three people, or groups of people who might be considered to be
stakeholders in Elly’s business.
5.
Describe three internal and three external constraints facing Elly’s business.
6.
Suggest three reasons for the failure of Elly’s business.
7.
Outline two alternatives strategies which might enable Elly to start up her
business again and run it more successfully.
Activity 7
Employees in employment (000s)
1971
Agriculture, forestry, fishing
Energy and water supply
Other minerals and ore extraction
Metal goods, engineering and vehicles
Other manufacturing industry
Construction
Distribution, catering and repairs
Transport and communication
Banking, finance and insurance
Other services
450
798
1282
3709
3074
1198
3686
1556
1336
5049
1992
1994
283
267
403
299
635
562
2030
1836
1924
1864
839
768
4605
4603
1324
1208
2639
2726
7076
6865
Source: Employment Gazette
1.
Identify which of the above categories of employment could be classed as
primary, which secondary and which tertiary industries.
2.
What changes have occurred in the numbers employed in each sector? Suggest
possible reasons for the changes you have identified.
Activity 8
Read the case study below and answer the questions which follow.
McDonald’s has had great success with franchises in Scotland, Wales and
Northern Ireland, but until 1994 most of their branches in England were
company-owned. In that year they embarked on a plan to double the number
of franchises within ten years, and by 1997 almost half of McDonald’s outlets
were operating as franchises. McDonald’s takes great care in selecting its
franchisees. Each year it receives thousands of enquiries about franchises.
Before even being considered as a franchisee candidates have to work in a
McDonald’s for several days. Training for franchisees takes nine months and
includes a stint at Hamburger University in London where, at their own
expense, franchisees learn how to motivate their staff and satisfy customers
in the McDonald’s way. Franchisees use McDonald’s materials and
equipment so that the meals offered are of a standard quality in all outlets.
In return franchisees have to finance 40% of the cost of setting up their
branch, and pay McDonald’s an annual royalty.
Source: The Times
1.
What are the advantages of becoming a McDonald’s franchisee?
2.
List at least three advantages to McDonald’s of franchising some of its
outlets.
3.
In which sector of industry is franchising most common? Give examples of
actual businesses and explain why this sector is particularly sui ted to being
organised via franchises.
Activity 9
Working in groups of 3 or 4, collect information about at least 12 businesses
in your local area. Include at least one from the public sector, one charity,
and one each from the categories of sole trader, partnership and limited
company. Create a table for your findings with the headings: Name of
business, Type of firm, Number of employees, Sector of activity, Location,
Goods or services, Aim of organisation.
On your own, create at least two different kinds of graph to display the
information found by your group and write a report on your findings.
Activity 10
Read this newspaper clipping, ‘Sea-ing is Believing’, then answer the questions
below.
1.
Name the factors of production which Crane has used in his business venture.
Explain the importance of each of these to the organisation.
2.
Analyse the role of the entrepreneur in this business. You should refer to the
starting up of the organisation and the influence of the entrepreneur as the
organisation has progressed.
3.
Do you think this organisation is a successful one? Explain your answer.
4.
Using examples from the case study explain the external factors which
influenced Crane to set up the business.
5.
What external factors might affect the success or failure of the organisation in
the future? Explain clearly how they might affect the organisation and make
suggestions as to how the organisation might tackle these problems.
Activity 11
Types of organisation
1.
Choose one organisation which belongs to the private sector. Try to
choose a local example. Explain in your own words why this
organisation belongs to the private sector. Outline who the owners are,
and discuss some ways in which this organisation may have obtained its
finance.
2.
Repeat this exercise for an organisation of your choice from the public
sector, and again for an organisation from the voluntary sector.
3.
Look again at the three organisations of your choice and compare them
making reference to the differences in their activities, ownership and
ways of obtaining finance.
Activity 12
Organisational objectives
Read the case study entitled ‘Family build up their hopes’, and answer the questions
below.
1.
Write a short paragraph giving background information about the organisation
Hope Homes. You should include information about the sector (private, public
or voluntary) which the business belongs to, the ways it has obtained or could
obtain finance, and why you think this organisation was set up in the first
instance.
2.
Outline at least four objectives that Hope Homes might have and explain why
these are the objectives of an organisation such as this one.
3.
Choose another organisation from a different sector and compare it to Hope
Homes. Discuss the differences there will be in the objectives of the two
organisations, comparing at least three objectives.
Activity 13
The Happy Meal Man
Read the case study, ‘The Happy Meal Man’, and answer the questions below.
1
Describe the type of organisation this is and name which sector it
belongs to. Outline the advantages of this type of organisation. What
objectives do you think Steve Tomlin had when he started out on this
venture? Give examples of external factors which might affect Steve’s
business listing possible consequences for the business.
2 Compare Steve’s business to two different types of local businesses.
Explain what you understand by each of these types of businesses,
discussing who might own the organisations and where the finance to
run them might have come from.
3 Give four possible objectives for each of the three organisations you
have chosen, Steve’s and the two others’.
4 Compare the organisations you have chosen and accurately explain why
their objectives can differ.