CHAPTER 1
The Business World and Business Management
, LEARNING OUTCOMES
• Explain the role the business organisation plays in making available the products
and services society must have to exist and thrive
• Describe the needs of society and how a business organisation satisfies those
needs in a market economy
• Distinguish between the world’s three main economic systems
• Explain the interface between a business organisation and a market economy
• Describe the nature and purpose of business management as a science, where the
enabling factors, methods and principles of the business are studied to ensure the
efficient functioning of a business organisation
• Comment on the development of business management as a science
• Distinguish between and comment on the different management functions.
, 4 ELEMENTS OF BUSINESS
Elements of business Description Examples
Human activities This involves the people who are part of • The entrepreneur
the production of goods and services. This • Various tellers at a supermarket
includes the entrepreneurs and the staff. • Receptionist at a hotel
Production of goods and Production is the transformation of certain • Sasko’s conversion of flour, sugar and
services resources into products and services. butter into bread
• In a hospital, beds and medicine are
converted into a health service.
Profits/ surplus Profit is the reward for meeting people’s • A KFC makes a profit of 20cent for
needs, and it enables businesses to pay for each item each chicken meal they sell
resources and to make a living.
Exchange The products/ services of a business are A customer pays for food delivery
given to consumers in exchange for money
The Business World and Business Management
, LEARNING OUTCOMES
• Explain the role the business organisation plays in making available the products
and services society must have to exist and thrive
• Describe the needs of society and how a business organisation satisfies those
needs in a market economy
• Distinguish between the world’s three main economic systems
• Explain the interface between a business organisation and a market economy
• Describe the nature and purpose of business management as a science, where the
enabling factors, methods and principles of the business are studied to ensure the
efficient functioning of a business organisation
• Comment on the development of business management as a science
• Distinguish between and comment on the different management functions.
, 4 ELEMENTS OF BUSINESS
Elements of business Description Examples
Human activities This involves the people who are part of • The entrepreneur
the production of goods and services. This • Various tellers at a supermarket
includes the entrepreneurs and the staff. • Receptionist at a hotel
Production of goods and Production is the transformation of certain • Sasko’s conversion of flour, sugar and
services resources into products and services. butter into bread
• In a hospital, beds and medicine are
converted into a health service.
Profits/ surplus Profit is the reward for meeting people’s • A KFC makes a profit of 20cent for
needs, and it enables businesses to pay for each item each chicken meal they sell
resources and to make a living.
Exchange The products/ services of a business are A customer pays for food delivery
given to consumers in exchange for money
