BUSINESS STUDIES
FORM ONE
CHAPTER ONE
INTRODUCTION TO BUSINESS STUDIES
Definition of terms used in business studies
Business – refers to any activity that is carried out by an individual or an
organization concerned with provision of goods and services with the aim
of making profits
Business studies- it is the study of the activities that are carried out in
and around production, distribution and consumption of goods and services
Business environment – these are the business surroundings which may
be internal or external
Goods – These are items which are tangible i.e. can be touched and felt
e.g. furniture, buildings, bread. Etc
Services – These are actions or activities that may be sold. They are
intangible e.g. teaching, banking, hairdressing etc
Production – It is the creation of goods and services or increasing their
usefulness. Its done by producers e.g. farmers.
Distribution – It’s the movement of goods and services from the producer
to the user. Involves transport, communication etc
Consumption – Refers to using of goods/service mostly done by
consumers
Disciplines in business studies
● Economics – it’s the study of how human beings strive to satisfy
endless wants using the available scarce resources. Human wants
are the desires that people strive to satisfy using goods and services.
Resources – Things that are required in order to satisfy human
wants
● Commerce – Study of trade and aids to trade. Trade is the exchange
of goods and services for other goods or services or for money.
● Accounting – It’s a systematic way of recording business activities
which are used for decision making.
1
Prepared by Mburugu ken
, ● Office practice – these are activities carried out in the office e.g.
communication, filling, reproduction of documents etc.
● Entrepreneurship – It’s the study of activities involved in the
process of identifying a business opportunity and acquiring necessary
resources.
Importance of business studies in the society
● Assists members to relate the knowledge, skills and attitude acquired
to day to day business activities.
● Equip members with knowledge and skills to start and run a business
● Assists individuals in appreciating the role of business studies in
provision of goods and services
● Makes the members to appreciate the need of good business
management practice.
● Assist individuals to acquire self discipline and positive attitude
towards work.
● Equips individuals with abilities to promote cooperation
● Enables individuals to understand the role of government in business.
● Equips individuals with abilities to understand role of communication
and modern technology to business management.
● Help individual develop positive attitude towards the environment
● Equips individuals with knowledge and skills required to evaluate
business performance
CHAPTER TWO
BUSINESS AND ITS ENVIRONMENT
The main purpose of a business is to make profits. To achieve this, a
business needs to
2
Prepared by Mburugu ken
, ● Satisfy customer needs
● Reduce operating costs
● Strive to survive by competing favorably
Types of business activities
● Extraction – means obtaining goods from their natural setting e.g
mining, farming, lumbering etc
● Processing of raw materials – it is changing the form of goods
without combining it with other goods
● Manufacturing – combining different raw materials to come up with
one final product e.g. table is made of wood, glue, nails and varnish
● Construction – Rails, road and buildings
● Distribution of goods – Spreading of goods from the manufacturers
to the users. Done by distributors
● Trade – Buying and selling of goods with the aim of making profits.
Done by traders
● Provision of services – Selling services to consumers e.g.
hairstylist, car washers
Business environments and their effects
Internal and external
Internal environment
● May either be strengths or weaknesses of the business e.g. skilled
man power.
● It is also called micro environment
They include :-
● Business structure
3
Prepared by Mburugu ken
, This is the formal arrangement of the activities carried out at various levels
of the organization. A well laid business structure would lead to success
because:-
● Each employee knows what is expected
● No conflict or confusions
● Team work is enhanced
● Proper control – promotes efficiency
● Resources
A resource is something that can be used to achieve an objective. The
following are some of the resources to a business
● Human resource
Employees in a business provide human resource. A business with qualified
human resource is more likely to do well.
● Financial resources
A business with adequate finances is more likely to do better than one
lacking such aspects.
● Physical resources
These are tangible facilities which belong to a business e.g. buildings,
machinery, furniture and stock.
● Technology
These are the skills and methods used in production. A business with the
relevant technology is more likely to succeed.
● Business culture
Business cultures arise from the combination of employees expectations,
beliefs and values within the business. A culture of involving employees in
decision making always does better.
● Owner
4
Prepared by Mburugu ken
FORM ONE
CHAPTER ONE
INTRODUCTION TO BUSINESS STUDIES
Definition of terms used in business studies
Business – refers to any activity that is carried out by an individual or an
organization concerned with provision of goods and services with the aim
of making profits
Business studies- it is the study of the activities that are carried out in
and around production, distribution and consumption of goods and services
Business environment – these are the business surroundings which may
be internal or external
Goods – These are items which are tangible i.e. can be touched and felt
e.g. furniture, buildings, bread. Etc
Services – These are actions or activities that may be sold. They are
intangible e.g. teaching, banking, hairdressing etc
Production – It is the creation of goods and services or increasing their
usefulness. Its done by producers e.g. farmers.
Distribution – It’s the movement of goods and services from the producer
to the user. Involves transport, communication etc
Consumption – Refers to using of goods/service mostly done by
consumers
Disciplines in business studies
● Economics – it’s the study of how human beings strive to satisfy
endless wants using the available scarce resources. Human wants
are the desires that people strive to satisfy using goods and services.
Resources – Things that are required in order to satisfy human
wants
● Commerce – Study of trade and aids to trade. Trade is the exchange
of goods and services for other goods or services or for money.
● Accounting – It’s a systematic way of recording business activities
which are used for decision making.
1
Prepared by Mburugu ken
, ● Office practice – these are activities carried out in the office e.g.
communication, filling, reproduction of documents etc.
● Entrepreneurship – It’s the study of activities involved in the
process of identifying a business opportunity and acquiring necessary
resources.
Importance of business studies in the society
● Assists members to relate the knowledge, skills and attitude acquired
to day to day business activities.
● Equip members with knowledge and skills to start and run a business
● Assists individuals in appreciating the role of business studies in
provision of goods and services
● Makes the members to appreciate the need of good business
management practice.
● Assist individuals to acquire self discipline and positive attitude
towards work.
● Equips individuals with abilities to promote cooperation
● Enables individuals to understand the role of government in business.
● Equips individuals with abilities to understand role of communication
and modern technology to business management.
● Help individual develop positive attitude towards the environment
● Equips individuals with knowledge and skills required to evaluate
business performance
CHAPTER TWO
BUSINESS AND ITS ENVIRONMENT
The main purpose of a business is to make profits. To achieve this, a
business needs to
2
Prepared by Mburugu ken
, ● Satisfy customer needs
● Reduce operating costs
● Strive to survive by competing favorably
Types of business activities
● Extraction – means obtaining goods from their natural setting e.g
mining, farming, lumbering etc
● Processing of raw materials – it is changing the form of goods
without combining it with other goods
● Manufacturing – combining different raw materials to come up with
one final product e.g. table is made of wood, glue, nails and varnish
● Construction – Rails, road and buildings
● Distribution of goods – Spreading of goods from the manufacturers
to the users. Done by distributors
● Trade – Buying and selling of goods with the aim of making profits.
Done by traders
● Provision of services – Selling services to consumers e.g.
hairstylist, car washers
Business environments and their effects
Internal and external
Internal environment
● May either be strengths or weaknesses of the business e.g. skilled
man power.
● It is also called micro environment
They include :-
● Business structure
3
Prepared by Mburugu ken
, This is the formal arrangement of the activities carried out at various levels
of the organization. A well laid business structure would lead to success
because:-
● Each employee knows what is expected
● No conflict or confusions
● Team work is enhanced
● Proper control – promotes efficiency
● Resources
A resource is something that can be used to achieve an objective. The
following are some of the resources to a business
● Human resource
Employees in a business provide human resource. A business with qualified
human resource is more likely to do well.
● Financial resources
A business with adequate finances is more likely to do better than one
lacking such aspects.
● Physical resources
These are tangible facilities which belong to a business e.g. buildings,
machinery, furniture and stock.
● Technology
These are the skills and methods used in production. A business with the
relevant technology is more likely to succeed.
● Business culture
Business cultures arise from the combination of employees expectations,
beliefs and values within the business. A culture of involving employees in
decision making always does better.
● Owner
4
Prepared by Mburugu ken
