1 MNB101
Study Unit I The Business World And Business Management
Ch 1.2 The Role of Business In Society
The business world is a complex system of people and organisations, which, in a market economy combine
scarce resources, to provide goods and services to satisfy the community wants, with a view to make a profit.
The Market System: The system in which individuals decide what to produce, how to produce it and at what price
to sell their product.
Business emphasises the following four elements:
1) Business actively involves human activities: They are managed and operated by people.
2) Business actively involves production: This is the transformation of resources into product.
3) Business involves change: Produce products and services for exchange of money
4) Business involves Profit: Profit is the reward for meeting peoples needs.
There are 4 categories of scarce resources: 1) Labour
2) Capital (= machinery)
3) Entrepreneurship
4) Land (=natural resources: minerals, forests)
Businesses and the society in which they function influence each other in a number of ways:
Businesses’ influence on society: Remember these 4 points:
1. Businesses are catalyst for economic growth
2. They bring about a high standard of living
3. They are the source of technological progress, research and
innovation, and improvement to infrastructure.
4. They play a crucial role in supporting (e.g. through sponsorships)
education, arts, sports…
Influence of society on businesses: (These influences are exercised through legislation)
Remember these 5 points
1. Social responsibility: businesses are expected to act responsibly
towards the community
2. Business Ethics: Managers are expected to maintain high ethical
standards (eg toward workers, shareholders…)
3. Affirmative Action: They have to create equal opportunities
towards every social group
4. Environmental damage: Business are forced to take into account
the preservation of the air, water and soil from pollution
5. Consumerism: various actions aimed at protecting the consumer
from abuse and misleading promises.
Ch 1.3 Needs and need satisfaction
Human needs are unlimited. Abraham Maslow : Human needs range in in a definitive order, from most essential
for survival to least necessary.
He classifies them into 5 categories.
Communities Unlimited Needs
5. Self Realisation needs (aiming at self development)
4. Esteem needs (prestige needs: bigger car, luxurious house...)
3. Social needs (love, recognition, needs for friends…)
2. Security needs (insurance protection…)
1. Physiological needs (hunger, thirst, food, clothes.)
He argues that humans try to satisfy the most basic needs (group 1), when these are satisfied, they move to the
need of group two. Until they reach the last group (no5).
Society’s Limited Resources
Study Unit I The Business World And Business Management
Ch 1.2 The Role of Business In Society
The business world is a complex system of people and organisations, which, in a market economy combine
scarce resources, to provide goods and services to satisfy the community wants, with a view to make a profit.
The Market System: The system in which individuals decide what to produce, how to produce it and at what price
to sell their product.
Business emphasises the following four elements:
1) Business actively involves human activities: They are managed and operated by people.
2) Business actively involves production: This is the transformation of resources into product.
3) Business involves change: Produce products and services for exchange of money
4) Business involves Profit: Profit is the reward for meeting peoples needs.
There are 4 categories of scarce resources: 1) Labour
2) Capital (= machinery)
3) Entrepreneurship
4) Land (=natural resources: minerals, forests)
Businesses and the society in which they function influence each other in a number of ways:
Businesses’ influence on society: Remember these 4 points:
1. Businesses are catalyst for economic growth
2. They bring about a high standard of living
3. They are the source of technological progress, research and
innovation, and improvement to infrastructure.
4. They play a crucial role in supporting (e.g. through sponsorships)
education, arts, sports…
Influence of society on businesses: (These influences are exercised through legislation)
Remember these 5 points
1. Social responsibility: businesses are expected to act responsibly
towards the community
2. Business Ethics: Managers are expected to maintain high ethical
standards (eg toward workers, shareholders…)
3. Affirmative Action: They have to create equal opportunities
towards every social group
4. Environmental damage: Business are forced to take into account
the preservation of the air, water and soil from pollution
5. Consumerism: various actions aimed at protecting the consumer
from abuse and misleading promises.
Ch 1.3 Needs and need satisfaction
Human needs are unlimited. Abraham Maslow : Human needs range in in a definitive order, from most essential
for survival to least necessary.
He classifies them into 5 categories.
Communities Unlimited Needs
5. Self Realisation needs (aiming at self development)
4. Esteem needs (prestige needs: bigger car, luxurious house...)
3. Social needs (love, recognition, needs for friends…)
2. Security needs (insurance protection…)
1. Physiological needs (hunger, thirst, food, clothes.)
He argues that humans try to satisfy the most basic needs (group 1), when these are satisfied, they move to the
need of group two. Until they reach the last group (no5).
Society’s Limited Resources
