UNIT 1:
EXPLORING
BUSINESS
,Table of Contents
Unit 1: Exploring Business.......................................................................................................5
Introduction.......................................................................................................................................5
A1 Features of Businesses........................................................................................................5
P1............................................................................................................................................................................5
Dyson.................................................................................................................................................5
RSPCA.................................................................................................................................................5
Ownership and Liability...........................................................................................................6
Private................................................................................................................................................6
Sole Trader.........................................................................................................................................6
Partnership.........................................................................................................................................6
Private Limited Company (PLC)...........................................................................................................7
Public Limited Company (PLC)............................................................................................................7
Cooperative........................................................................................................................................7
Limited Liability..................................................................................................................................7
Unlimited Liability..............................................................................................................................8
Public..................................................................................................................................................8
Not-for-profit......................................................................................................................................8
Purposes.................................................................................................................................8
Difference between for-profit and not-for-profit businesses..............................................................8
Sectors....................................................................................................................................9
Primary...............................................................................................................................................9
Secondary...........................................................................................................................................9
Tertiary...............................................................................................................................................9
Quaternary.........................................................................................................................................9
Scope of business activities....................................................................................................10
Local.................................................................................................................................................10
National............................................................................................................................................10
International.....................................................................................................................................10
Size of a business...................................................................................................................11
Micro................................................................................................................................................11
1
, Small and Medium enterprises (SMEs).............................................................................................11
Large.................................................................................................................................................11
Reasons for success...............................................................................................................12
Profit................................................................................................................................................12
Non-profit.........................................................................................................................................12
Aims and objectives..........................................................................................................................12
Clarity of vision.................................................................................................................................13
Innovative products or processes.....................................................................................................13
A2 Stakeholders and their influence......................................................................................13
Internal Stakeholders............................................................................................................14
P2..........................................................................................................................................................................14
Employees........................................................................................................................................14
Managers..........................................................................................................................................14
Owners.............................................................................................................................................15
External Stakeholders............................................................................................................15
Suppliers...........................................................................................................................................15
Lenders.............................................................................................................................................16
Competitors......................................................................................................................................16
Debtors and Creditors.......................................................................................................................16
Customers........................................................................................................................................17
Government Agencies and Departments..........................................................................................17
Communities....................................................................................................................................18
Pressure Groups...............................................................................................................................18
Interest groups.................................................................................................................................18
The influence of stakeholders on business success.................................................................18
Customers as long-term assets.........................................................................................................18
Employee involvement.....................................................................................................................18
Corporate social responsibility.........................................................................................................19
A3 Effective business communications...................................................................................19
M1........................................................................................................................................................................19
Appropriate presentation and delivery of information to a given audience...........................19
Written presentations......................................................................................................................20
2
, Oral presentations............................................................................................................................20
Importance of communication to aid business success...........................................................21
B1 Structure and Organisation..............................................................................................22
P3..........................................................................................................................................................................22
Organisational Structure...................................................................................................................22
Hierarchical.......................................................................................................................................22
Flat structure....................................................................................................................................23
Matrix...............................................................................................................................................24
Holocratic.........................................................................................................................................25
M1........................................................................................................................................................................27
Functional/ operational areas...............................................................................................28
Human Resources.............................................................................................................................28
Research and Development..............................................................................................................28
Sales.................................................................................................................................................28
Marketing.........................................................................................................................................28
Purchasing........................................................................................................................................29
Production and Quality.....................................................................................................................29
Finance.............................................................................................................................................29
Customer Service..............................................................................................................................29
IT......................................................................................................................................................30
Administration..................................................................................................................................30
B2 Aims and objectives..........................................................................................................30
Aims of businesses in different sectors.............................................................................................30
Mission.............................................................................................................................................30
Vision................................................................................................................................................31
Values...............................................................................................................................................31
Private..................................................................................................................................31
Making profits..................................................................................................................................31
Profit maximisation..........................................................................................................................31
Breakeven.........................................................................................................................................32
Survival.............................................................................................................................................32
Growth.............................................................................................................................................32
3
EXPLORING
BUSINESS
,Table of Contents
Unit 1: Exploring Business.......................................................................................................5
Introduction.......................................................................................................................................5
A1 Features of Businesses........................................................................................................5
P1............................................................................................................................................................................5
Dyson.................................................................................................................................................5
RSPCA.................................................................................................................................................5
Ownership and Liability...........................................................................................................6
Private................................................................................................................................................6
Sole Trader.........................................................................................................................................6
Partnership.........................................................................................................................................6
Private Limited Company (PLC)...........................................................................................................7
Public Limited Company (PLC)............................................................................................................7
Cooperative........................................................................................................................................7
Limited Liability..................................................................................................................................7
Unlimited Liability..............................................................................................................................8
Public..................................................................................................................................................8
Not-for-profit......................................................................................................................................8
Purposes.................................................................................................................................8
Difference between for-profit and not-for-profit businesses..............................................................8
Sectors....................................................................................................................................9
Primary...............................................................................................................................................9
Secondary...........................................................................................................................................9
Tertiary...............................................................................................................................................9
Quaternary.........................................................................................................................................9
Scope of business activities....................................................................................................10
Local.................................................................................................................................................10
National............................................................................................................................................10
International.....................................................................................................................................10
Size of a business...................................................................................................................11
Micro................................................................................................................................................11
1
, Small and Medium enterprises (SMEs).............................................................................................11
Large.................................................................................................................................................11
Reasons for success...............................................................................................................12
Profit................................................................................................................................................12
Non-profit.........................................................................................................................................12
Aims and objectives..........................................................................................................................12
Clarity of vision.................................................................................................................................13
Innovative products or processes.....................................................................................................13
A2 Stakeholders and their influence......................................................................................13
Internal Stakeholders............................................................................................................14
P2..........................................................................................................................................................................14
Employees........................................................................................................................................14
Managers..........................................................................................................................................14
Owners.............................................................................................................................................15
External Stakeholders............................................................................................................15
Suppliers...........................................................................................................................................15
Lenders.............................................................................................................................................16
Competitors......................................................................................................................................16
Debtors and Creditors.......................................................................................................................16
Customers........................................................................................................................................17
Government Agencies and Departments..........................................................................................17
Communities....................................................................................................................................18
Pressure Groups...............................................................................................................................18
Interest groups.................................................................................................................................18
The influence of stakeholders on business success.................................................................18
Customers as long-term assets.........................................................................................................18
Employee involvement.....................................................................................................................18
Corporate social responsibility.........................................................................................................19
A3 Effective business communications...................................................................................19
M1........................................................................................................................................................................19
Appropriate presentation and delivery of information to a given audience...........................19
Written presentations......................................................................................................................20
2
, Oral presentations............................................................................................................................20
Importance of communication to aid business success...........................................................21
B1 Structure and Organisation..............................................................................................22
P3..........................................................................................................................................................................22
Organisational Structure...................................................................................................................22
Hierarchical.......................................................................................................................................22
Flat structure....................................................................................................................................23
Matrix...............................................................................................................................................24
Holocratic.........................................................................................................................................25
M1........................................................................................................................................................................27
Functional/ operational areas...............................................................................................28
Human Resources.............................................................................................................................28
Research and Development..............................................................................................................28
Sales.................................................................................................................................................28
Marketing.........................................................................................................................................28
Purchasing........................................................................................................................................29
Production and Quality.....................................................................................................................29
Finance.............................................................................................................................................29
Customer Service..............................................................................................................................29
IT......................................................................................................................................................30
Administration..................................................................................................................................30
B2 Aims and objectives..........................................................................................................30
Aims of businesses in different sectors.............................................................................................30
Mission.............................................................................................................................................30
Vision................................................................................................................................................31
Values...............................................................................................................................................31
Private..................................................................................................................................31
Making profits..................................................................................................................................31
Profit maximisation..........................................................................................................................31
Breakeven.........................................................................................................................................32
Survival.............................................................................................................................................32
Growth.............................................................................................................................................32
3
