Summary - Business Studies

Micro environment
Business functions
· There are eight business functions that a business has to consider

· The functions interconnect because they are dependent on one another for the overall
success of the business.

· The manager/ entrepreneur should have a deep understanding of these functions and
what role each function has for in achieving the vision of the business.

· The functions: 1. General management ​

2. Financial function

3. Administration function

4. Human resources

5. Purchasing

6. Production

​ 7. Public relations

​ 8. Marketing

General Management
Responsible for generating plans that can improve the performance and profitability of the
business.

Responsibilities:

· Vision: The guideline of the business using the past and current situations to determine
the future of the business

· Mission: Specifies the existence of the business. Who the business is, what the
business does, and what the business values

· Goal: Long-term accomplishments the business wants to achieve.

· Objective: Short-term targets for the business to reach its goals.

Characteristics:

, · ​ Planning – Most of the planning takes place, which entails looking at the future of the
business and deciding how to tackle situations to meet the success of the business

· ​ Organising – Organises the other business functions by combining the factors of
production to achieve the objectives of the business

· ​ Leading – guiding and leading employees means implementing plans and assisting
employees to understand their assigned tasks.

· ​ Controlling – Crucial for the success of the business, because the actual results
achieved are compared to the standards set during planning. Management compares the
performance and the difference from the goals and the reason for the difference is
determined and corrected.

· ​ Communication – described as the transfer and receiving of information.
Communication is key to build relationships between management and employees, as
there is the potential to improve efficiency since the right information will reach the right
people at the right time.

· ​ Coordination – the functions are informed on what is expected of them to achieve
collaboration between the work schedules of the multiple functions.

· ​ decision making – used to solve problems. When making a decision all the possible
and relevant facts must be considered, while ensuring that no biased ideas influence the
final choice.

· ​ delegating – used to ensure distribution of work and reduce the burden on
management. When a manager delegates, they allocate duties, authority and
responsibilities to their subordinates. However, the manager is responsible in making
sure that the work is done well.

· ​ Discipline – is used to improve the future behaviour of employees. For disciple to be fair,
everyone must understand the code of conduct and the consequences of misconduct.
Offenders must be dealt with consistently or else it weakens the purpose of the
disciplinary action.

· ​ Motivating – means encouraging employees to work at their best abilities.



Financial function

To start a business the entrepreneur has to decide how they’ll obtain capital. The financial
function ensures that the business has sufficient capital and that it is used in the most
productive way.

· Fixed capital (long-term) – used to buy fixed assets. E.g. land

· Working capital (short-term) – used to buy trading inventory, pay
creditors and pay business expenses.