Unit 1: Business
organization and
environment
Definitions • Key Concepts • Exam Language
Business - a decision-making organization involved in process of input to produce goods and
services, and satisfy needs and wants
Types of products:
→
Consumer goods sold to general public (durable → > 1 year, non-durable < 1 year)
→
Capital goods bought by other businesses
Services
Specialisation - business concentrates on production of specific good or service
Table 1 - advantages and disadvantages of specialisation
Advantages Disadvantages
productivity boredom
efficiency capital costs
profit not flexible
standardization
Business sectors:
primary - extraction of natural resources
secondary - manufacture
tertiary - service
quaternary - knowledge and data
Types of operating sectors:
Private – organizations that are individually owned & controlled, and aim for profit
Public sector - organizations owned and controlled by the government that provide
goods and services that benefit the population, often funded through tax revenue, and
, are underprovided by the private sector.
Capital intensive – high reliance on machinery
Labour intensive – high reliance on human labour
Liability - extent to which you risk losing possessions in case of failure
Limited liability – restricted by your initial investment
Unlimited liability – person is fully responsible for all debts and loses
organization and
environment
Definitions • Key Concepts • Exam Language
Business - a decision-making organization involved in process of input to produce goods and
services, and satisfy needs and wants
Types of products:
→
Consumer goods sold to general public (durable → > 1 year, non-durable < 1 year)
→
Capital goods bought by other businesses
Services
Specialisation - business concentrates on production of specific good or service
Table 1 - advantages and disadvantages of specialisation
Advantages Disadvantages
productivity boredom
efficiency capital costs
profit not flexible
standardization
Business sectors:
primary - extraction of natural resources
secondary - manufacture
tertiary - service
quaternary - knowledge and data
Types of operating sectors:
Private – organizations that are individually owned & controlled, and aim for profit
Public sector - organizations owned and controlled by the government that provide
goods and services that benefit the population, often funded through tax revenue, and
, are underprovided by the private sector.
Capital intensive – high reliance on machinery
Labour intensive – high reliance on human labour
Liability - extent to which you risk losing possessions in case of failure
Limited liability – restricted by your initial investment
Unlimited liability – person is fully responsible for all debts and loses
