business studies preliminary - topic 1 plus some initial thoughts!

BUSINESS STUDIESPRELIMINARY - TOPIC 1

Plus some initial thoughts!

BUSINESS STUDIES

What is needed for HSC SUCCESS?

HSC SUCCESS

HSC SUCCESS

BECOME AN INDEPENDENT &

LIFE-LONG LEARNER

OUTSIDE THE CLASSROOM

HSC SUCCESS


LIFE-LONG LEARNER


HSC SUCCESS


LIFE-LONG LEARNER

IN THE CLASSROOM

DEVELOP LISTENING & QUESTIONING

SKILLS

USE LESSONS TO CLARIFY WORK DONE

ELSEWHERE

MAKE NOTES OF BOARDWORK &

O/HEADS

IDENTIFY YOUR PREFERRED LEARNING

STYLE & MAKE IT WORK FOR

YOU

HSC SUCCESS


LIFE-LONG LEARNER


HSC SUCCESS


LIFE-LONG LEARNER

IN THE CLASSROOM


SKILLS


ELSEWHERE


O/HEADS



YOU

HSC SUCCESS


LIFE-LONG LEARNER


DO BOOKWORK TO KEEP PACE WITH

CLASSWORK

USE WORKBOOK FOR REVISION & SELF-

TESTING

READ NEWSPAPERS & BRING ARTICLES

TO CLASS

DO ALL THE HOMEWORK SET

CREATE GLOSSARIES OF

KEY TERMS

IN THE CLASSROOM


SKILLS


ELSEWHERE


O/HEADS



YOU

HSC SUCCESS


LIFE-LONG LEARNER


HSC SUCCESS


LIFE-LONG LEARNER

IN THE CLASSROOM


SKILLS


ELSEWHERE


O/HEADS



YOU

HSC SUCCESS


LIFE-LONG LEARNER


DO BOOKWORK TO KEEP PACE WITH

CLASSWORK

USE WORKBOOK FOR REVISION & SELF-

TESTING

READ NEWSPAPERS & BRING ARTICLES

TO CLASS

DO ALL THE HOMEWORK SET

CREATE GLOSSARIES OF

KEY TERMS

DEVELOP AN INDEPENDENCE IN LEARNING

IN THE CLASSROOM


SKILLS


ELSEWHERE


O/HEADS



YOU

YOU WILL BE SUCCESSFUL IF YOU ARE AN ACTIVE LEARNER NOT A PASSIVE LEARNER

SUCCESS!!

THIS TRANSLATES INTO:

15 - 20 MINUTES

5 NIGHTS A WEEK!!

From the Syllabus: Nature of Business

Students learn to:

use existing business case studies to investigate and communicate ideas and issues related to the nature of business. The focus of these case studies will be to:

Identify* a range of internal and external stakeholders Determine* the value, and benefit, added Identify* types of business entity, including small-medium

enterprises (SMEs) Identify* position in the business life cycle Identify* the main elements of the business environment of

a business Analyse* the ethical and social responsibilities of specific

businesses. * = Key HSC words

From the Syllabus: Nature of Business

Students learn about:

1.1 the importance of business• 1.2 the function of business in creating value/benefits

and adding value to all the business processes (value chain)

• 1.3 social and economic roles – wealth creation, employment, innovation, quality of life, choice, entrepreneurship

• 1.4 identification of relevant stakeholders• 6.1-6.5 ethical & social responsibilities

• 1.5 business goals• 1.6 the importance of small business• 1.7 coordinating the business

The Importance of Business 1.1

• A business may be defined as an organisation that combines resources, such as materials and labour (inputs) to produce goods and services (outputs) to sell and make a profit.

• To be profitable, businesses must satisfy the needs and wants of individuals, other businesses and organisations, such as government.

The Importance of Business 1.1

• A business makes a profit when the income it earns, or its revenue, exceeds its costs of production or expenses.

The Function of Business 1.2

• Any business process is one of adding value in the production process.

• Whether a business is creating a good or service, unless value is added to the production process, as measured by continued sales of the good or service, the business cannot survive.

• Value adding is not only transforming inputs, often called intermediate goods, but also providing services in association with those inputs.

OUTPUTS FLOUR

The Function of Business 1.2 Adding Value

The Function of Business 1.2Adding Value

OUTPUTS BAKERY OUTPUTS FLOUR makes

INPUTS bread


OUTPUTS BAKERY OUTPUTS SUPERMARKET OUTPUTS

FLOUR makes sells INPUTS bread INPUTS bread



FLOUR makes sells $5000 bread $13000 bread

Value Added by Bakery

Value of Production = Outputs/Sales – Inputs = $13000 - $5000 = $8000



FLOUR makes sells $5000 bread $13000 bread $16000

Value Added by Supermarket

Value of Production = Outputs/Sales – Inputs = $16000 - $13000 = $3000

Focus Questions1. Define business.

2. Identify one common feature shared by all businesses.

3. Explain how profit is calculated in a business.

4. Explain how businesses add value.

5. Distinguish between intermediate goods and finished goods.

6. “The outputs of one business often become the inputs for another.” Explain this statement.

7. Distinguish between the value adding in a business and the value of its sales or output.

Social & Economic Roles 1.3

Businesses contribute to society in a number of social and economic ways: Wealth creation. Increased Gross Domestic Product (GDP) can lead

to increased income, higher standards of living and increased wealth Income is earned through work or supplying other inputs or

assets into production, such as materials or equipment – income is often called a flow concept because it is always related to a time period.

Wealth is the amount of assets, such as money, property and shares that one possesses at a point in time – it is regarded as a stock concept

Profits generate increased wealth for the community as they are taxed by the government and this funds essential services for the community, such as roads, hospitals and other infrastructure


Employment. Businesses provide employment opportunities for the labour force. Significant changes in the nature of employment in recent years are: many of the jobs now being created are casual jobs, often called

‘Mac-jobs’, and part-time jobs there are proportionally less full-time jobs in the total workforce outsourcing, which involves outside businesses undertaking

some non-core business activities, has increased downsizing (reducing the number of people required to do

work), and retrenchments (releasing workers from employment because there is no longer work) has been common in Australian business.

moving ‘production offshore’ to remain competitive

Social & Economic Roles 1.3 innovation & technology. New technology (the way products are made) can lead

to better products, greater choice and lower prices all of which, while benefiting consumers, provide a business with a competitive edge businesses constantly seek to gain a competitive edge and this is often through research

and development (R&D):

seeking to create new products and services (invention) or/and improve the existing ones (innovation)

Social & Economic Roles 1.3 Quality of life. This is a broader concept than standard of living, which is a quantitative measure. Quality of life

takes into account more qualitative factors, such as health standards, educational standards and life expectancy Choice. When businesses compete they seek to differentiate their products to gain a competitive edge – the outcome

is greater choice for consumers and possibly lower prices. Entrepreneurship. An entrepreneur is someone who starts, operates and assumes the risk of a business venture in

the hope of making a profit. Entrepreneurs are known as the risk takers.

Successful entrepreneurs possess motivation, self-discipline, good time management, excellent communication

skills, both in speaking and listening, and vision.


• Undertake a personal skills audit and

• prepare a brief oral report on yourself mentioning three positive and negative attributes that will contribute/inhibit your current performance or future as an entrepreneur

• this is to be presented to the class.

WHO WANTS TO BE A GENIUS?

Social & Economic Roles 1.3Focus Questions

1. List the different social and economic contributions made by businesses.

2. Outline how businesses create wealth within the economy.

3. Distinguish between income and wealth.

4. Explain the link between technology and employment levels.

5. Explain what is meant by a ‘Mac-job’.

6. Define: Outsourcing; Downsizing; Retrenchment; Job redundancy

7. Distinguish between invention, innovation and technology.

8. Explain what is meant by the quality of life.

9. Explain how a competitive business environment benefits consumers.

10. Outline the role of the entrepreneur in our business environment.

11. Identify some skills that an entrepreneur should possess.

Identification of Stakeholders 1.4

a stakeholder is any person, group or organisation that has an interest in an organisation and will be affected by decisions of that organisation. Stakeholders may be internal or external:

internal stakeholders include owners/shareholders, managers and employees. external stakeholders include the government, customers, suppliers/creditors and competitors.

in addition, it is now accepted that the environment and even future generations are external

stakeholders.

Ethical & Social Responsibilities of Business 6.1

values are principles or attitudes that people hold as important. Values and ethics are closely interrelated and concerned with the idea of what is fair and just.

ethics are a set of inner moral beliefs governing behaviour of an individual, group or society. Ethics involves decisions about what we ought to do, what is right and in a particular situation, given we may have conflicting values, requiring us to make a choice.

business ethics is the application of moral standards to business behaviour.

in some cases, laws are made to regulate businesses in the absence of their own ethical behaviour.

Responsibilities to Shareholders, Managers, Employees, Consumers & Society 6.2

a business has a primary financial/economic responsibility to the owner of the business, This may be expressed as maximizing profits or even providing a fair return investment based on its share price or alternatively it asset value.

a business must also comply with its legal responsibilities to its stakeholders. Often these legal responsibilities have been placed on all businesses because in the past some of them have not behaved ethically. Legal responsibilities include:

• providing factual and accurate records (shareholders & suppliers);

• paying taxes (government); • supplying safe products (customers), • not engaging in uncompetitive behaviour (competitors) and • meeting all occupational health and safety requirements for

its workers and observe all legislation related to employment of workers, such anti-discrimination legislation (employees)

Responsibilities to Shareholders, Managers, Employees, Consumers & Society 6.2

nowadays, an organisation/business is expected to go beyond its legal responsibility and display social responsibility to its stakeholders. Social justice issues would include:

• contributing to ecological sustainability of the environment through recyclable products;

• only using suppliers who do not exploit their workers;• introducing policies that seek to eliminate practices that

perpetuate the ‘glass ceiling’, such as workplace child-care centers and

• supporting charitable organisations

Reconciling Conflicting Interests of Stakeholders 6.3

a conflict of interest arises when trying to meet the needs of different stakeholders.

when pursuing its economic responsibility to shareholders, to increase profits and investment returns, the legal and social responsibilities to other stakeholders invariably increase costs that reduce profits.

reconciling conflicts of interest is part of management’s role and in doing it they need to acknowledge prioritise their economic, legal and social responsibilities.

Ethical & Social Responsibilities of Business 6.1 – 6.3

Focus Questions

1. Define stakeholder.

2. Distinguish between internal and external stakeholders of an organisation.

3. Construct a ‘mind map’ that either identifies the stakeholders of Joeys or a business with which you are familiar.

4. Define ethics. Distinguish between values and ethics

5. “Legislation regulating business behaviour reflects a systematic failure of business ethics.” Discuss this statement.

6. Identify and describe the types of responsibilities organisations have to stakeholders.

7. Explain why conflicts often arise between:

• between shareholders, society and future environments

• between shareholders and employees.

Business Goals 1.5

businesses establish goals to give direction for the future and to provide some benchmark for measurement of its achievement and how successful it has been. Business goals are classified into three types: financial goals including profit maximisation, increasing

market share, return on investment, business growth and expansion, sales volume.

social goals including environmental conservation, ecological sustainability, social justice, and community assistance.

Personal goals are the goals of managers and owners - many successful business people are motivated by individual goals while others may be motivated by more altruistic goals.

Importance of Small Business 1.6

small-medium enterprises (SME) are an important part of the business environment. The Australian Bureau of Statistics (ABS) provides a number of definitions of what comprises a small business: for a manufacturing business, it is one that employs less

than 100 people for a non-manufacturing business, it is one that employs 20

or less people any business that has 5 or fewer employees is known as a

micro business

Importance of Small Business 1.6

Small-medium enterprises (SME) SME’s are important because they:

• represent the largest number of business enterprises (approximately 1.3 mill.)

• are a major source of employment (providing over 52% of all private sector employment)

• contribute to economic growth (produce approximately 40% of all products each year)

• help our balance of payments through exports

• provide the benefits that come from the research & development they undertake

Coordinating the Business 1.7

coordinating is the management task of making sure that various parts of the business all operate in harmony with each other.

the value chain refers to the links that exist between various parts of the business, with each step adding value to the final goods and services produced.

value chain analysis allows managers of a business to closely examine each stage and determine how much each stage adds to the value of the final product

value chain analysis has led to many businesses outsourcing

non-core activities but often expensive activities.

Coordinating the Business 1.7 management requires the coordination of human, physical, financial

and information resources to achieve the objectives of the business.

when management is successful in performing this coordinating role the end result is synergy.

management involves activities relating to the following functions (POLC model):

• Planning, which involves defining goals, establishing strategy and developing plans to achieve these objectives.

• Organising, which is the process of translating plans into reality by deciding what tasks are to be done, by whom and how.

• Leading, which involves directing, motivating and developing others and.

• Controlling, which is about monitoring and evaluating performance against plans.

Coordinating the Business 1.7

Planning

Controlling Organising POLC Management Cycle

Leading

The Interdependence of Business & its Environment 1.7

interdependence in business, means relying on other people or businesses to help produce something.

the business environment refers to the surrounding conditions in which the business operates and can be divided into two categories . internal (micro) business environment includes all those

things that the business has some degree of control over, such as employees, legal structure, managers and manager styles.

external (macro) business environment includes those things outside of the businesses control like economic conditions, government policy, competitors and technology.

Coordinating the Business 1.7Focus Questions

1. Define what constitutes a small business.

2. Outline the significance of small business in the Australian economy.

3. Explain what is meant by value chain analysis.

4. Outline the four functions of management.

5. Distinguish between the internal and external business environment.

business studies preliminary - topic 1 plus some initial thoughts!

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