Business & its Environment
What is Business?
Business is a way of dealing with the problem of scarcity
Business involves the transformation of inputs into outputs to meet particular needs or wants of consumers
Business is not just The Private Sector it is also The Public Sector and Societies have to choose the balance between the public and private sectors
The Private Sector
Consists of all business in some form of private ownership
COMPETITON & PROFIT MAKING This is what drives businesses in the private sector.
The Public and Voluntary Sector
Working in the public sector means working for the government A wide range of careers are available in the public sector, such as nursing, teaching, the armed forces and the emergency services.
Public Sector deals with scarcity differently than The Private Sector.
There are significant advantages to society from providing some goods and services on a ‘not-for-profit basis’ For example the NHS, as a society we may decide that access to health care should be on the basis for equal treatment for equal need rather than whether a person can afford to pay for treatment
The Environment of Business
The purpose of business decisions is to make sure that a business is running successfully and making a profit
Environmental analysis helps to fill the knowledge gap and guide business decisions:
Analytical techniques: * PESTLE (political, economic, social, technological, legal, environmental) * SWOT (strength, weaknesses, opportunities, threats) * Alternative scenarios * Trend extrapolation * Expert opinion * Stakeholder analysis
For an organisation to produce outputs it needs a set of inputs
The economic problems arise due to scarcity
Needs: Things we must have to survive Food, Water, Shelter and Clothing.
Wants: Are all of the things we would like to have to improve our standard of living,