1st of February 2013
Business organization and management
Small business: e.g. Independent service-station, restaurant
Medium business: e.g. coffee club, nando’s
Large business: Maccas, red rooster, kfc
Economies of scale; this term refers to the lower costs per unit of output as a result of operating on a larger scale.
Question 1. What is meant by economies of scale? Provide 3 examples of typical economies of scale enjoyed by large organizations: a) Coles (big organization, buys in bulk)
4th of February 2013
Business organization and management
Public vs. Private sector
Public sector is a government owned business, and a private sector is a privately owned business.
-A project or undertaking, typically one that is difficult or requires effort. -Initiative and resourcefulness.
-The action or process of investing money for profit or material result.-A thing that is worth buying because it may be profitable or useful in the future.Economy-The wealth and resources of a country or region, esp. in terms of the production and consumption of goods and services.Summaries:Owners/Shareholders: Own a business, or a sector of the business and gain profit/suffer the loss on how the business runs.Managers: People who are employed on behalf of its owner, to over look the succession of the business.Investors/Lenders: Individuals, financial institutions or even other businesses who are able to fund the business.Public Sector: Government owned businessesPrivate Sector: Privately owned businessEnterprise: Initiative and resourcefulnessInvestment: Putting something within a business with the intention of getting something out of itEconomy: Wealth and resources of an entire countryOwners/Shareholders:A business is the property of it’s owner/s. The owners receive profit from the business. Shareholders usually have shares for large businesses hoping for a rise in the share price.Managers:Employed to direct the business on behalf of its owners. Managers do not normally receive a share of the profits and business. Instead they are paid a salary in return for their managerial work. Some may benefit from a bonus and profit sharing schemes or packages linked to the performance of the business.Investors/lenders: Whether small of large, business owners can raise funds through external investors – individuals, financial institutions or even other businesses. In terms of companies, additional investments can also be sought from the owners of the company – the shareholders. Outside investors therefore have a stake in the business’s performance.Employees:Staff have a stake in organizational performance, including the business’s profitability. The work environment, opportunities for employees and job security are all dependent on business viability. Because of the link between profitability and employment levels, the trade union movement also shares the interest of employees and employers in terms of organizational performance.Suppliers:Businesses buy inputs from other businesses. These include:Plant (buildings)Raw materialsEnergyComponentsMachinery and equipmentSpare partsVarious outsourced services (eg. Maintenance, marketing)The suppliers of these inputs have a financial stake in an ongoing flow of orders and reliable payment from the buyer; they, therefore, have a strong interest in the continuing viability of an organization to which the make sales.Customers:The goods and services produced by businesses are bought and used by customers who may be individuals or even other organizations. Customers have a stake in performance that delivers products of acceptable price and quality for their purpose.Government:Governments of all political parties recognize that the countrys standard of living is closely tied to business performance. Successful businesses not nly provide jobs and generate wealth; they...
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