Business: Sainsbury ' s and Private Sector Essay

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BTEC Level 3 Business

Unit 1: The Business Environment
Notes (September 2012)

Learning outcomes:
On completion of this unit a learner should:

1 Know the range of different businesses and their ownership
2 Understand how businesses are organised to achieve their purposes
3 Know the impact of the economic environment on businesses
4 Know how political, legal and social factors impact on business.

1 Know the range of different businesses and their ownership

* Range of different businesses: local; national; international; global; public; private; not-for-profit/voluntary; sectors of business activity (primary, secondary and tertiary)

E.g. Public Limited Companies (PLCs) have to publish their accounts, making them available to the public. Private Limited Companies (LTDs) do not have to publish their accounts publicly, though some choose to. This is usually a good starting place to investigate private sector business activity.

* Business purposes: supply of products or services; difference between profit and not-for profit organisations

E.g. Purposes could include reasons why businesses exist, how products and services may be supplied for profit, at cost and below cost by local, national and global business organisations.; how businesses supply products and services to consumers, other businesses, and central and local government agencies in response to demand.

* Ownership: public, private and voluntary sectors; types of ownership (sole trader, partnerships, private and public limited companies, government departments, government agencies, worker cooperatives, charitable trusts); main implications of different types of ownership on businesses (extent of liability, limitations to operation for public and charitable organisations)

E.g. Advantages and Disadvantages of these types of ownership must be clear in your assignment – Sole Trader’s advantage is that he keeps all the profits made. However, his/her disadvantage is that he/she bears all the losses if the business goes bankrupt.

* Key stakeholders: customers; employees; suppliers; owners; trade unions; employer associations; local and national communities; governments; influence of stakeholders on organisations

E.g. Stakeholders are any group of people who have an interest in the decisions a business makes. Explain the links and interdependencies between the stakeholders. E.g. employees and trade unions are linked as trade unions are the pressure group that employees might use to negotiate pay and conditions with the employer.

2 Understand how businesses are organised to achieve their purposes

Organisational structures: purpose (division of work, lines of control and communication); types of structure (functional, geographic, product, type of customer); diagrammatic representation of structure (organisation charts); span of control

Functional area: finance; marketing; production; customer service; sales; human resources.

Strategic planning: mission and values; development of strategic aims and objectives; cascading of objectives throughout the organisation; strategic planning process; use of SMART (specific, measurable, achievable, resourced, time-bound) objectives

Influencing factors: stakeholders; business environment; business type and ownership.

Different aims: private sector aims (breakeven, survival, profit maximisation, growth); public sector aims (service provision, cost limitation, value for money, meeting government standards, growth of range of provision)

3 Know the impact of the economic environment on businesses

Economic: importance of stability; impact on business of changes in the economic environment (growth, recession, ripple effect); levels of inflation; availability and cost of credit; labour; changes in government policy (legal, fiscal, monetary)

E.g. Economic factors such as pay levels, cost of credit (interest rates) competitive pressures, globalization, energy…