Title Business and Accounting Studies (G10+G11) New Edition.pdf ✅

1 BACKGROUND OF A BUSINESS • A business is an economic ac�vity that manufactures or provides goods and services in order to fulfil customer needs and wants. • Objec�ves of a Profit Oriented Business o Earning Profits o Increasing Customer Sa�sfac�on o Increasing Quality of Goods and Services o Genera�ng Employment Opportuni�es o Employee Welfare Needs Wants Definition: Requirements that must be fulfilled essentially for existence Definition: Different ways of satisfying needs Primary Secondary Simple Complex Essen�al Not Essen�al Limited Unlimited • Commodity Manufacturing Business o Processed Food, Automobile, Furniture • Service Providing Business o Wholesale, Retail, Beauty Salon • Factors of Produc�on o Land – All the Natural Resources o Labour – Mental and Physical Contribu�on o Capital – Anything Produced by Man o Entrepreneurship – Role of Organizing the Factors of Produc�on  An entrepreneur Takes the Risk, Creates Innova�ons and Take decisions with regard to business ac�vi�es. Business categories based on nature of the product produced by the business. Main Objec�ves Sub Objec�ves
2 Stakeholder Descrip�on Objec�ve Contribu�on Owners Persons providing resources to the business • Security of Investment • Earning a sufficient Profit • Growth of Business Opera�ons • Contribu�ng adequate capital • Being dedicated to business ac�vi�es • Supervising business Managers Persons Implemen�ng the decisions of the owners • Taking Decisions to achieve Objec�ve • Implemen�ng those decisions • Promo�ons and Job Sa�sfac�on • Implemen�ng plans properly • Taking correct decisions Employees Individual performing the opera�ons of the business • Receiving a fair wage or salary • Job security • Comple�ng tasks assigned • Increasing produc�vity of Labour Suppliers Providers of Raw material, transport facili�es, etc. • Securing orders con�nuously • Obtaining money without delay • Supplying quality raw materials con�nuously • Supplying on �me Government Propagate Policies required to achieve economic growth • Collec�ng taxes due • Genera�ng employment opportunity • Increasing domes�c produc�on • Providing business friendly incen�ves Compe�tors Other businesses providing similar goods or services • Determining prices of own goods • To face compe��on Customers Persons who buy goods and services • Obtaining products at reasonable price • Obtaining quality products Community Popula�on living outside the business • Analysing whether business is conducted in environmentally friendly manner and contributes to social welfare. Financial Institution Ins�tu�on providing loan and consultancy services • Collec�ng Loans and advances given • Providing more loans and advances Future Investors Individuals and Ins�tu�ons willing to invest • Taking decisions on investment
3 BUSINESS ENVIRONMENT • Business environment is the environment in which factors affec�ng the business are ac�vated. Internal Environment External Environment Different par�es and forces ac�ng within a business and affec�ng a business Different par�es and forces ac�ng outside the business and affec�ng the business • Owners • Managers • Employees • Customers • Suppliers • Compe�tors • Poli�cal Environment o Infrastructure development Policy o Fiscal Policy (Annual Budget) • Legal Environment – Consists of Laws to Protect Consumers, Domestic manufacturers and business community o Companies Act No. 07 of 2007 o Consumer Affairs Authority Act No. 09 of 2003 o Shop and Office Employees Act No. 14 of 1954 • Technological Environment – Advancement in Computer, Communication, Production Technologies. • Economic Environment o Interest Rate, Infla�on, Income Distribu�on, Level of Employment, Interna�onal rela�ons, Foreign exchange rate, Savings. • Global Environment o Posi�ve Impact: Possibility to obtain Latest Technology, Possibility to obtain quality raw materials from abroad, Inflow of Foreign Capital. o Nega�ve Impact: Create a highly compe��ve environment, Nega�ve changes in culture, Domes�c skilled workers migra�ng to foreign coun�es. Internal Environment External Environment Strengths • Availability of Adequate Capital • Experience of Managers Opportuni�es • Introducing low interest loans by government • Designing new ci�es Weakness • Business knowledge of owner is insufficient • Scarcity of Trained Workers Threats • Natural Disasters • Interna�onal Trade Embargo