UNIT 1

THE BUSINESS ENVIRONMENT

LO2

LO1 P1

WHERE DOES A BUSINESS

OPERATE?
LOCAL
NATIONAL
INTERNATIONAL
GLOBAL
TASK
You have 1 minute to discuss and provide
an example of each location

WHO OWNS THE BUSINESS?

PUBLIC SECTOR
Owned by the Government
PRIVATE SECTOR
Owned by individuals or private share
holders
PRIVATISED
Ownership of a business has been
transferred from government to private
owners

NOT-FOR-PROFIT/VOLUNTARY
BUSINESSES
Not all businesses aim to make profit
HOW MANY CAN YOU THINK OFF?

Examples
Associations
Clubs
Societies
Unions
Charities
Universities
Churches

WHICH SECTOR

TASK
You are required to draw the
manufacturing process of
innocents Orange Juice.
You must be sure to include the
which processes belong in
Primary, Secondary and
Tertiary.
You have 5mins to complete.

https://padlet.com/joshua_reeves/Inno

SUPPLY OF PRODUCTS AND

SERVICES
We all have wants and needs.
A product or service is provided to satisfy
these .
TASK
Complete work sheet :
Supply of products and services
Located on Moodle.

RECAP OF TASK
Product or service

Want or need that it satisfies

Business

Think of your own example

Think of your own example

Internet music
download
Sandwich

Tooth filling

Haircut

Think of your own

example

PROFIT & NOT-FOR-PROFIT

Not all businesses aim to
make a profit

Number in
UK

MICRO

SMALL

MEDIU
M

LARGE

MAJOR

82,391

52,815

21,257

4,270

533

Proportions 51.1
32.8
13.2
2.6
0.3
%
Not all businesses aim to make a profit, but not for profit
Income
228.5still cover
1,856.1
6,544.2
11,821. 18,798.8
organisations
must
their running
costs
(M)
5
This means customers must be happy to pay more for the
products than it costs the business to supply them
TASK
You have 30 seconds to think of as many not-for-profit
organisations as you can. You must be prepared to share them
with the class if asked.

OWNERSHIP
Private
Owned by individuals or shareholders
Public
Owned by Government
Voluntary
Supervised by trustees

QUESTION
Think about what the OBJECTIVES of each
sector might be.
You have 1 minute to discuss before we
discuss as a class.

TYPES OF OWNERSHIP
Sole Trader
Partnership
Private Limited Companies
Public Limited Companies
Worker co-operatives
Government Departments
Governments Agencies
Charitable Trusts

TYPES OF OWNERSHIP
Sole Trader
Partnership

TYPES OF OWNERSHIP
Sole Trader
Partnership
LTD
PLC
Worker co-op

TYPES OF OWNERSHIP
Sole Trader

A government department is staffed

by civil servants.
Private Limited Companies
These businesses do not aim to make
Public Limited Companies
a profit, but to collect taxes to run the
country.
Worker co-operatives
Partnership

Government Departments
Governments Agencies
Charitable Trusts

TYPES OF OWNERSHIP
Sole Trader
Partnership
Private Limited Companies
Public Limited Companies
Worker co-operatives
Government Departments
Governments Agencies
Charitable Trusts

VS

TYPES OF OWNERSHIP
Sole Trader
Partnership
Private Limited Companies
Public Limited Companies
Worker co-operatives
Government Departments
Governments Agencies
Charitable Trusts

LO1 P2

STAKEHOLDERS
TASK
You have 30 seconds to write a
definition of a stakeholder .

Definitions
An individual or group with an
interest in an organisation.
Any individual or group who can
affect or are affected by the
achievement of a businesss
objectives.

EXAMPLES OF STAKEHOLDERS
Customers
Employees
Suppliers
Owners
Trade unions
Employer association
Local & national communities
Governments

TASK Internal or External?

You must create a diagram that demonstrates which
stakeholders are internal and which are external.
Customers

Owners

Share Holders

Trade unions

Employees

Employer association

Manager

Local & national communities

Suppliers

Governments

Societies

INTERNAL OR EXTERNAL?

STAKEHOLDERS
TASK
You must complete Stakeholder
interests and power worksheet
You have 10 mins to complete

EQUALITY
The reality is that stakeholders do not have equality in terms of their
power.
Senior managers have more influence than environmental activists
A venture capitalist with 40% of the companys share capital will
have a greater influence that a small shareholder
Banks have a considerable impact on firms facing cash flow
problems but can be ignored by a cash rich firm
A customer that provides 50% of a business revenues exerts
significantly more influence than several smaller customer
accounts
Businesses that operate from many locations across the country
will be less relevant to the local community than a business which
is the dominant employer in a town or village
Governments exercise relatively little influence on many wellestablished and competitive business-to-business markets.
However their power is much stronger over businesses in markets
which are regulated (e.g. water, gas & electricity) or where the

SO HOW DO THEY INFLUENCE THE

BUSINESS?
A Business needs to take its stakeholders interests into account.
For example, if Virgin decided to use greener fuels then fares for
journeys would increase.
This could be seen as a bad
thing as:

This could be seen as a good

thing as:

Customers may have to pay

It is better for the
higher fares
environment
Shareholders may get lower
More people may want to
profits
travel by train because it is
Virgin buys from new suppliers
greener
Employees feel better
rather than old
Some jobs may be at risk
about working for a
The Government may lose
greener travel company
taxes
(motivation)

YOUR TURN
In groups of 3 you must discuss the influence of your selected
stakeholder.
You will be required to present this to the class using a
presentation aim.
You can use:
A3 PAPER
PENS

YOU HAVE 10 MINUTES

STAKEHOLDE
RS
Owners
Managers
Employees
Government
Banks
Customers
Suppliers
Local Community

CONFLICTS OF INTEREST
Due to the demands placed on businesses by so many
different stakeholders, it is no surprise that there are often
disagreements and conflict between the different groups

For Example
What would the conflict be between shareholders and
employees if Employees want a pay rise?

THE ASSIGNMENT
The assignment can be found on Moodle, please download
the document and save in the relevant folder!
You are required to read the document and be ready to
discuss as a class.