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Business Management business Enterprise for Higher.doc
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Business Management business Enterprise for Higher
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NATIONAL QUALIFICATIONS CURRICULUM SUPPORT
Business Management
Business Enterprise
Revised Student Notes
and Activities
[HIGHER]
The Scottish Qualifications Authority regularly reviews
the arrangements for National Qualifications. Users of
all NQ support materials, whether published by LT
Scotland or others, are reminded that it is their
responsibility to check that the support materials
correspond to the requirements of the current
arrangements.
Acknowledgements
Learning and Teaching Scotland gratefully acknowledge this contribution to the National
Qualifications support programme for Business Management. The original resource of this
title was written by Christine Murray and Jane Macfarlane and issued in 1999. The Revised
Notes were updated by Mark Kinnon and the Revised Activities by Sheena Dow. The
permission of the following publications to reproduce copyright material is acknowledged with
thanks: The Herald, The Observer, Times Educational Supplement Scotland, Daily Record.
© Learning and Teaching Scotland 1999 and 2006
This resource may be reproduced in whole or in part for educational purposes by educational
establishments in Scotland provided that no profit accrues at any stage.
2 BUSINESS ENTERPRISE (HIGHER, BUSINESS MANAGEMENT)
© Learning and Teaching Scotland 2006
Contents
Section 1: Business in Contemporary Society 4
Student Activities 28
Solutions to Activities 37
Section 2: Business Information and ICT 44
Student Activities 58
Solutions to Activities 74
Section 3: Decision Making in Business 84
Student Activities 106
Solutions to Activities 120
Section 4: Internal Organisation* 128
Student Activities 151
Solutions to Activities 160
* Note that Section 4 is no longer included in Unit assessment. However, it still forms
part of the overall course assessment.
BUSINESS ENTERPRISE (HIGHER, BUSINESS MANAGEMENT) 3
© Learning and Teaching Scotland 2006
BUSINESS IN CONTEMPORARY SOCIETY: STUDENT NOTES
Section 1: Business in Contemporary Society
The role of business in society
Everyone in our society has ‘wants’. Some wants are for things like food,
clothing and shelter while others are for entertainment, leisure, travel and so
on. Taking everybody in society together, there are millions of wants. To
satisfy these wants we make use of (or consume) goods and services. If
suitable goods and services were not available, we would not be able to
satisfy our wants. This is why business activity is important: because it is
through business activity that goods and services are provided.
A definition of business activity is any kind of activity that results in the
provision of goods and services which satisfy human wants.
Goods are tangible while services are intangible. Goods sold to the general
public are often referred to as consumer goods. Consumer goods may be
classified as durable goods like cars, washing machines, or personal
computers; or non-durable goods like sweets, drinks, newspapers. Durable
goods can be used regularly over a long period of time while non-durable
goods are consumed over a short period, usually soon after they are bought.
Examples of services are going to the hairdresser, being served in a
restaurant, or visiting a doctor.
Goods and services can be described as the outputs of business activity. In
order to produce these outputs, business makes use of resources, also called
factors of production. Factors of production are classified into four
categories:
land (i.e. all natural resources, from mineral deposits to the site of a
factory)
labour (i.e. all human resources)
capital (i.e. all resources which have been made by labour, such as
machinery and other equipment)
enterprise (i.e. organising the other factors of production and taking the
risk of producing goods or services in advance of them being sold).
In summary, then, business activity involves using resources to produce
goods and services which people require in order to satisfy their wants.
4 BUSINESS ENTERPRISE (HIGHER, BUSINESS MANAGEMENT)
© Learning and Teaching Scotland 2006
BUSINESS IN CONTEMPORARY SOCIETY: STUDENT NOTES
Business activity can be described as ‘wealth-creating’. This is because the
term ‘wealth’ is used to refer to the amount of goods and services, or output
available – the more goods and services that exist the greater the amount of
wealth. In this sense, then, wealth is not money as such but the total of goods
and services which can be given a monetary value.
Finally, goods and services are sold in markets. These exist where goods
and services are exchanged between consumers and producers. Examples of
markets are the housing market, the market for snack foods, and the financial
services market.
Cycle of business
This phrase is sometimes used to describe the various stages of business
activity. These stages can be shown as follows:
Wants People in society have wants which they
wish to satisfy.
Identification of wants Businesses recognise that there are
wants which can be satisfied by the
production of goods or services.
Production Businesses combine inputs to produce
an output of the required goods or
services.
Consumption and
satisfaction of wants
Goods and services are made available
to consumers who consume them and
thus satisfy their wants. Wealth is
created for companies and for their
employees and shareholders.
Wants The cycle begins again.
BUSINESS ENTERPRISE (HIGHER, BUSINESS MANAGEMENT) 5
© Learning and Teaching Scotland 2006
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