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Business Studies for Cambridge IGCSE & O Level Brian Titley The most forward-thinking and rigorous approach for the modern Business Studies classroom Up-to-date and scrupulous preparation for your students ✓
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Global outlook – international case studies your students can relate to
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C o o mp l le t e te e c o ov v e e r ra g e e o f f t he mo s s t t r e e c ce nt e C amb r ri i d dg e g e I G G C C SE E and O Le S ve v l e l s y l ll l ab u u s se s e s
A comprehensive and thorough approach which will challenge your students and get the best results
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1.1 1. 1 Bu Busi sine ness ss ac acti tivi vity ty
Business and the environment in which it operates 1.1 Business activity
1.1.1
1.1.1 Business activity as a means means o adding value and meeting customer needs 1.1.2 Classication o local and national national rms into primary, secondary and tertiary sectors
{
Business involves organizing and combining resources into frms to produce goods and services to satisy needs and wants o consumers.
{
Resources, or actors o production , are used to make goods and services.
{
Resources are scarce. There are not enough to produce everything we need and want. We must choose between alternative uses o resources.
{
Resources include land (natural resources), labour (human eort), capital (man-made resources) and enterprise (the knowledge and skills people need to own and run business organizations).
{
Resources are inputs to productive activity and products (goods and services) are outputs rom productive activity.
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Business activity adds value to resources by using them to produce goods and services that are more desirable to consumers.
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Firms owned by private individuals are private enterprises . Most rms aim to make a proft but some, like charities, engage in non-proft making activities.
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Some business organizations are owned and controlled by government authorities. These are public enterprises . Many provide public services.
1.1.3 Business growth and measurement measurement o size 1.1.4 Key eatures o a national economy 1.2 The organization
1.2.1 Business objectives and their importance 1.2.2 Stakeholders and their diering objectives 1.2.3 Aims o private and public sector enterprises
1.3 The changing business environment
1.3.1 Government infuence over decision making by using economic policy measures 1.3.2 Impact o technology on business 1.3.3 Business reaction to market changes
1.4 Economic environment
1.4.3 Problems entering new markets abroad 1.4.4 Competition and business 1.4.5 Exchange rates and how changes changes in them aect business • •
Fundamental ideas are outlined at the start of each chapter, preparing students for the unit ahead
Suggestions or coursework Examination questions
Opportunity cost – the benet lost by
who are willing and able to buy goods and services.
not consuming or producing the next best alternativeproduct.
Consumption – the using up o goods
Wages and salaries – payments made by
and services to satisy consumer needs and wants.
rms to employees to use their labour or productiveactivity.
Production – using resources to make
Customers – consumers who buy goods
goods and services to satisy consumer needs and wants.
or services rom business organizations.
Factors o production – productive
goods and services to customers.
Tricky vocabulary is clearly dened in advance, helping language-learners to focus on the subject material
Revenue – proceeds rom the sale o Proft – a surplus o revenue over costs o
production.
Firms – organizations that produce goods
and services. Entrepreneur – a person with the know-
how and willingness to take the risks and decisions necessary to set up and run a business.
Modern and highly visual design makes the content more accessible to students, increasing motivation and enthusiasm
Business buzzwords
Consumers – people and organizations
resources used to make goods and services.
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Key PoINTs
1.4.1 Mixed and market economies 1.4.2 International trade (access to markets markets and taris)
Assessment exercises
Business activity as a means of adding value and meeting customer needs
Value added – the dierence between
the price o a product and the cost o the natural and man-made materials, components and resources used to make it.
Business and the environment in which it operates
H e el l p p s t t u ud e d en t s s l e ea r n ho w w t he y l e ea r n b e es s t t . Mor e e e x xe e r r c c i is s e e s s and r e ev v i i s s i io n not e es s ar e e i nc l lu d e ed on a d r re e e C D D- R O OM or e e xt x t r ra f e ex x i i b i l li i t t y .
A truly global approach lled with international case studies and examples makes the book relevant to students internationally Important keywords are highlighted, with a glossary to ensure concepts are fully understood
From the article identiy and list the main eatures, advantages and disadvantages o a sole trader business.
Businesses are organized according to how they are owned, controlled and financed From the last section you will recall there are a number of different types of business organization in the private sector of an economy. They vary according to:
who owns the business
how it is controlled
how it is financed
Pop in for something Bitesize Customers o Bitesize, the new sandwich and coee bar in the town, can look orward to good ood and a personal, riendly service, according to owner Saabira Rahman. She was busy preparing resh sandwiches, snacks and lots o delicious pastries or local shoppers and ofce workers when we popped in to sample her menu. We asked her why she had decided to open her own business.
the owners’ liability to repay business debts.
‘I ENJOY cooking but had been unemployed or some time,’ Saabira explained. ‘By running my own business I am ensured a job but I get to be my own boss and keep all the prots I make. Not that I have made any yet,’ she laughed. ‘I have to work every hour I can to run the business, whether it is buying ingredients, cooking and preparing ood, serving, cleaning and even keeping the accounts. I I had the time and money I would hire some employees to help me!’ Starting your own business can be an expensive and risky business as Saabira ound out. ‘Banks wouldn’t lend me any money. They said there was too much competition and my business could be at risk.’
The sole trader The sole trader is the oldest and most popular type of businessorganization A sole trader or sole proprietership is a business organization owned and contolled by one person. They may employ other people to work in the business, but it will only ever have one owner. Most businesses are sole traders. It is the oldest and most common form of business organization in the world. Many small businesses run local shops or provide personal services such as hairdressing, plumbing, building and vehicle repairs. Many of today’s largest corporations started out as sole traders many years ago.
v is io n Ma ke re ve. i v fec t i f mo re e f
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Most sole traders finance their business from their personal savings, borrowing from friends and family or from a bank loan. However, banks are often unwilling to lend to sole traders because they are considered risky enterprises. They can face considerable competition from larger businesses and other small businesses, and many close down within their first few years of operation. Modern technology has reduced the cost of starting up a new small business. Many sole traders can operate their businesses from home thanks to the Internet and mobile communications which allows them to keep in contact with customers and suppliers. However, in the event of business failure the sole trader will be liable for all the business debts.
A dv dv an an ta ta ge ge s o f a so so le le tr tr ad ad er er +
Businesses operating as sole traders are easy to set up. There are usually ew legal requirements involved in business registration.
+
These businesses can oten be set up with little capital.
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The owner is his or her own boss and has ull control over the business.
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The owner receives all profts ater tax and thereore has an incentive to work hard.
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Personal contact with customers can increase customers’ loyalty. Separate accounts are not required or the business.
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Case studies depict scenarios students can relate to, bridging the gap between the theory and the real world
ACTIVITY 2.1
Understanding business organization
In this section we will look at each type of business organization in these terms.
ips a re ion t ip iss io Re v i ng raa ted, a l o n teg r in i we rs e l ans w d o m h h t t i w ra te t r s t to demon y t y i t l e xam-qua . responses
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Businessactivity
Instead Saabira had to use all her savings to buy equipment and pay the deposit on her shop premises. ‘Monthly bills or ingredients, electricity and my mobile phone are also high,’ she said. ‘I must earn at least $400 in revenue each month just to break even. I’d love to take a ew days of but I wouldn’t make any money.’ ‘Then o course, i the business ails I will have to repay any business debts even i it means selling my possessions to do so! But I plan to make the business a success and so ar, so good!’ Bitesize can also provide sandwiches and pastries or business unctions and parties.
D is is ad ad va va nt nt ag ag es es of of a s ol ol e t ra ra de de r -
The owner has ull responsibility or running the business rom day to day. This may mean working very long hours and going without holidays.
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The business may lose revenues and profts i the owner is o sick or on holiday and cannot manage the business.
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The owner has unlimited liability to repay any business debts.
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Sole traders oten lack capital to buy new equipment or to expand.
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Sole traders oten lack all the skills they need to run their businesses successully. Ownership and internal organization
Business structure,organizationand control
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Concepts are fully explored and broken down into manageable segments which are easier for students to absorb
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