• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The Need for, and Nature of, Business Activity.

Extracts from this document...

Introduction

The Need for, and Nature of, Business Activity. 1. The production of goods and services that satisfy the needs of consumers or other firms (often with the aim of making a profit) is known as 'business activity'. Businesses need to purchase resources (known as factors of production) to do this. 2. There are four factors of production; they are: land, labour, capital and enterprise. Normally, the term 'land' includes the natural resources that are available in the area, such as crude oil and coal. Labour is the workforce, manual and skilled alike. Capital includes finance as well as the man-made resources required to run the business. Any business needs enterprise for production to commence. It combines the other factors of production with entrepreneurship (providing a managing, decisive and co-ordinating role) to create a unit that is capable of producing goods and services. 3. An increase in industrialisation boosts the GDP, which raises the average living standards. ...read more.

Middle

own the business. The infrastructure in a Private Limited company's business is such that ownership is divided into shares, so more than one person can control the business. A sole trader business cannot be divided into shares. Another difference is present in the way the business is run. In a sole trader, the sole owner of the business has complete control over decision making. However, if any decisions are to be made in a Private Limited Company, decisions can rest upon the agreement of other shareholders. A Private Limited Company's end-of-year accounts must be sent to the Companies' House, where it is available for public inspection. However, a sole trader has more secrecy concerning financial affairs. 6. Since a large number of shares are issued (and because many people and institutions invest in the company), it is unlikely the original owner/s of a public limited company will be able to retain total ownership and control. ...read more.

Conclusion

can lead to conflict and inefficiency. 2. If one of the partners fail, the whole project is put at risk. 8. By buying a majority of the shares, the Directors of a Public Limited Company might decide to convert the business back into a Private Limited Company to overcome the separation of control and ownership. The owner of a ltd can take a long-term long-term planning view of the business. As a public limited company, 'short-termism' can be damaging to the long-term investment plans of the business. The cost of business consultants and financial advisors is less in a Private Limited Company. There is less risk of takeover and the risk of fluctuation of share prices is less. 9. If a company has limited liability, people and institutions are more willing to invest because the company's chance of closing down is greatly reduced. It also encourages investment because the shareholders' private assets cannot be put at risk when debt is incurred by the business. It is also easier for limited companies to raise finance because they can issue shares. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Marked by a teacher

    ASDA's Ownership

    4 star(s)

    Household income figures increase and decrease. In 1987, figures showed wages and salaries that were paid were high (above 50) but then decreased (down to below 50) and then started to increase in 2000 (back to 50). However, the amount of tax that was deducted increased year after year.

  2. Btec National Business Level 3 Year 1 - Exploring Business Activity

    Public means that they are owned by the government for the benefit of everyone. It has wider objectives than profit often has wider social service aims. The government assists Oxfam to give the charities to save from homeless, poverty and disease etc.

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    is the consumer prices index. It is the measure adopted by the Government for its UK inflation target. It measures all the goods and services available to a consumer. The Retail Price Index (RPI) is also used by the government to measure inflation. It measures the cost of items consumers buy, for example when you

  2. For my portfolio, I was asked to do an assignment on two businesses. I ...

    Being near to suppliers and natural resources This will help a business to avoid cost on transport. Sometimes business need to locate near to suppliers when their items are heavy and costly to transport or they need a item which is available only in selected areas of the country for

  1. Barclays Investigating a Business

    demand for products and services are high as people are willing to spend their money. This may mean that people are less likely to be using Barclay's savings account, however there is more of a chance of customers borrowing money for the products they want to buy.

  2. Introduction to Business Assignment

    contention of being a global market leader with regards to being a world lighting leader because as you get larger, the unit cost per item reduces and thus would allow room for profits to be ploughed back into research and development, and other marketing novelties such as advertising.

  1. Departments and their roles within a business.

    the finance department before-hand to make sure the business can afford to pay extra wages for the overtime. If the marketing department purchased new advertising graphic software they would need to send the invoices and purchase orders to the finance department to process and clear.

  2. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    They also offer some International branded foods to meet the needs of their foreign customers. To cater needs of some customers say for people who like meat but need to be assured that its produced by professionals, there are counter butchers and fishmongers in store that tailor in selling professional meat.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work