Reducing the workforce means a business has fewer employees.
Machines do the work (automation)→ Fewer workers are needed
Sales go down→ Business cannot afford many workers
Factory, shop, or office closes→ Workers lose their jobs
Business moves to another country→ Jobs in the old place are lost
Training helps a business to:
Learn new machines or processes
Work faster and better
Improve skills of unskilled workers
Reduce supervision
Greater flexibility – hours can be adjusted easily.
Useful during busy periods – staff can be scheduled only when needed.
Extended opening hours – easier to cover evenings and weekends.
Lower wage expectations – suits students and parents with childcare duties.
The first stage of recruitment.
Involves studying:
Tasks
Duties
Responsibilities of the job
The first stage of recruitment.
Involves studying:
Tasks
Duties
Human Resources (HR) Department→ Manages people in an organisation→ Focuses on hiring, managing, motivating, and protecting employees
Attracting job applicants
Selecting the best candidates
Filling job vacancies efficiently
A trade union is an organisation formed by employees.
It represents workers’ interests and acts as a pressure group to improve working conditions.
Trade unions exist worldwide (e.g. USA, UK, India, Papua New Guinea).
Leadership is the ability to inspire and guide people to work towards a common goal.
Leaders exist in many areas: business, politics, religion, and sports.
In business, effective leadership helps motivate employees and improve performance.
Delegation means giving a subordinate the authority to carry out specific tasks.
The final responsibility remains with the manager, even if the task is done by someone else.
If a task is done poorly, the manager is accountable, not the employee.
Saves time: Managers cannot do every job themselves.
Management refers to the activities carried out by managers (leaders, directors, headteachers, etc.) to ensure an organisation achieves its goals effectively. Although job titles differ, the core functions of management are similar in all organisations.
Setting aims or targets for the future.
Gives the organisation direction and purpose.
Involves deciding strategies and resources needed to achieve goals.
The chain of command is the line of authority from the top of an organisation to the lowest level.
It shows who reports to whom.
A long chain of command means many levels of management.
A short chain of command means fewer management levels.
Organisational structure refers to:
The levels of management
The division of responsibilities
How employees are linked and report to each other
It is usually shown using an organisational chart with clear hierarchy.
Methods used to motivate employees without increasing pay
Focus on improving job satisfaction (enjoyment from doing the job)
Effective only after basic dissatisfaction issues are solved
Fair wages
Good management
Meaning
Fringe benefits are extra, non-financial rewards given to employees in addition to wages or salary.
They are also called perks.
These benefits usually depend on the seniority or level of the job.
Who gets what?
Factory or junior workers: may receive small benefits like product discounts.
Payments used by businesses to motivate employees to work harder and more effectively.
Act as incentives to improve performance and productivity.
Common methods:
Wage
Salary
Financial rewards are payments used by businesses to motivate employees to work harder and more effectively.
Wages
Salaries
Bonuses
When people work for themselves (entrepreneurs), they usually work harder because they get direct rewards.
When people work for others, they may not always give their best.
So, management’s job is to motivate workers to improve efficiency and productivity.
Many studies were done to understand what motivates employees.
Maslow said people are motivated in levels. You must satisfy the lower level first before the next level can motivate you.
Food, water, shelter, rest.
In business → wages high enough to meet weekly bills.
If this isn’t satisfied, nothing else will motivate the worker.
People work for many reasons, but the main one is to earn money so they can buy food, shelter, and other basic needs.
Other reasons include:
Voluntary work – done without pay.
Personal satisfaction – enjoying the job.
Status and respect – gaining recognition.
A stakeholder is any person or group that is affected by a business or has an interest in how the business runs.
Stakeholders can be inside the business or outside.
Owners / ShareholdersWant profits and business growth.
ManagersWant success, efficiency, and meeting targets.
A business doesn’t run for just one group. Many different people care about the business, and each one wants different things. That’s why managers can’t choose only one objective — they must balance everyone’s expectations.
From the center outward:
Want: Growth, higher profits, higher value of the business.
They try to meet profit targets set by the government.
The profit they make is either:
Reinvested back into the organisation, or
Given to the government, since the government is the owner.
Why important: They invest money into the business and take risks.
How affected:
If the business makes profit → they earn more.
If the business fails → they lose their money.
Business objectives = the aims or targets a business wants to achieve. Every business needs clear objectives because they guide the whole organisation.
Give direction: Workers and managers know exactly what they are working towards.
Motivates employees: Clear goals keep everyone focused and encouraged.
Better decision-making: Managers can check — “Will this decision help us reach our objective?”
Other public-sector enterprises are run by local governments (municipalities). They handle many community services.
These don’t charge people directly:
Street lighting
Government schools
Public sector businesses These are businesses and services that the government owns. They include things like hospitals, schools, fire stations, and government departments. They are run to provide services to the public, not mainly to make profit.
Public corporations These are big businesses fully owned by the central government.
They used to be private companies, but the government bought them — this is called nationalisation.
Examples in many countries: railways, water supply, electricity boards (though many are now being sold back to private companies — privatisation).
How they are run
The government owns them but doesn’t run them directly.
A joint venture is when two or more businesses team up to create a new project or business.They share the money, share the risks, and share the profits.
One partner may have money and technology
The other may have local knowledge or market access
Together they can succeed faster than working alone
Franchising It’s a way of doing business where one company (the franchisor) owns the main idea, brand, or product. Instead of selling directly to customers everywhere, they allow other people (the franchisees) to run the business using their name and system.
The franchisee pays the franchisor for:
Using the brand name
Training
Support
Equipment or recipes (depending on the business)
Limited liability for shareholders.
Separate legal identity — company continues even if a shareholder dies.
Can raise very large amounts of capital — unlimited number of shareholders.
Shares can be freely bought and sold — no restrictions.
Has high status, making it easier to get:
A private limited company is separate from its owners. This means:
It keeps existing even if an owner dies.
It can make contracts in its own name.
Its business money is kept separate from the owners’ personal money.
Partners can put their savings together.
This helps the business grow faster — like buying more taxis in this case.
Tasks are divided based on skills.
1. Easy to start Very few legal steps. You can start the business quickly.
2. Full control You make all decisions yourself. No partners to argue with.
3. Keep all the profit Whatever the business earns goes to you alone.
4. Personal service Customers like dealing directly with the owner. Builds trust.
5. Flexible You can change prices, products, timings anytime you want.
Not every business survives. Many new businesses close within their first few years, and even long-established ones can fail if they face serious problems. Here are the main reasons:
Poor management is one of the biggest causes of failure, especially for new businesses.
Owners may have good ideas but no experience in running a business.
Bad decisions, such as:
Businesses don’t always grow into big companies. Many choose — or are forced — to remain small. This can happen due to several key reasons:
Some industries are naturally suited to small businesses because they offer personal or specialised services.
Hairdressing
Car repairs
The merger reduces the number of competitors in the industry.
It allows the business to achieve economies of scale.
The combined business gains a larger share of the total market compared to before.
Higher profits A larger business can sell more and earn more.
More status and prestige Owners and managers gain reputation, and bigger firms often pay higher salaries to managers.
Lower average costs (Economies of scale)As the business grows, the cost per unit usually falls.
Larger market share The business controls a bigger part of the market:
More power with suppliers and distributors
Easy to measure and compare across businesses.
Limitations:
Some businesses are capital-intensive, using machines instead of many workers → high output but few employees.
Part-time workers create confusion: two part-timers = one full-timer or two employees?
Governments usually encourage entrepreneurs to start new businesses because of the benefits they bring to the economy:
New businesses need workers.
Hiring more people helps reduce unemployment levels in the country.
More firms in the market means consumers have more choices.
A short introduction about the business.
Includes history (if any) and the main objectives of the business.
Explains what the business will sell or provide.
Details of how the product will be made, delivered or improved in the future.
Enterprise and entrepreneurship What will you do when you leave school or college?
Maybe you will go to university or get a job.
Some of you may decide to take the risk of setting up your own business – this could be full- or part-time.
If you do decide to do this then you will become an entrepreneur! What are the benefits – and possible disadvantages – of starting up your own business?
For many successful entrepreneurs, starting up their own business has led to great wealth and fame. How many of these business leaders have you heard of? They all started out as entrepreneurs with their own business idea.
Every economy is made up of three main sectors:
Primary sector: extracting natural resources
Secondary sector: manufacturing and processing
Tertiary sector: providing services
Over time, the importance of these sectors changes as countries develop. This shift is influenced by technology, global competition, resource availability, and rising living standards.
The importance of each sector in a country is judged by:
The percentage of workers employed in that sector
The value of goods and services produced by that sector
In developing countries:
The primary sector (farming, fishing, mining) is the most important
Stages of Economic Activity
This is the first stage of production.
It involves using the Earth’s natural resources.
Examples: farming, fishing, forestry, mining, and extraction of materials such as oil and copper ore.
The output of this sector is raw materials.
Without business activity, life would be very hard. In early, simple economies, there were no businesses. People tried to do everything by themselves. They grew food, hunted, and made things on their own. This life was basic and living standards were low.
As time passed, people started specialising. They focused on what they were good at and traded their goods with others. Slowly, businesses were formed, and trade increased. Today, people work in specific jobs, earn money, and buy many goods made by different businesses.
Combines scarce resources to make goods and services
Produces things to satisfy needs and wants
People always have unlimited wants.
The four factors of production (land, labour, capital, enterprise) are limited.
Because of limited resources and unlimited wants, there is scarcity.
Scarcity forces people to make choices, which leads to opportunity cost.
Specialisation helps improve efficiency when using resources.
Resources like land, labor, and machines are limited
So we must use them in the best and most efficient way
Long ago: one worker made the whole product
Now: workers focus on one skill, and businesses focus on one product
The main reason we have shortage or scarcity is because we don’t have enough resources to make everything people need and want. People’s wants are unlimited, but the resources to produce them are limited.
1. Land All natural resources from nature. Examples: fields, forests, oil, gas, metals, minerals.
2. Labour People who work to produce goods and services.
3. Capital Machines, tools, equipment and money used to make products.
Needs = things you must have to liveExample: water, food, clothes, shelter
Wants = things you like to haveExample: phone, games, fancy clothes, snacks, etc.
Your needs list is short, but your wants list can go on forever.
Because:
Goods are physical things we can see, touch, and own.
They satisfy our needs and wants.
Examples: food, clothes, books, cars.
Services are activities done by others to help us.
Needs are the things that are necessary for survival and daily life.
Without them, a person cannot live properly.
They are limited and the same for everyone.
Examples: food, water, shelter, clothing, healthcare, education.
A producer is a person, company, or country that makes goods or provides services.
They use resources (like land, labor, machines, raw materials) to create products.
Producers bring things to the market so people can buy them.
Examples:
A farmer producing milk
Measured by GDP (Gross Domestic Product). If GDP increases, it means economic growth.
Causes:
Better technology
More workers
More investment (factories, roads, schools)
Perfect Competition – Many sellers, same product (like vegetables in a market). No one controls price.
Monopolistic Competition – Many sellers, similar but not same products (like Nike vs Adidas shoes). Some control over price.
Oligopoly – Few big sellers (like Pepsi & Coke). They control a big share.
Monopoly – Only one seller (like Railways). Full control of price.
Getting better