Sunday, October 14, 2012

Introduction

Hello, this is a summary of IGCSE Business Studies, made by me, MrSpitfire to help you understand the concepts of Business Studies more easily. As a student, I would like to share with you my experience since I am studying this subject right now. I am not a professional so please feel free to add comments and suggestions on how I should improve.

This study guide is going to be about IGCSE Business Studies, Third Edition by Karen Borrington and Peter Stimpson. For more information, visit this page.

I hope you will enjoy this study guide and for me to be of help.
MrSpitfire



Saturday, August 25, 2012

Chapter 1: The purpose of Business Activity


The economics problem: needs and wants.

Basically, all humans have needs and wants. Needs are things we can't live without, while wants are simply our desires that we can live without. We all have unlimited wants, which is true, since all of us want a new PC, a car, new graphics card, etc. that we actually do not need to live. Businesses produce goods and services to satisfy needs and wants.

Although we have unlimited wants, there are not enough resources for everyone. Resources can be split into 4 factors of production, which are:

- Land: All natural resources used to make a product or service.
- Labour: The effort of workers required to make a product or service.
- Capital: Finance, machinery and equipment required to make a product or service.
- Enterprise: Skill and risk-taking ability of the entrepreneur.

Entrepreneurs are people who combine these factors of production to make a product.

Friday, August 24, 2012

Chapter 2: Types of business activity

Levels of economic activity


In order for products to be made and sold to the people, it must undergo 3 different production processes. Each process is done by a different business sector and they are:
  • Primary sector: The natural resources extraction sector. E.g. farming, forestry, mining... (earns the least money)
  • Secondary sector: The manufacturing sector. E.g. construction, car manufacturing, baking... (earns a medium amount of money)
  • Tertiary sector: The service sector. E.g banks, transport, insurance... (earns the most money)

Thursday, August 23, 2012

Chapter 3: Forms of business organisation

Almost every country consists of two business sectors, the private sector and the public sector. Private sector businesses are operated and run by individuals, while public sector businesses are operated by the government. The types of businesses present in a sector can vary, so lets take a look at them.

Private Sector

Sole Traders

Sole traders are the most common form of business in the world, and take up as much as 90% of all businesses in a country. The business is owned and run by one person only. Even though he can employ people, he is still the sole proprietor of the business. These businesses are so common since there are so little legal requirements to set up:
  • The owner must register with and send annual accounts to the government Tax Office.
  • They must register their business names with the Registrar of Business Names.
  • They must obey all basic laws for trading and commerce.

Wednesday, August 22, 2012

Chapter 4: Government and economic influences on business

The impact of business activity on society

All business activity has benefits and undesirable effects on society. These reasons are why governments want to have some control over business activity:

Possible benefits:
  • Production of useful goods to satisfy customer wants.
  • Create employment/increases workers living standards.
  • Introduction of new products or processes that reduces costs and widen product range.
  • Taxes help finance public services.
  • Business earn foreign currency in exports and this could be spent on imports.