DEFINITION OF BUSINESS TERMS 1.BUSINESS

POB Grade 10

Week: One

Lesson: One

Topic: Nature of Business

DEFINITION OF BUSINESS TERMS

1.BUSINESS: Business maybe defined as one or more person engaged in an activity to make a profit and to

satisfy the needs and wants of its customers. 2.NEEDS: These are the essential things in life e.g., food etc.

3.WANTS: these are the luxurious things in life e.g., bed

4.CUSTOMER: A person that buys or consumes (goods or services) and has the ability to choose between

different products and suppliers.

5.PROFIT:The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is

computed and dividend is paid. It is the best-known measure of success in an enterprise.

6: GOODS: These are tangible commodities that we can see, feel, and touch e.g. sugar

7.SERVICES: Services are intangible commodities that we cannot see, feel, and touch but has the power to

satisfy us e.g. transportation, doctor

8.ENTREPRENEUR: An entrepreneur is a person who takes risk and contributes capital to start as well as

sustain the business.

9.MARKET: Market is interaction between buyers and sellers.

10.CAPITAL: Capital is defined as money or resources used to start as well as sustain the business.

11.NATIONALIZATION: Nationalization is the transfer of ownership from private citizens to government of

businesses.

12.PRIVATIZATION: Privatization is the transfer of ownership of government agencies to private individuals.

ACTIVITY: Match the word with the correct example on the opposite side

1. Goods

2. Wants

3. Service

4. Market

5. Customer

Week: One

Lesson: Two


BARTER

Barter is the exchanging of goods and services for other goods and services without the use of money. This was

the way early trade was done.

ADVANTAGES OF BARTER

1. People were able to dispose of the surplus they had and at the same time obtain a wider range of things

which they needed.

2. Productivity was increased to improve the way their way of life and allowed for specialization in things that

people could produce best.

3. Increased productivity resulted in more surplus and further wealth.

DISADVANTAGES OF THE BARTER SYSTEM

1.DOUBLE COINCIDENCE OF WANTS: this was the problem of finding someone to exchange with,

someone who had what you wanted and wanted what you have.

2. RATE OF EXCHANGE: someone always felt cheated

3. SOME GOODS COULD NOT BE TRADED IN PARTS: some goods had to be traded even though the

size and value was greater than what they were being exchanged for e.g you could cut off the leg of an animal

because it valued more than the good that you wanted.

4. SOME GOODS WERE EASILY PERISHABLE: some good could not last long e.g tomatoes.

ACTIVITY

Imagine that you are a farmer living in an era of the barter system. You are a vegetable farmer and wants meat.

There is another farmer who rears chicken. Identify somethings you would need to consider if you were to trade

with him.

Week: One

Lesson: Three


HISTORY OF MONEY

Money maybe defined as any commodity that is generally acceptable as a measure of value and medium of

exchange. From the origins of bartering to modern money, this is how the system has evolved. At the dawn of

humanity, bartering was used in lieu of money to buy goods. As early man began to rear domestic livestock,

one of the earliest forms of barter included cattle, sheep, as well as vegetables and grain.

CHARACTERISTICS OF MONEY

•It must be durable: it should be long lasting and must be able to withstand wear and tear.

•It must be generally acceptable: people must agree to use it

•Divisible: we must be able to divide it into units.

•Scarce: its value is maintained when it is harder to acquire.

•Portable: it must be convenient to carry around.

•Homogenous: they must be of similar kind

ACTIVITY

1. Give reasons why you think money replaced barter?

2. Why do you think some countries like Canada and Australia use plastic instead of paper notes?

FUNCTIONS OF MONEY • It must be durable: it should be long lasting and must be able

to withstand wear and tear. • It must be generally acceptable: people must agree to use it • Divisible: we must be able to divide it into units. • Scarce: its value is maintained when it is harder to acquire. • Portable: it must be convenient to carry around.

• Homogenous: they must be of similar kind

Week: Two

Lesson: One


INSTRUMENTS USED IN EXCHANGE AND PAYMENT

Bills of exchange: the bill of exchange is made out by the seller/exporter of goods. It requires that the

buyer/importer pay a sum of money on demand, or at an agreed future date. It is commonly used in the

settlement of international debts.

Documentary credit: is also known as a letter of credit, it enables exporters to obtain payment before the

documents of ownership are released to the importer.

Electronic Transfer (EFT): this is the exchanging of money without paper money changing hands. This can be

done through various financial institutions e.g bank. It enables exporters to obtain payment before documents of

ownership are released to the importer.

Tele-banking: this is where the customer uses an appropriate type of telephone to access services provided by

banks e.g. checking account balances, transfer funds, payment of bills etc.

ACTIVITY.

1. What does the abbreviation EFT represent?

2. Which of the following is not directly related to EFT

A) debit card B) credit card c) cheque issue d) standing order

Week: Two

Lesson: Two



E-commerce: refers to the buying and selling of goods and services through an electronic medium such as the

internet.

Cheques: a slip of paper that the customer fills out and sign instructing their bank to do something with

money in their bank account.

Money Order: these are printed order for payment of a specified sum and facilitated by a bank or post office.

These are prepaid.

Debit Card: these allows the holder to make purchases at home or abroad and connected directly to their

account. This is a service provided by banks to their account holders. The purchaser presents the card to the

trader’s connection to the banking system at the point of sale(POS) terminal

Credit Card: these enable the holder to buy goods and services without using cash or cheque.

ACTIVITY

1.Briefly explain why it you would prefer to use a debit card or credit card as oppose to cash.

2.What does the abbreviation POS stands for?

3. Using a mobile phone to pay for products is referred to as…………………..

Week: Two

Lesson: Three



Bank Draft: these are a form of cheque draw on the issuing bank itself rather than the customer’s bank

account. This is as good as cash because the bank guaranteed it for their customer, who has paid the value of the

draft into the bank in advance.

Telegraphic Money Transfer: this is used when the sender wants to send money to an overseas destination.

Example of companies that offer these services include Western Union, Money Gram

Money Mobile/mobile wallet: this is sometimes referred to as m-money. It is an app running on a mobile

device that lets users store, send and receive money. The user can pay safely through their mobile device

instead on using cash and plastic card.

Standing order: this is where a regular amount has to be paid on behalf of a customer on a regular basis e.g.

monthly installment.

ACTIVITY

Contemplate and answer the following questions

1. If a business wants to pay the wages of its employees electronically it will use:

a) standing order b) cheque c) electronic funds transfer d) bank draft

2. Which of the following involves the use of a PIN?

a) debit card b) cheque c) standing order d) bill of exchange

3. List and explain three other ways how monetary transactions can be conducted without the use of cash.

Week: Three

Lesson: One


PUBLIC SECTOR & PRIVATE SECTOR

Public sector entities are businesses controlled by the government. Their main aim is to offer services to everyone

and not to make a profit e.g. schools, healthcare facilities etc. It is funded by government through taxes and fees

paid by the citizens. On the other hand, private sector businesses are run for profit and owned by private

individuals.

Public sector business falls into two categories:

1. Municipal Undertaking

2. State Undertakings

MUNICIPAL UNDERTAKINGS

these are enterprises or services operated on a commercial basis by local government authorities. They are

financed by local taxation and charges are made for the use of their services or other commercial activities.

Sometimes municipals are subsidized by grants from central government. Neighbourhood Democratic Councils

and Town councils are examples found in Guyana.

ACTIVITY

1.Find out three roles of your local Neighbourhood Democratic Council or Township towards your community

2.Identify two services that is provided by the public sector and also the private sector in your country.

Week: Three

Lesson: Two


STATE UNDERTAKINGS

State undertakings, state ownership, public enterprise and nationalized industries are all terms that refer to a

variety of enterprises operated by the government on behalf of the public. Each public corporation is set up by an

‘ACT OF PARLIAMENT’, to provide commercial or industrial functions often in a monopolistic position. Each

corporation has a legal identity separate from government and may include transport, telecommunications etc.

Public Corporations are owned by the public but managed by the government on their behalf.

REASONS FOR STATE OWNERSHIP

1. To take a monopoly out of private ownership for the good of all the citizens.

2. To keel natural monopoly in public ownership e.g. water, electricity.

3. To assist with the initial cost of setting up since it maybe too high for private enterprises.

4. To avoid duplication of services e.g. water

5. To save an ailing essential industry and to protect jobs.

ACTIVITY

1. Identify three examples of state owned corporations found in Guyana.

2. Briefly explain why sometimes it is necessary to have state corporations.

Week: Three

Lesson: Three


ADVANTAGES OF STATE OWERSHIP

1. The government has the resources to fund a vast essential industry.

2. It ensures that essential services are always provided.

3. Profit benefits the whole nation as opposed to a limited number of persons.

4. It reduces possible duplication of services and equipment e.g. water

5. the large scale of public corporations enables them to enjoy maximum economies of scale.

DISADVANTAGES OF STATE OWERSHIP

1. It can be over cautious since they are answerable to the public.

2. Local issues maybe disregarded in favour of political objectives.

3. Losses have to be met by the taxpayers.

4. A state monopoly can lead to inefficiency and an inefficient profit motive.

5. The ultimate bosses are politicians who may not have the required expertise to run a major enterprise.

ACTIVITY

Read the following sentences and state whether its true of false.

1. Most state corporations are not monopolies. ()

2. Politics/politicians may influence management. ()

3. Taxpayers bears the losses. ()

4. Profit from state corporations benefit the country as a whole. ()

5. State corporations results in duplicity of industries and services. ()

Week: Four

Lesson: One


PRIVATE SECTOR BUSINESS ORGANISATIONAL UNITS

Private sector business organizations are operated for profit and owned by private citizens. The following are

business organizational units that belongs to the private sector:

1. Sole Trader

2. Partnership

3. Cooperatives

4. Private Limited Companies

5. Public Limited Companies

6. Multinationals

7. Conglomerates

8. Franchises.

Understanding risks involved in private sector businesses.

The most serious risk involved in investing in a business is bankruptcy, that is the business cannot pay the debts

it owes to its creditors. If the business has

1. Limited Liability: this is where the owner of the company is liable only for debts equivalent to the amount

of their investment. This allows people to invest in a business without having to face the risks of losing

personal assets such as their homes, they can only lose the amount they have put into the business.

2. UNLIMITED LIABILITY: this is where the members are liable (legally responsible) for all of their debts.

Not only can the lose the money they invested in the firm, but they can also have their personal assets such

as their homes or vehicles taken in order to pay off their debts.

ACTIVITY

1. Differentiate between limited liability and unlimited liability.

2. 1.Based on what you know identify one example of each business unit listed above.

Week: Four

Lesson: Two


SOLE TRADER

A sole trader is a one-person business and is sometimes referred to as a sole proprietor.

FEATURES OF A SOLE TRADER

1.It is easy and inexpensive to become a sole trader.

2. It is usually financed by the owner.

3. They usually provide a personal service to their customers.

4. Sole trader bears all risks and suffers all losses, but he also enjoys all profit.

ADVANTAGES OF A SOLE TRADER

1.It can be easily and quickly formed.

2.The sole trader accounts to himself only.

3.Decisions can be made quickly because he has no one to consult.

4.All profits belong to him.

5.He enjoys a personal relationship with his customers.

6.A sole trader business can progress and grow into a large company.

ACTIVITY

State whether true or false

1. All profit belongs to the sole trader. ()

2. His business will be stagnant cannot grow. ()

3. He is distant from customers. ()

4. It is not expensive to set up. ()

5. He accounts only to himself. ()

Week: Four

Lesson: Three


DISADVANTAGES OF A SOLE TRADER

1. A sole trader assumes all risk and losses himself.

2. It is not easy to obtain loan from a bank because of high risk.

3. He has long working hours.

4. He has unlimited liability.

5. A sole trader business usually dies with its owner.

ACTIVITY

A sole trader has unlimited liability. Imagine you are a sole trader who has run bankrupt. Explain what does

limited liability mean and how this can affect you.

POB Grade 10

Week: Five

Lesson: One


PARTNERSHIP

A partnership maybe defined as a legal agreement between two and up to twenty (20)

individuals who undertake to form themselves into a business with a common view to

making a profit.

DEED OF PARTNERSHIP

A partnership is formed by a Deed of Partnership signed by all partners and contains the

following information:

*number of partners

*amount of capital contributed by each partner

*type of trade engaged in

*share of profits losses accruing to each partner.

*name of partnership

*salary of each partner

*mechanism for dissolution

ACTIVITY

Answer the following questions with true or false

1. The maximum number of persons who can form a partnership is twenty. ()

2. A deed of partnership governs a partnership. ()

3. The main aim of a partnership is to make a profit. ()

Week: Five

Lesson: Two


ADVANTAGES OF PARTNERSHIP

1.A partnership is easy to form without legal formalities.

2.More capital can be raised by the combined resources of partners

3.Specialization in management is possible as each partner may participate in the field in

which he has experience and training.

4.Workload is shared among partners.

5.A partnership can progress and grow into a large company.

DISADVANTAGES OF PARTNERSHIP

1.All the partners stand to lose if one makes a bad mistake.

2.Capital is still limited.

3.There is limited liability.

4.There is a risk of disagreement and quarreling with other members of the firm.

ACTIVITY

Differentiate the advantages from the disadvantages of partnership.

1. A partnership can grow into a large company.

2. Capital is limited.

3. Workload is shared among partners.

4. Specialization is possible.

5.There is limited liability

Week: Five

Lesson: Three


COOPERATIVES

What is a cooperative? A cooperative is a business organization that is owned and operated by its members.

Members are generally a group of people with corresponding interests who have

established the cooperative society for their mutual benefit.

TYPES OF COOPERATIVES

• Consumer Cooperatives: these provide members with goods and services e.g. food and

fuel.

• Producer Cooperatives: these are usually agricultural in nature and provide member

with purchasing, marketing and transport services.

• Financial Cooperative: members pool their savings in order to secure credit for

themselves at low cost e.g. credit union.

• Service Cooperative: these provide their members with a variety of services normally

considered prohibitive e.g. healthcare, housing.

• Workers Cooperative: this type of cooperative provides employment for its members it

allows members to determine and control their choice of employment.

ACTIVITY

1.Differentiate between consumers cooperative and workers cooperatives.

Week: Six

Lesson: One


ADVANTAGES OF COOPERATIVE

1. There is a guaranteed market for members.

2. Little or no advertising costs are incurred.

3. There is no profiteering.

4. There is a democratic form of management.

5. Economies of bulk buying are available to all members.

6. Employment is created within the organization.

DISADVANTAGES OFCOOPERATIVE

1.Management may be poor and inexperience.

2.Conflict may arise when members are both employers and employees.

3.Lack of capital may cause problems.

4.Cooperatives maybe unable to attract skilled professionals.

5.Capital base is limited.

ACTIVITY

In the table below insert three advantages and three disadvantages of cooperatives.

ADVANTAGES DISADVANTAGES

Week: Six

Lesson: Two


PRIVATE LIMTED COMPANY

A private limited company is one in which only two but not more than fifty (50)

shareholders form the company. It is governed by:

*A memorandum of association: this governs the external relationship of the company and

contains:

1. Name of the business and its status.

2. Objectives of the business.

3. Country of operations.

4. Method of finance, name of the company etc.

An articles association: this is a document detailing the control of the internal aspects of a

company and contains:

1.The rights of shareholders.

1. The methods and manner of electing directors.

3.The manner in which meeting are to be conducted.

2. The division of profit.

3. The remuneration, appointment and removal of auditors.

4. The issue, transfer and forfeiture of shares.

ACTIVITY

1.Explain the difference articles of association and memorandum of association.

Week: Six

Lesson: Three


Features of a private limited company:

1. It enjoys limited liability.

2. It is a legal entity.

3. It must have a memorandum and articles of association.

4. There must be proper keeping of accounts for tax purpose.

5. Directors are usually elected in an annual general meeting (AGM).

6.A minimum of two but not more than 50 shareholders are legally required.

ADVANTAGES OF PRIVATE LIMITED COMPANY

1. Privacy is retained.

2.There is limited liability.

3.Continuity is ensured- the death of a shareholder does not affect the company.

4.It enjoys benefits e.g. specialized help.

DISADVANTAGES OF PRIVATE LIMITED COMPANY

1.Shares are not freely transferable without directors' consent.

2.The amount of capital is limited growth is slow.

3.It is vulnerable to changes in demand.

4.The entrepreneurial pool is restricted to family members and close friends.

5.Such companies are not known as innovators or for research and development.

ACTIVITY

In the table below insert three advantages and three disadvantages of private limited

companies.

ADVANTAGES DISADVANTAGES

Week: Seven

Lesson: One


PUBLIC LIMITED COMPANIES

Public Limited companies (PLC) is distinguished from a private company in that the shares

are openly sold on the stock exchange while s private company’s shares are not. In addition,

all PLCs must have the letters PLC written after the company’s name whereas private limited

company has Co.LTD printed after the company name.

ADVANTAGES OF PUBLIC LIMITED COMPANIES

1.There is easy access to capital for expansion.

2.They have limited liability.

3.They enjoy economies of scale.

4.Specialist help is hired to run the company.

5.The plc is independent of its owners.

6.Risk is spread over many shareholders.

ACTIVITY

Distinguish between a private limited company and a public limited company.

Week: Seven

Lesson: Two


DISADVANTAGES OF PUBLIC LIMITED COMPANIES

1.The objectives of the managers maybe different from shareholders(owners).

2.Small powerful groups e.g. insurance companies may dominate the company.

3.Over expansion can lead to economies of scale.

4.Workers feel left out in decision making.

5.Accounts must be submitted annually to the department of trade.

CONGLOMERATES A conglomerate is simply a group of companies each operating in different industries and

sectors but under the same name (umbrella). They may be involved in transport, tourism,

construction etc.

ACTIVITY

Indicate whether it true or false

1. Workers feel left out of decision making. ( )

2. The objectives of the managers and shareholders are always the same. ( )

3. Company may benefit from economies of scale.

4. A conglomerate is a group of companies.

5. Accounts is submitted yearly to the trade department.

Week: Seven

Lesson: Three


ADVANTAGES OF CONGLOMERATES

1.There is strength and security in numbers, hence risk of failure is spread.

2.Companies can draw on each other’s resources leading to economies of scale.

3.Security is provided against takeover bids via holding companies.

4.There is much interaction between members in terms of staffing, promotions etc.

5.Successful companies help to make up for companies that perform below par.

DISADVANTAGES OF CONGLOMERATES

1. Because of the diversity of interests, analysis of the group’s companies is difficult.

2.Some managers may resent control outside their own companies.

3.There maybe frictions between lines of authority.

ACTIVITY

Differentiate between advantages and disadvantages of Conglomerates

1. There is strength and security in numbers. ( )

2. There maybe be frictions between lines of authority. ( )

3. There is much interaction between members (staff). ( )

4. Analysis of the company is difficult. ( )

5. Companies can benefit/assist each other. ( )

Week: Eight

Lesson: One


MULTINATIONALS

A multinational firm is one which owns, controls, and operates businesses in several

countries at the same time to increase their market share and overall profits. Example of

multinational in Guyana is KFC, Popeyes.

ACTIVITY

Examine five Caribbean Countries and list one multinational company that can be found in

each and show how that country has benefitted from the company.

Provides much needed investment in

the Caribbean They provide foreign expertise and

train local labour.

They are a valuable source of taxation,

revenue and foreign exchange They create employment

They encourage positive work ethics

Week: Eight

Lesson: Two


DISADVANTAGES OF MULTINATIONAL

1. They extract raw materials but do not add value locally.

2. The welfare of the economy is not a concern of the multinational.

3. They transfer profits to home country.

4. They may harm the environment.

5. They may change the culture of the country.

FRANCHISE

A franchise is a form of business in which a firm has successful service or product (the

franchisor) enters a contractual relationship with another business (the franchisee). The

contract allows the franchisee to operate under the franchisor’s name with the franchisor’s

guidance in guidance in exchange for a fee, sometimes referred to as royalties.

ACTIVITY

Identify five franchises that can be found in the Caribbean.

Week: Eight

Lesson: Three


ADVANTAGES OF FRANCHISE

1. They reduce the startup risk for entrepreneurs.

2. They usually market a known, successful brand name and image.

3. Banks are more likely to allow loans to new entrepreneurs backed by successful

businesses.

4. The franchisee gains an exclusive right to a market within a specified area.

5. The franchisor will have an established supplier relationship, so the franchisee does not

need to create this.

6. The franchisor provides considerable back-up facilities such as training, marketing,

advertising etc.

DISADVANTAGES OF FRANCHISE

1. If the franchisor has not researched the potential market correctly, the franchisee will

suffer losses.

2. Cost maybe higher than expected. this will affect the franchisee’s potential to make a

significant profit.

3. A franchise agreement includes restrictions on how the business should be run. This

can restrict the franchisee’s freedom to adapt its approach to local market conditions.

4. If the franchisor changes its operational techniques, the franchisee must adhere to the

changes even if they do not agree with them.

5. If the franchisor goes out of business this will have a direct effect on the franchisee.

6. It can sometimes be more difficult to sell a franchise business than a non-franchise one.

ACTIVITY

Indicate whether the statements below are true or false.

1. The market is usually a successfully know brand. ( )

2. It is easier to get loans from banks because the are backed by successful businesses. ( )

3. If the franchisor goes out of business the franchisee also goes out of business. ( )

4. The franchisee has access to unshared market in a specified area. ( )

5. Cost can be higher than anticipated, thus resulting in the reduction of profit. ( )

Week: Nine

Lesson: One


ECONOMIC SYSTEMS

Definition

Definition is the state or manner in which a country runs or operate. It refers to the total

composition of its economic activities and includes producing the things we all want to

take place but follows the basic economic problems of:

1. What should be produced? example quantities of food, machinery etc.

2. How production should be organized? What are the best ways to combine the factors of

production (land, labour, capital and entrepreneur).

3. For whom to produce? Should everyone be entitled to an equal share of production or

should some receive more than some.

TYPES OF ECONOMIC SYSTEMS

1. Subsistence economy

A subsistence or traditional economy is one where there is little specialization of labour

and little trade. In such economy people live in family groups and grown most of their own

food. it is called a subsistence economy because people can do little more than provide

only the basic necessities to survive. This was the kind of economy that was the feature of

life of early, money did not play in role in subsistence economy.

ACTIVITY

1. Draw a poster in your book depicting subsistence economy as you understand it.

Week: Nine

Lesson: Two


ECONOMIC SYSTEMS

2. COMMAND ECONOMY

A command economy is one in which the government assumes economic responsibilities

for economic planning in order to achieve the best possible use and distribution of a

country’s scarce resources. The government decides on what to produce, how it is to be

produced and for whom it is to be produced. An example of command economy is China.

Other names for Command economy are:

1. Socialist Economy

2. Communist Economy

3. Planned Economy

ADVANTAGES OF COMMAND ECONOMY

1. The state ensures that the needs of the whole community are met and not just the

needs of those with the most wealth.

2. State control eliminates wasteful competition.

3. The state will provide goods and services that private enterprise would be unwilling

to provide.

4. It is not possible for a private monopoly to develop.

ACTIVITY

1. In your own words briefly describe command economy.

2. List two other countries besides China that has a command economic system.

Week: Nine

Lesson: Three


DISADVANTAGES OF COMMAND ECONOMY

1. A free-market economy and competition are discouraged.

2. Too many non-productive government officials are required to administer the system.

3. Centralized production may not respond quickly enough to changing conditions and

needs.

4. Creativity and efficiency are not encouraged.

FREE MARKET ECONOMY

In a free market economy, there is little or no government interference. It is based on the

private ownership of the factors of production and the means of distributing goods and

services. Market forces are allowed to determine how resources are allocated. There is no

pure one hundred percent ‘free market’ economy, but the USA is a close example. Other

names for free market economy include:

1. Capitalist economy

2. Unplanned economy.

3. Laizzez-faire economy.

ACTIVITY

Indicate whether the following statements are true or false by placing T or F in the bracket

provided.

1. In command economy wasteful competition is avoided. ( )

2. There is little or no government interference is a feature of command economy. ( )

3. China is an example of command economy. ( )

4. There is no one hundred percent pure free market in existence. ( )

5. Creativity is encouraged in a command economy. ( )

Week: Ten

Lesson: One


ADVANTAGES OF FREE MARKET ECONOMY

1. Free competition stimulates innovation and keeps prices down.

2. Individuals are completely free to use their income and labour to their best advantages.

3. Consumers decide what will be produced by influencing market forces.

4. A larger variety of goods and services are made available to consumers.

5. Competition forces can force prices down.

DISADVANTAGES OF FREE MARKET ECONOMY

1. Social and merit good e.g. health, education and security.

2. Monopolies develop and these can exploit consumers since they can decide on higher

prices.

3. Large sums of money are spent on advertising, which create artificial demand and

increase price.

4. It encourages inequalities of wealth.

5. Wealthy people are more able to purchase goods and services and influence the market

than the poor.

ACTIVITY

In not less than a hundred words briefly do a comparison of command economy and free

market economy.

Week: Ten

Lesson: Two


MIXED ECONOMY

A mixed economy (also refer to as a dual economy) is a combination of elements from a

free economy and a controlled economy. The means of production and supply are shared

between the private and public sector. There public sector is influenced and controlled by

the state and the private sector are individuals who risk capital in producing goods and

services for a profit where market forces have maximum influence. Caribbean countries are

examples of mixed economy.

FUNCTIONAL AREAS OF A BUSINESS

The term functional area of a business refers to grouping individuals on the basis of the

role or purpose each performs in the organizations. There are five functional areas of a

business:

1. Production Department

2. Marketing Department

3. Finance Department

4. Human Resource Department (HR)

5. Research and development department (R & D)

PRODUCTION DEPARTMENT

Production is the processes and methods used by producers to transform inputs such as raw

materials, semi-produced goods and even ideas, information or knowledge into goods and

services. Functions of the production department include:

1. Purchasing raw materials or stock for sale and storing them in a suitable place.

2. Manufacture of goods from design to finish stage.

3. Conducting quality control.

4. Organizing production within a certain time frame.

ACTIVITY

Answer the following questions

1. Which of the following is an example of mixed economy?

a) Cuba b) USA c) Guyana d) China

2. Mixed economy can also be referred to as _____________?

a) Command economy b) dual economy c) collectivist economy d) laizzez- faire

economy

3. Both public and private sector operates in a mixed economy.

a) Yes b) No

4. Production deals with?

a) Marketing the product b) Manufacturing the product c) Advertising the product.

5. Buying raw materials is a function of the production department.

a) Yes b) No

Week: Ten

Lesson: Three


MARKETING DEPARTMENT

Marketing refers to all the processes involved in promoting ad selling goods or services in

the most profitable and efficient manner. Functions of the Marketing department include:

1. Accessing market possibilities by market research and sales forecasting.

2. Advertising and sales promotion.

3. Distribution of products.

4. Risk assessment and quality control.

5. Coordinating the elements of marketing refers to as the four P’s.

FINANCE DEPARTMENT

The finance department is the lifeline of any business activity. It plays a vital role in that it

provides access to all the resources employed in the production and marketing of products

or services. Functions of the finance department include:

1. Producing the annual balance sheet.

2. Advising management on the availability of capital for expansion and plant building

and offering advise on how funds may be raised.

3. Making all payments and issuing receipts.

4. Maintaining a satisfactory cash flow position.

RESEACH AND DEVELOPMENT (R&D) DEPARTMENT

Research and development department is responsible for the investigative activity a

business carries out with the aim of getting new knowledge that it can use to create new

products or systems. Basic research identifies new knowledge that may or may not be used

at some future time. Applied research is carried out with a predetermined aim e.g. to create

a new product or to improve an existing one.

ACTIVITY

1. State three difference between the marketing department and the finance department.

Principals of Business Grade 10

Week: Eleven

Lesson: One


HUMAN RESOURCE (HR) DEPARTMENT

The human resource department is concerned with managing people within an organization. It is normally

referred to as the glue that holds the organization together.

STAKEHOLDERS OF A BUSINESS

A stakeholder is any person or group of people that has an interest in the business and its activities. The

following a list of the main stakeholders:

1. Owners/Shaeholders

2. Employees

3. Customers

4. Suppliers

5. Community

6. Government

7. Pressure Groups

ACTIVITY

1. In the context of business and the human resource find out the definition of the following words:

1. Recruitment 2. Promotion 3. Incentives 4. Motivation 5. Grievance

2. Your parents have decided to open a stationery supplies store where you live. Create a chart showing at

least four stakeholders of the business.

Week: Eleven

Lesson: Two


ROLES AND FUNCTIONS OF STAKEHOLDERS INVOLVED IN BUSINESS

ACTIVITIES.

1. Owners/shareholders: these are the main stakeholders. They have invested money in the business (their

stake) and they look for a return on their investment in the form of dividends and an increase in the value of

their shares in the business. they have the responsibility of providing the resources that are needed,

employing suitable workers and ensuring those workers are provided with safe conditions and are paid a fair

wage.

2. Employees: these are dependent on the business for their job and incomes. Their role is to work efficiently

to carry out tasks to achieve the business objectives.

3. Customers: these are dependent on the business for their supplies of finished goods, raw materials or

services and rely on them to supply them at an economic price, on time and in good condition. On the other

hand, the business relies on them to buy from the business.

4. Suppliers: these are stakeholders because they will want the business to be successful and continue to buy

from them as this increases their own potential to survive and make a profit. Their role is also to provide

good quality supplies to the business are the right time and at the right price.

5. Community: these have several interests in businesses, it sees the firm as a local employer, thus adding to

the wealth of the community both locally and nationally. The community also hopes that the business will

help to develop and protect the local environment.

6. Government: the business pays taxes to the government. The fact that the business employs people also

supports government aims by reducing unemployment and creating income tax. Many businesses also sell

goods and services to other countries through overseas trade(exports). This contributes to the whole

country’s balance of payment and it brings in foreign curry that adds to national wealth. Government also

has a role to play in exerting influence that regulates the ethical behaviour of business activities and if

necessary, creating legislation.

7. Pressure groups refers to a section of society that has an interest in what the firm does and who may want to

influence the firm in some ways e.g. union groups will want to influence the firm to gain the best wages.

ACTIVITY

In the context of the above topic define the following words:

1. legislation 2. ethical 3. invest 4. interest 5. tax

Week: Eleven

Lesson: Three


SCHOOL BASED ASSESSMENT

The School Based Assessment is a very important part of your overall assessment, the SBA covers the course

work followed in the POB syllabus. Your SBA component of your exam is worth 40 marks. The SBA is more

or less a research paper that is expected to research and gather information to analyze and interpret. The SBA

report must not exceed 1000 words.

STARTING OFF THE PROJECT

1. With the help of your teacher select a topic or problem. It can be a problem identified at school or in the

community.

Example

A. An investigation into the factors which contribute to the decline of sales in stationery at Ajax Stationery

Supplies.

B. An investigation into the reason why students prefer to purchase lunch from outside vendors as opposed

to the school cafeteria.

2. Once you choose your topic formulate a purpose or problem statement. This should state what you are

going to investigate and why.

Week: Twelve

Lesson: One


ETHICAL AND LEGAL ISSUES RELATING TO BUSINESS

Ethical issues may be defined as Ethical issues in business is a situation where a moral conflict arises and

must be addressed. In other words, it is an occasion where a moral standard is questioned. Ethical issues occur

when a given decision, scenario or activity creates a conflict with a society’s moral principles. Both individuals

and businesses can be involved in these conflicts, since any of their activities might be put to question from an

ethical standpoint. Individuals are subject to these issues in their relationships with other individuals or in their

relationships with organizations and same goes for organizations. There are regulations that a company must

follow to be recognized as a legal entity e.g.it must be registered with the registrar and must be formed using

the Companies Act.

Legal issue or issue of law is a legal question which is the foundation of a case. It requires a court’s decision.

It can also refer to a point on which the evidence is undisputed, the outcome of which depends on the court's

interpretation of the law.

MONEY LAUNDERING

Money Laundering is one illegal activity that has become increasingly frequent in today’s global business.

Money laundering is a term used to describe the process by which criminals disguise the original ownership of

the proceeds (profit) of their criminal conduct. They do this by making it appear that such proceeds have

originated from a legitimate source, by often investing them it into legitimate business.

NATIONAL INSURANCE AND INCOME TAX

One of the legal obligations of a business is to collect money on behalf of the government by deducting it from

their employees’ wages to contribute to national insurance and income tax. The business is then required to pass

the money on to the appropriate authorities. Failure to do so is regarded as fraud and criminal.

VALUE ADDED OR CONSUMPTION TAX

A value added or consumption tax also falls under the category of monies collected on the government’s behalf.

Businesses that fail to make the obligatory payments defraud both the government and their customers.

ACTIVITY

1. Do you know the various agencies that are responsible for investigating fraud in Guyana? Identify at least

two agencies that deals with fraud and fraudulent investigations.

Week: Twelve

Lesson: Two


PRINCIPLES RELATED TO FORMING A BUSINESS

1. Code of Ethics

A code of ethics is an organization’s overall principles that guide its decisions and actions in relations to

internal or external issues. It provides a general understanding od the ethical or moral responsibilities that

the owners and governing body are expected to meet e.g. acting with honesty and transparency. A code of

ethics aims to demonstrate an open commitment to stakeholders. It consists of a series of statements.

2. Code of Conduct

A code of conduct is an internal document that is the practical

application of the code of ethics. It is a set of rules and guidelines that describes how people within the

organization are expected to behave. It guides personnel in how to respond under certain circumstances

including personal behaviour, bullying etc. The code of conduct is often not a single document but a series

of policy documents. All personnel are given a copy of the full code of conduct and are required to sign an

acknowledgement.

3. Code of Practice

A code of practice is a set of written rules which explain how people working in a particular profession

should behave as they carry out their work. This is intended to reflect food practice that is generally

recognized by the whole profession. Code of practice can relate to a single business or represents an entire

industry. Code of practice helps to uphold the reputation of the business or the industry.

ACTIVITY

1. In a short paragraph differentiate between a code of ethics and code of conduct.

2. Give one reason why you feel it is important for business/industries to establish a code of practice.

Week: Twelve

Lesson: Three


SCHOOL BASED ASSESSMENT

1. Now that you have chosen your topic and your problem/purpose the next step is to identify the business or

organization that you will be doing your research on.

2. The next step would be to identify your objectives. What are you hoping to find out from the investigation

based on your statement/problem? Since it is the cognate it is advised that if you are doing all three subjects

you should have three objective and if you are doing two or less two objectives will work.

e.g. to determine reasons why students prefer to purchase food outside of school rather than from the school

cafeteria.

3. After selecting the topic and business of research a background overview is required. this includes a

description of the topic/issue/problem. A brief history and a short description on the development of the

issue/topic. The overview also includes why the research is being conducted (why the topic is important to

the you the student and the impact the issue/topic is having on the society and stakeholders.)

Week: Thirteen

Lesson: One


CONSEQUENCES OF UNETHICAL OR ILLEGAL PRACTICES

If you were caught in behaving in an illegal or unethical manner, it is likely that not only would you be

punished but also that the misdeed will be associated with your name for a very long time. Thus, in most

countries’ governments establish regulations and procedures to show how businesses should be run, to guide

business practices and to protect competitors and the wider public. These are often backed by legislations.

Failure to follow government guidance often results in large fines and penalties. Thus, constantly breaking the

laws can lead to costly legal battles and even resulting in the closure of the business.

NEGATIVE EFFECTS OF UNETHICAL AND ILLEGAL PRACTICES

If it becomes public knowledge that a business has acted illegally or ethically the business loses credibility.

While some companies can and do survive it is costly. The recovery cost usually includes reimaging and

advertising campaign etc. and many businesses lose customer base during the time taken to retore the image

and customers confidence.

ACTIVITY

Answer the following questions.

1. Money laundering is best described as:

a) disguising the origins of money b) the way accountants balance the books

c)discounts given to preferred customers d) pricing products incorrectly

2. Which of the following best describes ethical behaviour?

a) obeying the laws b) paying taxes c) doing the right thing d) accepting lower profit

3. Which of the following makes an ethical contribution by the business to the environment?

a) using non-biodegradable packaging b) advertising hazardous products

c)using renewable energy resources d) employing only vehicle using diesel fuel

Week: Thirteen

Lesson: Two



CONSUMERISM

Consumerism refers to an organized movement to protect the interest of consumers by influencing businesses to

act in a socially responsible manner. The greater need for consumer protection results rom the increasing

complexity of products and the growth in the power of large business organizations and their powerful

marketing techniques. most countries have legislative measures in place to protect the consumer e.g.

*good must be of merchantable quality- goods must be reasonably fit for their normal purpose, bearing in mind

the price paid and the nature of the goods.

*the good must be as described- it must correspond with the description given by the seller or with labels on the

items or packaging.

*fit for purpose which is made know to the consumer by the seller before purchase is made.

Misleading Advertisement

False or deceptive advertising is unfair and wrong because it is fraudulent practice on the public. Advertising

can raise many moral issues. Countries have some of legislation such as Sale of Goods Act that help to protect

the consumer from exploitation. The basic understanding is that advertisement should be legal, honest and

truthful. Advertisement should follow the following practice:

*observe the laws as it relates to advertising.

*do not make claims that cannot be supported.

*take care not to offend individuals or groups.

*act responsibly.

*do not exploit the vulnerable.

ACTIVITY

1. Explain in your own word what you think is consumerism and how this affects or benefits consumers.

2. Briefly describe in your own words how misleading advertisements can affect consumers.

Week: Thirteen

Lesson: Three


SCHOOL BASED ASSESSMENT: METHODOLOGY

1. After selecting the business that you will be research you need to identify your method of data collection.

How will you go about the getting the necessary information from the business? You can choose from the

following:

a. questionnaire b. observation c. interview d. experiment

e. reports f. checking the company records and documents

In the methodology you are expected to clearly describe your instruments (methods) of data collect that you

will be using. You are expected to use at least two instruments (methods). It should include:

*the appropriateness of the method to the research, you, must justify your reasons for choosing the methods.

*each method must be clearly described

*you must also include limitations you experienced while gathering your data/information.

Week: Fourteen

Lesson: One



UNETHICAL DISPOSAL OF WASTE

Most commercial and industrial activities result in waste materials. The following are a few examples of the

kind of practice a business can choose to adopt that help to reduce pollution and waste:

1. The use of non-biodegradable packaging has increased as a result of globalization. this persists even though

pressure groups are continually raising awareness of its harmful effect. A business can pursue a policy of

consciously increasing its move towards biodegradable packaging even influencing its suppliers to be aware

of the need.

2. Plastic products have been clearly identified as harmful to the environment because they take such a long

time to degrade.

3. Companies are encouraged to recycle waste.

4. Some businesses use renewable energy e.g. solar panels.

5. Some fast-food companies are now printing on their takeaway packages an encouragement tp dispose of

garbage in waste bins etc.

6. Some countries have introduced tax on plastic bags in supermarkets especially to encourage consumers to

use reusable shopping bags.

ACTIVITY

Using your country as an example identify three ways how businesses dispose of waste unethically and list one

solution to each issue.

Week: Fourteen

Lesson: Two



WITHHOLDING TAX

Withholding tax is in effect cheating the government of revenue and when you cheat the government of revenue

you cheat the entire population. Withholding tax is not only associated with money laundering but many

businesses look for ways of keeping their tax payment to the minimum.

PRESSURE GROUPS

Pressure groups are organizations that seek to persuade the central government, local government, businesses

and other organizations to recognize their views and respond to them. They try to influence the decision making

processes by demonstrating the strength of their feelings and exposing unethical practices. Trade unions are

examples of pressure group. They try not only to influence employers to pay a fair wage to their employees but

also to raise awareness of businesses on environmental issues.

ACTIVITY

Copy and complete the following sentences by inserting the missing word.

1. Businesses collect national insurance and income tax on behalf of the__________________.

2. A code of _____________________ guides an organization’s overall principle.

3. A code of _____________________ is the practical application of a code of ethics.

4. Failure to follow government guidance to businesses can result in costly __________________.

5. Acting unethically can result in a business loosing ______________________.

6. Pressure groups try to ____________________ the decision-making process.

Week: Fourteen

Lesson: Three



PRESENTATION AND ANALYSIS OF DATA

After collecting data, it is expected that you present the data in the form of charts tables and graphs. Data

presented (graphs, charts etc) must be aligned with objectives.

1. The data reflected in these charts, tables and graphs should be relevant to the objectives of the project.

2. The data shown must reflect adequate analysis.

3. Findings from data collected must correspond with analysis.

Week: Fifteen

Lesson: One


CAREERS IN BUSINESS

JOB

A job is the activity a person does in return for payment. A job may or may not require a particular level of

education or training. A person often holds several jobs during their working life.

CAREER

A career is often seen as a lifetime ambition that requires special learning beyond the scope of training. A

career takes motivation, strategic planning and purposeful thinking. A career may involve several job changes

but always in the same field of work.

SIZE MATTER

In considering career possibilities you have to consider the scope in terms of businesses available and your

career aspirations. In small businesses roles are summarized (one person multitask) a large business however

there will most likely be specialist for specific tasks. You have to think do you want to be a big cog (having a

degree, masters etc) in a small wheel or being a big cog in a small wheel or being a big cog in a big wheel.

ACTIVITY

Briefly explain the difference between a job and a career.

Week: Fifteen

Lesson: Two


CAREERS OPPORTUNITES IN BUSINESS

1. Advertising: basically is the process of telling potential buyers about the products or services. Advertising is

the main way of communicating what the company has to offer.

2. Public relations: this is specifically aimed at promoting a good image of an organization. this builds the trust

of the company.

3. Compliance officer: ensures that a business is in complete compliance with all national and international

laws and regulations that apply to the industry in which the business is engaged in.

4. Strategic planners: gathers information from both internal and external sources, analyze the information

collected and then organize in such a way that helps the business grow.

5. Educators: these ensure that staff have the skills requisite to their role.

6. Information office: an information officer develops information to make it more accessible to others. Good

IT skills is necessary in this field.

7. Entrepreneurs: these are the persons who take the risk to invest time and money to venture into their own

businesses.

8. Web designer: the people use their technical skills to create new websites and redesign existing ones in

order to promote the business.

9. Web planner: these people design, build and maintain websites applications.

10. Software developers: they design, install and test software systems.

ACTIVITY

Above is a list of modern/technological careers in business, after careful consideration identify five traditional

careers that falls under the category of business.

Week: Fifteen

Lesson: Three



Now that your analysis is completed you are required to write a conclusion. Your conclusion should include

what you gathered/ summarized from the projects. Your conclusion should be based on your findings.

Example the research has proven that students prefer to purchase food outside rather than from the school

cafeteria because they find the quality is better.

DEFINITION OF BUSINESS TERMS 1.BUSINESS

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