IB Business and Management BUSINESS ORGANISATION AND ENVIRONMENT 1.1 T

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IBBusinessandManagement.com IB Business and Management The IB Diploma Business and Management course delivered IN STYLE, ONLINE. ©

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Factors of production z To produce a good or provide a service, resources must be used Factors of production Are the inputs (or resources) necessary for the production process Land All natural resources labour Physical & mental effort used in the production process capital All non-natural (i.e. manufactured) resources used in producing other products enterprise Entrepreneurship – management, organization & planning of the other f.o.p.

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z Land All natural resources labour Physical & mental effort used in the production process capital All non-natural (i.e. manufactured) resources used in producing other products enterprise Entrepreneurship – management, organization & planning of the other f.o.p. Physical land of school grounds Solar power generating heating & electricity Teachers & teaching assistants Technicians & support staff Cleaners Accountant & business manager Buildings Technology Furnishings Funds in bank Department heads Management team Board of directors Finance director Natural resources for producing plastics, rubber, glass & steel Assembly line workers Engineers Designers Quality controllers Distributors/agents Manufacturing plant Machinery Technology Stock of components Retained profits Production managers Ceo Finance director Marketing director Sales managers

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Income is the returns for factor inputs z land rent labour capital enterprise wages interest profit Income Factors of production

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In the production of a particular product there can be further specialization of a particular activity specialization A business concentrates on a the production of a particular good or service (or a small range of products) z

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z specialization

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z specialization

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z specialization

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Business functions z Question 1.1.3: p. 12

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Business sectors z primary secondary tertiary Businesses involved in the cultivation or extraction of natural resources The construction & manufacturing of physical products The provision of services to customers

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Changes in economic structure z As an economy develops (gets more advanced), economic activity shifts primary secondary tertiary

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Changes in economic structure z

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Changes in economic structure z

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Changes in economic structure z

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z Changes in economic structure

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z Changes in economic structure Structural change refers to the shift in relative share of national output & employment that occurs in each business sector 1950 1995

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The shift towards services – why? z Higher household incomes More leisure time ↑ Reliance on support services Question: 1.1.4, p. 15