Principles of Business free essay sample

ROLE OF THE ENTREPRENEUR An entrepreneur is a person who launches, or help launches a new venture or enterprise and accept full responsibility for a company’s output. M. J. S. Boutique has three (3) entrepreneurs. Each entrepreneur has to identify what resources will be needed to establish and run the business. Each entrepreneur has to create an initial outline study to determine whether the concept looks like a practical idea. Each entrepreneur has to acquire the necessary funds for the business. Each entrepreneur has a specific part to play in M. J. S. Boutique though. Two (2) of the entrepreneurs design the clothes and choose colour schemes while the third entrepreneur handles all the finances of the business. GOVERNMENT REGULATIONS The entrepreneurs will have to register the company. Registration will take place at Registrar General, Ministry of Legal Affairs. Registration is important in order to gain legal access to operate and transfer any transaction in and out. 11. Establish guidelines for the conduct of good management and staff relations in the workplace; Guidelines for establishing good relations between managers and employees. 12. Evaluate the role of teamwork in the success of an organization; The value of teamwork within an organization: (a) definition; (b) advantages; (c) disadvantages. 13. Outline strategies for effective communication within an organization; The communication process and strategies for effective communication within an organization. 14. Explain the concept of a Management Information System (MIS); The concept of MIS in an organization (to manage information for decision-making for example, manual and automated). 15. Outline the benefits and challenges of a Management Information System in business; (a) Benefits of an MIS system, for example: (i) savings in time, money and labour; (ii) improvement in production; (iii) increased competitiveness. (b) Challenges of an MIS system, for example: (i) cost of setting up and maintaining (establishment, maintenance and security); (ii) cost of training (human resource development) (iii) Human error. 16. Discuss the personal needs that are satisfied through employment. Economic, social, psychological and physiological needs. CXC CSEC Principles of Business Exam Guide Profile 1: Organizational Principles Section 1: The Nature of Business SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Explain terms and concepts related to business; Definition and explanation of the following terms and concepts: (a) enterprise (b) entrepreneurship (c) barter (d) profit (e) loss (f) trade (g) organization (h) economy (i) producer (j) consumer (k) exchange (l) goods (m) services (n) market (o) commodity (p) capital (q) labour (r) specialization 2. Trace the development of instruments of exchange; Brief history of trading instruments from subsistence economy to money economy, including the use of the following: (a) bills of exchange (b) credit cards (c) electronic transfer (d) tele-banking and e-commerce 3. State reasons why an individual may want to establish a business; Reasons for establishing a business 4. Describe the various forms of business organizations and arrangements; Forms of business organizations and arrangements: definition, formation and management of: (a) sole trader (b) partnerships (c) co-operatives (d) companies (including conglomerates and multi-nationals) (e) franchises (f) state corporations and nationalized industries (g) local and municipal authorities (h)government departments (j) concept of private and public sectors 5. Differentiate among the different economic systems; Types of economic systems: (a) traditional (subsistence) (b) command or planned (socialist) (c) free or capitalist (d) mixed (public and private) 6. Identify the stakeholders involved in business activities; Owners, employees, customers and all other members of society 7. Discuss the role of the stakeholders involved in business activities; Role of employers, employees, consumers and government. 8. Outline the functions of a business; Functions of a business in satisfying needs and wants through the provision of goods and services. 9. Describe the role of business within a community. Economic, financial, social, political and ethical CXC CSEC Principles of Business Exam Guide Profile 1: Organizational Principles Section 3: Establishing a Business SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Define the term entrepreneur; The concept of entrepreneurship 2. Explain the role of an entrepreneur; The role of the entrepreneur in conceptualizing, planning, accessing funds, organizing, operating and evaluating the performance of a business. Attention should be paid to the bearing of risks and the entitlement to the profits and losses of the business. 3. Identify the characteristics of the the typical entrepreneur; Personal traits and leadership qualities: (a) creative (b) innovative (c) flexible (d) goal-oriented (e) persistent (f) persevering (g) propensity to take calculated risks 4. Outline reasons why persons may want to establish their own business; Reasons for wanting to start a business: (a) desire for financial independence (b) self-fulfillment (c) self-actualization 5. Outline the essential steps that should be taken in establishing a business; Steps for establishing a business: (a) conceptualization (b) research (market probe) (c) identification of resources (d) creation of a business plan (e) acquisition of funds (f) operation of the business 6. Describe the role of key functional areas in the operation of diferent types of business. Role of the production, marketing and finance, legal, Research and Development (R and D) departments in a business. 7. Identify sources of information for conducting research into the establishment of a business; Primary and secondary sources of information for conducting research. 8. Explain the relationship between planning and the operation of a business; The necessity for short-term, medium-term and long-term planning in a business. 9. Identify regulatory practices instituted by governments for the establishment of different types of businesses; Local regional and global rules for conducting business, including local government (municipal, village council, parish council regulations) 10. Outline the advantages and disadvantages of different types of business organizations; Opportunities and challenges encountered by different types of organizations. 11. Identify sources of captial for the setting up of a business; Sources of capital including venture capital. 12. Explain the significance of collateral in accessing capital to establish a business; Collateral: (a) concept; (b) evaluation of different types; (c) the value of collateral. 13. Outline the features of a business plan; Analysis of all the elements of a business plan, including the executive summary and the operational, marketing and financial plans. 14. Explain the purposes of a feasibility study; The purpose of a feasibility study. 15. Identify ethical and legal issues in the establishment and operation of a business; Ethical and legal issues, for example advertising, taxation and environmental issues. 16. Explain the consequences of ethical and illegal practices in business. Consequences of unethical and illegal practices in business: (a) misleading advertisements- unfair and fraudulent practice on the population (b) withholding of tax cheating the government of revenue (c) unethical disposal of waste- pollution (d) money laundering distortions in the national economy CXC CSEC Principles of Business Exam Guide Profile 1: Organizational Principles Section 4: Legal Aspects of Business SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Explain the concept of contract; Definition and concept of a contract. 2. Describe the characteristics of a simple contract; Offer and acceptance, competence of parties, intention to create legal relations, consideration. 3. Differentiate between a simple contract and a specialty contract; special contracts including mortages, sale of land and insurance 4. Determine the validity of various contracts; Use of case studies to determine the validity of contracts. 5. Distinguish between offer and invitation to treat or bargain; Concepts of offer and invitation to treat. 6. Explain the conditions under which offer and acceptance are communicated; Concepts of offer and acceptance. 7. Outline ways by which contracts may be terminated or discharged; Definitions of discharge, types of discharge methods of discharge. 8. Explain why documentation is necessary in business transactions; The importance of record-keeping in a business, including its value in satisfying requirements for taxation and auditing 9. Prepare business documents for various purposes; preparation of various business documents including pro forma invoices, purchase requisitions, statements of accounts and stock cards. 10. Interpret information on transport documents; Transport documents including import license, bill of lading, and airway bills. 11. Identify instruments of payment; Instruments of payment including cheque, money order, bank draft, debit card, credit card and telegraphic money transfer. 12. Interpret information on various instruments of payment; Interpretation and significance of information on instruments of payment. 13. Explain the use of documentary credit; The concept of documentary credit, 14. Distinguish between insurance and assurance; The concepts of insurance and assurance. . 15. Evaluate the principles upon which insurance is based; The concept of pooling of risks. 16. Explain the various types of insurance policies; Types of insurance policies: life and business insurance. 17. Explain how insurance facilitates trade. The value of insurance coverage in lowering the risks associated with business CXC CSEC Principles of Business Exam Guide Profile 2: Production, Marketing and Finance Section 5: Production SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Identify factors in the production of goods and services; Factors of production: Land, Labour, Capital, Enterprise. 2. Identify industries developed from the natural resources of Caribbean territories; Caribbean industries developed from agricultural produce and mining. 3. Differentiate between production and productivity; The effects of efficiency in the production of goods and services. 4. Explain the importance of productivity Productivity as it relates to the efficiency of labour, including its value and importance; the factors affecting its supply; human resource development (including education, health, and working conditions). 5. Outline the effects of migration; Migration and its positive and negative effects on the labour force. 6. Describe the role of the entrepreneur in the decison making process; Importance of entrepreneurial organizational skills. 7. Explain the role of capital in production; Fixed working and venture capital. 8. Differentiate among the various production levels; Production levels: subsistence, domestic consumption, surplus and export. 9. Classify the different types of production; Types of production: (a) extractive; (agriculture, mining, fishing) (b) construction; (building) (c) manufacturing; (assembling, refining) (d) service; (transport, communication, tourism) 10. Describe the characteristics of cottage industry; Cottage industries: (a) home-based; (b) mainly manual; (c) small scale; (d) use of local raw materials; (e) use of family members as labour. 11. Outline the opportunities for and the benefits of developing linkage industries; Linkage industries: (a) backward; (b) forward; 12. Outline the factors that determine the location of a business; Factors affecting location: (a) geographical; (b) availability of raw materials and supplies; (c) infrastructure; (d) power; (e) water; (f) transport; (g) health facilities; (h) labour supply; (i) governmental regulation 13. Outline the functions of a small business; Functions of a small firm 14. Explain the effects of growth on a business; Growth of a business and effects on: (a) organizational structure; (b) capital; (c) labour; (d) scale of production. (economies of scale) (e) use of technology. (f) potential for export. 15. Describe the economic and social implications of technological development. Capital intensive versus labour intensive production in developing countries, mechanization and automation, e. g. computer-aided design (CAD) and computer aided instruction (CAI). CXC CSEC Principles of Business Exam Guide Profile 2: Production, Marketing and Finance Section 6: Marketing SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Distinguish between the terms market and marketing; Definition of market and marketing 2. Identify marketing activities; Marketing activities: (a) market research (b) pricing (c) packaging (d) branding (e) sales promotion (f) advertising (g) distribution 3. Describe the marketing mix; Marketing mix: (a) product (b) price (c) place (d) promotion 4. Explain the concept of market and market research; Market research: (a) concept; (b) definition; (c) types. 5. Outline the reasons for conducting market research; Reasons for conducting market research. Identification of: (a) consuumer taste; (b) competition; (e) consumer behaviour. 6. Describe the factors that influence consumer behaviour; Factors that influence consumer behaviour: (a) price; (b) price of substitutes (c) quality; (d) taste; (e) tradition; (f) income (affordability) (g) spending patterns; (h) brand loyalty 7. Identify main types of market structures; Market structures: (a) perfect competition; (b) monopoly; (c) monopolistic competition; (d) oligopoly. 8. Explain how price is determined; Pricing: determinants of price: (a) demand and supply; (b) concept of equilibrium price or market clearing price. 9. Identify forms of packaging and presentation of goods; Packaging: (a) presentation; (b) use of brand names. 10. Explain the concept of copyright; Concept of copyright: (a) producers or entrepreneurs: tose who maintain ownership and control over the product they have created and registered by obtaining a patent; (b) consumers: those who may purchase the product but cannot reproduce it for commerical purposes without permission of the producer. 11. Explain the term patent; Concept of patent including the concept of franchisee who is given a patent or official permission to reproduce the product. 12. Describe methods of promoting sales; Methods of promoting sales: (a) advertising: (i) functions and forms (ii) promotion including trading stamps and coupons; (iii) loss leaders. (b) public relations including business entertainment and the offering of special awards and sponsorship; (c) sales promotion; (d) personal selling. 13. Identify the techniques of selling; Selling: (a) salesmen and their approaches (b) merchandising and adjusting of pricing policy; (c) methods of maintaing good customer -firm relationships, for example, after sales services. 14. Explain the various terms of sales; Terms of sale: (a) cash; (b) credit; (c) hire purchase; (d) cash and trade discounts. 15. List the functions of consumer organizations; Functions of consumer organizations: (a) The rights and protection of consumers (private organizations and government); (b) The role of the Bureau of Standards; (c) role of the Ombudsman. 16. Identify the links in the chain of distribution; The distribution chain: (a) manufacturer; (b) wholesaler; (c) retailer; (d) consumer. 17. Identify methods of retailing; Methods of retailing: (a) shops; (b) department stores; (c) mail order; (d) e-commerce; (e) tele-marketing; (f) vending machines. 18. List the various forms of transport; Forms of transport: (a) land; (b) air; (c) sea. 19. Explain the importance of transport in marketing; Importance of transport in domestic regional and foreign trade. 20. Distinguish among the methods used for transporting specific goods; Methods of transporting specific goods: (a) oil and gas- pipelines and tankers; (b) timber rivers and barges; 21. Identify the problems likely to be encountered in distribution; (a) Relationship betwen the availability of airport, harbour and docking facilities and the efficient distribution of goods; (b) Problems of distribtion: delayed shipment, spoilage, misdirection of goods, inadequate wharehousing facilities, lack of proper security measures, industrial unrest, ineffective communication. 22. Outline measures to mitigate problems in distribution. Measures to mitigate problems of distribution. CXC CSEC Principles of Accounts Exam Guide Section 5: THE PREPARATION AND ANALYSIS OF FINANCIAL STATEMENTS OF THE SOLE-TRADER SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Explain the purpose of preparing financial statements; The purpose of preparing Financial Statements to satisfy the needs of user. 2. List methods of inventory (stock) valuation; Methods of inventory (stock) valuation: First in, First out (FIFO), Last in, First out (LIFO), Average Cost (AVCO) 3. Calculate the values of closing inventory (stock); Calculation of closing inventory (stock) using: FIFO, LIFO, AVCO. 4. Assess the effect of different method of inventory (stock) valuation on profit; The effect on profit of different methods of (inventory) stock valuation. 5. Prepare closing journal entries; (a) journal entries to close off accounts in the ledger (b) linkage with Trading and Profit and Loss accounts 6. Identify the components of the Financial Statements; Trading and profit and Loss Account and Balance Sheet. 7. Draw up the Trading and the Profit and Loss account to determine gross profit or loss and net profit or loss; Trading and Profit and Loss Account for sole-traders including: adjustments for return inwards and outwards; closing stock. 8. Show the effect of net profit or loss on capital; Treatment of net profit or loss on the Balance Sheet. 9. Use ratios to determine the performance (profitability) of the business; Trading results: simple ratios such as stock turn, average stock, gross profit percentage, net profit percentage. 10. Prepare classified balance sheet in vertical style; Definition of working capital, Calculation of working capital; Preparation of classified Balance Sheet showing working capital. 11. Explain the significance of the working capital for the operation of a business; Working capital as a basic tool for solvency; Working capital formula. 12. Calculate ratios to demonstrate the financial position of a business; Analysis and interpretation of the financial position of a business using ratio: current ratio; acid test ratio; return on investment. 13. Make recommendations about a business based on ratio analysis. Preparation of simple reports evaluating a business based on ratios and making recommendations. CXC CSEC Principles of Business Exam Guide Profile 3: The Business Environment Section 8: The Role of Government in an Economy SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Outline the responsibilities of government in an economy; Responsibilities of government in an economy: (a) security of the State; (b) protection and general welfare of citizens; (c) job security and severance benefits to workers; (d) protection of the environment (e) maintenance of a safe environment for investors 2. Identify ways by which business could protect the environment; Adherence by business to laws, including laws governing taxation, labour and the environment. 3. Describe measures used by governments to protect consumers; Consumer protection legislation, including regulations on price controls, food and drug standards, hire purchase legislation. 4. Identify ways by which government regulates business activity; For example, by divising laws related to zoning and the disposal of waste. 5. State the purposes of taxation; The role of taxes in raising revenue, income distribution,and control of spending. 6. Distinguish between direct and indirect taxes; Direct taxes and indirect taxes. 7. Distinguish between progressive, regressive and proportional taxation; Concepts of progressive, regressive and proportional taxation. 8. Outline forms of assistance offered by government to business; Forms of government assistance to business, including institutions for lending capital, training and technical assistance, research and information centres, subsidies and grants. 9. Evaluate the impact on the country with respect to social services provided by government. Impact of socal services provided by government: (a) healthcare a healthy population (b) National Insurance Scheme -provision and security for the elderly; (c) education an informed and literate population; (d) roads and transportation access to goods and services CXC CSEC Principles of Business Exam Guide Profile 3: The Business Environment Section 9: Social Accounting and Global Trade SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Outline the factors that determine a countrys standard of living; Indicators of a countrys standard of living (factors indicating a countrys wealth): (a) level of consumption of goods and services; (b) average disposable income of the population; (c) level of national ownership of capital equipment; (d) access to modern technology; (e) level of investment in research and technology. 2. Distinguish between a countrys standard of living and its quality of life; Indicators of a countrys quality of life (factors indicating the extent to which a population enjoys the benefits of its wealth): (a) extent of security enjoyed (level of crime); (b) availability of health, educational and recreational facilties; (c) diet and nutrition; (d) life expectancy; (e) rate of infant mortality; (f) access to public utilities, such as electricity and potable water. 3. Explain the concept of national income and its variants; The concept of national income and its variants; 4. Explain the approaches used to measure national income; Approaches to measure: (a) Gross Domestic Product (GDP); (b) Gross National Product (GNP); (c) National Income (NI); (d) Per Capita Iincome; (e) Advantages and disadvantages of different approaches used to measure national income. 5. Distinguish between economic growth and development; Concepts of economic growth, negative growth, growth witout development, the quatitative nature of growth and the qualitative nature of development. 6. Describe the role of education in economic growth and development; The role of human resource development in economic growth and development. 7. Outline the reasons for international trade; Reasons for internatonal trade. 8. Differentiate between balance of trade and balance of payments; Concepts of balance of trade and balance of payments. 9. Outline the measures which a country may adopt to address balance of payment problems. Measures to address balance of payment problems: (a) tariffs; (b) licenses; (c) quotas; (d) exchange control; (e) devaluation (f) borrowing from another country; (g) accepting gidts from other countries; (h) importing on credit; (i) drawing on the resources of the International Monetary Fund or other international financial institutions. CXC CSEC Principles of Business Exam Guide Profile 3: The Business Environment Section 10: Regional and Global Business Environment SPECIFIC OBJECTIVES The students should be able to: CONTENT 1. Explain the functions of major economic institutions and systems; Major economic institutions and systems: (a) Caribbean Community (CARICOM); (b) Caribbean Single Market Economy (CSME); (c) Caribbean Development Bank (CDB); (d) World Bank; (e) Inter-American Development Bank (IADB); (f) Organization of Eastern Caribbean States (OECS); (g) Organizatin of American States (OAS); (h) Economic Commission for Latin American Countries (ECLAC); (i) Association of Caribbean States (ACS); (j) European Union (EU) (k) World Trade Organization (WTO); (l) Caribbean Basin Initiative (CBI); (m) Organization of Petroleum Exporting Countries (OPEC); (n) Eastern Caribbean Common Market (ECCM); (o) North Amerian Free Trade Agreement (NAFTA) (p) Caribbean Canadian Agreement (CARIBCAN) (q) Free Trade Area of the Americas (FTAA) 2. Identify major economic problems in the Caribbean; Major economic problems in the Caribbean: unemployment; population density; migration debt burden; sourcing captial and raw materials; economic dualism in the region. 3. Outline possible solutions to economic problems in the Caribbean. Possible solutions to economic problems: (a) Access to foreign direct investment; (b) development of human resources; (c) development of the manufacturing sector