Business Theory

Businesses operate in an external environment in which as well as competition from rivals businesses have to take account of legal, political, social and...

There are a number of laws that protect the customer against the actions of unscrupulous manufacturers and sellers. Particularly important are the Sale of Goods...

A business converts inputs into outputs in order to make a profit. However, the business does not exist in a vacuum, it exists within...

A multinational company is one that operates in more than one country and typically operates in a number of major global markets. The three...

Businesses operate in an external environment in which as well as competition from rivals businesses have to take into account legal, political, social and...

Money is demanded in order for it to be used to buy and sell goods and services. The same applies to international currency. Foreigners...

Banks provide a number of important financial services to business: Loans Provide businesses with expansion capital. A secured loan is one that is guaranteed by some...

Sales of products will eventually decline, as outlined in the four stage product life cycle. Businesses will often attempt to phase out existing products...

Knowing the cost of an item, or activity makes it possible to calculate the profit of that item or activity. This is very important....

Budgets are statements setting out the planned performance of a business type in a table made up of numbers. Usually, these plans deal with...

Management accounting uses financial information in order to enable better decision-making within the organisation. The format and content of management accounts will depend on...

For any business, it is important to have an understanding of how much it costs to run various parts of the company, for example,...

The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted...

When you raise the price of most items, people will buy less of them. For example, when one airline raises its price, air passengers...

Forecasting and business trends a projection into the future that is based on evidence of past results, or on other appropriate information (e.g. what...

Market planning is the process of developing and implementing a plan to identify, anticipate and satisfy consumer demand, in such a way as to...

The marketing mix is often referred to as the '4 Ps', i.e. product, price, place and promotion. To meet customers' needs a business must...

The product life cycle is the period over which it appeals to customers. The sales performance of any product rises from nothing when the...

A market orientated company is one that organises its activities, products and services around the wants and needs of its customers. By contrast, a...

An important aspect of production management and control is the management of facilities. Facilities management typically involves the following: Buildings and site maintenance Make sure that...

The chain of production consists of the various stages involved in the production of a particular product. The chain of production for furniture may include...

Operating activities (or operations) are the ongoing activities that a business is involved in - e.g. processing a customer's order in an Argos store,...

Continuous improvement is arguably one of the most important concepts in Japanese management, and is the main difference between Japanese and Western approaches to...

Technology is the process of applying new scientific discoveries and other developments to products and processes. If we look at the development of production...

A motivated employee is someone that works hard because they feel fulfilled when they do so. Motivation is an important area of business research...

Today people are often the key resource of a firm and their employees can make up at least two-thirds of all costs. Well-managed training...

Communication is the passing on of ideas and information. In business we need good, clear communication. The contact may be between people, organisations or...

Core competencies are the skills that allow a business to deliver a benefit to customers, and capabilities that are critical for a business to achieve a...

Management has been described as getting things done by other people. Managers have the responsibility of enabling an organisation to achieve its objectives. They...

The UK is a diverse society, made up of many different peoples from many different backgrounds and cultures. Changes to population are called demographics and...

The vision of a company is an outline of what that company wants to achieve. It needs to promote aspiration and inspire stakeholders, both internal...

The finance department of a company generates a variety of financial information that is helpful in decision making, including: Profit and Loss accounts provide details...

There are different views about what makes a successful business. Typically success should be judged by the ability to meet objectives. Criteria for judging...

Every organisation made up of more than one person will need some form of organisational structure. An organisational chart shows the way in which...

Plans are developed in order to set out a route map to help in achieving objectives. Whilst the plan is made by managers with...

The main types of business organisations in the private sector in the UK are - sole traders, partnerships, companies and franchises. The sole trader...