Business Theory

The international environment is very important today. Globalisation, the process whereby businesses develop worldwide brands and products which they supply across the world, and...

Before creating business plans or making decisions, it is important to 'scan' the external environment. This can be achieved through a PEST analysis, i.e....

Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment. This takes the form of a SLEPT...

Regulation means providing rules and frameworks for business and other activities. Some aspects of business activity are self-regulating - for example, the Advertising Standards...

Economic growth is measured by changes in the size of a nation’s income. There are a variety of ways to calculate national income, the...

Globalisation is a result of the world becoming increasingly interconnected due to the hugely increased trade and cultural exchange. The biggest companies are no longer just...

Promotion is a common marketing term, one that attempts to draw attention to product or business in order to gain new customers or to...

An important business objective is to break even i.e. to exactly cover your total costs by sales revenue. It is even more desirable to...

Accounting principles involve the recording and interpretation of business activity in figures (recording accounts). Records are kept of business transactions and full sets of accounts...

By law companies are expected to produce financial statements each year. These statements appear in Company Reports. There are two main financial statements: 1.The profit and...

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...

Costing is an important aspect of production because: by knowing how much it costs to produce an item or to carry out an activity it...

Market research and development involves collecting, recording and making sense of all the available information which will help a business unit to understand its...

A market consists of all the consumers who purchase a particular type of good or service. The market may be subdivided into separate segments...

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...

International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, United Airlines, BIC, Cadbury-Schweppes and Nissan have...

Organisations will often set up different structures to deal with different types of customer customers. This is because they will often give some groups...

Organisations change over time in a variety of ways. There are a number of ways in which they might change: 1. From small companies to...

The production process is concerned with transforming a range of inputs into those outputs that are required by the market. This involves two main sets...

Productive efficiency is measured by the number of units of output that can be produced from given quantities of inputs. Organisations depend upon the skills...

Location of production Production activity should be located where a firm can be most productive, and yield the highest revenues per unit of investment. A...

In business terms, innovation is the commercial exploitation of an invention. This involves dedicating resources and bringing a new idea to market. The succession of...

The location of a business is where it is situated e.g. in Central London, Silicon Valley, etc. Where to locate a business is a...

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

Effective communication is an essential part of a smoothly running business organisation. Communication involves the transmission of information from a source (or a number...

Disputes between employers and employees (and/or their representatives) usually occur when all the available channels of discussion and negotiation have been tried. Reasons for...

Human resources are the people that work for an organisation, and Human Resource Management is concerned with how these people are managed. However, the...

Recruitment is the process of identifying that the organisation needs to employ someone up to the point at which application forms for the post...

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

Organisations are structured in radically different ways ranging from relatively fixed structures with positions, rules, and established chains of communication to dynamic structures in...

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

An objective is the end or ends that an organisation is trying to achieve. Typically, objectives will be set at a number of levels,...

A business organisation is a decision-making unit that sets out to produce a product in the form of goods or services. Key decisions need...

Good business planning is an essential requirement if a business is to succeed. A business plan is a document setting out information about the...

The owner of a business is the person who owns the business - i.e. has put the financial capital into the business and takes...