Functions of Business & Economic Resources

Functions of Business What goes on behind the scenes?

Functions of Business Main Functions of Business Production Production Marketing Marketing Finance Finance Human Resources Human Resources Management Management Additional important function for some businesses and secondary for others: 1. Research and Development (R&D)

1. Production Process of converting a business’s resources into goods and services. Different types of resources are necessary and may vary depending on the type of business. Examples: 1. Law cutting business would take its workers, tools, equipment and business money and use them to cut the lawns of its customers 2. A doctor’s office will have different equipment from an auto mechanic’s shop or a gas station or restaurant.

Factors of Production/ Economic Resources  Resources which make products and services available to consumers. 1. Natural or Land Resources 2. Human or Labour Resources 3. Capital Resources 4. Information 5. Entrepreneurship

Natural Resources Materials that come from the earth, water, and air.

Natural Resources Most natural resources are non- renewable and are limited, or they may take decades to replenish. Most natural resources are non- renewable and are limited, or they may take decades to replenish. What does this mean for business? What does this mean for consumers? What does this mean for society?

Human Resources/Labour The people who work to create, deliver, service, and sell the goods and services. Includes all the mental and physical work Examples include: farmers, factory workers, construction workers, website designers, investment bankers, teachers, nurses, lawyers, etc. Many business have a Human Resources Department to manage its labour. Wages and salaries is usually the largest expense of any company.

Capital Resources The money to start the business and needed for the purchase of equipment, tools, computers, etc, to keep the business running. The money to start the business and needed for the purchase of equipment, tools, computers, etc, to keep the business running. For example: buildings, equipment, tools, trucks, furniture, are all examples of capital resources. For example: buildings, equipment, tools, trucks, furniture, are all examples of capital resources.

Information Using computers and other technology, businesses track information about their operations, customers, and competitors. Managing information is especially important for international corporations which have offices and plants around the world.

Entrepreneurship The individuals who bring all the factors of production together to start a business. The individuals who bring all the factors of production together to start a business. Includes individuals who have the skills and determination to start and operate a business Includes individuals who have the skills and determination to start and operate a business

2. Marketing Marketing Defined All the business activity used to plan, price, promote, and distribute goods or services to satisfy consumer needs and wants. All the business activity used to plan, price, promote, and distribute goods or services to satisfy consumer needs and wants. 4 P’s of Marketing 4 P’s of Marketing 1. Product 1. Product 2. Price 2. Price 3. Promotion (includes advertising) 3. Promotion (includes advertising) 4. Place (Distribution) 4. Place (Distribution) Mrs. Banks’ 5 th P Mrs. Banks’ 5 th P 5. People (Customers) 5. People (Customers) Marketing involves a great deal of research (Market Research) Marketing involves a great deal of research (Market Research)

3. Finance Managing money is referred to as finance. Managing money is referred to as finance. Keeping accurate records on all the money coming into the business and all the money going out is very important. Keeping accurate records on all the money coming into the business and all the money going out is very important. Why? Why? Large companies will have an accounting department to handle the finances of the business. Large companies will have an accounting department to handle the finances of the business.

4. Human Resources A Human Resource Department is responsible for: 1. Determining job requirements 1. Determining job requirements 2. Recruiting and interviewing potential new employees 2. Recruiting and interviewing potential new employees 3. Selecting the right people for the job. 3. Selecting the right people for the job. 4. Training and developing the employees. 4. Training and developing the employees. 5. Assessing employee performance 5. Assessing employee performance 6. Managing employee wages/salaries and benefits (dental plans, life insurance, pension plans etc) 6. Managing employee wages/salaries and benefits (dental plans, life insurance, pension plans etc) The People Owner(s) Managers Supervisors Staff Employees

5. Management Includes the planning, organizing, and controlling of all business activities. Managers set short and long- term goals of the company Organize employees and employee responsibilities Need strong leadership, communication, interpersonal and problem solving skills.

6. Research and Development (R&D) Invest capital and other resources into researching and developing new technologies, processes, and products that will: Invest capital and other resources into researching and developing new technologies, processes, and products that will: 1. improve how current technologies, processes, or products work or function (make them cheaper to produce, cleaner on the environment, work faster, provide more benefits to the consumer, etc); 1. improve how current technologies, processes, or products work or function (make them cheaper to produce, cleaner on the environment, work faster, provide more benefits to the consumer, etc); 2. create new ways to fight and/or cure disease; and 2. create new ways to fight and/or cure disease; and 3. address other societal needs, concerns, wants and demands 3. address other societal needs, concerns, wants and demands

Business Interdependence Business Interdependence  Businesses rely on other businesses to provide resources to them in order to run their business.  A car manufacturer (GM) relies on other business and vice versa for their raw materials and capital resources. (i.e. plastics, electronics, and (i.e. plastics, electronics, and various components of cars GM various components of cars GM needs for their cars.) needs for their cars.)

Business Interdependence Example: A large clothing manufacturing company needs: A large clothing manufacturing company needs: 1. cotton (natural resource) 1. cotton (natural resource) 2. machinery or replacement parts (capital resource) 2. machinery or replacement parts (capital resource) 3. accounting services (human resources) 3. accounting services (human resources) The clothing manufacturer relies on other businesses to provide these products and services. The clothing manufacturer relies on other businesses to provide these products and services.

Additional Sources Used Additional Sources Used 1. Liepner, Michael E. et al. Exploring Business For the 21 st Century. Toronto:McGraw-Hill Ryerson Limited, Wilson, Jack et al. The World of Business (5 th ed.) Toronto: Nelson Education Ltd., 2007