General Business Knowledge

Who is a Consumer?
A consumer is a person who buy goods or services to be consumed by himself or
herself.
 Goods may include both consumable items and durable consumer items.
 Consumable goods are like flour, rice sugar, milk etc.
 Durable consumer goods are like television, refrigerator, microwave etc.
 While services paid for might be transport, electricity, movies, etc.

Rights of consumers
If consumers are to protect themselves from being exploited or
cheated, they must be given certain rights so that they are in a
position to ensure that the sellers of goods and service providers are
more careful in dealing with them.

1. The right to satisfaction of basic needs

Consumers have the right to have access to basic, essential goods
and services which is adequate food, clothing, shelter, healthcare,
education, public utilities, water and sanitation.
2. The right to safety
Consumers have the right to be protected against products,
production processes and services that are hazardous to their health
or life.
3. The right to be informed
Consumers have the right to be given the facts needed to make an
informed choice and to be protected against dishonest or
misleading advertising and labelling.
4. The right to Choose
Consumers have the right to be able to select from a range of
products and services offered at competitive prices with an
assurance of satisfactory quality.
5. The right to be Heard
Consumers have the right to have their opinions represented in the
making of government policy and in the development of products
and services.
6. The right to Redress
Consumers have the right to receive a fair settlement of just claims,
including compensation for misrepresentation, faulty goods or
unsatisfactory services.
7. The right to consumer Education
Consumers have the right to acquire knowledge and skills needed
to make confident choices about goods and services while being
aware of basic consumer rights and responsibilities.
8. The right to a Healthy Environment
Consumers have the right to live and work in an environment that
is non-threatening to the well-being of present and future
generations.

Responsibility of Consumers

1. Responsibility of self Help

Consumers are expected to act in a responsible manner to
protect themselves from being deceived

An informed consumer can always take care of his/her interest

more than an un-informed one.
 2. Proof of transactions
It is the consumer’s responsibility to ensure that he/she obtains
and preserves proof of purchase and documents relating to
purchase of durable goods.

It is important to get a receipt on purchase of goods in case you

must return them for refund or exchange.
3. Proper Claim
While making complaints and claiming compensation for loss
or injury, you should not make unreasonably large claims.
4. Proper use of Products and Services
Consumers should always use products and services properly
and responsibly.
5. Timely Payments
Consumers should make timely payments in case of credit
purchases.

Ethics & Social Responsibility

Ethics- beliefs about what is right or wrong and good or bad
based on an individual’s values and morals.
Business Ethics- ethical or unethical behaviours by employees in
the context of their jobs.

 Managerial Ethics
the standards of behaviour that guide individual managers in their work.
  Behaviour towards employees-matters
including hiring and firing, wages and working conditions and privacy and
respect.

 Behaviour towards the organization

In areas such as conflict of interest, confidentiality and honesty

 Behaviour towards other economic agents

In activities conducted by businesses with primary agents of interest
(customers, competitors, stockholders, suppliers, dealers, unions)

Company Practices and Business Ethics

Companies have taken formal steps to discourage unethical and illegal
activities.
Two common approaches:
 Adopting written codes
 Instituting ethics programs

Social Responsibility
 The overall way in which a business attempts to balance its
commitments to relevant groups and individuals in its social
environment (stakeholders).
Primary stakeholders usually are:
Customers
Employees
Investors
Suppliers
Local and International Communities

Areas of Social Responsibility

 Responsibility towards the environment

 Responsibility towards customers
 Responsibility towards employees
 Responsibility towards investors

Approaches to Social Responsibility

 Obstructionist stance- do as little as possible to solve social or

environmental problems, have little regard for ethical conduct
 Defensive stance- do everything that is legally required but nothing
More.
 Accommodative stance- meets, an in cases, exceeds legal and
requirements.
 Proactive stance- indicate sincere commitment to improve the
general social welfare: proactively seek opportunities to contribute to
Responsibility towards customers: consumer rights, unfair pricing, ethics in
advertising.
Responsibility towards investors- proper financial management and representation
of finances.

SHOULD SMALL BUSINESS PRIOTISE

SOCIAL AGENDA?
ANSWER HERE
 Lesson 2

1. Describe the services of financial

institutions: Credit unions, banks,
building societies.

2. Identify the roles and functions of trade

unions to the employer and the
employee.

3. Identify the primary functions of local

and regional bodies such as OECS,
CARICOM, NDF and the Chamber of
Commerce.
 The services of financial institutions: Credit Unions,
banks, building societies

 The financial sector is made up of all firms that protect and invest
customers’ money or one who make money available to members
of the public as loans.

Credit Unions
 A credit union is a member-owned financial cooperative.

 It is democratically controlled by its members.

 It operates to promote thrift, providing credit at

competitive rates, and other financial services to its members.

 Members save with the credit unions and own shares in the
organisation.

 Members also qualify for loans at reduced rates and with little or
no security.

 Credit Unions are usually formed to promote the development of

their members who usually have a common interest. For example,
an association of a nation’s teachers may start a credit union for its
members e.g. The St. Vincent and the Grenadines Teachers
Cooperative Credit Union.

 A credit union is different from a bank in many ways, these

include:
 Credit unions are owned by members, while banks are not.
 Only members of credit unions can save in and access the services
they offer. Banks on the other hand, do not usually restrict
membership to a special group of people.
 Credit unions offer many of the same services as banks, but often
use a different terminology. Common services
 include:
1. Share accounts (Saving accounts)
2. Credit cards
3. Share draft accounts (checking accounts)
4. Share term certificates (certificates of deposit)
5. Online banking
6. Credit Unions

 Credit unions may have special saving plans and loans to cater to
the needs of their members.

 Surveys of customers at banks and credit unions have consistently

shown a significantly higher customer satisfaction rate with the
quality of service at credit unions.

Building Societies
 Building societies act as intermediaries between “small’ savers
who wish to invest funds and people who wish to borrow money to
purchase or improve property.

 They lend by means of a mortgage which is a long-term loan, often

repayable over a period of twenty years or more.
 Usually the deeds of the property purchased by the borrower is
held by the building society until the loan has been repaid.
 If the borrower defaults on the payment of the mortgage, the
society can sell the property to recover the debt.

 Building societies compete with the commercial banks to obtain

deposits from savers. They offer many of the financial services that
are being provided by banks e.g. deposit accounts, loans to buy
vehicles etc.

Banks

A bank is a financial entity that takes money from customers in the

form of deposits which they secure and invest until the customers
returns and ask for their money.

One of the main reasons people put money into banks is because
banks offer them interest payments when they deposit their money
with them.

Types of Banks

 Wholesale banking – this refers to banks that focus on a few large

clients (usually other businesses) with whom they engage in large
transactions, usually at discounted rates.

 Retail banking – these banks offer standard day to day services to

customers who may want to do anything from opening an account
to making a standing order arrangement.

 Business banking – providing services to mid-market businesses.

  Private banking – provide wealth management services to high
net worth individuals and families.

 Investment banking – relates to activities on the financial

markets.

 Central banks – normally government owned and charged

with regulatory responsibilities such as supervising commercial
banks and controlling the cash.

Commercial Banks

 Commercial banks are the most popular form of banks and usually
when one uses the term “bank’ it is a commercial bank that is
being referred to.

 Commercial banks offer three types of accounts.

I. Checking accounts

Customers who have checking accounts are able to access the funds
in their accounts by writing cheques or more popularly by using
debit cards to make purchases or withdrawals.

 Savings accounts – holders of saving accounts are unable to write

cheques but can access their funds by making an over the
 counter transaction or by swiping a bank card.

 Timed accounts – funds in timed accounts are frozen for a fixed

period. This means that holders of timed accounts are restricted
from accessing the funds ( or do with great penalties) before a
specified time has elapsed.

 Financial advice

 Financial managements tips

 Cheque Books

 Debit cards & Credit cards

 Night deposits

 Standing orders & direct debits

 Credit transfers

 Mortgages

 Savings - Loans – student, vehicle, personal, overdrafts

The role and functions of trade unions to

employers and employees
 Trade Unions

These are associations of workers in an industry or group of industries

who join in their common interest to regulate the relations between
employees and employers.

By cooperating in this way, members of a union hope to win concessions

from their employees.

The role and functions of trade unions to

employers and employees.

“In unity is strength” is the motto of the trade union movement

Trade Union aims

Trade unions aim to secure for workers the following:

 Participation in company decision- making.

 Improved wages and reduced working hours.
 Better working conditions
 Full employment and national prosperity
 Job security
  Benefits for members who are sick, retired or on strike
 An influence on government
 Improved public and social services
 A reasonable share in the wealth of the country.
 Improved sickness benefits and pensions.

Collective bargaining
The main function of trade unions is to obtain improved wages and
working conditions for their members.
Wage settlements are often the results of collective bargaining – this
refers to talks between representatives of employers and trade unions to
decide pay rates and other terms and conditions of employment.

Although pay is one of the main subjects of collective bargaining, many

others can be involved, including:
 Hours of work

 Holiday entitlement

 Maternity leave

 Working conditions

 Redundancies

 Sick pay

 Pensions

 Training
 Although pay is one of the main subjects of collective
 bargaining, many others can be involved, including:

 Hours of work

 Holiday entitlement

 Maternity leave

 Working conditions

 Redundancies

 Sick pay

 Pensions

 Training

 The role and functions of trade unions to
 employers and employees.

 Although negotiations between employers and employees
 may not reach an agreement, there are other means of
 solving the deadlock.

 Conciliations – this is where a third party is appointed to try
 to help find a solution that is acceptable to both sides.

 Arbitration – is where both sides of a dispute request that it
 goes before an arbiter, whose verdict both sides agree to
 accept.

 The role and functions of trade unions to
 employers and employees.

 Industrial Legislation

 The following are some of the rules that cover actions
 that should be avoided by management and the union
 alike:

 The union must not:

 Coerce anyone to join or not to join a union.

 Coerce employees in their choice of the parties to
 bargain on their behalf.

 The role and functions of trade unions to
 employers and employees.

 The union must not:

 Charge unfair membership fees.

 Refuse to bargain collectively with an employer.

 Cause the employer to pay for services not rendered.

 Influence an employer to discriminate