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student-led learning.
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all learning
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classroom, secure Principles of
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9:02 pm
Scenario
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Critical t
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business:
for CSEC® Examinations, Second Edition.

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Find us on Facebook Find us on Twitter
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I S B N 978-1-380-03422-9
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for CSEC ®
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Written for
For further information

Business
all learning
classroom, secure levels and designed
exam to engage students
edition of Macmillan’s success and maximise in the
future employability,
2nd Edition
the CXC ® syllabus Principles of
Business provides the second Author team:
Please note that these flash cards do not cover the entire curriculum and are to be used
– including
for CSEC ®
full curriculum, complete coverage Riana Balliram
coursework of (Trinidad)
and exam support. Peter Budd (China/UK)
Edith Emmanuel Examinations
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each unit. read and confirm (Trinidad)
Kevin James
comprehension. (Jamaica)
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(St Vincent)
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Find us on Facebook
/macmillancaribbean Find us on Twitter Balliram |
@MacCaribbean Budd | Emmanuel
I S B N 978-1-380-03422-9
www.macmillan-caribbean.com | Guiness
| McCloskey
in Macmillan’s
| Raghoo
CSEC PoB
2e cover.indd
1 9 781380
Bitu
034229
Principles of
Business for
09/08/2019
9:02 pm
CSEC ® Examin
coverage of the CXC® syllabus, full curriculum, coursework and exam support. ations, Second Edit
ion. to use the flash card in
Please turn over for further information! conjunction with the book
so you know you’ve fully
covered the question
This item is a free promotional item to support Macmillan’s Principles of Business for CSEC® Examinations, Second Edition
I S B N 978-1-380-05227-8
/macmillancaribbean
9 781380 052278 @MacCaribbean
About Principles ofPrinciples
Business for
of Business Principles of Business A task-based approach to learning
2nd Edition
CSEC Examinations, Second Edition:
for CSEC® Examinations
® for CSEC® Examinations where scenarios, critical thinking tasks,
Written for all learning levels and designed to engage students in the Author team:
classroom, secure exam success and maximise future employability, the second
edition of Macmillan’s Principles of Business provides complete coverage of
the CXC® syllabus – including full curriculum, coursework and exam support.
Peter Budd (China/UK)
comprehension questions and mini-
ject
ob iv
Structured to mirror
the CXC® syllabus
Pause points for
students to digest
Advisors:
research projects are interwoven into the
core syllabus content
Alana Gadjahar (Trinidad)
es
Specific
with related Specific what they have Kevin James (Jamaica)
Check
Objectives grouped read and confirm Roxanne Williams (St Vincent)
together in each unit. comprehension.
Thought-provoking and relevant learning

Student reviewer:
materials that fully engage students h

project Helping relate topics to the
real world while building iew
s Credible and current insights into
the subject area from Caribbean
Expert v
s
Researc
communication and business people and those in the
collaboration skills through global economic environment to
student-led learning. inspire entrepreneurship.
Inspires entrepreneurship and

s
Micro-enterprises, Caribbean
and non-Caribbean scenarios hin
king Exercises to encourage
students to think deeper
showcases career possibilities
Scenario
Critical t
with accompanying questions by questioning, challenging
Student-friendly layout, with text written in ask students to apply

their learning to different
situations.
and considering different
perspectives or contexts.
accessible language for all learning levels

es
Digital r
ources Additional content
such as case study as
ers Puzzles and
activities to
CSEC® is a registered trade mark
of the Caribbean Examinations
Brain te
Students will build knowledge of
videos, worksheets consolidate learning for CSEC® Examinations is an
and answers. in a visual and active independent publication and has
way. not been authorized, sponsored,
modern business trends, concerns and
2nd edition
Digital stimuli and ICT-centered activities practices in the Caribbean and the global
integrated within the text Balliram | Budd | Emmanuel | Guiness | McCloskey | Raghoo Bitu
economic environment
Find us on Facebook Find us on Twitter I S B N 978-1-380-03422-9
/macmillancaribbean @MacCaribbean
www.macmillan-caribbean.com 9 781380 034229
Where to go for more support:

CSEC PoB 2e cover.indd 1 09/08/2019 9:02 pm
Free online Teaching Resources Revision Resources

There are free online resources available from Worked Solutions Principles of Business
this course to download from our website: 2012 – 2016 offers model answers for
www.macmillan-caribbean.com Digital the past papers from the years 2012 –
resources 2016 and multiple-choice questions for
One sample lesson plan for every unit essential practice.
Answers provided for all the end of unit exam style questions –
CXC® past papers for principles of
both the multiple choice questions and essay style questions
business are available to purchase in all
Case study videos bring to life the key topics covered good bookstores.
This item is a free promotional item to support Macmillan’s Principles of Business for CSEC® Examinations, Second Edition
/macmillancaribbean
@MacCaribbean
E O F B U S I N E
TU R
O F B U S I N
THE NATUR E
Business Functions and Stakeholders
Turn over for more information and examples of answers to the questions! The success of the functional areas of businesses are highly dependent on the activities
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of the stakeholders of these businesses. A stakeholder may be defined as any individual,
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institution, group or agency which has a vested interest in how well a business performs.
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Types of Business Organisations and
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OF BUS INESS
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produce and exchange goods and services with the goal of
Legal and Ethical Issues in Business
maximising profit. There are legal and ethical issues involved in the
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establishment and operations of business entities:
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The Nature
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different legal forms. Legal issues inform the way in which business operations
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need to be conducted and established, related to
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Business organisations in the private sector can be classified
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government regulations and laws. Ethical issues refer to
according to how they are financed, owned and controlled.
the moral responsibility of the entrepreneur to ‘do the right
They include sole traders, partnerships, cooperatives, Limited
thing’ towards internal and external stakeholders.
companies and franchises.
What legal and ethical issues do you need to
What classification would you give to your new
SINESS U F BUS
consider when setting up your business?
R E O INES
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business?
AT U R E O F B TH E N A
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Careers in Business Forms of Exchange and Economic Systems
A business needs to attract and retain people with a range of different skills and abilities Many different instruments of exchange are used today in trade to make and receive
O F B U S I N E SS
if it is to perform its functions effectively and be successful. payments in exchange for goods and services. They include cheques, credit cards and
THE NATURE
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THE NATURE
electronic bank transfers among others.
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S I N
What examples of a business career could you consider?
AT U R E O F B U
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2nd Edition
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Author team:
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Macmillan’s Principles of Business for CSEC® Examinations, Second Edition

not been authorized, sponsored,
2nd edition
Balliram | Budd | Emmanuel | Guiness | McCloskey | Raghoo Bitu
I S B N 978-1-380-03422-9
9 781380 034229
09/08/2019 9:02 pm
F B U S I N E
TURE O E O F B U S I N
THE NATUR
Types of Business Organisations and Careers in Business Business Functions and Stakeholders:
Economic Systems
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business (shareholders) relations
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2nd Edition
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Author team:
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For more information, please see Unit 1:

area from Caribbean
omic environment to
epreneurship.
urage
deeper
hallenging
different
ontexts.
The Nature of Business, in Macmillan’s

2nd edition
Principles of Business for CSEC® Examinations, Second Edition.

I S B N 978-1-380-03422-9
9 781380 034229
09/08/2019 9:02 pm
THE INTERNAL ORGANISATIONAL ENVIRONMENT
L
Leadership
N A E N V IR ONMENT
N A L O R
Turn over for more information and examples of answers
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questions!
THE IN T E A good leader will often use a mixture of leadership styles, depending on the situation
G A N I S AT I O N
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and the skills and attitudes of those they report to or manage.
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What leadership style would you use for your business? Use the
Management: examples on the back to help you.
ENVIROand NM ENT
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Management involves L organisation coordination of
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NAL EN
things that they do? Name some key functions of or objectives between one or more individuals within an
The Internal
L O R G A N I S ATIO management that would exist in your business.

Organisational
organisation. This may be between employees; between
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managers at the same or different levels or between an
Environment employee and a manager.
Industrial relations refers to the management of
Organisational Structure MENTbetween managers and workers, and the ways
relationships
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THE INTERNA
Organisational structure refers to the way in which a business
What strategies do companies and employees
allocates roles, responsibilities and management authority within
its organisation to achieve its objectives. Internal Communication
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organised within a business is to use an organisational chart. message information is passed from one
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person or organisation to another.
relationships and functional relationships. Motivation is the general willingness or desire to fulfil a
ME NT
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What are all the different given task or goal. This is vital in business.
ON
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L EN V I R O N M
channels and methods of
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I S AT I
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charts to help you. place within a business? could you use to motivate your employees?
HE INTERN
2nd Edition

Author team:
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area from Caribbean
omic environment to
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Unit 2: The Internal Organisational Environment,

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2nd edition
I S B N 978-1-380-03422-9
9 781380 034229
09/08/2019 9:02 pm
E N V IR O NMConflict ENTat Work
Management: Leadership
Autocratic Leadership TIO N A L Resolving
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use to resolve conflict at work: to resolve conflict at work
I O
• Organising • • An autocratic leader tells employees what to do, and
G
expects orders to be followed without question, which
A N I S AT
• Resolve dispute directly • Resolve dispute directly
RNAL OR
• Directing Communicating •
can help with making quick decisions, but can lead to
THE INTE
• Controlling • Motivating • Use independent third- • Use independent third-
employee dissatisfaction party, which can take the party, which can take the
• Coordinating Democratic Leadership following forms: mediation; following forms: mediation;
NVIRONME NT
ISATIONAL E • A democratic leader consults other managers and arbitration; conciliation arbitration; conciliation
AN
L ORGOrganisational Structure employees and involves them in problem solving and • Seek trade union • Lock-outs
decision making representation • The hire of temporary
An organisational chart for • The span of control
E N T
Laissez-faire Leadership labour
M
a business can show: each manager has in
• The organisational
A L EN V I R O N
terms of the number of • A laissez-faire leader is a ‘hands off’ manager, who • Refusal to negotiate
hierarchy: the different
N I S AT I O N employees that report communicates aims and objectives to employees, but with employees or their
L ORGA
levels of management directly to them allows the employees to make their own decisions representatives
ERNA
within the organisation • The auxiliary or support • For characteristics, advantages and disadvantages of each • Scare tactics
• The chain of command staff to managers style of leadership, see Principles of Business, Unit 2
of each manager in within the firm
(includes: secretaries,
IRONMENT
terms of the other Internal Communication
administrative assistants, Motivating Employees TIONAL ENV
L ORGANISA
levels of management Different channels of Communication methods:
they have authority or legal advisers)
THE IN
Financial NA to
TERstrategies Non-financial strategies to communication: • Verbal communications via
seniority over motivate employees: motivate employees: • Upward: from employees to telephone or in face-to-face
IR ONME
• Overtime pay
N V
• Training management NT meetings
E
owner/senior
manager
TIO N A L
L ORGANISA
secretary • Piece-rate pay • Opportunities for • Downward: from • Written communications
THE INTERNA
• Bonuses promotion management to employees include writing to a receiver
accounts sales • Awards or recognition • Horizontal: across the span using a memo, notice, letter,
• Commission text messages or e-mail
manager manager of control of different
• Profit-sharing • Social activities or a
T
managers, between • Visual communications
salesENT
M
E N
team-oriented culture
VIRONassistant
Nsales
L Eassistant
O N M
accounts accounts
NA • Allowances
R
managers or between include sending videos,
I
clerk ATIOclerk
AL ORGANIS
T I O N A L EN V employees who are at the pictures, charts and
I S A
same level diagrams
HE INTERN
AL ORGAN
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ESTABLISHING A BUSINESS
G A B U S I N E SS Preparing a Business Plan
ESTABLISHIN
Turn over for more information and examples of answers to the questions! The business plan is a document that will guide you from your
business idea to reality. Other reasons for preparing a business plan
include:
E S T A B L ISHING
U S I N E S S • To research and assess the feasibility of the business
NG A B
Starting a Business
ISHI
• To attract potential investors
Starting and running a business involves many risks. It can have • To raise finance
many disadvantages. However, it can also be very rewarding both
• To guide the operations of the business when making decisions
personally and financially. It is important, therefore, for every
would-be entrepreneur to consider all the ‘pros and cons’ of • To ensure the business complies with all necessary laws and
business ownership and management before taking a decision
USINESS
HING A BEstablishing S
regulations.
to start a new business venture.
ESTABLIS
G A B U S I N E S
ESTABLISHIN
What are the key sections that you will include in your
What are the essential steps you would need to A Business business plan?
take before starting a business?
S I N E
Choosing a Business Location
H I N G A B U An entrepreneur needs to identify the most suitable location or
ESTABLIS
The Role of an Entrepreneur locations for their business.
An entrepreneur identifies business opportunities. They are Many factors will affect the choice of location, including the cost
innovative, with new ideas, and take risks to provide goods and and availability of land or premises. For example, Market pull refers
services for prospective customers. to the ‘pull’ or attraction of the target market. It is used in location
decisions, where locations near to major consumer markets can
What are the key functions performed by result in a competitive advantage.
A B
entrepreneurs?
USINESS I N G
GAB
ESTABL I S H
What are the factors that influence a business
ESTABLISHIN
What are the key traits that entrepreneurs have? location?
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A B U S I N E S S
G
ESTABLISHIN
Starting a Business Preparing a Business Plan
The essential steps you’d need to take before starting a business: Key elements of a Business Plan: • Operational Plan (a detailed plan
GA
• Introduction (gives brief information, that sets out how each team, section
ESTABLISHIN
• Conceptualisation (developing business idea and concept) or department will contribute to the
the name(s) of the owners, proposed
E S S
achievement of the organisation’s
I N
business location, name of the
S
• Research / Market probe (do market research on consumer characteristics in your
U
goals)
B
market, the features they want and the prices they can / are willing to pay) business and the amount of financing
G A
needed) • Marketing Plan (will outline the ways in
ISH I N
• Identification of Resources (identify resources needed such as materials, machinery, • Executive Summary (summarises all which your marketing will be organised
equipment, premises and people) other sections of the business plan: – including marketing strategies and
gives the reader a synopsis of the the marketing budget)
• Creation of a Business Plan (see Preparing a Business Plan for what a business plan business and its layout) • Financial Forecast (the financial
should include!) forecast should give details of how
SINESS
• The Business Opportunity (gives
A BU
any investment will be repaid by the
G
S S
an overview of how the business
IN
L IS H
I N E
• Acquisition of Funds (necessary for buying or hiring resources. This could be from
B
A S
business whilst the daily expenses of
ES T
B U
opportunity came about)
A
personal funds, loans or investments)
G
the business are taken care of)
E S TA B L I S H I N
S I N E
The Role of an Entrepreneur Choosing a Business Location
A B U
Key functions performed by Entrepreneurs: Characteristics of Entrepreneurs: Factors which influence a business • Access to power and water supplies
H I N G
location:
I S
• Conceptualising • Creative • Access to telecommunications
TA B L
• Geographical setting
S
• Planning • Innovative • Access to a supply of suitable labour
E
• Accessing finance • Flexible (Adaptable) • Availability of raw materials and • Access to health facilities
supplies
• Organising • Goal oriented • Government assistance and regulations
• Access to roads, ports and other
• Operating the business • Persistence and perseverance infrastructure
• Evaluating business performance • Willingness or propensity to take
• Risk bearing calculated risks
G A BU SINESS
I S H I N G A B
ESTABL
• Making a profit and managing losses
E S TA B L IS H IN
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F B U S INESS
S O F B U S I N
GAL ASPECT
E C T S O
AL ASPASPECTS
EGLEGAL OF BUSINESS
Turn over for more information and examples of answers to the questions! LE
BUSINESS Legal Principles and Contracts
LEGAL ASPE C T S O F B U S INESS
The Principles of Insurance
S S
Each day, a business will enter into contractual relationships with
E
An insurance contract or policy is a written agreement between an
U S I N
other businesses and individuals. These can include suppliers,
B
insured party (policyholder) and the insurance provider.
O F
employees, customers and government authorities. The businesses,
E C T S
An agreement to provide insurance is based on a number of
SP
or people involved in a contract, are referred to as the parties.
EGAL A
principles.
A contract is a voluntary but legally binding agreement between
two or more parties. What are the key principles of insurance that you as a
Legal Aspects policy holder and the insurance provider must uphold?
You are entering into a contract for your business. of Business
O F
What are the essential characteristics of a contract
that you would expect?
A S P E C T S
A S P E C T S O F BUSIN ESS LEGAL
Types of Insurance
Insurance allows your risk of loss from known events (such as a car
LEGAL
Business Documents accident, fire and theft) to be transferred from one party to another
F B
in exchange for a payment (premium).
S O
There are many documents used in business; these can be related to record keeping or to
S P E C T
transactions.
A
What are the types of insurance used by businesses
EG A L
– what type of insurance might your business need?
L
Record keeping helps with decision making, accountability, retrieval of important
information, evaluating performance and compliance with tax and auditing regulations.
F BUSINESS
Business documents include invoices, pro forma invoices, purchase requisitions and
purchase orders, statements of account, credit notes and debit notes.
What types of business document might you use in your business?

T S O F BUSIN ESS
LEGAL A S P E C
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F B U S INESS
S O F B U S I N
GAL ASPECT
ASPand
LPrinciples C T S O
E Contracts
EGA
LE
Legal
All contracts will display the following • Intention to create legal relations (the The Principles of Insurance
BUSINESS
essential characteristics: parties are willing to accept the legal Principle of Utmost Good Faith • Principle of Subrogation
consequences of failing to fulfil their
ESS
• Offer (an indication of a person’s • The insurer and the insured must • If the insured party has been
F BUSIN
legal obligations under the contracts)
O
willingness to enter into a contract on
A S P E C T S honestly disclose all relevant facts compensated for loss of an asset,
LEGAL
the terms that he / she has put forward) • Competence of parties (individuals and issues pertaining to the insurance ownership of that asset now lies with
• Acceptance (when the offeree agrees to entering into a contract must have legal contract the insurer
S
capacity or competence)
E S
the offer, thereby committing themselves Principle of Insurable Interest Principle of Loss Minimisation
U S I N
to the contract)
F B
• An individual can only insure something • The insured person must take all steps
S O
• Consideration (the term given to what is
T
that he has a monetary interest in necessary to minimise losses
SP E C
being done / given (or not being done)
EGAL A
Principle of Indemnity Principle of Nearest or Proximate Cause
as a benefit / item of exchange in the
contract. (e.g. money from a sale is • To restore the insured to the same • The main cause of an event, where there
termed consideration, as are the goods financial position as before the loss may have been several contributing
being sold) occurred causes
A S P E C T S O F
LEGAL
Business Documents Types of Insurance:
INESS
Key examples of business documents: • Purchase Order (a purchase order is • A Statement of Account (a • General Liability or • Accident and Sickness
C T S O F B U S
the document issued to a supplier statement of account is a document Public Liability Insurance Insurance
ASPE
• A Purchase Requisition (a purchase
LEGAL
requisition is an internal business that stipulates what is being sent by the seller to the buyer • Property Insurance • Trade Credit Insurance
B
purchased) showing details of transactions that
F
document used to inform the
O
• Auto Insurance • Business Interruption
S
occurred over a specified period)
T
relevant persons that a purchase is • Invoice (an invoice is a document
E C
Insurance
P
• Worker’s Compensation
S
being requested) showing the details of goods • Stock Card (a stock card is an
L A
Insurance • Event Insurance
EG A
• Pro-forma Invoices (pro-forma bought or sold) internal business document used for
L
invoice is an estimate or quotation, • Credit Note (a credit note is a recording the movement of stock, • Professional Liability • Goods in Transit
also referred to as an inventory Insurance Insurance
F BUSINESS
also known as a preliminary bill document sent by the seller to the
of sale) buyer indicating that the buyer’s card) • Product Liability • Marine Insurance
outstanding balance to the seller Insurance
ESS
has been credited or reduced) • Health Insurance
A S P E C T S O F BUSIN
LEGAL
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PRODUCTION
PRO D U C T I O N
Turn over for more information and examples of answers to the questions! PRODUCTION
Small Businesses
Definitions of small business vary by country. According to CARICOM (The
Caribbean Community), a small business employs between seven and 25
people, and micro-enterprises are generally thought to employ fewer than
nine.
Factors of Production PRODUCTION In addition to sole traders, small businesses include many partnerships
T I O N
and some small limited companies.
PROD U C
The process of production adds value to raw materials and other inputs
by turning them into useful goods and services that other consumers What are the advantages and disadvantages to a small
need and want, and are willing and able to pay for. business?
ODUCTION
Economists group together the different productive resources into four
factors of production. These are land, labour, capital and enterprise.
What factions of production would you use to support

your business in making products? What exactly would
Production
P R O D U C T I O N
O N
Business Growth
T I
they involve?
P R O D U C Most businesses are small and remain small, either through choice
PRODUCTION
or because the size of their markets is small. However, some small
businesses are able to grow in size and expand their scale of production.
PRODUCTION
Production and Productivity A business can benefit from growing its scale of production in a number
of ways. Internal growth occurs when a business uses its own resources
Productivity measures the output produced from a given amount of to increase its scale of production.
factor inputs, in other words, the efficiency of production.
PRODUCTION
External growth is more common than internal growth. It occurs when
Different industries are usually classified into three broad industrial two or more businesses combine to form a larger one, and this is also
sectors. These reflect their main type of productive activity. known as integration.
C T I O N
N
In which industrial sector would your business be?
O U
How would you grow your business through external
I O D
PRODU C T PR
growth integration?
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Factors of Production PRO D U C T I O N R
Small Businesses
P TheO D
Advantages TIOTheNDisadvantages of Small
UofCSmall
Businesses: Businesses:
The four factors of production are land, labour, capital and Labour:
enterprise. • Can usually be set up • Often lack specialist skills
• Labour is the physical and mental efforts of people that easily • Find it difficult to raise
PRODUCTION
Land: contribute to businesses, and can be divided into different
skill levels including managerial and professional, skilled, • Able to respond quickly financial capital
• Land includes geographical areas of land, as well as all to changes in economic • Lack the resources
O N
semi-skilled and unskilled
I
the natural resources that can be extracted or produced
T
and market conditions
C
necessary to offer a wide
U
from the land Capital:
PROD
• Innovative and introduce range of services, or to
• Natural resources include: fertile soils, sunlight, beaches, • Capital includes human-made resources “capital goods” new products and ideas service large numbers of
sand, water, plants, trees, animals, fish, oil, gases and to produce other goods and services customers
• Increase competition for
ODUCTION
minerals • These include machines, tools, vehicles, computers and larger business
• Natural resources can be classified into ‘renewable’ and other equipment
‘non-renewable’ resources • Increase consumer choice
O N
Enterprise:
C T I
• Provide local
R O D U
• Organising land, labour and capital inputs to create
P
opportunities for
and produce goods or services that people and other employment and social
T I O N
businesses want is called enterprise
U C
development
Production and Productivity P R O D PRODUCTION

• Generate income for
their owners
PRODUCTION
The three main industrial sectors are: • Construction: construction uses natural
and manufactured materials – such as Business Growth
Primary Industry
wood, bricks etc.- to build infrastructure External growth through integration can • Mergers (when the owners of two or
• Extractive: specialises in the extraction of and buildings take different forms: more business organisations agree to
natural raw materials such as food crops, combine their capital and operations to
• Joint Ventures (a contractual agreement
PRODUCTION
oil, coal and wood Tertiary Industry
between two or more organisations form a new larger enterprise)
Secondary Industry • Services: the provision of service is often
called tertiary production because it to share their expertise, investment, • Takeovers or Acquisitions (when one
N
• Manufacturing: manufacturing is called management, costs, profits and risks of company buys enough shares in the
T I O
involves the distribution and sale of
N U C
O
running a new business project) ownership of another so that it can take
D
secondary production because it is the
T I O
manufactured goods and services to
C PR
PRODU
second stage of a chain of production customers overall control)
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MARKETING
MAR K E T I N G Product Packaging and Presentation
MARKETING
Turn over for more information and examples of answers to the questions! The packaging of products can increase consumer satisfaction and the
visibility of the product
(Allowing it to stand apart from others on the shelf). Packaging therefore
can contribute significantly to profits.
MARKETING
N G
What are the benefits of packaging in your business?
I
The Role of Marketing
Marketing in business is the process of identifying, creating,
communicating and delivering value to consumers, so that their needs
and wants can be satisfied at a profit.
What elements of marketing would you use to support MAR K E T Sales and Customer Services
Promotions are marketing communications designed to influence
consumer behaviour and spending decisions. They make consumers aware
of a product, its brand name and features, where it can be purchased and
your business? Marketing the price it sells for.
MARKETING MARKETING
What methods of promotions could you use to encourage
customers to buy your product?
G MARKETING
The Protection of Consumers
MAR K E T I N Understanding Consumer Behaviour

Consumers are individuals and organisations that are willing and able to
buy products that will satisfy their needs and wants. However, they only
In their aim to maximise profits some businesses may supply poor quality
goods at high prices.
They sometimes adopt unfair trading practices, such as making false
I N G
become customers once they have purchased products.
T
claims about their products.
Who would your consumers be – and what factors might

influence their behaviour?
MAR K ETo protect consumers from exploitation, many governments have

introduced consumer protection laws to control marketing activities
to ensure they are fair and accurate.
MARKETING
What are the rights of your customers – and how are they
protected?
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The Role of Marketing
MAR K E T I N G Product Packaging and Presentation
MARKETING
Example elements of • Market research Benefits of Packaging: • Information to the customer (some information is
marketing: • Pricing • Instant brand recognition (with hundreds of products on required by law, but other information is provided by the
• Social media marketing grocery shelves, customers search for the familiar colours business)
• Packaging
(SMM) and packaging of their favourite brands) • Protection and preservation of the product (the packaging
• Branding is important for preserving the products inside, and in
MARKETING
• Integrated marketing • Easy distribution (the shape of the package can lend itself
– creating a seamless • Sales Promotion to easy handling in the warehouse, and for packaging some cases extending their shelf life)
I N G
image across all • Advertising into larger quantities for distribution) • Protection of the end user (businesses need to ensure
MAR K E T
customer facing • Distribution a level of child-proofing to prevent children from easily
activities opening unsafe items)
Understanding Consumer Behaviour Sales and Customer Services

Factors influencing consumer behaviour: Examples of types of promotions: Sales Promotions Tools • Point of Sale displays
Price Factors • Advertising: Types of Advertising • Free Samples • Rebates
MARKETING MARKETING
• Product prices • Informative Advertising • Coupons • Bundling
• Prices of Substitutes (substitutes – goods or services • Persuasive Advertising • Premiums / gifts attached • Loss leaders
that satisfy the same or similar consumer need or • Subliminal Advertising • Contests and Sweepstakes Public Relations (PR)
want)
• Loyalty points Personal / Direct Selling
MARKETING
Non-Price Factors
I N G
• Offers and discounts
E T
• Product Quality (consumers define quality in different
MAR K
ways - for example features, durability, conformance
to standards and serviceability) The Protection of Consumers
• Taste (individual preferences or lifestyle choices) Consumers are protected by laws and regulations, consumer • Right to information (right to information about price,
G
organisations and government agencies. quality, ingredients, etc)
I N
• Tradition (can be either cultural customs or individual
MAR K E T
habits) Customer’s rights: • Right to choice (the right to have a choice and not be
• Income • Right to consumer education (the right to be educated forced into a decision)
• Brand Loyalty about their own rights) • Right to be heard (the right for a consumer’s complaints
• Right to safety (the right to protection against hazardous to be heard)
MARKETING
products) • Right to redress (consumers have the right to seek
redress)
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D S U P P LY C
LOGISTICS AND SUPPLY CHAINLO
Turn over for more information and examples of answers to the questions!
GISTICS AN Overcoming Problems in Distribution
IN
SUPPLY CHA
It is therefore important for businesses to develop contingency plans and
D
LOGISTICS AN
Y CHAIN
measures to reduce or avoid the damaging impact any problems with
A N D S U P P L distribution can have on costs, sales and reputation.
LOGISTICS I N
Managing Supply Chains
CHAIN
P P LY C H A
What are potential distribution problems that you might
ICS AND SU
C S A N
Different
PPLYparts,
D SUmaterials, finished goods, services, information and
come across in your business? How would you mitigate
LOGIST
them?
factors of production flow along the supply chain for a product.
Logistics is the process of organising the movement of these
goods from one part of the supply chain to another, to ensure they
The ImpactPPofLYInformation
CHAIN Technology
Y CHAIN
are available for production when they are needed so that the
LogisticsLO ND SU
GISTICSTheAdevelopment
and
S AND SUPPL
product reaches its customer in the right place at the right time. and use of modern information technologies (such as
TIC
LOGISWhat
Supply Chain GPS systems and e-commerce) have transformed logistics and supply
CHAIN changed
I N
logistics are involved in your business?
A
chain management and operations. They have
PPLYfundamentally
D S U P P LY C H C H
LO
business G IS T IC
relationships S A
with N D SUsuppliers
customers, and intermediaries and
A N P LY
have provided organisations with unprecedented opportunities to gain
I S T I C S D S U P
ISTICS AN
competitive advantage over their rivals.
IN
L O G What Information Technology tools could you use in your
logistics and supply chains?
S A N D S U P PLY CHA
GISTIC Transportation IN
LOG
Transportation involves the movement of goods and people S ANtoDanother.
ISToneIClocation
from
SUPPLY CHA
A N D S U P P LY CHAIN
What transport system would your business use? LOGISTICS
A N D S U P P LY CHAIN
OGISTICS Principles of Business
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D S U P P LY C
LO GISTICS AN
Overcoming Problems in Distribution
Potential problems: Potential measures to mitigate problems:
Managing Supply Chains • Delayed shipment • Government intervention
Logistics involves: ND SUPPLY CHA • IN
Ensuring a flow of information for • Spoilage of goods • Communication network
G IS TICS A
LO
• Organising the storage of goods, through logistical management to manage and
N D S UPPLY
• Industrial unrest
CHAIN • Insurance
A
track goods
warehousing and managing the inbound
LOGIS T IC S • Misdirection of goods • Selection of appropriate channel of
and outbound flow of goods
HAIN
PLYtheCstorage
P P LY H A I N
• Establishing a process of distribution,
C • Inadequate warehousing facilities distribution
ICS AND SU
either directly to customer or through
CS AND SUPabout
• Thinking costs,
intermediaries • Lack of proper security measures • Reputable handling services
LOGIST
and ways to minimise them through
processes like Just in Time • Ineffective communication • Proper labelling and documentation
• Insuring Risks in Production, Storage and • Holding large stocks
Distribution INof security companies
CH•AUse
D SUPPLY
Y CHAIN LOGISTICS AN
ISTIC
LOGTransportation S AND SUPPL The Impact of Information Technology
IN
N
CHa A
U P P LY C H A I
Multimodal transport is when two or
H
Methods of transport:
LOGISTICS
Examples of IT in Logistics and Supply SUPP
AN•DWhereas LYgives
GPS location,
D S C
more methods of transport are used to
Y
Chain: Geographic Information Systems (GIS)
A N P L
• Air transport
T I C S S U P
move finished or semi-finished goods and
S D
is a database which has the ability to
I ISTICS AN
• Road transport Global Positioning Systems (GPS)
materials from one location to another, capture, store, analyse and manipulate
O G
• Global Positioning System (GPS) uses
L
through a single provider or carrier who is • Rail transport geographic data, such as street maps
responsible for arranging the methods of satellites that orbit the earth and a
• Marine transport (cruise and cargo) process called ‘triangulation’ in order • It can assist with pre-planning,
transportation.
U P IN
PLY CHA
• Pipelines to tell the user exactly where they are navigation, fleet management within
S A N D S Intermodal transport involves the located businesses, and costs

GISTIC movement of goods from the origin • Digital Delivery
Portnet
CHAIN
Y CHAIN
• GPS in the business field is used to
to their destination using several methods
D SUPPLY L
of transport, when each transport provider LOGISTICS AN S U P P
help reduce costs and add to the level
A N D
• Portnet is a global information system
LOGISTICS
or carrier involved will be contracted of revenues through improvements in and online portal
separately by the producer. efficiency, planning and control • The portal connects port operators and
Geographic Information Systems (GIS) authorities, shipping companies, hauliers,
Y CHAIN
• Geographic Information Systems (GIS) freight forwarders, customs officials and
A N D S U P P L operate differently from GPS other government agencies
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E S S F I N A N C E
B U S I N
BUSINESS FINANCE BUSINESS FIN
ANCE Choosing a Source and Method of Finance
E S S F I N A N C How can entrepreneurs find the money needed to start a new business?
N C E U SIN
How can an established business quickly raise the financial capital it
A B
F I N
needs to take advantage of a time-limited golden opportunity (such as
BUSIN E S S
the purchase of a new store, at a great price, in a fantastic location)?
Financial Institutions and Regulation Businesses need to access a range of finance options, depending on the
particular situation they face.
People, businesses and government organisations in every country
N C E
need somewhere they can hold money safely, and quick and easy
N A
What are the short-term and long-term finance options for
S F I
ways of making payments.
E S
your business?
NESS F I N A N C E B U S I N Businesses that specialise in providing these and other financial

services to individuals and other businesses are called financial
institutions.
What are the financial institutions you might use for

Business
Finance
Keeping Financial Records
Keeping detailed and up-to-date financial records is essential in a
business.
your business?
N E S S F I N A N
Businesses need to monitor:
CE
Managing Personal Finances
A NCE BUS I • How much they earn from the sale of goods or services
BUSINESS FIN
• How much they spend to produce goods and services
Managing your personal finances is important whether you intend
to start up your own business or work as an employee of another • How much they owe to suppliers and providers of finance
organisation after completing your studies. • Whether they are making a profit or a loss
A N C E
There are strong parallels between how individuals or families
F I N AN CE
What bookkeeping systems would you use for your
SINESS BUSINESS FIN

need to manage their incomes and expenditures and how
business?
U
businesses manage their finances.
What do you need to consider when running your What is an income statement, a statement of financial
N A N
position and a cash flow statement, and why are they
F I
personal finances?
BUSINE S S
useful?
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F I N A N C E
BUSINESS BUSINESS FIN
ANCE
Financial Institutions and Regulation
Examples of Financial Institutions: Non-bank Financial Institutions
Choosing a Source and Method of Finance
Examples of Short-term • Instalment credit • Stock market flotation
Commercial Banks Non-bank financial institutions hold no Finance:
F I N A N C
• Indigenous credit
E S S
• Debentures
C E BUSIN
banking licences, but still offer a range
N
• Overdraft
A
• Commercial banks perform four main • Private money lenders • Government loans and
F I N
of services for businesses and individuals
BUSINESS
functions: • Loan from family • Advances from customers grants
which are similar to those offered by banks.
• Providing safe and secure accounts for • Short-term secured loan • Factoring • Crowdfunding
savings and deposits Major non-bank financial institutions
include: • Short-term unsecured • Sale of assets • Venture capital
• Offering loans and credit facilities loan • Angel investor
• Credit Unions Examples of Long-term
C E
• Providing a way of making payments • Retained profits
N
finance: • Hire purchase
N A
• Building Societies
BUSINESS F I
• Offering investment banking services • Trade credit • Issue new shares • Leasing
• Insurance companies
• Promissory note
E
• Micro-lending Agencies
N E S S F I N A N C Managing Personal Finances

Keeping financial records
Bookkeeping Systems Types of financial statements:
When running your personal finances, you Savings and Investments:
• Single entry bookkeeping provides a • An income statement is used to calculate
N C E
need to consider:
N A
• Putting money aside in a bank or
F I
simple record of income and expenses and monitor the profit or loss made by
Budgeting and financial planning:
• Preparing a budget to understand
building society savings account
• Placing money in interest bearing deposit
BUSINE S S
using a manual cash book, journal or a
spreadsheet. It records when money is
a business over each 12-month trading
period. This can be compared with the
ANCE
BUSINESS FIN
the balance between incomings and accounts either coming into the business or going previous period to examine whether
outgoings • Putting money in short-term fixed out of the business profitability has improved or deteriorated
• Managing your expenditure (e.g. finding deposits • Double Entry Bookkeeping is the • A statement of financial position or
peaks and troughs) • Grouping together in a Sou-Sou (an accounting system used to record balance sheet is used to add up and
transactions in ledger accounts. It record the following values at the end of
C E
• Budgeting according to your income informal savings club)
A N
requires every business transaction each trading period.
F I N A NCE
• Saving money for the future when • Investing in company shares
USINESS BUSINESS FIN

to be recorded twice, as a credit to • A statement of cash flow (cash flow
possible • Putting money into bonds and one business ledger account and a refers to transfers of cash in and out of a
debentures corresponding debit to another business over time)
N
• Investing in a mutual fund
S S F I N A
BUSINE
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N E C O N O M
O F G O V E R N THE ROLE OF GOVERNMENT MENT IN A
HE ROLE IN AN ECONOMY
GO VERNMENT IN
A
Y
MGovernment THE ROLE OF
N T IN A N ECONO
VERNM E
A
Government Responsibilities and Policies Assistance for Business
ROLE OF GO Governments perform many different roles in modern mixed economies. A
E R N M E N T I N Government assistance can take many forms. It may be targeted at
G O V
major function is to overcome or correct problems caused by consumers different industrial sectors or types of business activity to support
THE ROLE OF
and businesses that have a negative impact on others, for example: particular aims of government policy.
pollution, waste, exploiting vulnerable employees or those which affect
For example, financial assistance (such as low-cost loans or non-repayable
ONO
education and healthcare.
AN EC
grants) can support capital investments in new technologies, or encourage
What are the responsibilities that governments have The Role of
E R M E N T IN
the installation of new and more productive machinery.
N
GOV
THE ROLE OF
with regards to business, and how might they affect Government What are the common types of support that government
your business?
in an offer to businesses? How might they benefit your business?
Economy
O V ERNMEN T IN AN
Taxation
N ECONOMY E RO L E O F G
TH
N
T IN Afor by
O
NMEN
C
O ERadministrative
E
For many governments, a large share ofVtotal spending is accounted
F G
N
O L E O
A
public T HE R
I N
spending on government authorities, departments and
The Provision of Social Services
E N T
state-owned enterprises. The majority of public expenditure is financed from
V E R N M
tax revenues. Governments are major producers or providers of goods and services.
O F G O
They uses taxes and other public revenues to fund the provision of socially
LE
Direct taxes are collected directly from the income (or wealth) of individuals
and economically desirable goods and services that the private sector is
and businesses. It includes income tax, corporation tax, capital gains tax and
unwilling or unable to supply.
capital transfer tax.
Indirect taxes are on goods and services, and the producers (or suppliers)
A N ECONO MY
What social services are provided by the government?
IN
How might they benefit your business?
of the taxed products are responsible for their payment. It includes custom
VERN M E N T
GO
duties, excise duties, purchase tax, stamp duties and consumption taxes.
What are the purposes of taxation?

THE ROLE OF ERNMENT IN
AN ECONOM
THE R OLE OF GOV
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Macmillan’s Principles of Business for Examinations, Second Edition
MENT IN A
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VERN
ROLE OF GO
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N E C O N O M
O F G O V E R N MENT IN A
HE ROLE
Government Responsibilities and Policies Government Assistance for Business
Examples of responsibilities government has harmful impacts of businesses, such Common types of support for businesses for training costs can be high for businesses)
regarding businesses: as water pollution, air pollution and government:
A
ERNMENT IN
• Research and Information Centres
• State Security (the government has to contamination by hazardous chemicals • Lending Capital (government may
RO(access GOVinformation
LE OtoFresearch,
provide state security to ensure social
A N ECONO
and general waste)
MY THE
provide low-cost loans to help business and expertise can be invaluable to
N T IN
E
A
and economic stability. This includes • Maintenance of a Safe Environment owners raise financial capital) businesses. Different sectors have
VERNM
ROLE OF GO
N T I N
national defence, diplomacy and internal for Investors (through their legislation, institutions that support their specific
E
• Technical Assistance (this refers to a
N M
security) policies and spending power, needs)
E R
range of support given to businesses,
O V
governments can provide protection,
G
• Protection and General Welfare (for including: advice, expertise, mentoring, • Subsidies and Grants (grants and
OF
incentives and opportunities for
THE ROLE
businesses to be productive, reliable training and financial support) government subsidies are ways in which
energy, water and infrastructure are businesses to establish themselves and the government might help to financially
thrive) • Training and Human Resource
crucial, as well as adequate welfare for support businesses)
ONO
Development (governments may often
AN EC
workers) • Regulation of Business Activity
IN
assist with training, as recruitment and
(government imposes rules called
E R N M E N T
GOV
• Employment Law (employment law is
THE ROLE OTheFProvision of Social Services

intended to maintain a happy, safe and regulations on businesses to affect how
productive workforce and it protects the they are run)
company from litigation from staff)
T IN AN
Examples of social services provided by the • Education (employment prospects
• Protection of the Environment
ONOMY
government:
L E O F G O V ERNMEN increase for educated workers. By
E RO
(government creates laws to protect contrast, those without basic literacy
ENT IN AN EC TH
• Healthcare (when people are fit and
O N
the environment from the potentially
GOVERNM
C
skills may be limited to manual jobs)
E
healthy they are generally more
THE ROLE OF
N A N
productive) • Roads and Transportation (safe, efficient
E N T I
Taxation roads and transportation networks are
M
• National Insurance (national insurance
E R N
essential to businesses)
V
is a system of contributions paid by
O
Purposes of taxation: • To lower unemployment by encouraging
F G
employers and employees to meet the
O
people to buy local produce, so
LE
• To curb inflation by reducing the rate at cost of pensions and other state benefits,
which total demand or spending is rising encouraging linkages among sectors
including: disability, unemployment and
in the economy • To achieve greater equality in the maternity benefits)
distribution of wealth and income by
MY
• To remove competition from local goods
N ECONO
in order to protect infant or fledgling taxing higher income earners to fund
E N T
the provision of social services for the
M IN A
VERN
industries by taxing imports at high rates
GO
majority of citizens
THE ROLE OF AN ECONOM

• To discourage the consumption and
production of harmful products
ERNMENT IN
THE R OLE OF GOV
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VER NMEN
Principles of Business for CSEC Examinations, Second Edition.
ROLE OF GO
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E G L OBAL B USINES
OGY A N D T H
TECHNOAND L THE GLOBAL
TECHNOLOGY
N V I R O N M E NT
The Impact of Regional and Global Economic
BUSINESS ENVIRONMENT
A L B U S I N E S SE Institutions and Systems
LOB
Y AND THE G
A number of major economic institutions help to support and promote
E
SS ENVIRONM
economic growth and development in Caribbean economies; they also
AL BUand SIN E
facilitate increased
Y AND TH GLOBcooperation
Eeconomic international trade.
Business Technology TECHNOLOG
D T H E G L O
These include regional organisations (e.g. Caribbean Community,
OLOGY AN
Business technology refers to inventions and discoveries created through Caribbean Single Market and Economy, and Caribbean Development
TECHN
applying knowledge in various fields (science, design, engineering, Bank) and global organisations (e.g. the World Bank, International Bank
information, management) for business goals. Business technology for Reconstruction and Development, the International Monetary Fund,
VIR ONMand EN T Technology
INE S ENboth
results in change whichSaffects businesses society. World Trade).
GLOBAL BUS and the Global
NMENT
Information communication technology (ICT) refers to all types of What are the key regional and global organisations in the
Business
ENVIRO
technology (inventions) such as devices, networking, applications and
systems dedicated to the use of information and communication of
L B U S IN E S S
Environment
Caribbean?
A ND THE G information digitally or electronically. LOBA

N O L O G Y
CH business? How might they affect your Economic Problems in the
L
What is the role and what are the types of ICT used in
business?
H E G L O B A Caribbean
OGY AND T
Throughout the Caribbean there are common
TECHNOL
economic problems, such as unemployment, migration
Living Standards and Economic Development and a growing debt burden. Some issues are specific
to a particular country due to its economic climate,
Standard of living is a measure of wealth, as well as the basic needs and material comfort that a citizen circumstances and experiences.
T
has the ability to buy and to be able to enjoy.
USINESS E NVIRONMENWhat are the major economic problems
D T H E G L OB ALtoBenjoy
OLOGY
Quality of life refers to the general well-being of individuals A
andNcommunities and their ability in the Caribbean? How could they affect
ECHN
good physical and mental health,Thousing, S ENV
BAL BUSINES
employment, education and security. your business?
THE GLO
What are the measures you could use to assess standard of living and quality of life? TECHN OLOGY AND
NMENT
How might these affect your business or your employees?
L B U S IN E S S ENVIRO
EG LOBA Principles of Business
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E G L OBAL B USINES
OGY A N D T H
TECHNOL E N T
Business Technology
S SE N V I R O N M The Impact of Regional and Global Economic Institutions and Systems
N E
Main roles of ICT in Examples of Types of ICT • Design of products tools Key regional and global organisations Global:
business: used in business:
LOB A L B U S I
• Manufacture of products helping to support and promote economic • The World Bank
Y AND THE G
• Planning, organising, tools development and growth in Caribbean
• International Bank for Reconstruction NME
controlling, and decision- • Market research tools
countries:
B BUSINE(IBRD)
andLDevelopment
A SS ENVIRO
storage
making tools, .e.g. Regional:
D T H E G L O
NOLOGY AN
O
• Promotion tools • International Monetary Fund (IMF)
TECH
G L
Management Information
E
• CARICOM
• Sales tools
D T H • World Trade Organization (WTO)
OLOGY AN
receipt retrieval
System – MIS
Digital • CARICOM Single Market Economy
• Security tools • Communication tools • Organization of American States (OAS)
TECHN
information
(CSME)
• Financial reports, bills • Training tools
IRON
ENVpayment MENT
tools
• Caribbean Development Bank (CDB)
INESS
transmission editing
• Recruitment tools
GLOBAL BUS • Bookkeeping tools
• Stock control tools
N V IR NT
NMEMigration
Economic Problems in the Caribbean
OCaribbean:
IN E S S E
LOBAL BUS Unemployment
Major Economic Problems in the
O G Y A
Living Standards and Economic
NDof T HE G
Development
• Push factors encourage people to leave
N O L
CH living in different countries:
• Structural Unemployment occurs when an area. These include: discrimination,
L
Measures used to compare standard Measures used to compare quality of life in unemployment, low income, limited
B A
there is an incompatibility between the
G L O
different countries: opportunities for personal growth and
H E
skills demanded by employers and the
OGY AND T
• Consumption – generally divided • Extent of security enjoyed / level of crime skills job seekers possess crime
TECHNOL
into 10 areas: food, clothing and • Access to high-quality healthcare • Cyclical unemployment occurs whenever • Pull factors entice people to move to a
footwear, housing, heating and energy, there is a decline in economic activity, particular area. These include: freedom,
health, transport, house furniture and • Availability of educational facilities jobs, high income, opportunities for
such as in a slump in the business cycle
appliances, communication, culture and • Access to recreational facilities personal growth and peace
• Frictional unemployment occurs when
schooling, and entertainment • Diet and nutrition people are enteringV ONMfor
IRworkforce
the EN theT Debt Burden
• Disposable income SINtime,
BUfirst ENemployees
ESorS when
THE GLOBAL
• Life expectancy are moving • Debt burden or the national or public
• National Ownership of Capital L O G Y A N D from one job to another debt arises when government finances
TECHNO • Infant mortality rate
INESS
USborrowing
its public expenditure through ENV
HE GLOBAL B
Equipment Population Density
• Access to electricity
• Access to Modern Technology O G Y A N D T
• Access to clean water TECH
• Factors influencingNOL
population density in
NMENT
• Levels of Investment in Research and the Caribbean are: flat land, steep land,
ENVIRO
Technology industry, closeness to markets
L B U S IN E S S
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FLASH CARDS FOR MACMILLAN’S Each subtopic on the flash

card poses a question,

ATU T Business Func dependent on

Principles of Business Principles of Business nt legal forms. the moral respon

Principles of Business for CSEC® Examinations

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THE NATURE OF BUSINESS

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THE NATURE OF BUSINESS

THE NATURE OF BUSINESS

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THE NATURE OF BUSINESSabout the topic, make sure

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Unit 1: The Nature of Business,

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V I R O N M E N T Conflict may be described as a clash of interests, ideas

L O R G A N I S ATIO management that would exist in your business.

ATor IO ALby which a

for CSEC® Examinations

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Unit 2: The Internal Organisational Environment,