People in Business Chapter 1 JCSOC Entrepreneurs Investors

People in Business Chapter 1 JCSOC

Entrepreneurs Investors Employer Supplier Stakeholders In Business Producer Employee Service Provider Consumer Government JCSOC

Commercial Business • Is a profit making business. • Eg. Dunnes Stores. JCSOC

Non Commercial Business • Is a non profit making organisation. • Eg. Charities, Barnardos. • Eg. State Agency, Fás. JCSOC

Stakeholders • These are the people that are affected by business. • These include: Entrepreneurs, investors, employees, producer, consumer, service provider , interest groups and the government. JCSOC

Entreprenuer • This is a person who spots a gap in the market and takes the initiative to set up a business. • The entrepreneur takes a financial risk and a personal risk. • An example of an entrepreneur is Bill gates. JCSOC

Investor • Are people who provide funding for a business. • They expect a return on their money. • The higher the risk the higher the return expected. • Eg. shareholders, banks, gov…. JCSOC

Types of Investors Type Security Reward Bank Assets Interest Shareholder Part ownership Dividend Government Advisors Jobs JCSOC

Manager • A managers job is to run the business on a day to day basis and make sure that is achieves its aims. • The manager uses resources such as people, money and equipment to make the business a success. • A manager must lead, communicate and motivate employees. • An example of a manager is Micheal O Leary. JCSOC

Producer eg. Glanbia • • Turns raw materials into finished products. Eg. Glanbia turns milk into yoghurt. They enter into contracts with suppliers. They try to make a profit by keeping costs low and prices competitive. JCSOC

Supplier eg. Dairy Farmer • Provides raw materials needed for producers. • They compete for contracts. • They offer inducements • -discounts -credit -promp delivery -free delivery JCSOC

Service Providers • Are people or organisation that provide support services to the public or businesses. • Financial Institution: Loans, current a/c……. • Insurance Co. : Protection against losses……. . • Solicitor: Legal advice… • Transport: Delivery of goods in and out. . JCSOC

Employer • Is a person or organisation who hires people to work in return for a wage. • They have responsibilities such as: • Provide suitable working conditions. • Pay a fair wage and deduct PAYE & PRSI. • The costs of being an employer include, wages, PRSI, insurance & facilities. JCSOC

Employee • Employees are the people recruited by the employer to run the business. • They get a reward called a wage or salary. • Employees have rights such as minumum wage and safe and healthy working conditions. • Employees have responsibilities such as respecting authority and being punctual. JCSOC

Government • Changes in government laws or taxes can affect how a business is run and the profits it earns. • The government uses the revenue collected from tax to help run the country. • If a business is selling more products or making more profit this means an increase in Government revenue. JCSOC

Interest Groups • Are groups that wish to influence the political decision making process but are not part of the accepted political structure of a country. • They are a group of people who come together to campaign for a common goal. • They put pressure on the government or EU to accept their position on an issue. • Eg Trade unions, IFA, Greenpeace. JCSOC

Examples of interest groups ICTU: Irish Congress of Trade Unions IBEC: Irish Business & Employers Confederation CAI: Consumer Association of Ireland ICMSA: Irish Creamery Milk Suppliers Association • IFA: Irish Farmers Association • • JCSOC

Co- operative relationship • To co operate means to act in a manner which is of mutual benefit to all concerned. • They both have the same objective so they work together to achieve their goals. • This produces better results. JCSOC

Cooperation within a business • Employees work in teams • Employers & employees agree on wages and work conditions. • Producers listen to feedback from their customers. • Investors give funding to entrepreneurs who keep them informed and rewarded. JCSOC

Competitive relationship • This means that one party wants to be more successful than the other. • Two employees fighting for promotion. • Employers and employees have a competitive relationship when the employer pays low wages and provides poor working conditions. • Ryanair and air lingus have a competitive relationship as they both want a larger share of the market. JCSOC

Competition within business • Employees compete with other employees for promotion. • This may increase productivity but • can also cause conflict & stress. JCSOC

Dependent Relationship • Some stakeholders need each other to be successful. • They cannot achieve their goals on their own. • They rely on the other party to provide them with what they need. • Eg entreprenuer is dependant on the investor. • Producers are dependant on the consumer. JCSOC

Dynamic Relationship • Relationships between stakeholders in business are constantly changing. • Sometimes they are cooperative. • Sometimes they are competitive. • Eg. Ford and mazda are rivals however in 1990 they formed a strategic alliance to produce a new car. JCSOC

Law of contract • A contract is a legally binding agreement enforceable by law. • A judge can order a person to pay compensation if they break the agreement. • There are 8 elements to a valid contract. JCSOC

Elements of a valid contract • • Offer Acceptance Consideration Intention to contract Capacity to contract Consent to contract Legality of form Legality of purpose. JCSOC

Elements of a valid contract • Offer - An offer is make when one person asks another to enter into a deal. • This can be done by gesture, in writing or by speaking. • An invitation to treat is an invitation to make an offer. A price is an example of an invitation to treat. JCSOC

Acceptance • This can be made by gesture, in writing or by speaking. • It must be made within a reasonable time or the offer will lapse. • The person must accept all terms to of the deal. • Making a counter offer is an automatic rejection of the offer. JCSOC

Consideration • Each party to the contract must give something of value to the other party. • The consideration is usually money or it must be real and valuable. • Both sides must get something out of value. JCSOC

Intention to contract • This means that both parties to the agreement must mean it to be a legally binding agreement. • All business agreements are intended to be legally binding. • Private and social arrangements are not legally binding. JCSOC

Capacity to contract • No person must ever be forced into making a contract. • The following people do not have the legal right to enter into a contract: - people under 18 - someone that is drunk, on drugs or insane. - Diplomats as they have diplomatic immunity. - company directors when they do something outside their authority known as acting ultra vires. JCSOC

Consent to contract • No person should ever be forced into making a contract. • You must enter the contract voluntarily otherwise there is no contract. JCSOC

Legality of form • This refers to the manner in which the contract is made. • Hire purchase agreements, loans, mortgages etc must be in writing. JCSOC

Legality of purpose • This means that legally binding contracts can only be for legal transactions. • Agreements to commit a crime will not be held up in court. JCSOC

How is a contract terminated? • By Performance – when both parties to the contract have carried out their side of the agreement. Eg. A band is hired to play at a wedding. They band play at the wedding and the bride and groom pay them the money. • By Breach -If one of the parties does not perform his/her side of the bargain/contractual obligation i. e. does not honour the promises made, the contract is said to have been repudiated. Example: A condition of the contract states that the furniture is to be black leather but when its delivered its red this is a breach of the contract. • By Frustration -An unforeseen event prevents the contract from being completed. Something happens which makes it impossible to complete the contract. Example: The death or bankruptcy of one of the parties to the contract. • By Agreement -The parties to the contract may agree to end/cancel a contract by mutual consent whether or not the purpose of the contract has been achieved. Example: A contract of employment may be ended by agreement if it includes a clause stating the contract can be terminated if one month’s notice is given. JCSOC

Remedies for breach of contract • Sue for damages – A judge can reward compensation to the innocent party. Eg if a singer cancels a concert they would have to pay compensation to the promoter. • Specific Performance – A judge orders both sides of the contract to carry out the contract eg. The singer must go through with the concert. • Rescind the contract – the judge orders that the contract be cancelled. Eg. The concert does not go ahead. JCSOC