These slides unpack the important content that learners in grade 10 business studies need to remember for Terms 1 and 2.

1. BUSINESS STUDIES
GRADE 10 (revision)
BY MR AP MNCWANGO

2. CONTACTS
EMAIL:AndileMncwango17@gmail.com
CELL: 0658520221
:Andy_The_Impact

3. LESSON OUTCOMES
1. The learner should able to demonstrate knowledge and analyse the impact of
changing and challenging environments on business practice in all sectors.

4. Proposed content
•Business environments (Micro, Market and Macro)
•Analysing and describing the features of the business environment and
their interrelationship.
•Exploring contemporary socio-economic issues (e.g. poverty,
HIV/AIDS, unemployment, gambling, skills levy, violence, crime, riots,
inclusivity) and analysing their impact on business.
•Social responsibility (CSR and CSI)
•Forms of ownerships(Sole Trader, Partnership, Close cooperation, etc)

5. BUSINESS ENVIRONMENTS
WE HAVE THREE BUSINESS
ENVIRONMENTS NAMELY;
1.MICRO ENVIRONMENT
2.MACRO ENVIRONMENT
3.MARKET ENVIRONMENT2

6. MICRO ENVIROMNMENT.
 The micro environment refers to the internal factors that will influence the
performance of the business.
 These include aspects such as:
-The different business functions;
- The resources available to the business; and
The business policy.
All the' elements of the micro environment are directly controlled by management

7. BUSINESS FUNCTIONS:
There are eight main functions in a business. The entrepreneur must know how to manage
all aspects of the
business, but if he does not know how to do everything himself, he can employ other
people to help in the
business. The functions in the business are as follows:
 Purchasing
 Production
 Personnel/Human resources (HR)
 Administration
 Marketing
 Public relations (PR)
 Financial
 General management

8. Resources:
 human resources (employees),
 financial resources (capital) or
physical resources such as raw material or equipment used in the business in order to
produce goods
and services.
ORGANISATIONAL CULTURE
 The organisational culture can be described as the values and beliefs that are
shared within the business.
 People's attitudes and behaviour will be guided by the culture in the
organisation.

9.  If the culture is positive, cooperation and achievement will be the
mutual goal, while a negative culture could lead to conflict and
employees undermining one another.
STRUCTURE
 The organisational structure refers to the way in which labour,
authority, responsibility and other resources are organised to ensure
all components will work together to form a system in which
business objectives can be met

11. ANALYSE THE CARTOON AND DESCRIBE WHAT IS HAPPENING

12. MARKET ENVIRONMENT.
The market environment consists of elements immediately outside the business; therefore management
has very little control over the market environment.
IT CONSIST OF ;
 Consumer
 Supplier
 Competitors
 Intermediaries
 Alliances
 Regulators
 NGO’S

13. MARKET ENVIRONMENTS.
 The market environment will consist of SUPPLIERS selling the required
quality and quantity products to the business at a fair price at the time when
they are needed.
 These products will then be delivered to the place where they are needed.
Alternatively the supplier does not have to sell a product, but can also deliver a
service to the business.
 CONSUMERS are the purchaser of a good or service in retail.
Or an end user, and not necessarily a purchaser, in the distribution chain of a good
or service.

14.  COMPETITOR are other businesses that sell the same, similar or substitute
products to the same target market. It is not only existing competitors that will
influence the business's actions, but also potential new entrants to the market. The
higher the level of competition, the better the quality of product that has to be
delivered to the consumer and the lower the business has to keep the price in order
to make it attractive to the customer.
 Abusiness may decide to form a STRATEGIC ALLIANCE with another business
in order to potentially expand the target market. An example of such an alliance is the
agreement between Edcon and Medicross that patients may use their Edgars cards to
pay for doctors' consultations at Medicross. This ensures that people who do not have
cash or medical aid facilities to pay for the doctor can use their Edgars credit facility to
obtain the services they need. This enlarges the potential customer base for sales
transactions for both Medicross and Edgars

15. Agents or brokers act as INTERMEDIARIES between the business and the
consumer and therefore they also form part of the market environment. In fact all
members of the distribution channel can be seen as intermediaries between the
manufacturer and the consumer. The wholesaler acts as a link between the producer
and retailer, while the retailer interacts with the consumer as the last link in the
distribution channel
Non-Government Organisations (NGOs) are usually non-profit organisations
that focus on environmental, social or educational issues. One such organisation is
Junior Achievement (JA) which uses sponsorships from businesses to provide
entrepreneurial education to both the youth and adults.

17. MACRO ENVIRONMENT
Refers to the external factors that have a direct impact on how the business operates and
its success towards achieving its Goals.
P - Political environment E - Economics
S - Social factors
T - Technology
L - Legislation
E - Environmental factors
Extended PESTLE or P*E*STLE
P - Physical
E - Ethical
NO CONTROL

20.  Socio-economic issues form part of the macro- or external environment, and especially
in the South African context they influence the day-to-day management of the business.
It is important to be aware of these issues and how they affect the business.
 These are issues that affect the economy, business and society in a negative way
SOCIO-ECONOMIC ISSUES AND SOCIAL RESPONSIBILITY
POVERTY CRIME GAMBLING HIV & AIDS

21. Social responsibility (CSR and CSI)
• Means that individuals and companies have a duty to act in the best interests of their environment and society.
• This can be done through the community projects in which business establish to help improve the standard of
living. It focuses on the following:

22. Forms of ownership

23. Factors affecting the choice
⚫ Tax considerations
⚫ Liability exposure
⚫ Start-up and future capital requirements
⚫ Control
⚫ Managerial ability
⚫ Businessgoals
⚫ Management succession plans
⚫ Cost of formation

24. Major forms of ownership
⚫ Sole Proprietorship
⚫ Partnership
⚫ Corporation
⚫ Limited Liability Company
⚫ Private Company
⚫ Public Company
⚫ State-owned Company
⚫ Non-Govenmental Organization
⚫ Cooperatives

25. Entrepreneurship
⚫Entrepreneur: A person who forms and operates a new
business either by himself or herself or with others
⚫Sole proprietorship: A form of business in which there is a
single owner managed by one person.
⚫The business is not a separate legal entity
⚫Sole proprietor: The owner of a sole proprietorship

26. Advantages and Disadvantages
ADVANTAGES
⚫ Simple to create
⚫ Least costly form to begin
⚫ Profit incentive
⚫ Total decision-making authority
⚫ No special legal restrictions
⚫ Easy to discontinue
DISADVANATGES
⚫ Unlimited personal liability
⚫ Limited skills and capabilities
⚫ Feelingsof isolation
⚫ Limited access to capital
⚫ Lack of continuity of the business

27. Partnership
⚫ An association of two or more people who co-own a business for the purpose of making a
profit.
⚫ Always wise to createa partnership agreement.
⚫ The best partnerships are built on trust and respect

28. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
⚫ Easy to establish
⚫ Complementary skills of partners
⚫ Division of profits
⚫ Larger pool of capital
⚫ Ability to attract limited partners
DISADVANTAGES
⚫ Unlimited liability of at least one partner
⚫ Capital accumulation
⚫ Difficulty in disposing of partnership interest
without dissolving the partnership
⚫ Lack of continuity
⚫ Potential for personality and authority conflicts
⚫ Partners bound by law of agency

29. Corporation
Types of corporations:
⚫ Publicly held – a corporation that has a large numberof shareholders and whose stock usually
is traded on one of the large stock exchanges.
⚫ Closely held – a corporation in which shares are controlled by a relatively small number of
people, often family members, relatives, or friends.

30. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
⚫ Limited liability of stockholders
⚫ Ability to attract capital
⚫ Ability to continue indefinitely
⚫ Transferable ownership
DISADVANTAGES
⚫ Costand timeof incorporation process
⚫ Double taxation
⚫ Potential fordiminished managerial incentives
⚫ Legal requirements and regulatory “red tape”
⚫ Potential loss of control by founder(s)

31. Private company (Pty) Ltd
• It needs a minimum of one shareholder and there is no limit on the number of shareholders
• Requires one or more directors and one or more shareholders.
• The company name ends with letters (PTY) Ltd.
• Register with the registrar of companies by drawing up Memorandum of Incorporation.
• Investors put capital in to earn profit from shares.

32. ADVANATAGES AND DISADVANTAGES
ADVANTAGES
 A company has continuity of existence.
 Managed at least by one competent highly skilled
director.
 Information in a private company is only
available to shareholders.
 Not required to file annual financial statements
with the commission.
 The company has unlimited number of
shareholders and its life span is perpetual.
DISADVANTAGES
 Difficult and expensive to establish a private
company compared to Close Corporations and
Sole Proprietorship
 Large management structures can result in
decision-making taking time.
 The private company is not allowed to sell shares
to the public.
 Directors may sometimes act in their own
interest, not in the company's best interest.
 Annual financial statements must be reviewed by
a qualified person, which is an extra expense to
the company

33. Public company Ltd.
• A public company is a company that is registered to offer its stock/shares to the general
public. This is mostly done through the Johannesburg Securities/Stock Exchange (JSE).
 A minimum of one person is required to start a public company.
 The company name ends with letters Ltd
 Shareholders have a limited liability.
 A prospectus is issued to the public to raise capital.

34. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
 The business has its own legal identity and can
own assets/property.
 Managed by at least one competent highly skilled
director.
 Directors bring creative ideas which encourage
innovation/high productivity
 Shareholders can sell/transfer their shares freely.
 Attracts small investors as shares can be
transferred freely/ easily
 Strict regulatory requirements protect
shareholders.
DISADVANTAGES
 Difficult and expensive to establish as the
company is subjected to many legal requirements
 Must disclose all financial information which can
be used by its competitors
 Directors may not be motivated to work very
hard because share-holders decide on the
directors' remuneration
 Directors may not have a direct interest in the
company, which can hamper growth and profit
maximisation
 Directors' fees increase the company's expenses
which reduces net profit.

35. State owned company (SOC)
• A state owned company has the government as its major shareholder and falls under the
department of Public Enterprise.
 The name ends with letters SOC.
 SOC is listed as a public company.
 It is owned by the government and operated for profit.
 One or more persons may incorporate and there is no limit on number of shareholders.
 Requires three or more directors and one or more shareholders.
 Register with the Registrar of Companies by drawing up Memorandum of Incorporation.

36. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
 Shareholders have limited liability.
 Profits may be used to finance other state
departments.
 Offer essential services which may not be offered
by the private sector
 Wasteful duplication of services is eliminated.
 Jobs are created for all skills levels.
 Generates income to finance social programmes.
 Prices are kept reasonable/Create sound
competition with the private sector to make
services affordable to more citizens.
DISADVANTAGES
 Inefficiency due to the size of the business.
 Financial statements must be audited.
 Losses must be met by the tax payer.
 Government can lose money through the
business.
 Shares are not freely tradable making it difficult
to raise capital.
 A lack of incentive for employees to perform if
there is no absence of other motivator such as
productivity bonuses.
 A lack of incentive for employees to perform if
there is no share in the profit

37. NON-PROFIT COMPANY
• A non-profit company/NPO is not formed with intent to make a profit, but established for
public benefit.
 The main aim is to provide service and not to make a profit.
 They are funded by donations and foreign funding.
 The name of the company must end in NPC.
 All profits must be used for the primary objective of the non-profit company.
 It must prepare the Memorandum of Incorporation

38. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
 Profits are used solely for the primary objective of
the organisation.
 They provide social services to various
communities.
 Donors receive tax deductions.
 The liability of the members is limited
 Has a legal personality and continuity of
existence.
 Can receive grants grants/aid
DISADVANTAGES
 Need professional assistance to set up this
organisation
 Does not generate enough capital to cover their
expenses.
 Donations may not always be enough to finance
the company’s expenses.
 Assets are not distributed to the members upon
closing down.
 Creating a non-profit company takes
time/effort/money.
 Obtaining grants can be a slow and tiring process

39. CO-OPERATIVES
• A cooperative is a traditional way of a group of interested parties getting together and
sharing resources/infrastructures and costs to achieve a better outcome.
 Minimum of five members is required to start a cooperative.
 The word ‘Cooperative Limited’ must appear at the end of its name.
 They are motivated by service rather than profit.
 They are managed by a minimum of three directors.
 Decisions are taken democratically

40. ADVANATAGES AND DISADVANTAGES
ADVANTAGES
 Access to resources and funding.
 Decision making is by a group
 Members have limited liability
 The decisions are democratic and fair
 Co-operatives have continuity of existence
 Profits are shared equally amongst members
DISADVANTAGES
 Difficult to grow a co-operative.
 Shares are not freely transferable
 Very few promotion positions for staff.
 Decisions are often difficult to reach and time
consuming.
 It can be difficult to get a loan because their main
objective is not always to make a profit.