This document provides an overview of business concepts including the private, public, and voluntary sectors; business functions such as operations, people, information, research and development, and finance; advantages and disadvantages of large organizations and small-to-medium enterprises; changes in local, national, and global employment patterns; and the relationships between supply and demand, price and profit, and markets and competition. Examples are given for each topic to illustrate key points.

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The aim of this unit is to help the learner understand the business environment and how it
impacts on opportunities for learning and work.
1.1 Define the private sector and give examples of types of private sector businesses
Private sectors are run by individuals or organisations not linked to government bodies. This
means they are not funded by the government and they have to create profit as a form of
funding.
An example of Private sector business would be Toolkit Websites. Toolkit Websites is not
owned by the government, the company is own by the founder Marcus Green.

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1.2 Define the public sector and give examples of public sector organisations
A public sector business would be any company that is funded by the government. For
example, 3aaa is an apprenticeship agency funded by the government. Another example
would be a building company that do road maintenance on the motorways and roads in the
UK. There will all be government funded.

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1.3 Define the voluntary sector and give examples of voluntary sector organisations
A voluntary sector is a business that doesn’t exist to make a profit. For example, NSPCC is a
charity that work towards the safety and wellbeing of children. They put all their money in to
advertisements and rehoming children that are in danger at home. They do not have a profit
margin or yearly turnover, all their money goes into the cause in one way or another.

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1.4 Explain the possible advantages and disadvantages of working in one of the following
sectors: private, public or voluntary
Working for a private sector allows you more room to move around from one position to
another. You have more freedom in your title and you are not bound to a specific role as
much as you are in a public sector job role. It is also easier to get a raise from a private
sector as you do not need to go through the government. Salary can be negotiated in a
private sector where as Public sectors tend to work on a band system and it is much more
difficult to get a raise. The ability to get promoted faster and work your way up in a business
is much easier in a Private sector, although it is not impossible in a public sector, it is
definitely much harder.
A con of working in a private sector would be is the lack of benefits. Some companies may
certainly offer great insurance and retirement packages, they are often not on the same level
as those in the public sector. It can also be harder to get into a Private sector job without
having a degree. Sometimes you may have to start as an Intern or as an apprentice to build
a relationship with your employer to be made a full time employee.
A pro of working in a public sector would be the stability that comes with a job like this. For
example, if you are working for the NHS, it is much harder to be sacked than it is in a Private
sector.
However, a con of working for a public sector would be that they are mostly associated with
the lower salaries. On average, the salaries offered in the public sector are not as high as
those offered in the private sector. Also, there are many entry-level positions available, but it
can be more difficult to work your way up the corporate ladder.
Voluntary sector work can expose you to a number of new experiences. Local charity
jobs can give you a better view into the needs of people in your area, while working for a
larger charity can lead to traveling internationally and once in a life time experiences.
Voluntary sector work takes up a lot of time, which can be difficult when you are not getting
paid, even though the work can be rewarding.

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2 Understand how businesses function
2.1 Describe the following business functions:
• Operations
Having a detail operation allows for a company to run smoothly and effectively to increase
sales and spend the right money in the right places to make the whole process cost effective.
• People
Without employees, a company will struggle to manage all aspects of the business such as
admin and actually provided the service etc.
• Information
Without information, the customer won’t know what they are paying for which will mean that
the consumer will go to a competitor that is much more informative about the service/product
so the customer knows exactly what they are paying for.
• Research and development
Without initial research, the company will not know what market to target and what audience
within that market they are looking to target. They will not know what their competition is or
how costly their product or service will be.
• Finance
Without financial support, a company won’t have the money to buy the resources need to
provide a service/company or market themselves in anyway.

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2.2 Compare the possible advantages and disadvantages of working for a national
organisation and a Small and Medium-sized Enterprise (SME)
The pros of working for a large company would be the stability of the job. You will be
assigned to do one specific job and you will carry out that specific job while everyone else
has their own specific job. Larger companies, in general, are better about providing benefits
like retirement plans and more holiday a year.
Whereas a smaller company may not be able to afford to give employees these benefits, but
having a small work force allows for stronger bonds to be made and staff can be treated
better. For example, if you are not happy without something in the office, you will know
exactly who to go to as there is only one manager, whereas, if you are working for a huge
company with offices all over the UK you may not know where to go if you are having an
issue want something to change to make office life better for you and your colleagues.

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3.1 Outline some of the changes in patterns of employment locally
With employment law and equal pay legislation coming into place over the last 25 years,
women are being encouraged to work and not be punished for raising children.
Employers offering flexible working practices or child care facilities at the workplace have
also helped to make it easier for women with children to continue working.
Another change in recent years has been rate of pay. As recent as this year, Apprenticeship
wage has risen from £2.74 to £3.30 and hour. This is making apprenticeships look more
appealing as the majority or 16 – 17 year olds that are looking at apprenticeships, tend to
say no due to the low pay as they want to start earning a decent wage from the start, not
taking into consideration that you are still in education.

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3.2 Outline some of the changes in patterns of employment nationally
The rise in students going to higher education after school has also resulted in a large
temporary workforce available for employers such as supermarkets and restaurants.
A dramatic increase in female part-time workers has again appeared mainly due to more
women being in the workplace, but only work part-time due to child care.

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3.3 Outline some of the changes in patterns of employment in Europe and globally
In 2014, the employment rate for 15-64 year olds in Europe was 64.9%. In 2008, the rate
peaked at 65.7%.

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3.4 Describe how changing patterns of employment may affect his/her choices for learning
or work
With employment numbers in Europe falling overall, it seems that this generation are opting
to for higher education in order to gain more qualifications, such as Masters and Honours
degrees instead of getting straight into the work place for experience, etc. University seems
to be the trend now as students feel that these qualifications will increase their chances of
getting a job in the future over experience.

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4.1 Explain the relationship between supply and demand in the business environment
Supply and demand is the amount of a commodity, product, or service available and the
desire of buyers for it, considered as factors regulating its price. If demand increases then
supply increases too, showing a positive growth of a business. However, if the supply
increases but the demand decreases then the product will become more valued and rarer
making the price higher.

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4.2 Describe the relationship between price and profit
Revenue is the amount of money a company receives from all sales made by the company. The
profit is the amount of money after the expenses have been taken off, such as Gas and electric
bills, employee payment, accommodation and the company’s marketing scheme.

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4.3 Identify the connections between markets and competition
A marketisa groupof consumersthatwouldbythe product/service youare providing.Competition
iswhenanothercompanyistryingto sell the same product/serviceasyouand tryingto take your
business.Forexample,McDonaldsandBurgerbothsell verysimilarproductsbutare verydifferent
companieswhenitcomestobrand identityandeventhe pricingof products.