Chapter 1: People In Business

Question 1

People In Business

Answer 1

• Entrepreneurs
• Service Provider
• Producer
• Supplier
• Government
• Investor
• Employee
• Employer
• Consumer

Question 2

Entrepreneurs

Answer 2

An entrepreneur is a person who spots a gap in the market, takes initiative to set up a business and takes the risk involved with setting up in business

Question 3

Service Provider

Answer 3

People or organisations that provide support services to the business

Examples:

• Financial institutions provide accounts, loans, etc.
• Insurance companies provide insurance cover
• Solicitor provides legal advice
• Electricity companies provide the business with power

Question 4

Producers

Answer 4

• Turn raw materials into finished products
• Enter into contracts with suppliers
• Try to make a profit by keeping costs low and prices competitive

Example – Glanbia turns milk into yoghurt and cheese

Question 5

Suppliers

Answer 5

• Provides the raw materials required by producers
• Compete with other suppliers for contracts by offering inducements, e.g. discounts, credit, prompt delivery or free delivery

Example – dairy farmer

Question 6

Government

Answer 6

Can effect businesses by the decisions they make, e.g. laws, taxes, etc.

Question 7

Investors

Answer 7

• Investors provide finance or funding for a business
• In exchange, they expect a return on their money
• The greater the risk they take, the greater the return the expect
• Examples of investors include shareholders, banks, venture capitalists , the Government

Question 8

Employees

Answer 8

Make or sell the goods and services for the business in exchange for payment of a wage or a salary

Question 9

Employers

Answer 9

Hire employees to perform various tasks

Question 10

Consumer

Answer 10

A consumer is a person who buys goods and services for their own use

Question 11

Interest Groups

Answer 11

• Interest groups represent the interests, views or goals of the various stakeholders
• They achieve results by applying pressure or lobbying decision makers

Example:

• IBEC – Irish Business and Employers Confederation
• ICTU – Irish Congress of Trade Unions
• CAI – Consumers’ Association of Ireland

Question 12

Business Relationships

Answer 12

• Relationships between a business and its stakeholders can be either co-operative or competitive
• A co-operative relationship occurs when they work together towards a common goal
• A competitive relationship occurs when both parties want the same thing but only one of them gets it (win-lose)

Question 13

Co-operation within a business

Answer 13

• Employees work in teams
• Employees and employers agree on wages and work conditions
• Producers listen to feedback from their customers
• Investors give funding to entrepreneurs who keep them informed and rewarded

Question 14

Competition within businesses

Answer 14

• Employees compete with other employees for promotions
• Employees look for increased wages but employers want to keep costs to a minimum

Eg. Ryanair & Aer Lingus

Question 15

Relationships In Business

Answer 15

2. Entrepreneurs and Investors-
   The entrepreneur seeks out opportunities and is willing to take risks e.g. Padraic O
   Ceidigh of Aer Arann identified the need for domestic flights in Ireland
   The Investor supplies the finance for the project after examining a business plan. The
   investor expects an adequate return. If an investor lends the money this is called
   debt equity, if an investment is through buying shares, the investor receives a
   dividend.
   The entrepreneur is the ‘ideas person’ and the investor is the ‘ money person’
   The relationship is co-operative if the entrepreneurs idea is favoured and an investor
   is prepared to advance funds. Both parties benefit, when returns are made.
   The relationship is competitive if the investor refuses to advance funds for the
   project.