Success criteria:

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Learning Intentions:

Introduction to entrepreneurs and entrepreneurship

You should be able to:

Identify, describe and be able to give real-life examples of entrepreneurs.

Define entrepreneurship

Entrepreneur

A person who takes an idea and through ability and vision turns it into a good or service. He/she combines the four factors of production.

Richard Branson is Britain’s most famous entrepreneur.

Scottish entrepreneurs Sir Tom Hunter Ann Gloag and Brian Souter Tom Farmer Duncan Bannantyne Michelle Mone

How did they make their money?

Click for clip

Role of an entrepreneur Identify business opportunities Franchising Combine factors of production Innovation and risk taking

Identify business opportunities Look for a gap in the market

Examples: McDonald’s home delivery in

Clydebank?¹ Virgin Galactic² MJM³

Entrepreneurs and franchising In order to minimise risks, many young

entrepreneurs have taken to using franchises as a means of starting up a business.

It is important to remember the benefits of the franchising model as it reduces risk.

Combining factors of production

The entrepreneur brings together land, labour and capital.

Let’s look at Richard Branson at Virgin: He would buy or rent the floorspace

for factories or shops (land) He would hire the staff (labour) He would buy machinery/equipment

(capital).

Innovation and risk taking

Entrepreneurs do not invent, they innovate.

Henry Ford did not invent the automobile but through different innovations such as the assembly line and mass production he helped popularise car use and make it affordable for customers.

Risks involved are usually to do with uncertainty and money. No-one knows for sure if a new venture will be successful. The entrepreneur could go bust…like John DeLorean.¹

Success criteria:

.

Learning Intentions:To introduce stakeholders within and outwith business organisations.

You should be able to:•describe what a stakeholder is• identify stakeholders, both internal and external• describe stakeholders interests and influences

Stakeholders

Stakeholders are people with a key interest in a business.

Stakeholders affect businesses by exerting influence over decisions.

Their influence depends on the degree of their involvement or relative interest in a company.

The three Is… When answering questions about

stakeholders think of the three Is:

Identify (who are they?) Interest (why do they want the firm to

succeed?) Influence (how can they affect the

firm’s future?)

Identifying stakeholders for all business types

Internal Owners/shareholders Employees/workers Management

External Customers Banks/lenders Investors National/Local government Suppliers Donors (for charities) Taxpayers Society/Local Community

Stakeholder Interest

Owners want high profits, high dividends.

Managers want promotion, bonuses, job security.

Employees want better wages, better working conditions, job security.

Stakeholder Interest Suppliers want regular orders, prompt

payment. Customers want low prices, high

quality. Banks want loans repaid on time.

Stakeholder influence

Owners put capital in, vote at AGM (change board of directors).

Managers hire/fire employees, create policy and rules, make decisions.

Employees go on strike, increase/decrease productivity, provide good/bad customer service.

Stakeholder influence Suppliers raise/lower prices, change

delivery times, change credit terms. Customers can choose to buy or not to

buy products, affect ‘word of mouth’ and reputation.

Banks grant or deny loans, change interest rates, change repayment details (end date).

What does this mean?

Conflict amongst stakeholders??

Command word practice

Describe

Give a thorough description of whatever you are being specifically asked about.

It is vital that you describe the correct point not just the theory point.

Exam question

Describe how five different stakeholders could influence an organisation. (5 marks)

In this question you have to describe not the stakeholder but their influence on the business.

One to get you started... The bank is a stakeholder and they

could influence the business by granting a loan – this would mean the business could carry out their chosen objective to expand.

The influence – carrying out the objective is clear in this answer.

Now it’s your turn

Describe how five different stakeholders could influence an organisation. (5 marks)

You have 10 minutes.

Peer-assessmentsolutionThe following stakeholders have various influences on a

businesssuch as: Manager – makes decisions on the future plans of the

organisation helping to expand or improve the business Worker – can produce a quality product or service by

working hard and increase productivity shareholder/owners – purchase more shares increasing the

available capital for the business Customer – buys the product or service increasing sales and

in turn profits Local community – petition the organisation to make a

change to environmental policies improving the emissions from a business

Government – alters legislation and can keep businesses on track with laws and implementing ideas eg minimum wage act

Bank – approves a loan improving the businesses finances and allowing it to expand

Suppliers – alter the price of supplies either higher or lower, this causes a knock on effect for the businesses customers