Outline the role of business organisations in society
- Business organisations are producers of goods and services.
- Consumers use up – ‘consume’ – goods and services. Consumers may be individuals, communities, other businesses or governments.
- Consumer needs and wants are satisfied when organisations produce goods and services, which consumers can consume.
Consumer Needs and Wants
- Needs are goods and services which consumers must have to survive eg food, clothing and shelter. Most developed countries manage to satisfy basic needs of their populations
- although the government can step in to ensure that basic needs have been met.
- Wants are goods and services over and above those needed for survival eg technology, holidays, cars. The more consumer wants that can be satisfied, the higher the standard of living of
the consumer. - The government may provide some non-essential products eg transport, but most are satisfied by private organisations operating to make a profit by charging consumers a price.
Goods and Services
- Goods and services are the output of business activity.
- Goods are tangible products which you can see and touch eg a computer, mobile phone, food items, clothes, DVDs.
- Durable goods last for longer than a year eg cars, houses, electrical goods. Non-durable goods last less than a year eg food, shoes.
- Goods may be produced (manufactured) by private or public sector
- Services are products that an individual or organisation provides for you. These include public sector services provided by the government eg health, education, social work, leisure services, police, ambulance, fire brigade.
- Services are also provided by private companies on a profit-making basis eg catering, hotels, travel, banking, Internet services, haircut, utilities (phone, electricity, gas), car repairs, cleaning, retailing (shops).
- Other services are provided by charities and social enterprises eg sporting, social or religious groups. These may be additional to those provided by the government eg the charity Help the Aged offering services to senior citizens on top of those offered by social services.
- A key difference between a good and a service is that goods are tangible – you can see and touch them – whereas services are intangible – you cannot touch them and sometimes you cannot even see them eg electricity.
