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JC Business Course Overview

Overview of the three main sections of the Business Studies course with a breakdown of each topic in the three sections
by

E Keegan

on 11 November 2012

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Transcript of JC Business Course Overview

Advertising: giving information, about a product or service to consumers in the hope that they will buy the product

Types of Advertising
Informative: give information to the consumer e.g. health warning, date of upcoming sale, new price etc


Competitive: highlight differences of a rival firm's product e.g. price or quality difference



Persuasive: convince consumers they need a particular product or service




Generic: an ad for an industry, rather than a brand e.g. National Dairy Council




Methods of Advertising
Television and Radio
Newspapers: local and naitonal
Internet: Google Sense
Billboards


Sales Promotion: special offers, 2 for 1, introductory prices, free samples,


Branding: putting the company's name to a generic product to create a reputation and customer loyalty e.g. Tayto crisps. Tayto is the brand. Crisps are the generic product


Sponsorship: paying an event, person or place to use a brand or name e.g. Aviva Stadium


Merchandising: displaying products in an attractive way in shops to encourage impulse buying


Public Relaions: Using the media to promote a company. E.g. Ryanair often make controversial public statements to get people talking about their company. 'All publicity is good publicity' http://www.thisismoney.co.uk/money/holidays/article-1697420/New-publicity-stunt-Ryanairs-4-standing-seats.html JC Business
Studies Bookkeeping The Business Insurance Economics
Forms of Business
People at work
Communications
The Employer
Industrial Relations
Marketing
Delivery Systems Business Documents
Books of First and Second Entry
Final Accounts
Control Accounts
Assessing the Business
Club Accounts
Farm and Service Accounts The Business of Living Business of
Living Household Budgets Three types of Budgets
Complete the budget
Estimate following months
Revised Budget Key Words
Impulse Buying
Benefit in Kind
Regular -v- Irregular Income
Fixed -v- Irregular Expenditure
Discretionary Expenditure
Opportunity Cost is when we buy something on the spur of the moment without thinking of the consequences is a non cash from of income, such as a company car Regular income is income received every week or every month e.g. wages Irregular income is received now and again e.g. overtime Fixed expenditure stays the same no matter how much the item is used e.g. TV Licence or Car tax refers to those items we should only buy if we have money left over after we have set aside enough money to pay all our important bills The opportunity cost of buying something is the item we had to do without or the opportunity we had to forego The Household Consumer What is a good consumer?

Consumer Laws
Sale of Goods and Supply of Services Act 1980






The Consumer Protection Act 2007




Agencies for the Consumer
The National Consumer Agency
The Ombudsman
The Consumer Association of Ireland
The Advertising Standards Authority of Ireland


Small Claims Procedure

Trade Associations



Key Terms
Brand names
False economy
Guarantee -v- Warranty
Loss leader Lays down certain rules that apply every time goods are sold or a service is provided. Rules
All goods sold must be of merchantable quality
All goods sold must be fit for the purpose intended by the buyer
Goods must be the same as the description
Goods must match any sample used to sell the good
When a service is supplied: i) the person must have the necessary skill ii) they must do the job properly iii) materials must be of good quality

Solutions/Remedies/Redress
Refund
Replacement
Credit note

The consumer is not entitled to a remedy if:
They do not return the goods within a reasonable period of time after they have purchased them
They simply changed their mind and no longer want the good
They caused the fault themselves through misues or accident
The goods were marked 'seconds' or the fault was pointed out at the time of purchase

The retailer is responsible for the goods and services they sell and cannot tell the consumer to return the goods to the manufacturer. The consumer, however, may deal with the manufacturer directly, if they so wish. The main objective of this Act is to try to make sure that manufacturers and retailers always act fairly and that they always tell the truth about the products or services they sell and never say, write or do anything that might fool or mislead the consumer.

The main parts of the act are as follows:
It set up the National Consumer Agency - replacing the Office of the Director of Consumer Affairs
It protects consumers against unfair practices, such as
i) saying a product is in short supply when it is not
ii) Running high profile competitions to promote a product but not awarding the prizes
You must not say anything false about the goods you sell e.g. saying a car had one previous owner when it had three
You must not say anything false about a service you sell e.g. 'free delivery to all areas' when it only applies to some areas
If you reduce the price of your products/services, you can only mention the previous higher price if you actually sold the product/service at the higher price in the past
You cannot say anything in an advertisement that is likely to mislead or confuse the public Bookkeeping Final Accounts Trading Account
Find Gross Profit Money and Banking Saving and Investing Insurance The
Business
Environment Delivery Systems Economics Forms of Business People at work Communications The Employer Industrial Relations Marketing Business Documents Books of First and Second Entry Control Accounts Assessing the Business Club Accounts Farm and Service Accounts Define employer: Is a person or company that pays others to work for them e.g. government pays teachers, nurses and gardaí Rights of an Employer 1. Set up a business
2. Decide on the aims and objectives of the business
3. Select suitable staff
4. Dismiss dishonest employees
5. Expect employees to honour their contracts Responsibilites of an Employer 1. Provide a safe and healthy working environment
2. Obey all laws relating to employing staff, e.g. 'hiring an firing' staff
3. Pay the agreed wage for the work done
4. Keep records on each employee for income tax and PRSI purposes Procedure for employing staff 1. Find out what staff are needed
2. Prepare a job description
3. Advertise the job internally and externally
4. Examine applications and CVs to decide on a shortlist for interview
5. Offer successful applicants the job on trial (probationary) basis and draw up a contract
6. Induct the new employees - train, register them and play practical joke! Sample Advertisement Contract of Employment A contract lays out the terms of employment - such as rates of pay and holidays

Example of a contract Employee Records An employer keeps a lot of information about employees 'on file' including:
Letter of application
CV
Tax details
Details about their performance
Contract of employment
Medical certificates Paying Staff Wage vs Salary
If the payment of a work is based on the number of hours worked or the quantity of goods produced, it is called a wage
If the employee receives a fixed amount each time they are paid, it called a salary The amount that the employee receives for anormal working week before any deductions have been made is called their basic pay.
If the employee works extra hours, this is known as overtime and they will reeive extra pay for this
The employee may also receive a bonus payment if they work particularly hard during the year.
Flexitime is where an employee is free to choose when they work during the week. Once they work the correct number of hours e.g. 39, they can work them anytime the workplace is open. Basic pay, overtime and bonuses Gross Pay The employee's total pay i.e. basic pay plus any overtime and bonus payments is called their gross pay. It is what they earn before deductions are taken away

Calculating Gross Pay
1. Time rate: is where an employee is paid by the hour. The more hours you work, the more you get paid. It usually works in a clock in, clock out system (think of the Flintstones!) The disadvantage of this system is that it does not reward employees who work harder during each hour they are at work.
2. Piece rate: is where an employee is paid for each unit of the firm's product that they produce. The supervisor will keep a record of the number of products produced by each employee. The advantage of this system is that employees who work harder will be rewarded for this.
3. Commission rate: is where an employee is paid a percentage of the sales they made during the week or month e.g. insurance sales, stock traders Net Pay An employee's net pay is also known as their take home pay and is the actual amount of money they take home, after deductions have been taken away.

There are two types of deductions:
1. Statutory deductions: these are compulsory deductions. This means they must be paid. There are two types:
PAYE: Pay As You Earn - this is income tax
PRSI: Pay Related Social Insurance - the money collected from PRSI is used by the government to pay a regular income to those who:
i) are out of work due to unemployment
ii) are out of work due to illness or disabiility
iii) are out of work on maternity leave
iv) have retired from work

2. Non-statutory deductions: these are voluntary deductions. Examples include:
Union subscriptions
Private pension payments (known as superannuation)
Health insurance such as VHI or Aviva The Payslip Each time an employee is paid, they must receive a payslip. This shows:
Their gross pay
The deductions from gross pay
Their net pay Tax Credits Tax credits are calculated by the tax office and represent the amount of income employees are allowed to earn free of tax Sample Question From the following information, complete the payslip for Paul Byrne for the week ending 7 March. During that week:
Paul worked 39 hours @ €20 per hour
He did 8 hours' overtime at time an a half
His weekly tax credits amount to €50
He pays tax at the rate of 20%
PRSI is 8% of gross pay
Union dues are €2.60
VHI contribution is €14.50
Pension contribution is €16.80

Solution:
Total gross pay
Basic pay 39 hours @ €20 = 780.00
Overtime 8 hours @ €30 = 240.00
Total gross pay 1,020.00

PAYE
Tax 20% of €1,020 = 204.00
Less tax credit 50.00
PAYE 154.00

PRSI
PRSI €1,020 X 8% = 81.60

Total deductions
PAYE 154.00
PRSI 81.60
Pension 16.80
Health contribution 14.50
Union 2.60
Total 269.50

Net pay
Gross pay 1,020.00
less deductions 269.50
Net pay 750.50 Wages Book This is a written record of the wages paid to each employee by the firm each week or each month. It contains all the information from each payslip as well as the amount of PRSI paid by the employer for each of their employees.

The employer pays PRSI for their employees, which comes out of company funds. The percentage paid by the employer is higher than the percentage paid by the employee. Methods of Payment Cash
Advantages
Being paid in cash may suit employees who do not have a bank account
There is no cost to the employer for paying in cash

Disavantages
There is a risk of theft
There is more administration work as notes and coins need to be counted out exactly.

Cheque
Two people will usually sign each cheque - the CEO and the accountant
Advantages
It is very safe
It is quick

Disadvantages
The bank charges the firm for each cheque they write
Employees must go tot the bank to lodge the cheque before they can spend the money

Transfer to Employee's Bank Account
Wages can be paid directly to the employee's bank account from the company's bank account. This is known as paypath. Employees still receive a payslip from their employer
Advantages
It is completely safe
It is very quick
Employees can get access to their money immediately
Disadvantages
There is a small charge for each electronic payment and their is a fee for having your bank account online Definition of Industrial relations refers to the relationship which exists between employers and employees Benefits of Good Industrial Relations The workers will not go on strike becuase problems will be sorted out quickly
Benefit to employer: the firm will not lose money or customers
Benefit to employee: they wont lose wages or their job
The employees will be happy in their work
Benefit to employer: happy and contented employees work harder, which leads to higher profits
Benefit to employee: a good atmosphere in the workplace
The firm will have a good name among the general public
Benefit to employer: The firm's sales will increase and so will profits
Benefit to employee: employee morale will increase Trade Unions A trade union is an organisation of workers whose main objectives are to protect the jobs of their members and improve their pay and conditions

Functions of a trade union
To protect jobs of their members by doing all they can to stop workers being made redundant or dismissed
To try to improve their members' working conditions
To try to increase their members' pay
To stand up for their members if they are involved in a disagreement Types of Trade Unions in Ireland Craft Unions members belong to a particular trade and have served an apprenticeship e.g. Nation Union of Journalists, the Technical, Engineering and Electrical Union Industrial Unions members work in the same industry. It doesn't matter what position they hold. They are popular in Europe, but they are not common in Ireland. E.g. Irish Bank Officials Association General Unions Unions whose members come from many different industries. They tend to be large e.g. The Services, Industrial, Professional and Technical Union (SIPTU) Professional (White Collar) Unions members work in professional areas e.g. teaching. Teachers Union of Ireland (TUI) Shop Steward The shop steward is the person elected by the trade union members to represent them in the workplace.

Functions:
To encourage workers to join the trade union
To collect the trade union membership fee from the workers each week or month - called 'union dues'
To make sure that all agreements made between the union and the management are followed by both sides
To help the workers to solve any problems they may have with the employer The Irish Congress of Trade Unions The ICTU is the governing body for trade unions in Ireland. It is a voluntary organisation and represents and helps those trade unions that are joined to it. The main functions of the ICTU are:
to provide advice and training to trade unions and their members
to help trade unions to solve problems they may have with their employers
to try to improve the pay and working conditions for all trade union members by negotiating national pay agreements with the government Industrial Disputes The main causes of disputes
A worker is suspended or dismissed
Workers want an increase in pay but management say no
Workers are not happy with their conditions of employment and ask for them to be changed e.g. extra holidays, fewer working hours or longer lunch breaks
Workers are not happy with their working conditions e.g. health and safety standards
The workers feel they have were treated unfairly e.g. employee was passed over for promotion
A worker is being asked to do the work of another worker - known as a demarcation dispute
The employer refuses to allow the workers to join a trade union or refuses to talk to the trade union shop steward Types of Strikes Official strike: is one that has the support of the ICTU. Workers may receive strike pay during official strikes. The following steps must have been taken for the strike to be called an official strike:
The trade union organises a secret vote in which the members decide whether or not they want to go on strike
If the majority are in favour, the union asks the ICTU for their support
The employer is then given one week's notice of the worker's intention to stop working and go on strike

Unofficial strike: the workers decide to go on strike without the agreement of either their own trade union or the ICTU. They are bad because:
Usually no vote is taken so the views of all the workers have not been listened to
No notice is given to the employer, so he or she has no time to try to find a solution
There is no strike pay for the workers

Sympathetic Strike: workers who have no problems with their employer go on strike to support their colleagues who do have a problem

Wildcat/Lightning Strike: workers suddenly call a strike and walk out of work without holding a vote or giving any notice to the employer. They are therefore unofficial strkes. They usually take place because something unexpected has happened in the workplace without any woarning.

Work to rule: aka 'go slow'. It works as follows:
the workers come to work as normal
They refuse to do any overtime
They may refuse to do certain tasks e.g. answering the phone. However, they contine to perform their other duties and son cannot be dismessed or have their wages stopped Solving Trade Disputes Grievance procedure:
1. The employees should discuss the problem with their shop steward, who should bring it to the attention management
2. The HRM should discuss the problem fully with the shop steward to see if a solution can be found
3. If no solution can be found, the shop steward should pass the problem to the trade union's head office. The trade union employs specially trained people who will contact the firm and try to solve the problem

If this does not work, there are a number of outside organisations that can help:
Labour relations Commission (LRC): uses conciliation to help solve the problem
The Labour Court: uses arbitration to solve the problem
Equality Officer: used in cases of unfair treatment. Uses arbitration
Rights Commissioner: investigates disputes that involve only one worker. Again uses arbitration Industrial Relations and the Law Dismissal
1. Unfair dismissal: a dismissal is unfair if it is for any of the following reasons:
The worker's political or religious beliefs
Their race or colour
Because they are pregnant
Because they are a member of a trade union

2. Fair dismissal: a dismissal is fair if it is because of any of the following reasons:
The worker's bad behaviour
Because the worker was not qualified or able to do their job
If there is no work for them to do i.e. they are redundant

Equality
All employees, both male and female, must be treated equally in the workplace - there must be no discrimination
1. Pay: All employees who do the same work must be paid the same wage. However, an employer can pay more to employees who:
have been with the firm longer
have better qualifications

2. Treatment: everyone must be treated equally when it comes to:
Hiring new workers
Training staff
Choosing staff for promotion Employer Organisations Irish Business and Employers Confederation (IBEC)
Most employers are members of IBEC. The main functions of IBEC are as follows:
To give advice to member firms about all aspects of being an employer
To be an important source of knowledge, influence and connections for its members
To represent member firms at the Labour Court and the LRC Key Terms Conciliation: is the process of bringing two sides of a disupute together to discuss the problem and try to reach a solution that they both accept

Arbitration: is where an independent person e.g. the Labour Court listens to both sides of a dispute and makes a decision about how the disupute should be solved Marketing is everything involved in getting a product or service from the producer to the consumer at a profit A target market refers to those people who goods or services are aimed towards - those who might buy the product Marketing Mix - the 4Ps
Product: producing a product that fulfills a need for consumers. Size, quality and packaging are important factors
Price: must take into account a numer of factors. Cost of sales, expenses, competitors' price, consumers' income and desired profit
Place: choosing the appropriate channels of distribution
Promotion: making consumers aware of the product and persuading them to buy it.

Example
Product: Tayto. It fulfils a consumer demand for snack food. They are packaged in small bags for convenience. The packaging is also bright, with large writing to catch the consumer's attention
Price: Roughly a euro, depending on the shop. They are priced close to competitors e.g. Walkers, and cheaper than brands such as O'Donnells. This price allows them to sell a higher quantity covering costs and making a profit.
Place: The channel of distribution would usually be Manufacturer, Wholesaler, Retailer, Consumer. This is because they are bought in small quantities by the consumer. They are also not customised for each consumer.
Promotion: Tayto uses a number of different advertising techniques. Generally, they try to appeal to consumers by showing they are Irish. This is done in one advertisement with a Gaelic football game. Market Research: involves collecting information about a product and its market and then using that information to make business decisions.
It is used at the beginning and end of the product development process - a business will try to find out what a consumer wants through market research and then, after producing the good, check to see if the good they are producing is fulfillilng the consumer's needs.

There are two methods of market research
Desk Research: this is collected from secondary resources, such as newspapers, websites, government agencies etc. The advantages of this type of research is that it's quick and cheap. However, the information may not be totally accurate and it may not exactly fit the company's needs.
Field Research: this involves the company finding out what people think by conducting their own research. Examples include:
Questionnaires: getting the opinion of the public about a product or service. Advantages: the company can design their own questions to find out exactly what they want and the cost is relatively low
Test Marketing: asking a number of consumers to try a product before it is produced on a large scale.
Direct observation: watching a consumer's actions to learn from their behaviour. There is no bias in this research because the consumer is less likely to change their behaviour because of the researcher

Sample: in market research, a sample is the group of people selected to take part in the research. A sample should be a small group which represents the company's target market. E.g. Playstation's target market may be boys aged betweeen 8-18. Instead of asking all boys in this age group, they will take a smaller sample - 500 boys aged between 8-18. Promotion Market Research Finance and Planning for Business Banking for Business Business Insurance Borrowing Household Purchases We keep a record of our banking transactions so we may compare it to the banks records and ensure there are no mistakes

You may be asked to show a company's bank account in either the T account format or the Continuous format

When recording transactions, it is important to remember to include opening balances, lodgements (debit), withdrawals (credit) and the closing balance

The bank will send a copy of it's records in the form of a bank statement. This statement is prepared from their point of view. This effects how figures are presented
Money that we pay into our account, is owed to us by the bank (liability) and is therefore shown their credit column
Money that we take out of our account reduces their liability and so is recoreded on the debit side
For overdrawn balances, there will be a DR after a figure in the bank statement to show you owe that amount of money Bank Reconciliation Statement
The bank statement you receive from the bank is often different to the balance you calculate in your own records. This is normal. There are six main reasons for this:
Transactions that took place at the end of the month were included in our bank account but were too late to be included in the bank statement
Cheques we have written and entered in our own recoreds bave not been cashed by the payee - called 'cheques paid but not presented
Cheques we have received but not presented will not be included in the bank statment
Bank charges and fees that we do not know about until we get our statement e.g. writing cheques
Payments made and received by DD, CT or SO that were included by the bank but forgotten by the business
A mistake made by the customer or the bank

Both our records and the bank's records must be reconciled. By reconciliation, we mean that we want both our records and the bank's records to be the same. Past Paper Questions
2011 Paper I Q5
2009 Paper I Q4
2005 Paper I Q4 The Household Consumer
Household Budgets
Saving, Investing, Borrowing
Money and Banking
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