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Unit 1

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  1. Unit 1 Chapters 1,2,3

  2. Business is about ‘people’, not just customers and suppliers.

  3. On completion (U1)you should be able to; • Listing the main parties in business • Describe the relationship between people as, workers, TU members, managers, entrepreneurs, invertors and customers • Outline non-legislative, legislative methods of conflict reslotion • Outline a major piece of legislation and the elements of contract law that help deal with conflict • Analyse the relationships between people in bus • Illustrate how legislation affects these relations • Describe a business conflict and how the law could help solve it

  4. Main Parties/stakeholders in Business • Consumers • Entrepreneurs • Investors • Producers • Suppliers and service providers • Employers • Employees • Government • Interest groups (TU)

  5. Entrepreneurs e.g Tony Ryan (ryanair) • A person who takes the initiative and risk to set up a new business. See a niche in the market for a good/serviceand use their initiative to create a product/service for that gap. They take the personal risk of failure and the financial risk of loss. • They bring together the factors of production. • land, labour, capital and enterprise. • Reward is profit

  6. Producers/Suppliers • Entrepreneurs who supply the market with finished or nearly finished goods • Producers transform raw materials into products to sell to consumers • Suppliers supply raw materials and machinery to producers • Reward prompt payment and return business • E.g. Intel supply computer parts to Dell

  7. Service Providers • Organisations/people who provide a range of valuable services to the public/business e.g.; accountant/banks/esb/transport etc. • Reward is payment and regular business. • E.g. ESB supply Dell with electricity

  8. Investors e.g shareholders, banks or building societies. • A person willing to put money into a business venture to earn a return on investment (ROI). Would weigh up the pro’s and con’s before making investment. • They lend money to entrepreneur and are rewarded with interest on loan.

  9. Employers • A person who hires another person to do work for them in return for a wage. An entrepreneur becomes an employer when they can no longer run the business on their own. E.g. Ryanair • Employees • A person contracted to do a particular job in return for pay. He carries out work the entrepreneur has no time or skills to do themselves . E.g pilots

  10. Consumers • Person/Business who purchases goods and services from a seller in return for payment. A consumer buys these goods/services for their own personal use, with the expectation of quality and value for money. • (a customer is different, they do not use the product for their own use, they sell it on to the consumer)

  11. Interest Groups • An organisation representing a particular body of people who have a common interest. As a group they have more power, money, and talent and are more likely to be listened to by decision makers i.e.: Irish Business and Employers’ Confederation (IBEC)

  12. Trade Union • A TU is an organisation that negotiates with the employer to improve pay, conditions, etc. for the employees. Employees have more power as a member of a TU as employers will listen to the trade unions rather then one voice. • A shop steward is elected to be the link between employees and the TU.

  13. The government • Works on behalf of the general public. It wants the firm to provide employment, goods/services to the public, create wealth, pay taxes and act as a tax collector for VAT and PAYE. Its main aim is to protect the public, so they ensure businesses comply with laws effecting them. • They also provide assistance through grants, training and advice as well as transport, communications and other infrastructures. • Eg. Port tunnel means drivers spend less time on the roads

  14. HOMEWORK: P16, short questions, Q1-6

  15. Relationships between people in business • Co-Operative Where the parties work together for their mutual benefit. Less time wasted as they work together. Leads to good industrial relations, it means employees will be more likely to work hard. Overall the business runs smoothly.

  16. Competitive Where the parties have different objectives. This leads to better goods/services, although there is rivalry between employees over promotion, between sales reps wanting customers, leads to the closure of inefficient firms. Both parties want what's best for themselves, which might not be what is best for your company e.g. shareholders wanting more dividends which means a reduction in retained earnings, this could hinder expansion plans.

  17. Dynamic relationships Where the relationship between two parties changes over time. A person can always change their role within a business.

  18. You can be asked… Competitive, co-operative and dynamic relationship • Between stakeholders, (employers and employees) • Between business and its stakeholders (business and shareholders) • Between two producers in the same line of business e.g. pepsi and coca cola

  19. Causes of conflict between stakeholders • Different objectives (give a little, get a lot) • Negotiating style(assertive/aggressive) • Changing circumstances (work methods/economy/management)

  20. Conflict resolution • Non-legislative methods; • Sit down talk and negotiate • Use a 3rd party. • 3rd parites; • Consumers Association/Trade associations/Ombudsman • Conciliation/arbitration

  21. Legislative methods • Consumer has; The Sale of Goods and Supply of Services Act 1980 Consumer Protection Act 2007 • Employees have; The Industrial Relations Act 1990, EmploymentEqualityAct 1998, UnfairDismissalsAct 1988.

  22. QUESTIONS • P17, Long Questions, Q1,2,3,5

  23. Law of contract • Offer+acceptance=agreement • Consideration • Intention to contract • Consent to contract • Capatity to contract • Legality of form • Legality of purpose

  24. Offer+acceptance=agreement • An offer is when one party makes a proposal to another. If it is accepted in full by the 2nd party, a legal agreement is made. • An offer is no longer a offer if it is revoked or rejected. • Any changes to the offer by the 2nd party is considered to be a counter offer and can be accepted or rejected by 1st. • They can both be communicated orally, in writing or implied. • If an offer is not acceped in a certain time frame it lapses

  25. 2. Consideration • Both parties must give something to the other to validate the contact. The thing they offer is the consideration. • E.g Shopkeeper gives jeans, customer gives money

  26. 3. Intention to contract • Both parties must understand and assume the contract/agreement to be legal from the start. • Bussiness agreement are always legal e.g business agreeing with suppliers to keep price at the same level, if the price goes up, business still pays low price • Social agreements are not legal. Eg agreeing to bring food to a friends party is not a vaid contract.

  27. 4. Consent to contract • Both parties must be in honest agreement to make contract valid. i.e. one party cannot force another to enter into a contract. • Eg holding someone at gunpoint

  28. 5. Capacity to contract You cannot make a legally binding contract if you are • Under 18 • Insane/drunk at the time • A diplomat • Acting in Ultra Vires (acting outside the details of your companies memorandum of association e.g. selling tractors in a shoe shop)

  29. 6. Legality of form Some agreements must be in written form to be made legal. E.g. a wedding in a church is not legally binding until the wedding licence is signed by both parties.

  30. 7. Legality of purpose The reason for the contract must be a legal one for the contract to be valid. e.g. you cannot take a taxi company to court for not bringing you to a bank to rob it.

  31. Termination of a contract PFAB • Performance • Frustration • Agreement • Breach Remedies for breach of contract • Sue for damages • Resind the contract • Specific performance

  32. The Sale of Goods and Supply of Services Act 1980 Goods for sale should be: • Of merchantable quality Zip shouldn’t break on coat. • Fit for purpose intended. wood glue should stick wood • As described. Hotel should be distance from beach as stated in advertisement • Confirm to sample. Paint should be the same as colour on tin

  33. Services for sale should : • Be carried out with care and diligence. • Be done by worker with proper skills and training • Have merchantable quality tools used

  34. Redress • Depends on how serious the fault is, when and how it occurred, and how soon it was brought to the seller’s attention • Not entitled to a redress if fault is due to customers misuse or if fault was made known to customer before purchase • Refund • Repair • Replacement • Credit note (no basis in law, but can be used if the consumer agrees)

  35. Sellers responsibilities… • Take responsibility for faults and not pass the blame onto the manufacturer • Not have signs/statements up that take away the customers rights • Guarauntees*

  36. Other important provisions • Those buying under hire purchase have all the rights listed above • Unsolicited goods/inertia selling: when goods are sent to people who don’t order them and a bill is sent to them, the person doesn’t have to pay for the good, and can keep it if its not claimed after six months (it cannot be used in that 6 month period and should be kept in good condition until then)

  37. Consumer Protection Act 2007 Offence to.. • Apply a false trade description to goods • Give false or misleading info regarding the price • Publish any advertisement which is likely to mislead the public • Publish or put any misleading signs/notices on display • False claims by a sales rep.

  38. Also protects against: • Usage and owenership • Aggressive practices/selling • Pyramid schemes

  39. National consumer agency/director of consumer affairs Functions: • Promote high standards of legislation and ensure it is being adhered to • Request the alteration of an advert • Request the cessation of an advert • Investigate compliments • Prosecute offenders • Inform customers of their rights

  40. Monitor the consumer information act • Monitor EU directives • Small Claims Court Customers can take the complaint to the District Court’s Small Claims Court procedure. No solicitors involved.

  41. Industrial Relations • This is the relationship between employers and employees. It can be good or bad. A good relationship is vital to keep the business running smoothly and efficiently. Employees will be more willing to work hard and employers have more trust in them. When it is bad customers suffer through poor produce and disruption to the service (industrial action)

  42. Causes of industrial disputes • Claims for better pay and working conditions • Threat of redundancies • Changes in work methods • Discrimination, unfair dismissals, unfair treatment • Demarcation • Promotion disagreements The trade union may be brought in to solve these disputes

  43. Trade unions • A TU is an organisation that negotiate with the employer to improve pay, conditions, etc. for the employees. Employees have more power as a member of a TU as employers will listen to the trade unions rather then one voice. • A trade union is licenced by the department of Enterprise, Trade and Employment • E.g SIPTU – services industrial professional technical union. Irelands biggest trade union

  44. Employees have the right to join any union • A shop steward is elected to liase with the union on behalf of the employee body • There are many local branches for the larger unions eg. Meaths branch for TUI. Each branch then makes decisions regarding local issues with permission from head office • A National Executive runs the whole union from head office and decides on union policies, negotiates on a national level, approves official strikes, and trains negotiators.

  45. Shop steward • Elected by employees to liase with TU on their behalf • Negotiate with employer • Inform employees on union activity • Collect subscriptions and recruit new members • Ensure employers keep to agreements

  46. Functions of a trade union • Give workers power • Negotiate • Represent members in a dispute • Protect job security • Provide information of laws to members

  47. Benefits • Employers • Simplify negotiations • Discipline is maintained • Provide wage stability • Don’t lose out through strikes Employees • More power • Skillednegotiatorsavailable • Access to employmentlawthrough union officials • Access to researcherswhofind relevant stats for claims

  48. Industrial Action • Official strike • Unofficial strike • All out strike • Work to rule • Overtime ban • Go slow

  49. Parties affected by industrial action • The firm – business lost • The employees – wages lost, job security • Customers – service lost • Local businesses – business lost • Public – services lost (bus, doctor, teacher) • Union – strike pay • Country – bad reputation

  50. Homework • Page 48 question 1,2,3 • Page 49 question 1