Business Activity involves the process of converting raw materials into finished goods and selling at a profit.
Purpose of business activity:
- Ensures smooth production of goods and services
- Helps minimize cost of production
- Helps to improve efficiency
Stakeholders are people who are affected by the business, directly or indirectly.
Types of stakeholder:
Owner
Shareholders
Managers
Staff
Customers
Suppliers
Society
Government
Note: the first 4 are internal stakeholders and the latter 4 are external stakeholders.
Responsibility of the owner towards a business:
- They are responsible to invest capital, allocate resources and participate in decision making.
- In case the owners can not make decisions, they will hire external people who will be responsible to make decisions
- Their reward from the business is annual profir.
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