Commerce Lesson for Secondary School – Edudelight.com
SCHEME OF WORK FOR COMMERCE SS3.
- Business Law.
- Meaning, Branches of commercial Law e.g, Law of contract, Hire purchase, Sales of goods, Agency etc.
- Law of contract.
- Definition of contract.
- Classification of contract.
- Essential element of valid contract.
2. Types of Contract.
- Termination of contract.
- Remedies for branch of contract.
- Terminologies used in contract.
3. Law of Agency
- .Definition of Agency.
- Types of Agent.
- Appointment of Agent.
- Duties and Right of Principals.
- Termination of Agency.
4. Hire Purchase / Instalmental payment / Deffered Payment.
- Meaning, features of Hire purchase, parties to Hire purchase, conditions for Hire purchase.
- Merits and demerits of the Hire Purchase, termination of Hire purchase.
5. Contract of Sales of Goods.
- Definition of sales of good.
- Terms of contract of sale.
- Provision of sales of goods Act of 1893.
- Terminologies associated with contract of sale.
6.Contract of Employment.
- Meaning (Employer & Employee).
- The employer: duties & rights.
- The employee: Duties and Rights.
7.Government Regulation of Businesses.
- Meaning, methods of government regulation of Business e.g Business Registration, Patent Right, Trademark, Copy Right etc.
- Document required for Business establishment.
8. Structure of Business.
- Organization structure / set-up.
- Organization chart, Short notes, Authority and Responsibility, Span of Control, Scalar Chain of Command and, Unity of Command and Unity of Directions etc.
9.Introduction to Business Management.
- Meaning of Business.
- Business Resources.
- Objective of Business.
- Management: Meaning and Functions.
10. Business Environment.
- Departmentalization and Functions of each Department.
- Social responsibilities.
11&12. Revision & Exams.
BUSINESS LAW. (WEEK1)
Laws can be defined as rules that society enforces to ensure its survival and smooth functioning.
This is concerned with all the aspects of law that govern business transactions.
Business Laws are system of rules, which govern business transactions. These are aspects, which deal with the operations of business activities.
Branches of Commercial Laws.
The various branches of commercial law are as follows:
- Law of Contract.
- Sales of goods.
- Law of Employment.
- Hire purchase.
LAW OF CONTRACT.
- A contract is a legally binding agreement imposing rights and obligations on the parties, which will be enforced by the courts. It is a promise or a set of promise, the breach of which, the Law gives a remedy and the performance of which the Law, in some way recognizes. An agreement requires the existence of at least two parties. One of whom, called offeror makes a proposal, which the other called offeree is willing to accept.
- In a simple term, a contract is an agreement which is enforceable by law.
- Contract can broadly be defined as an agreement between two or more parties that will give rise to enforceable rights and obligations.
NOTE: The basis of all contract is agreement, a consensus “ad-Idem”, that is, the coming together of two minds with a common intention. It should be noted, however, that the term agreement does not always mean contract because not every agreement is a contract. For instance, an agreement to borrow your friend’s new TV game for the weekend would not create any contract because the agreement was not intended to create a legal obligation between you and your friend.
CLASSIFICATION OF CONTRACT
Contracts can be classified into:
- Specialty contract or contract of deed.
A specialty or contract of deed is typed, signed, sealed and delivered by one party to another. Some contracts must be under seal e.g, transfer or conveyance of legal estate and contract made without consideration.
Essential of Deed.
- Simple Contracts: These are contracts which require consideration. They purchase the following characteristics; offer and acceptance, intention to create legal relations, valuable considerations etc. they are not required by the law to be under seal.
FEATURES OF CONTRACT
The following are the features of a valid contract.
- Offer and acceptance.
- Contractual capacity of the parties.
- Intention to create legal backing.
- Consent of the parties must be genuine.
- Legality of objects.
- Possibility of performance.
- Terms of agreement must be certain.
OFFER AND ACCEPTANCE
One of the parties, the offeror, must make an offer, which should be accepted by another party called the offeree. The acceptance of the offer by the offeree should not be qualified. An offer is a statement of a willingness to be bound on certain specific terms. It is a promise which is bound on certain specific terms and can be converted to a contract by acceptance.
ACCEPTANCE: This is a final and unconditional expression of assent to the terms of an offer. The offeree will accept an offer made by the offeror.
CONSIDERATION MUST BE VALUABLE: A contract is valid if the gain to one party is balanced by some benefits known as consideration to the other party. The usual form of consideration is the payment of money. Consideration is simply the element of exchange in a bargain.
INTENTION TO CREATE LEGAL BACKING: For an agreement to be enforceable as a binding contract, if must have been the intention of the parties to create legal relations.
CASE: Merrit Vs. Merrit. A man agreed to pay his wife a sum of forty pounds per-month after the marriage broke down, the wife promised to discharge their mortgage. The men failed to fulfill his own part and the wife sued and won. It was held that they had the intention that any agreement they entered into should be binding on them. Therefore, there was a contract.
CERTAINTY OF TERMS OF AGREEMENT: The terms of agreement should be put down and clear to the parties involved in the agreement. The term can be expressly or impliedly stated.
ALL PARTIES MUST HAVE CONTRACTUAL CAPACITY: Those entering into a contract must have contractual capacity. An adult may enter freely into any contract subject to the following exceptions.
ALIENS: An alien has full capacity except that in time of war, an alien enemy may not enter into or enforce a contract made before he becomes an alien enemy. Any contract thus made becomes void completely.
MENTAL PATIENTS AND DRUNKARDS: In respect of contracts entered into by drunkards and by persons suffering from mental disorder who nevertheless are allowed to manage their affairs, the general law is that the contracts are voidable by them but only if the other party is aware of their disability of the time the contract is executed.
CORPORATION: A corporation can enter into a contract but any contract outside its memorandum of association is void.
MINORS: A minor is somebody who has not reached the age of 18 years. Contract entered into by infants may be void, invalid, voidable and unenforceable.
THE CONSENT OF THE PARTIES MUST BE GENUINE: One of the essential requirements of any contract is the genuine consent of each party to assume the rights and obligations resulting from his becoming a party to the contract. The consent of the parties should not be by mistake, misrepresentation, undue influence or duress.
FORMALITIES OF A CONTRACT: A few contracts require a particular form usually to provide better evidence of the term and so to prevent disputes. Such contract must be;
- Under seal
- In writing
- Evidenced in writing
THE OBJECT OF A CONTRACT MUST BE LEGAL: The object of a valid contract must be legal. A contract may be illegal because it is deemed to be contrary to public policy.
Examples of Illegal Contracts.
- Contract for the commission of crime.
- Contract for the sales of public offices.
- Contracts intending to impede the administration of justice.
- Contract made with an enemy in wartime.
- Contract for promoting immoral purpose.
- A contract to pay money in the commission of an unlawful act.
- Contract intended to defraud the revenue.
IF MUST BE POSSIBLE TO PERFORM: Another essential characteristics of a valid contract is the possibility of performance. There must be an assurance that the parties to a contract can actually perform their respective obligations in the contract. A party can enter into a contract with another party once he is sure that he can do it.
- Differentiate between offer and acceptance
- What are the feature of a valid contract
Commerce Lesson for Secondary School – Edudelight.com
TYPES OF CONTRACT (WEEK2)
The following are some of the more popular types of contract inherent in commerce.
- Informal Contracts: Informal contracts are simply contracts in the sense that they lack some of the basic. Ingredients of proof that are available in formal contracts. Informal contracts are difficult to enforce.
- Formal Contracts: Formal contracts are of several main types; namely,
- Contract Under Seal: This is a written contract that has a seal imprinted or affixed on it, or that has a wax impression upon the paper or has the expression “SIGNED AND SEALED” written on the paper. Contracts under seal are known as Specialty Contracts. They do not necessarily spring from agreement.
- Contract Of Record: This type of contract is registered in the court and so acknowledge by the court.
- Oral Contract: This is contract entered into orally, i.e with spoken words. For instance, any time are board a public transport (taxi, bus, etc) to take us to a named destination on an agreed price, the contract is oral. Oral contracts are informal in nature and have the force of formal contracts if evidence of proof is available.
- Written Contracts: This is a documented contract in the sense that the terms of contract are written down. A written contract can be formal or informal depending on the circumstances of the case.
- Implied Contract: This is contract entered into by the mere conduct or act of both parties. There is no written or oral evidence except the act or conduct of the parties. For instance, any time you buy something from a departmental store or market, a contract is an impliedly.
- Expressed Contract: This is contract in which both parties have exercised their freedom to make oral or written declarations of their intention and terms of the transaction.
- Valid Contracts: Valid contracts are contracts that have all the essential conditions and elements to make it binding and enforceable.
- Voidable or Void Contracts: This is a contract that may be binding and enforceable but may be rejected by one party due to the absence of an essential element, such as signing under duress, or one party not having legal capacity at the time of making the contract.
- Void Agreement or Contract: This type has no legal effect and is incapable of enforcement because the subject matter is prohibited by law. For instance, as happened in a Nigerian state in year 2003, a governor-aspirant promised a political “godfather”- ‘If you rig the election and put me into office as governor, I will give you 25% of the monthly Federal allocation to the state’. Such an agreement is void because it is illegal.
- Executed Contracts: If a contract has been fully performed, it is regarded as executed. In that case the obligee has no further claim to make.
- Executory Contract: An executory contract is one that has not been fully performed in which case something remains to be done.
- Bilateral Contract: If one promise is given by one party, in exchange for another promise, by another party, a bilateral contract is created. In other words, the offeror makes a promise and the offeree accepts by making his own promise. There is mutuality of obligations in a bilateral contract because each party has no obligation to perform his promise.
- Unilateral Contract: In a unilateral contract, only one party is expected to perform after the contract has been made.
TERMINATION OF CONTRACT
The following are five methods by which a contract may be terminated;
- By consensus
- Operation of law
- Breach of contract.
REMEDIES FOR BREACH OF CONTRACT.
The following remedies are available when there is breach of contract.
- Damages: The party that has suffered loss has the right to sue for damages.
- Recession: The parties can ask to be restored to their pre-contractual position in the law court.
- Injunction: The injured party can obtain a court injunction which is a mandatory order.
- Justice: This is when the injured party sues to re-enforce the contract.
Explain the method of terminating a contract
Commerce Lesson for Secondary School – Edudelight.com
LAW OF AGENCY (WEEK3)
- Agency is a common legal association which exist when one party, known as the principal, authorizes another party, known as the agent, to enter into contract with a third party in his or her name.
- This is a contractual relationship between a principal and an agent, in order to the principal into an agreement with the third party.
AGENT: An agent is a person who is employed to act on behalf of another person called the principal.
WHO MAY APPOINT AN AGENT: The Law allows every person who is legally competent to appoint an agent. Companies, partnerships, clubs, churches and societies as well as individuals, may appoint agents.
HOW AN AGENT MAY BE APPOINTED
An agent may be appointed in the following ways. By,
- Appointment: This is a statement by the principal authorizing a person to be his agent.
- Ratification: This happens when one person approves an act preciously done by another in the former’s name without authority.
- Estopel: This is an agency which arises when a person by word or conduct leads another person to believe that a third party is his agent or has the authority to execute particular acts.
- Necessity: An agent arises by necessity when an unforeseen emergency occurs. For instance, the driver of a bus operation between Lagos and Maiduguri may pledge his principal’s credit. In order to have needed repairs and may thereafter send the bill to the bus owner for settlement.
- By Implication: The circumstance of the situation may warrant a principal to appoint an agent by conduct or implication, but not in writing. In this case the persons finds himself in a position where his services are accepted as an agent.
TYPES OF AGENTS
Agents are of various types as follows;
- Brokers: Brokers are commercial agents who link their principals with potential buyers. They just search for potential buyers and link them up with their principals.
- Universal Agent: A universal agent is not restricted to any line of goods but is authorized by his principal to enter into all sorts of business transactions on the principal’s behalf.
- General Agents: This type of agent has authority to represent his principal in all matters relating to a particular business.
- Jobber: This type of agent buys from his principal and sells on his own behalf rather than on behalf of his principal.
- Factor: A factor is a commission agent who sells goods on behalf of his principal.
- Del-Credere Agent: This type of agent sells goods on credit on behalf of his principal and under takes responsibility for the collection of the proceeds of the sale. If the buyer defaults in payment the del-credere agent pays so that his principal does not suffer any loss.
- Commission Agents: This is an agent who is engaged by his principal to buy and sell goods at competitive prices on his behalf. Such agents are seen more in foreign trade and they deduct the commission due to them before remitting the cash proceeds to their principals.
- An Auctioneer: This is an agent who is licensed to sell the principal’s goods on auction to the highest bidders.
- Forwarding and Clearing Agents: These agents function more in import and export trade. They work at seaports and airports. Their duty is to do custom’s formalities and forward goods to the foreign importer on behalf of the home exporter. They also clear imported goods on behalf of the home importer and deliver the goods to the named destination of the importer.
- Advertising Agent: This is an advertising practioner who advertises goods and services for his principal.
- Manufacturer’s representative: This is an agent who represents a foreign or local manufacturer in the marketing of the manufacturer’s goods.
AGENT’S DUTIES TO HIS PRINCIPAL
An agent owes five important duties to his principal. These are as follows:
- Loyalty and good faith.
- Reasonable skill and diligence.
PRINCIPAL’S DUTIES TO HIS AGENT.
The principal has five important obligations to his agent. These are as follows;
- Abide by the terms of the agency.
- Not to interfere with the agent’s efforts.
- To make available all facilities that will enable the agent perform his duties satisfactory.
RIGHTS OF AN AGENT.
An agent enjoys the following rights.
- Right of lien over the goods he sells. If he has assumed liability for payment of the purchase price to the principal, he has the right to stop the goods from being consigned to his principal.
- He has the right to obtain refund of all expenses incurred on behalf of the principal.
- He has the right to be indemnified for losses incurred in the course of the agency.
- He has the right to his commission or remuneration.
RIGHTS OF THE PRINCIPAL
- Repudiation of the contract.
- Sue the agent for default.
- He can sue the third party for default.
- Takes over the secret profit made by the agent.
- Refusal to pay the agreed commission.
- Dismissal of the agent.
TERMINATION OF AGENCY
Agency come to an end in the following circumstances.
- Bankruptcy of the principal.
- Insanity of agent or principal.
- Death of either the principal or agent.
- By mutual agreement.
- By completion of the agreement.
- Breach of contract.
- Frustration of the agency.
- Illegality of object.
- By lapse of time.
What are the right of an agent
State the right of the principal
Commerce Lesson for Secondary School – Edudelight.com
HIRE PURCHASE CONTRACT (WEEk4)
MEANING: This is a form of agreement in which the owner transfers possession of goods to the hirer after paying an initial deposit while he retains ownership until final payment is made. It means the goods are on hire and not owned by the buyer until the final installment is paid.
PARTIES TO THE CONTRACT
- The dealer.
- Finance company.
FEATURES OF HIRE PURCHASE
- Cash price should be stated.
- Agreement should be documented and evidenced in writing.
- Requires initial deposit.
- Installment payment.
- Suitable for durable goods.
- Seller has right of repossession.
- Buyer can take possession and not ownership.
ADVANTAGES OF HIRE PURCHASE TO SELLERS.
- Increase in turnover.
- Enable sellers to dispose of expensive.
- The sellers can change higher prices for goods.
- Sellers can repossess the goods.
- Sellers retain ownership until full payment is made.
- Increase in profit.
ADVANTAGES OF BUYERS
- Buyers enjoy the use of goods even when they have not fully paid.
- Affords buyers the opportunity of acquiring expensive goods.
- Improves the customer’s standard of living.
- Buyers can return goods to seller before completion of payment.
- Buyers have access to credit.
DISADVANTAGES TO SELLERS
- Customers may fail to pay as at when due.
- Additional cost may be incurred as a result of court persecution.
- A lot of capital may be tied down.
- Problems of irrecoverable debts.
DISADVANTAGES TO BUYERS
- Buyers may pay more for the goods.
- They can buy more than what they can afford to pay for.
- The customers may not be able to negotiate better conditions of sales.
- The interest rate may be very high.
This is a credit agreement in which the customer is allowed to take possession and ownership of the goods upon the payment of the initial deposit.
FEATURES OF DEFERRED PAYMENT
- Ownership and possession are transferred immediately to the buyer.
- Less durable goods are involved.
- Sellers cannot repossess the goods.
- Lower price is charged.
Differentiate between a buyer and a seller
State the advantages of a buyer
State the feature of hire purchase
CONTRACT OF SALES OF GOODS (WEEK5)
Meaning of sales of goods: The contract of sales of goods is governed by the law of contract. According to the sales of goods Act of 1893. Sales of goods is a contract of goods whereby the seller transfers or agrees to transfer property in goods to a buyer for money consideration called the price.
FEATURES OF CONTRACT OF SALES
- There must be agreement to transfer property in goods.
- The property may be transferred immediately under the contract or it may be agreed to be transferred.
- There must be a buyer and a seller.
- There is money consideration on called price.
IMPLIED PROVISIONS OF THE SALES OF GOODS ACT 1893
- Right of seller to sell.
- That the goods shall correspond with the description.
- That the goods must be of merchantable quality.
- That the goods shall be fit for a particular purpose.
- That the bulk of goods shall correspond with sample.
- That the goods shall be free from any encumbrance at the time property is to pass.
- That the goods shall be delivered and accepted.
CONTRACTUAL RULES FOR THE SALES OF GOODS.
- Existence of an agreement.
- Intention to create legal relations.
- Contractual capacity of parties.
- It must be supported by valuable considerations.
RIGHTS OF THE UNPAID SELLERS.
The seller has the following rights;
- Right to lien.
- Right to stoppage in transit.
- Right to re-sell.
- Right to sue the buyer for the price.
- Right to sue buyer for non-acceptance.
RIGHT TO THE BUYER
The buyer has the following rights in a contract of sale;
- He can sue for non-delivery.
- He can sue to recover purchase price.
- Right to sue the specific performance.
- Right to repudiate the contract.
Explain the right of a buyer
CONTRACT OF EMPLOYMENT(WEEK6)
This is a contract whereby a person called the employer agrees to pay consideration usually called salary or wages to another called the employee for services rendered to him.
EMPLOYER: This is an organization or a person who agrees to pay consideration usually called salaries or wages, to another called the employee, for services rendered or for work done.
DUTIES OF THE EMPLOYER
- Duty to pay salaries and wages.
- Duty to provide training facilities.
- Duty to provide work.
- Duty to indemnity the employee.
- Duty to ensure safety.
- Provision of adequate job security.
- Duty to provide tools and equipment.
RIGHTS OF AN EMPLOYER
- Right to dismiss the employer.
- Fixing of salaries and wages.
- Right to employ.
- Right to withhold remuneration.
- Right to use invention of his workers.
This is a servant or someone who works under the control and direction of the employer. He receives remuneration called wages and salaries for rendering services to the employer.
DUTIES OF THE EMPLOYEE
- Duty to perform his function in good faith.
- Duty to obey all lawful instructions.
- Exhibition of skill and care in the performance of his assignment.
- Duty to render proper accounts.
- Non-acceptance of bribe or making of secret profit.
- Performance of his duty.
- Confidentiality of information.
- No conflict of interest.
- Duty not to delegate duties.
RIGHT OF AN EMPLOYEE
- Right to be indemnified.
- Right to go on leave.
- Right to work in safe place.
- Right to be re-imbursed for expenses.
- Acceptance of job.
- Right to receive salary.
State the duties of an employee
What are the duties of an employer
GOVERNMENT REGULARITIES OF BUSINESS (WEEK7)
The government regulated business in one or more of the following ways;
- Registration of business: The government registers all business units not only to give the business legal backing but also to determine the strength of the economy in the various industrial spheres.
- Patent: This is a special right granted by government to someone who has made an invention so as to protect that invention for him or her. Patent confers monopoly. The owner of patent is called patentee.
- Trade-Mark: A trade-mark is an identification mark registered by the owner to distinguish his products from those of other competitions. Trade-marks; Lux, Elephant, Omo, etc are registered trade-marks.
- Copyright: This is the sole right which the copyright law grants an individual to reproduce and market an intellectual, literary, artistic or musical work. Copyright does not last forever but it is limited to 50 years in the case of musical works from the date of release, or 50 years in the case of intellectual properties after the demise of the owner.
NOTE: GOVERNMENT REGULATION OF BUSINESS
This is the way by which government uses new information technology to provide people with more convenient access to government information and services to improve the quality of the services and to provide greater opportunities to participate and influence government and its policies.
OTHER METHODS OF GOVERNMENT REGULATIONS OF BUSINESS
- Publication of financial statement.
- Fiscal policies.
- Establishment of regulatory bodies.
- Use of standard weights and measures.
- Giving approval for business location.
- Ownership of business.
REASONS FOR GOVERNMENT REGULATION OF BUSINESS
- Prevention of monopoly.
- Revenue generation.
- Ensuring production of quality goods.
- Enhancing economic growth and development.
- Uniformity in commercial activities.
- Ensuring compliance with rules and regulations.
- To ensure uninterrupted supply of goods.
- Protection of consumers from exploitation.
- Production of safe goods.
Explain the reasons for government regulation of business
Commerce Lesson for Secondary School – Edudelight.com
STRUCTURE OF BUSINESS (WEEK8)
Organizational structure is the framework by which tasks are divided, grouped and coordinated.
ORGANIZATION CHART OR ORGANOGRAM
Organizational chart is a graphic representation or a blue print of all the units, divisions and departments and their related duties in an organization with a view to making every member be aware of the person he is directly responsible to.
BOARD OF DIRECTOR
PRODUCTION FINANCE PURCHASING MARKET SALES PERSONNEL
MANUFACTURING DESIGN CONTROL WARE HOUSE
ADVERTISING SALES MARKET RESEACH
TREASURY CASHIER AUDITY COSTING
ADMINISTRATION RECRUITMENT TRAINING
TYPES OF ORGANIZATIONAL STRUCTURE
There are various types of organizational structure. Some of them are explained below.
- LINE STRUCTURE: This is the oldest and simplest organizational structure which is suitable and applicable mostly to small or medium size manufacturing enterprises. It is used to denote the direct line of authority and responsibility between each superior and subordinate.
DIAGRAM OF A LINE STRUCTURE
BOARD OF DIRECTOR
PURCHASING MANAGER MARKETING AND SALES MANAGER HUMAN RESOURCE MANAGER FINANCE MANAGER
EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES
- FUNCTIONAL STRUCTURE: The activities of the organization are structured according to the basic organic functions of business undertaken by them. Under this structure, similar or related activities are grouped together under each department. E.g, production, marketing and finance.
DIAGRAM OF FUNCTIONAL ORGANIZATION IS A MANUFACTURING COMPANY
BOARD OF DIRECTOR
PRODICTION MANAGER MARKETING AND SALES MANAGER HUMAN RESOURCE MANAGE FINANCE MANAGER PURCHASING MANAGER
EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES
- LINE AND STAFF STRUCTURE: This is a mixture of direct executives responsibilities with specialists auxiliary services. It resembles the line structure, only that specialists are included in the arrangement.
DIAGRAM OF LINE AND STAFF
BOARD OF DIRECTOR
ASSISTANCE TO THE M D
PRODICTION MANAGER MARKETING AND SALES MANAGER HUMAN RESOURCE MANAGE PURCHASING MANAGER FINANCE MANAGER
SUPERVISOR SUPERVISOR SUPERVISOR
- TEAM-BASED STRUCTURE: This is made up of workgroup that performs organization’s work. It breeds departmental barriers and decentralizes decision making to the level of the teamwork.
INTRODUCTION TO BUSINESS MANAGEMENT.(WEEK9)
What is management? Management can be defined as the co-ordination of all the resources of an organization through the process of planning, organizing, directing, and controlling in order to attain organizational objectives effectively and efficiently.
PRINCIPLES OF MANAGEMENT
These are the fundamental principles propounded by Henry Fayol. He was a French engineer. He wrote comprehensively on management.
- DIVISION OF LABLOUR: This is breaking down of job into several parts so that each stage can be handled by different individuals.
- UNITY OF COMMAND: It means that the employee should receive orders from one superior at a time.
- AUTHORITY AND RESPONSIBILITY: Henry Fayol stated that responsibility should be commensurate with authority.
- DISCIPLINE: This is the respect for agreements which are directed at activity. It means obedience and outward mark of respect.
- REMUNERATION: The principle states that the employees should be given fair remuneration and the mode of payment should satisfy both the employee and employer.
- CENTRALIZATION: This refers to the extent to which authority is concentration at the top of the organization.
- ESPIRIT DE CORPS: This principle preaches that in union, there is strength.
- UNITY OF DIRECTION: This states that there must be one head and plan for each group.
- SPAN OF CONTROL: This refers to the numbers of employees a manager can effectively supervise.
- SCALAR CHAIN: This is the line of authority from the highest to the lowest rank of the organization.
BUSINESS: Business can be described as the sum of all activities involved in the production and distribution of goods and services for profit.
OBJECTIVES OF A BUSINESS
- Profit maximization.
- Wealth maximization.
- Consumer satisfaction.
- Turnover maximization.
- Employees’ welfare.
- Social responsibility.
- Survival and growth.
A resource can be an asset, competency, process, skill or knowledge controlled by the organization. Business resources are inputs that are used in productive processes. It comprises of human, material, financial, opportunities and goodwill.
FUNCTIONS OF MANAGEMENT
- PLANNING: This involves the establishment of objectives and the formation of strategies, policies, procedures, and action required to achieve the objectives of an organization.
- CONTROLLING: This is the process of compelling events to conform to plan. It requires the establishment of standards, measurements of performance with standards and ensuring that corrective actions are taken if there are deviations.
- ORGANIZING: This is the determination of the structure that would optimize the utilization of the corporate human and material resources in the achievement of its objectives.
- COORDINATION: This is the process of integrating the objectives and activities of the separate units of organization in order to achieve pre-determined goals effectively.
- STAFFING: This is a management function which focuses on the recruitment of qualified personnel to main different posts in an organization. The major components of staffing are recruitment, selection and placement.
- DIRECTING: This is the accomplishment of a company’s objective by guiding and motivating subordinates.
- MOTIVATING: This is the management function that makes the difference in intensity of behavior. It is the process of getting subordinates to put up their best willingly in terms of hard work and efforts through offer of incentives.
Explain the 14 principle of management by henry frayol
Commerce Lesson for Secondary School – Edudelight.com
The external environment of a business includes forces that affect a business organization, as well as other business operating within the same environment, such forces are external to the organization and cannot be controlled by the management. It can be classified into two major elements;
- Direct Element.
- Indirect Element.
- DIRECT ELEMENT: These include individuals and institutions who have considerable impact on the attainment of the organizational goals.
- INDIRECT ELEMENT:
- Political environment.
- Technological environment.
- Social-cultural environment.
- Legal environment.
- Economic environment.
- Demographical environment.
- Financial environment.
- Infrastructural environment.
- International environment.
- Ecological environment.
This is the way jobs are grouped into logical units. It ensures that activities that are similar are grouped into departments.
FUNCTIONS OF EACH DEPARTMENT
PERSONNEL DEPARTMENT: This is the department that is responsible for all matters concerning recruitment, selection, and training of staffs.
FUNCTIONS OF PERSONNEL DEPARTMENT
- Determining and maintaining good relations with trade union.
- Maintaining records and statistics of employment.
- Coordinating performance appraisal scheme.
- Coordinating promotion procedures.
- Manpower planning and training.
- Administration of wages and salaries.
- Ensuring adequate safety measures and welfare services.
- Developing and maintaining procedures for recruitment.
- Discipline of members of staff.
- Dismissal of members of staff.
- PURCHASING DEPARTMENT: This department makes arrangements for purchase of all items required by the business.
FUNCTIONS OF PURCHASING DEPARTMENT
- Processing of materials and assets.
- Maintaining inventory level.
- Monitoring of price of materials.
- Controlling volume of materials coming into the store.
- Advising production on late delivery.
- Purchasing of materials at the least costs.
- Maintaining records of operation.
- Checking invoices presented by vendors.
- FINANCE DEPARTMENT: This is a department that is concerned with the financial aspect of the organization. It is divided into different sections like accounting and auditing, etc.
FUNCTIONS OF FINANCE DEPARTMENT
- Efficient management of the financial resources of an organization.
- The finance department makes decisions on financial matters.
- It provides permanent records of all transactions.
- It evaluates the performance and profitability of the business organization.
- Finance department is charged with the responsibility of controlling expenditure.
- To control cost.
- Keeping records of assets and liabilities.
- It deals with tax matters on behalf of the organization.
- Calculation of salaries and wages.
- PRODUCTION DEPARTMENT: This department produces goods under the instructions of the production manager.
FUNCTIONS OF PRODUCTION DEPARTMENT
- The production department deals with the control of cost of production.
- It produces goods for the organization.
- It embarks on produce design.
- Ensuring quality control.
- It carries out research in order to develop new products.
- MARKETING AND SALES DEPARTMENT: This is the department that organizes the distribution and sales of goods. It ensures that the products of the firm are taken to the right place, at the right time and at the right price to meet demand.
FUNCTIONS OF SALES AND MARKETING DEPARTMENT
- To identify customers need.
- It advertises the products of the organization.
- To plan the distribution of finished products.
- In embarks on market research.
- The goods produced by the organization is sold by this department.
- It promotes the sales of goods.
SOCIAL RESPONSIBILITIES OF A BUSINESS
An organization should be socially responsible to all the people in the area where it operates.
An organization has responsibilities to the following;
- GOVERNMENT: A business organization provides the following responsibilities to the government;
- Tax payment.
- Partnership with government to provide social amenities.
- Compliance with government’s regulations and rules.
- Using local input for production.
- Accepting government regulatory rules.
- Sport sponsorship.
- Rural development.
- Employment opportunities.
- Provision of infrastructural facilities.
- Elimination of poverty.
- Scholarship award to students.
- Provision of quality products.
- Preservation of culture of the people.
- Donation to orphanages and rehabilitation centres.
- Protection against misleading advertising.
- Consumer oriented labelling.
- Provision of quality and reliable products.
- Provision of pre-sales service. E.g, credit facilities.
- Ensuring fair pricing of products.
- Rendering after-sales service. E.g, installation.
- Provision of information to make right choice.
- Giving attention to complaints from the consumers.
- Payment of fair remuneration.
- Provision of conducive environment.
- Ensuring security of job.
- Provision of good welfare package.
- Ensures that the workers are well trained.
- Ensuring safety of the employees.
- Indemnify employees in case of injury.
- Ensuring job satisfaction.
- Provision of satisfactory returns or profits.
- Safety of investment of owners.
- Distribution of profit as dividend.
- Organizing annual general meetings.
- Ensuring compliance with various accounting policies and standards.
- Preparation of financial statements.
- Provision of information about the organization to the owners.
- Implementation of decision taken at the annual general meeting.
- ENVIRONMENTAL RESPONSIBILTIES:
- Development of pollution control techniques.
- Adequate disposal of wastes.
- Reduction of pollution in the environment.
- Chemically treating wastes to make it harmless.
What is departmentalization
Explain the function of production and finance department