The Business Blueprint: Defining Objectives, Roles, and the Ghanaian Classification System | Business Management SHS 1 SEM 1 WEEK 1 (WASSCE & NaCCA Aligned)
100% NaCCA ALIGNED: National Curriculum Standard.
What is Business? Defining the Engine of the Economy
In our communities, we see countless activities involving the exchange of goods and services—from the vendor selling bread early in the morning to the large bank managing complex transactions. According to the NaCCA curriculum, a business is any activity or organization that provides goods or services to customers with the primary aim of generating profit. It involves organized efforts and activities of individuals to produce and sell goods and services for money.
It is crucial to differentiate between Goods (tangible items you can physically touch, like phones or yams) and Services (intangible actions performed for you, like teaching, banking, or a haircut).
The Essential Objectives of Every Enterprise
Businesses do not simply exist; they are driven by specific goals. These objectives guide their daily operations and strategy. Understanding these objectives helps us evaluate a business’s success and its societal contribution:
- Profit Generation: This is the fundamental, primary objective. Profit is the surplus of revenue over costs. Without profit, a business cannot survive, invest, or grow.
- Survival and Growth: Businesses must constantly adapt to market changes. A primary goal is long-term survival, which requires strategic growth, whether by increasing market share or expanding product lines.
- Provision of Goods and Services: A business must meet the needs of its customers efficiently. Whether providing essential staples or advanced technology, fulfilling market demand is a core purpose.
- Creating Employment: Businesses hire personnel to manage production and operations, thereby contributing significantly to job creation and reducing unemployment.
- Social Responsibility: Modern businesses have a duty beyond profit. This includes operating ethically, minimizing environmental impact, and giving back to the community through corporate social responsibility (CSR) initiatives, like donating to schools or health facilities.
The Pivotal Role of Business in Society
The impact of business extends far beyond the owner’s bank account. They act as essential pillars for national development and community stability:
- Economic Development: Businesses drive the economy by creating wealth, stimulating investment, and providing the infrastructure needed for commerce (e.g., logistics and communication).
- Taxation and Revenue: Businesses pay various taxes (corporate tax, VAT, etc.) to the government. This revenue is vital for funding public services like roads, security, and healthcare.
- Innovation and Technology: Competition forces businesses to improve processes, introduce new products, and adopt technology. This innovation raises the overall standard of living.
- Improved Standard of Living: By offering diverse, quality goods and creating employment opportunities, businesses directly increase the purchasing power and quality of life for citizens.
Classification of Businesses: Organizing the Market
Given the vast differences between a street vendor and a multinational telecommunications firm, we must classify businesses based on specific criteria:
1. Classification by Size
This is often determined by the number of employees, sales turnover, or investment capital. In Ghana, this is crucial for policy purposes:
- Small Businesses: Characterized by few employees (often less than 30) and limited capital (e.g., local mechanic shop, boutique).
- Medium Businesses: Larger organizations, often employing between 30 and 100 people.
- Large Businesses: Major corporations, often multinational, with significant assets and hundreds or thousands of employees (e.g., mining companies, major banks).
2. Classification by Ownership
This defines who legally owns and controls the enterprise:
- Sole Proprietorship: Owned and controlled by one person (e.g., most tabletop vendors).
- Partnership: Owned by two or more individuals sharing profits and liabilities.
- Company (Private/Public): A separate legal entity whose ownership is defined by shares (e.g., Fan Milk PLC).
- State-Owned Enterprise: Owned and controlled wholly or partly by the government (e.g., Volta River Authority – VRA).
3. Classification by Purpose
- Profit-Oriented: The main goal is maximizing financial returns (e.g., a beverage factory).
- Non-Profit Oriented: Focuses on serving a social, charitable, or educational cause; profits are reinvested into the mission, not distributed to owners (e.g., NGOs, foundations).
4. Classification by Industry/Sector
- Primary Sector: Involves the extraction or harvesting of raw materials (e.g., farming, fishing, mining).
- Secondary Sector: Processing and manufacturing raw materials into finished goods (e.g., construction, food processing).
- Tertiary Sector (Service): Provides intangible services to consumers and other businesses (e.g., banking, teaching, transport, telecommunications).
The Local Laboratory
To understand business classification, let’s look at the famous Waakye seller (Food). This operation is typically a Small Business and a Sole Proprietorship, focusing on profit generation by providing an essential service (food). Compare this to the Accra Mall (Landmark), which is a Large Business often structured as a company in the Tertiary Sector (retail services). Both contribute by paying levies to municipal authorities, an action governed by Fiscal Policy (Policy). When the Waakye seller registers her business with the local assembly and pays her required fees, she fulfills the same civic role as the large mall: contributing to national revenue.
Self-Check Quiz
Struggling? Click here to Reveal the Answer Key
[C, D, C]
Unlock Full Academic Mastery
DOWNLOAD TEACHER’S PREP SUITE (GHS 70)
DOWNLOAD STUDENT’S MASTERY PACK (GHS 70)
Full 14-week NaCCA-aligned experience.
