Business Functions
All organisations require resources to carry out their business
functions. A way of judging the success of a business is to compare
the resources the business uses with the value of the product that
results. One way of considering the resources used by business is to
classify them into factors of production. The main factors of
production are capital, labour and land.
Capital refers to any manufactures product used by the business to
make other products. This category therefore includes all machinery,
vehicles and office equipment used in the business. It also includes
the companies building.
Labour is the human resource used by business organisation during
production. It refers to the input of physical and mental activity of
the employee.
Land in the context of this classification is not only the site on
which the business is located, but also all the natural resources it
might use. So resources consumed by the business, such as coal, gas,
oil and water are classified as land.
Some economists would add enterprise to the list of factors of
production. Enterprise refers to the role of the people who risk their
money in establishing and operating the business. The other resources
would not be put to use without the catalyst of entrepreneurs wiling
to invest their money and take the risk.
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LABOUR
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All businesses combine factors of production as an essential part of
their production activities. To combine these factors, to engage in
production and to achieve their objectives organisations undertake a
number of functions ...