Author: Juan Anthonio Kambuno


 Chapter 2 
CLASSIFICATION OF BUSINESS 

Introduction…

In this chapter, you will read about how the businesses are classified and why it is so important.

1. PRIMARY, SECONDARY & TERTIARY SECTORS.
The goods and services they produce can be used to classify all of a country's businesses into one of three different sectors. Namely:

A. Primary Sector 
Primary Sector: A business activity that taking the natural resources from land and sea to produce goods.
Examples: > Farming 
                  > Fishing 
                  > Forestry 
                  > Mining
Some primary sector produces final product. 
          Examples: > Fruits
                            > Vegetables
                            > Fish
Why is it important?
Answers: This activity takes the natural resources from the earth. The products are made from the raw material which is from the earth. 

B. Secondary Sector
Secondary Sector: A business activity that producing a raw material into the original goods.
Examples: > Refining 
                  > Manufacturing
                  > Construction
Why is it important?
Answers: this are the important sector of making new products. If the secondary sector is gone, what are you gonna do with this raw material? Should you put back to land? Or just don't care with it? 

C. Tertiary Sector 
Tertiary Sector: A business activity that providing services to sell the finished goods. 
Examples: > Shops 
                  > Restaurants 
                  > Banks
                  > Cinemas
                  > Airlines
Why is it important?
Answers: the last sector is to get profit (money). That's what businessman thinks. The products sell in the stores or directly to customers. The benefits must be to consumers and the producers.

2. A CHANGE IN BUSINESS BEHAVIOUR RESULTING FROM:
> Expansion of the business can compete in global markets
> Better communication will open big opportunities to you
> The need to provide better services for their employees, it will increase demand for the goods and 
   services of your business

3. CHAINS OF PRODUCTION
It means, the production and supply of goods to the final consumers involves activities from primary, secondary and tertiary sector businesses.

4. PRIVATE SECTOR & PUBLIC SECTOR
Most countries in the world have Mixed Economy.
Mixed Economy: Where the resources are owned and controlled by private sector and public sector.
These are economies that have both private sector and public sector organisations.
Private Sector: Organisations owned by the state and run by government.

In Private Sector, there are Unincorporated and Incorporated.
A. Unincorporated
It means, they don't have any stock and shares.
> Sole Trader
   It means, own business and get profit by themselves.
   Examples: - Small Tradespeople
                     - Corner Shops
                     - Freelance Writers
                     - Artists
                     - Journalists
> Partnerships
   It means, 2 people (partner) making a new business and sharing ideas. But profits get half.
   Examples: - Firms of Solicitors
                     - Accountants
                     - Architects

B. incorporated
It means, They have stock and shares.
> Private Limited Companies
   It means, controlled by owned and no government included.
   Examples: - Family-owned business
                     - Small Engineering and Manufacturing Companies
                     - Larger Companies
> Public Companies
   It means, Owned and controlled by government.
   Examples: - Large Companies

In Public Sectors, there are Central Government and Local Government.
A. Central Government
It means, The central government is the political authority that governs an entire nation.
> Government Departments
   It means, a sector of a national or state government that deals with a particular area of interest  .
   Examples: - Health 
                     - Education
                     - Employment 
> Services Organisations
   It means, organisations that providing a services 
   Examples: - Police 
                     - Army
                     - Navy and Airforce 
> Public Corporations
   It means, a company whose shares are traded freely on a stock exchange. 
   Examples: - Televisions
                     - Postal Services
> Other Organisations 
   Examples: - Trading Standards Agency

 B. Local Government
It means, An administrative body for a small geographic area, such as a city, town, county, or state. A local government will typically only have control over their specific geographical region and cannot pass or enforce laws that will affect a wider area.
> Local Authorities
   It means, an administrative body in local government.
   Examples: - Schools
                     - Hospitals
> Administrative Departments
   Examples: - Treasures' Department
                     - Housing Department
                     - Roads
> Local Services
   Examples: - Parks
                     - Libraries
                     - Leisure Centres