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AQA GCSE (9–1)
BUSINESS
SECOND EDITION
Malcolm Surridge,
Andrew Gillespie
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Please note that when teaching the AQA GCSE (9–1) Business course, you must refer to AQA’s
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the specification, it does not provide complete coverage of every aspect of the course.
A wide range of other useful resources can be found on the relevant subject pages of our
website: www.aqa.org.uk.
1
The Publishers would like to thank the following for permission to reproduce copyright material.
Acknowledgements
pg. 4, Reproduced with the permission of Fatface (www.fatface.com); pg. 14, Department of Business,
Innovation and Skills:© Crown Copyright; pg. 17, Reproduced with the permission of Honest
Burgers (www.honestburgers.co.uk); pg. 27–28, Reproduced with the permission of Sport England
(www.sportengland.org); pg. 61, Reproduced with the permission of eMarketer; pg.65, From ‘WhatsApp:
the secret weapon for small businesses’, The Telegraph, 29/01/15 (Rebecca Burn-Callendar) © Telegraph
Media Group Limited; pg. 88, ONS © Crown Copyright; pg. 89, Trading Economics data © Crown
Copyright; pg. 93, Trading Economics data, Source U.S. Bureau of Economic Analysis; p95, World
Bank, Global exports 1960-2015; p96, CIA World Factbook pg. 100, Reproduced with the permission
of Merrythought Ltd; p120, Ofcom © Crown Copyright; pg. 147, Reproduced with the permission
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ISBN: 9781471899386
© Malcolm Surridge and Andrew Gillespie
First published in 2009
This edition published in 2017 by
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A catalogue record for this title is available from the British Library.
Contents
Introduction v
1 Business in the real world

1.1 The purpose and nature of businesses 2
1.2 Business ownership 10
1.3 Setting business aims and objectives 20
1.4 Stakeholders 30
1.5 Business location 35
1.6 Business planning 41
1.7 Expanding a business 46
2 Influences on business
2.1 Technology 58
2.2 Ethical and environmental considerations 68
2.3 The economic climate of business 82
2.4 Globalisation 94
2.5 Legislation 107
2.6 The competitive environment 117
3 Business operations
3.1 Production processes 132
3.2 The role of procurement 140
3.3 The concept of quality 148
3.4 Good customer service 153
4 Human resources
4.1 Organisational structures 164
4.2 Recruitment and selection of employees 175
4.3 Motivating employees 189
4.4 Training 198
5 Marketing
5.1 Identifying and understanding customers 212
5.2 Segmentation 218
5.3 The purpose and methods of market research 224
5.4 Elements of the marketing mix 234
5.5 Using the marketing mix: product and pricing 239
5.6 Promotion and distribution 251
iii
6 Finance
6.1 Sources of finance 264
6.2 Cash ﬂow 276
6.3 Financial terms and calculations 286
6.4 Analysing the financial performance of a business 298
Glossary 314
Index 320
iv
Introduction
Welcome to your AQA GCSE Business course.
1. What you will study

Your GCSE is divided into six parts which we have presented as
separate chapters.
Chapter 1: Business in the real world. This part of the course is designed to
introduce you to the subject. It considers the purpose of business activity, the
role of business enterprise and entrepreneurship, and the dynamic nature of
business. While studying this unit you will encounter the different legal forms
a business can take, the goals they set themselves, how they decide where to
locate and how they plan their activities. Both this chapter and chapter 2 relate
to the four functional areas of business (business operations, human resources,
marketing and finance) that are covered within chapters 3 to 6.
Chapter 2: Influences on business. All businesses are influenced by external
factors and this unit considers some of the most important of these, including
technology, the economic climate, globalisation and the law.
Chapter 3: Business operations. Discover the different ways that businesses
produce goods and services, how they manage their stock and their suppliers
and how they attempt to produce high quality products and provide excellent
customer service.
Chapter 4: Human resources. Topics within this chapter include how businesses
structure their organisations, how they recruit and select new employees and
how they motivate and train those employees once they start work.
Chapter 5: Marketing. This chapter encompasses the ways in which businesses
identify, understand and target their customers with advertising and other
methods of promoting their products. This chapter will help you to understand
how businesses discover the needs of their customers using market research.
Chapter 6: Finance. This final chapter will help you to understand how
businesses raise the finance they need to establish and expand their businesses.
It will also show how businesses manage their cash, calculate their profits (or
losses) and use financial data to judge their performance.
v
2. The benefits of using this book
Each chapter within this book is divided into a number of sections to give you a
series of short topics to study. Included throughout are the following:
➜ Key terms have been defined to help you to use business terminology to
identify and explain business activity as required by the specification.
➜ Regular ‘Business insight’ boxes link the theory that you study to examples of
actual businesses. It is important that you can see how different businesses
are affected by issues and topics from throughout the GCSE course.
➜ ‘Maths moment’ features will help you to use numbers effectively. Using
quantitative data effectively is an important skill within GCSE Business.
➜ The book is illustrated with a large number of pictures and diagrams to help
you to understand the subject. Many of these have questions which are
intended to make you think more deeply about the issue.
➜ ‘Study tips’ give you advice on a range of topics to enhance your understanding
of this subject.
➜ At the end of each section there are short answer and data response questions.
These allow you to test your knowledge and understanding.
➜ At the end of each chapter there are further practice questions and some
sample answers showing you the ways to tackle (and sometimes how not to
tackle) these types of questions.
3. What examinations will you have to take?

Your GCSE course is assessed through two examinations.
Paper 1: Influences of operations and HRM on business activity. This
examination is worth a maximum of 90 marks and comprises 50% of your
GCSE result. It lasts for one hour and 45 minutes and covers:
➜ Business in the real world ➜ Business operations
➜ Influences on business ➜ Human resources
Paper 2: Influences of marketing and finance on business activity. This
examination is worth a maximum of 90 marks and comprises 50% of your
GCSE result. It lasts for one hour and 45 minutes and covers:
➜ Business in the real world ➜ Marketing
➜ Influences on business ➜ Finance
Both examination papers have three sections:
➜ Section A: multiple choice and short answer questions worth 10 marks.
➜ Section B: a short case study with questions worth approximately 40 marks.
➜ Section C: a short case study with questions worth approximately 40 marks.
Good luck with your GCSE Business course.
Malcolm Surridge & Andrew Gillespie
April 2017
vi
1
Business in
the real world
The purpose and nature of every business is different. In
this chapter, we look at the very beginning of starting a
business. We consider the reasons that you might choose
to start one, the types of business that exist, setting aims
and objectives to measure how successful the business
is, and how a business can grow and expand. We also
look at how location can affect a business, the different
stakeholders that have an interest in the business and the
kinds of activities that businesses carry out.
1
Topic 1.1
The purpose and nature
of businesses
There are many different forms of business and many different reasons why
businesses exist. In this topic, we will consider why people set up in business
and the typical objectives that organisations have. We will also examine
the environment in which businesses operate and how this can affect their
behaviour.
By the end of this topic, you should know:
● the purpose of business
● the reasons for starting a business
● the basic functions and types of business
● business enterprise and entrepreneurship
● the dynamic nature of business.
● The purpose of business

Key terms
A business is an organisation that produces a good or supplies a service.
A good is a physical product, such as a car. A service is an intangible item (that A good is a physical
is, it is something that you cannot physically touch), such as financial advice product, such as a car.
or a yoga lesson. A business involves people – sometimes one and sometimes A service is an intangible
thousands – and aims to provide something that is demanded by others. product (that is, you
cannot touch it), such as
Businesses provide a range of products for customers. A customer is someone
financial advice or a bus
who buys a product. Products are used by consumers. For example, if you buy journey.
a mobile phone for yourself, you are the customer and the consumer. If your A customer is someone
parents buy it for you, they are the customer and you are the consumer. who buys a product from
a business.
A business is successful if it can meet the needs and wants of customers
effectively. A need is a basic human requirement – we need to eat and drink, for A consumer is someone
who uses goods and
example. A want is the desire for a particular product. We need to drink, but we services produced by
want Coca-Cola. We need to get from A to B, but we want to do so in a Ferrari. businesses.
2
1.1 The purpose and nature of businesses
● Reasons for starting a

business
People who start up their own business are called
entrepreneurs. Entrepreneurs are willing to take risks to
set up on their own. They see an opportunity and have
the determination, motivation and focus to start their own
businesses rather than working for someone else. The ability
to be an entrepreneur – to take risks to develop a business We may need to move around for our work. We
idea – is known as entrepreneurship. want to do so in a sports car!
What are the objectives of entrepreneurs?

There are many reasons why people might want to be entrepreneurs. For example: Key terms
➜ They want to be their own boss and make their own decisions (rather than An entrepreneur is
being employed by, and reporting to, someone else). someone who is willing to
take the risks involved in
➜ They want to keep all the profits of a business for themselves (rather than
starting a new business.
working for owners who keep the profits) so they earn more money than if
Entrepreneurship
they were employed by someone else. refers to the ability to be an
➜ They need a job and starting their own business is one way of making sure entrepreneur – to take risks
that they are employed and, hopefully, that they earn money. to develop a business idea.
➜ They have an interest or hobby and this grows into a business. A social enterprise is a
business that is set up to
➜ They want to prove something to themselves (and possibly others) by
help society rather than
showing they can start a business for themselves. This may give them a to make a profit.
sense of satisfaction.
➜ They are unhappy with their present job and want to do something different.
➜ They want more flexible working hours. They want to be able to work when
they want to, rather than having to work the hours that an employer wants
them to work.
➜ They have spotted a business opportunity and believe they can make profits
from providing this good or service.
➜ They want to provide a service for others. Some
businesses are set up to help other people, for
example, a shop set up for and run by the local
community or a local centre set up to help the
homeless. These are known as social enterprises
and are not necessarily profit-making.
Setting up in business creates many exciting
opportunities for people – they can make their own
decisions and create something new. If the business
is successful, there is likely to be a sense of personal
achievement. Establishing a business gives people
an opportunity to show their skills and possibly
Sir Stelios Haji-Ioannou has set up many different
make more money than they could by working for
businesses, such as easyJet, easyCar, easyCinema,
someone else.
easyCruise, easyJobs, easyBus and easyHotels.
3
Factors of production – land, labour, capital, Key terms

enterprise Resources are the
Factors of production are the resources (or materials) that businesses use to inputs that businesses
use to provide their goods
provide their goods or services. These include: or services.
➜ land – the physical land and the site on which the business is located, and
An enterprise is another
other natural resources a business might use word for a business. It
➜ labour – the skills and numbers of employees employed by a business also refers to the skills
➜ capital – the equipment used to provide the goods or services, such as of the people involved in
machinery and equipment the business to identify
business opportunities and
➜ enterprise – the skills of the people involved in the business to identify bring together resources to
business opportunities and bring together resources to meet these meet these opportunities.
opportunities. Interest is the money
What a business is able to produce will depend on the quantity and quality of paid by banks as a reward
to attract people to save
its resources and the way in which these resources are combined and managed. with them.
Opportunity cost
The opportunity cost is the sacrifice we make whenever we decide to do
anything. If we decide to go out tonight, we sacrifice the work we could have
done. If we stay in, we sacrifice the enjoyment of going out. There is always a
trade-off when we do anything. Whenever you make a decision, it is important
to consider the opportunity cost – what are you giving up? For example, if you
decide to set up a business, you may be giving up a more secure income in your
existing job. If you decide to invest your savings in a business, then you are not
using these savings to earn money, which is known as interest, in the bank.
Business insight
FatFace talk. What if they started selling tees and sweats,
and made enough money to carry on skiing? And
what if it was possible to live their dreams by
setting up a small business with a big heart?
Their favourite ski run was ‘La Face’ in Val D’Isere,

a ‘black-run’ which inspired our company name
FatFace. Over 25 years later we still love adventure,
love life and have the same strong values. We still
make clothes that reflect the happy, healthy and
active lifestyles of our customers.’
Source: www.fatface.com
The founders of FatFace set up a business because

it was a hobby that they loved and wanted to pursue.
Here is a description from the FatFace website of the Analyse two other reasons why people might set up
company’s approach and how it was founded: a business. (6 marks)
‘It was 1988. Two young British guys were skiing
in the French Alps, had an idea, and started to
4
What are the characteristics of entrepreneurs? Study tip

There are thousands if not millions of entrepreneurs in any country and so, not In order to decide
surprisingly, the characteristics of these people differ in many ways. However, whether or not a business
most entrepreneurs are: is successful, it is always
important to know why
➜ Innovative. This means an entrepreneur is good at spotting an opportunity.
someone started up
They can see a problem with the way things are done and can imagine a the business in the first
better way of doing things. They have a vision of how things could be. place. If the original aim
➜ Risk takers. An entrepreneur takes a risk that their idea is going to of the organisation was to
help others, then even if it
work. In reality, many new ideas fail. Setting up a business involves time,
does not make a profit it
money and emotional effort. If you get it wrong, you may have lost your may still be a success.
savings and you may feel as if you have failed. So you need to be prepared
for this.
➜ Hard working and determined. If you are setting up a business, you
need to be prepared for it to be a struggle. As a new business, you will
not be well known and will probably have to bargain hard to get a good
deal with suppliers. You need to work hard to get your business known
and, in many cases, it will just be you at the start and so it can be quite
exhausting.
➜ Organised. Running your own business involves many skills and many
decisions. You will often have lots to do and will usually have to be
good at meeting deadlines. You will have to organise materials, people,
production, orders, deliveries and fi nances. So you need to be good at
managing things.
Business insight
Richard Branson
Richard Branson, the founder of Virgin, set up his first business – a magazine
called Student – in the 1960s when he was still at school. He used to run it
from the school phone box. Since then, he has gone on to create hundreds of
businesses under the Virgin name, involving music, nightclubs, trains, planes,
taxis, bridal wear, cola, insurance and pensions.
Analyse the characteristics that might explain Branson’s success. (6 marks)
● Types of business and their basic functions

What sectors do businesses operate in?
Whatever you can think of, some business somewhere is probably providing
it. There are many different types of business and they can be classified in
different ways. For example, some businesses offer physical goods, such as
furniture. Others provide a service, such as education. Many businesses provide
a combination of the two: we may choose to go to a restaurant because of the
atmosphere and environment (a service) as well as the food (a good).
5
Businesses can also be classified in terms of their stage in the production

process:
➜ The primary sector is made up of organisations that are at the first stage
of production and use raw materials. Farms, oil exploration companies and
fishing fleets are primary businesses.
➜ The secondary sector is made up of organisations that are at the second
stage of the production process. They are involved in using primary resources
and converting these into products. Examples of secondary businesses are
manufacturers and printers.
➜ The tertiary sector is the final stage and is made up of organisations that provide
services, for example, fast food stores, estate agents and delivery companies.
The primary, secondary and tertiary sectors
Maths moment
About 2 per cent of workers in the UK are employed in the primary sector. About
22 per cent are employed in the secondary sector.
1 What percentage of employees are employed in the tertiary sector?
2 What are the biggest businesses in your area? Are they primary,
secondary or tertiary?
The functions of a business

A business transforms resources into outputs. To be successful, it must
understand its customers effectively and make sure it provides products Marketing Operations
that are in demand. It needs to think about the nature of the product,
how to promote the benefits of the product to potential customers, what
price to set and how and where customers will want to buy it. These
activities are all part of the marketing function (see Chapter 5).
The business must produce the good or service. For example, running Human
Finance
a hotel involves activities such as taking bookings, cleaning rooms, resources
managing the restaurant, organising check outs. The activities

involved in the production of the product are part of the operations
function (see Chapter 3). Figure 1.1 The four business functions
To provide the product will involve people. In many cases, there may only be
one person in the business, but some organisations have hundreds or thousands
of people working for them. Managing people (for example, recruiting and
6
training staff and deciding how to reward them) is known as the human
resource function (see Chapter 4).
A business will also have to manage money. It may need to raise finance, it will
need to monitor what is spent in different parts of the business and it will need
to calculate whether the business has enough money. These activities are part
of the finance function (see Chapter 6).
Whether the business is small or large and whatever products it provides, it will
have marketing, finance, human resource and operations functions.
● The dynamic nature of business

The business environment
A business will be affected by changes in the ‘business environment’. This
refers to all the factors outside a business that can affect it.
Changes in the business environment can be described under the following
headings:
➜ Technological change. Technology is changing at a rapid rate. This Key terms
creates new markets and products. Snapchat is relatively new, for example.
Technology also changes the way we shop and how and what we buy. Think Interest rates refer to
the cost of borrowing
of the challenge to hotels provided by AirBnB, which now allows people to money or the reward for
search online to find somewhere to stay in someone else’s house or flat so they saving money, expressed
do not need a hotel. See Topic 2.1 for more on the influence of technology. as a percentage.
➜ Economic change. This involves a range of economic factors outside a Inflation refers to the
business, such as the cost of borrowing money from banks (the interest rate), rate at which prices are
the rate at which prices are increasing (which is called inflation) and the increasing. For example,
if infl ation is 2 per cent,
income in the economy (which is called Gross Domestic Product or GDP). The prices are generally
term ‘economic environment’ is sometimes used to refer to these economic growing by 2 per cent that
factors outside a business (see Topic 2.3). year.
➜ Legal change. These are new laws and regulations (legislation). These Gross Domestic
may affect costs (for example, by insisting businesses pay a minimum wage Product (GDP)
to their employees) or demand for a product (for example, by preventing measures all the income
earned in a country’s
tobacco companies advertising their products). See Topic 2.5 for more about economy in a year.
the influence of legislation on business.
➜ Environmental expectations. Customers and consumers are increasingly
interested in the impact of a business on the environment. What resources is
it using? How is it producing the product? How does it transport its product?
The impact of the actions of a business can influence whether a customer
uses that business or not. Even if demand was not affected, some business
people would still be concerned about the environmental impact because it
affects what the world will be like for future generations. See Topic 2.2 for
more about environmental considerations.
The business environment is constantly changing (that is, it is dynamic). Just
look at any newspaper or news site and you will appreciate how much change
7
there is – changes in incomes, changes in the number of people working, new

Study tip
laws, new competitors, and so on. A business has to keep adapting. You may
once have made money from selling typewriters, but you would struggle to do Try not to confuse the
business environment,
so these days. You are unlikely to experience increased demand for cigarettes which includes legal
in the UK and so you would need to look for other opportunities. Businesses change, economic
cannot stay still. They need to be nimble. change, social and
technological change,
Legal Social with environmental
factors factors issues, which refer to
factors such as pollution
and global warming.
Marketing Operations
Human
Finance
resources
Technological Economic
factors factors
Figure 1.2 External factors influencing business functions
Business insight
Coca-Cola Zero Sugar The tax charges soft drinks manufacturers a levy
(tax) per litre of sugary drink packaged for sale, at
In 2016, Coca-Cola spent around £10 million advertising two rates. The higher rate includes drinks with more
its Coca-Cola Zero Sugar. The message of its advertising than 8 g of sugar per 100 ml, such as classic Coke.
was ‘Tastes more like Coke, looks more like Coke’. Over The lower rate covers those with 5–8 g, including
4 million samples of the new product were also given mid-calorie version Coke Life. Those under 5 g are
away to help launch it. exempt.
Zero Sugar has been developed to make the taste even A growing number of people in society want to reduce
closer to classic Coke than Coke Zero, which it replaced. their sugar intake but have been reluctant to try a
It is part of a campaign to encourage more classic Coke no-sugar option because they do not think it tastes as
drinkers to switch to a low- or no-calorie version. good as the original.
Coca-Cola, along with its soft drink rivals, has Analyse the factors in the external environment
now been given an economic incentive to move its that have led to the launch of Coca-Cola
consumers over, after Chancellor George Osborne Zero Sugar. (6 marks)
announced the so-called ‘sugar tax’ in the 2016 budget.
Business insight
Analysing trends in society ● greater interest in personalised services, such as
tailor-made holidays or advice on what books you
Recent trends in society that might create market might like
opportunities include:
● more families where both partners go out to work
● greater interest in the environment
● an ageing population.
● greater interest in healthy eating
Analyse how any one of these trends might affect a
business. (6 marks)
8
Summary
There are many different reasons why people start up because they want to help society. Ideas come from
in business. Some do it for money, some because they their own experiences, from things they have seen
want to achieve something for themselves and some elsewhere and from problems they want to solve.
Quick questions
1 State two possible sources of new ideas for 7 State two examples of businesses in the
a business. (2 marks) tertiary sector. (2 marks)
2 What is meant by an ‘entrepreneur’? (2 marks) 8 State two changes in technology that can
affect a business. (2 marks)
3 Explain one reason why someone might
start their own business. (3 marks) 9 State two changes in the economic
situation that can affect a business. (2 marks)
4 What is meant by ‘opportunity cost’? (2 marks)
10 State two factors of production. (2 marks)
5 What is meant by the ‘primary sector’? (2 marks)
6 State two possible characteristics of an

entrepreneur. (2 marks)
Case study C
Elon Musk
Born in 1971, Elon Musk keeps looking for new ideas. He is chairman
Musk is known as a of the solar energy developers Solar City and has
serial entrepreneur – published design studies of a solar power ‘hyperloop’
he just keeps setting transport system that will provide extremely fast
up businesses! He travel. Musk has been named business person of the
began at school selling year by Fortune magazine and, as of 2017, is said to be
a computer program personally worth over $13.9 billion.
he had produced. Musk has been described as a disrupter – he likes
He went on to set up to challenge things and change them. He says he is
technology businesses simply trying to make things better. Along the way, he
such as Zip2 and has invested all of his money into SpaceX and Tesla
X.Com. In 1999, he – at times, it looked like he would lose it all because
established PayPal and the technology was not working. Many thought he was
built this into a very foolish to risk all his wealth, but Musk says that he
successful business – when it was sold, he earned felt someone had to try it!
around $180 million at the age of 32.
1 Identify two reasons for someone setting up their
In 2002, Musk set up SpaceX aimed at developing own business. (2 marks)
space travel to colonise Mars. In 2003, he established
2 Explain two possible characteristics of a successful
Tesla Motors, a producer of electric cars. Both
entrepreneur such as Musk. (4 marks)
of these projects were initially thought to be
uncommercial but are now attracting a lot of interest. 3 Analyse the possible reasons why Musk wants to
Tesla cars are becoming more familiar on the roads be an entrepreneur. (6 marks)
and winning many awards for their technology. 4 Evaluate the reasons why a government
Meanwhile, the US space agency is using SpaceX to should help entrepreneurs set up in
carry space cargo. business. (12 marks)
9
Topic 1.2
Business ownership
There are many different types of business in the UK, including sole
traders, partnerships and private limited companies. This topic looks at the
different forms of business ownership and considers the advantages and
disadvantages of each.
● what a sole trader is
● what a partnership is
● what a private limited company (ltd) is
● what a public limited company (plc) is
● what a not-for-profit organisation is
● the advantages and disadvantages of the different types of business
ownership.
● Business ownership
Anyone starting up in business needs to think about what type of business they
will have in the eyes of the law (that is, what form of business ownership it will
have). There are various options, as shown in Figure 1.3.
Business
ownership
Sole trader Partnership Company Not-for-profit
Figure 1.3 Types of business ownership
● Sole trader
Key term
A sole trader is a form of business that is owned and managed by one person.
For example, if you set up your own business fi xing people’s computers, you are A sole trader is someone
a sole trader. Setting up as a sole trader is easy. You do not need to register with who sets up in business
on his or her own.
the government or fill in lots of forms. All you have to do is start trading. This
10
1.2 Business ownership
is why it is such a popular form of business and why this method is the one that
many famous business people first experienced. Sole traders are owned and
managed by the same person, although they may employ other staff.
Advantages of being a sole trader

➜ It is quick and easy to set up as a sole trader. Other forms of business, in
comparison, involve registering with the government.
➜ You make all the decisions for yourself so you do not need to consult lots of
other people. This can mean that decision-making is fast and you can get
things done the way you want them.
➜ You keep all the profits yourself, so if your business is successful you do not
have to share the rewards with other people. Key terms
Profit measures the
Disadvantages of being a sole trader difference between the
➜ It can be quite stressful making all the decisions yourself. Some people will values of a business’s
revenue (sales) and its
find it difficult to cope with this amount of pressure. total costs.
➜ A sole trader needs to handle all aspects of the business: the finances, the
Unlimited liability
marketing and the running of the business itself. Some people may not be means that the personal
good at all of these things. possessions of the
➜ If the business goes wrong, you have unlimited liability. This means that you owners of a business
can lose everything you own. are at risk if there are
any problems. There is
➜ There is usually a tremendous amount of work to do as a sole trader. For no limit to the amount of
example, when you are working hard to build the business up, it can be money the owners may
difficult to take a proper holiday. If you are ill, the whole business may come have to pay out.
to a standstill.
➜ If the sole trader dies, the business ends as well, even if he or she has been
running the business for many years.
➜ As a sole trader, you may find it difficult to raise as much money as you
would like in order to get the business going. Sole traders often have to rely
mainly on their own finances, or those of friends and family, to set up their
business. It may be possible to borrow from a bank but, because so many
new businesses fail, banks tend to charge a lot of money in the form of high
interest rates on loans.
➜ A sole trader business is likely to be small and will not have the power of a
large business over other businesses such as those that it buys its supplies
from. This may mean higher costs and lower profits.
Advantages of a sole trader Disadvantages of a sole trader

You are your own boss Unlimited liability
Can decide things quickly May lack finance
Easy to set up Heavy workload
Keep all the profits May not have all the skills required
Make your own decisions Difficult to take a holiday
Table 1.1 Summary of the advantages and disadvantages of being a sole trader
11
● Partnership Key terms

Under the 1890 Partnership Act, a partnership is created when two or more people A partnership occurs
set up in business to pursue a common purpose, such as profit. For example, a when two or more
people join together in a
group of designers may set up a studio together, or a group of doctors might set business enterprise to
up a practice. Partnerships are usually allowed to have a maximum of 20 partners, pursue profit.
although exceptions include solicitors, accountants, auctioneers and estate agents. A Deed of Partnership
is an agreement between
Deed of Partnership partners that sets out the
When setting up a partnership, the people involved (the partners) are advised rules of the partnership,
to write a legal document called a Deed of Partnership. This sets out the rules of such as how profits will
be divided and how the
the partnership. The Deed of Partnership will usually include details of: partnership will be valued
➜ how to divide up profits – for example, this may be related to how much if someone wants to leave.
money each partner puts in at the start or how much work they do in
comparison to the others
➜ how decisions are to be made (voting rights)
➜ how to value the business if someone wants to leave
➜ how to decide on whether someone else can join the
partnership.
The purpose of the Deed of Partnership is to avoid disputes.
If there is no Deed of Partnership, the profits must be paid out
equally, regardless of how much input each person has had.
Advantages of partnership In a partnership, more people own, and are
involved in, the business.
➜ Several people are involved in a partnership so each one can
contribute money. This should mean more funds are available compared
with sole traders who may have to rely on their own funds.
➜ In a partnership, there are more people involved as owners than there
are with a sole trader. Therefore, there can be more people involved with
discussing problems and deciding on strategies. This may lead to better
decisions being made. The partners can benefit from each other’s experience
and insight into problems.
➜ Each of the partners can specialise in a particular aspect of the business, which
can mean a better and broader service is provided. For example, in a legal
partnership someone may focus on company law, someone may deal with
consumer law and someone may deal with property law. This can provide
specialist knowledge in more areas than a sole trader may be capable of.
➜ Partners can cover for each other, for example, if someone is ill or wants
a holiday. This can mean that being in a partnership is less stressful than
Key term
running a business on your own.
Stakeholders
Disadvantages of partnership are individuals and
➜ The partners may have different ideas about how to solve a problem. This organisations that
can lead to disputes. By bringing in partners, the owners are bringing in are affected by, and
affect, the activities of a
stakeholders who have a direct role in the business and who will want to
business.
express their views.
12
➜ Decisions may be slower than for a sole trader because all the partners are
consulted, rather than just making a decision for yourself.
➜ The rewards are divided between partners rather than being kept by one person.
➜ The partners normally have unlimited liability. Even if a mistake is made by
one partner, all the partners must pay the price.
Advantages of a partnership Disadvantages of a partnership
Share workload May disagree with the other partners
More sources of finance than a sole trader Unlimited liability
Share skills Liable for the actions of the other partners and share profits
Table 1.2 Summary of the advantages and disadvantages of forming a partnership
● Companies
A company is owned by its investors, who are called shareholders. There are
Key terms
different types of shares, but the most common ones are called ‘ordinary shares’.
Owners of ordinary shares have one vote for every share they have. If you have A company is a business
that has its own legal
51 per cent of the shares, for example, you have 51 per cent of the total votes.
identity. It can own items,
A company has its own existence in law. This means that it can own things such owe money, sue and be
sued.
as land and equipment. It also means that when you, as a member of the public,
buy products, you buy them from the company rather than the individuals who A shareholder
is a person or an
own it. By creating a company, the shareholders are showing the difference
organisation that owns
between what they own as private individuals and what the company owns. part of a company. Each
This means that they have limited liability. This is very important because it shareholder owns a
means that people can invest in companies and be fully aware of the most that ‘share’ of the business.
they can lose if it all goes wrong. Without this, it would be more difficult to
attract investors because they would be worried about losing everything they
owned if there were problems.
The owners of a company are the shareholders. The people who control the
company and make the decisions every day are called managers. In many private
limited companies (see below), the shareholders are the managers. However, in
public limited companies, the shareholders and managers are often different
groups of people and this creates a separation between ownership and control.
It is possible that the owners and the managers have different objectives. The
managers, for example, may want to invest in long-term projects, such as
developing a new product, whereas the owners may prefer to take money out of
the business now. This can cause conflict.
Advantages of a company Disadvantages of a company

Limited liability Have to register
Better status in the eyes of some customers Have to disclose information on sales and profits
Continues after the death of the founders Have to have accounts independently checked
If there are other investors the original founder is not in
Can bring in investors
full control of the business
Table 1.3 Summary of the advantages and disadvantages of forming a company
13
Company types
Under the 1980 Companies Act, there are two types of company in the UK:
private limited companies (which put ‘ltd’ after their names) and public limited
companies (which put ‘plc’ after their names). Both types of company are owned
by shareholders and both have limited liability. However, there are differences:
➜ A private limited company (ltd) cannot publicly advertise its shares for sale Key terms
and is often owned by family members. In a private company, it is possible The Stock Exchange is
to place restrictions on whom shares can be sold to, for example, in order to a market for buying and
keep a business owned by family members. selling shares of public
➜ A public limited company (plc) can advertise its shares and can be listed limited companies. Large
numbers of shares are
(also called ‘quoted’) on the Stock Exchange. It must have a share capital of being bought and sold all
over £50,000. In a plc, it is not possible to place restrictions on whom the the time.
shares are sold to. This means that, if you own some of the shares of a plc, A flotation occurs when
you can sell them to whoever you want and other people can buy them easily a private limited company
via the Stock Exchange. (ltd) becomes a public
limited company (plc) and
A flotation occurs when a private limited company decides to become a public has its shares listed on
limited company. To do this, shares must be sold to the general public and the the Stock Exchange.
firm must meet the regulations of the Stock Exchange.
Maths moment
Sole traders
Companies
Partnerships
0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Number of businesses (millions)
Source: Department of Business, Innovation and Skills: www.gov.uk
Figure 1.4 Number of businesses in the UK private sector with and without
employees, by legal status, at the start of 2015
1 Estimate the total number of businesses in the UK at the start of 2015.

2 Calculate the proportion of businesses in the UK that were companies at
the start of 2015. Comment on your findings.
14
Private limited companies

A private limited company:
➜ is owned by shareholders – when a business is starting up, its shareholders
tend to be the business founders, although they may bring in outside
investors if they need more funding. The shareholders of many private
limited companies are family members
➜ has ‘ltd’ after its name
➜ cannot advertise its shares to the general public – if shares are sold, this will
be done privately
➜ can include certain restrictions in its Articles of Association to limit who the
shares are sold to (for example, only family members). This helps to make
sure that one owner of the business does not sell shares to someone the
others do not want.
Examples of private limited companies in the UK

Study tip
Advantages of setting up as a private limited company
You might be asked to
➜ Liability is limited. This means that the shareholders’ personal possessions compare the advantages
are safe, and can help businesses to gain access to funding from investors. of one business legal
structure with another.
Investors would be unlikely to take the risk of putting their money into a
Think about:
start-up if there was unlimited liability. But with limited liability, they are ● the liability of the
guaranteed a limit to their losses if things go wrong. business (Is it limited
➜ For many customers, a company seems to have more status than a sole or unlimited?)
trader. People assume that a company is better in some way. Setting up as a ● the control of the
company may, therefore, be a good marketing move. business (Do the
owners want to keep
➜ If the business founders die, the company still exists and whoever owns the
complete control or
shares now continues with the business. are they willing to
➜ Managers can be employed to run the day-to-day business while the owners bring in other people?)
retain control and the profits are distributed among the shareholders. ● the skills and
experience required
Disadvantages of setting up as a private limited company (Do the owners have
➜ Various legal procedures need to be completed, such as registering the enough skills or would
they benefit from other
company, which take a little time and some money.
people’s experience?)
➜ A summary of the business’s financial accounts must be produced and these ● whether or not the
have to be available to the general public. In making information available owners want to work
to other people, including competitors, the business will lose some privacy. with others.
15
➜ Accounts must be checked by an independent accountant (called an auditor),

which will create additional cost.
➜ The business must pay corporation tax (individuals pay income tax) and this
may be more than an individual would pay personally.
➜ Any additional investors in the business become important stakeholders.
For every share they own they will have a vote, and so they have a direct
influence on the business. They may not necessarily have the same values
and objectives as the original owners. Some entrepreneurs find it difficult to
work with other investors in a company as their styles clash.
Public limited companies

A public limited company is one that has shares that are sold to the general
public. These shares can be bought and sold easily on the Stock Exchange. The
share price changes when there is more or less demand for them.
Advantages of becoming a public limited company
➜ A public limited company can advertise its shares to the general public. This
means it has access to a greater number of potential investors than a private
limited company and therefore it may be possible to raise very large sums of
money by selling shares. These could be used to finance expansion.
➜ Public companies attract more media coverage because they usually have more
shareholders. By becoming a plc, a business is likely to attract more interest from
television and newspapers, which provides a good form of cheap publicity.
➜ Public limited companies are usually thought of as having more status than
private companies (and are often bigger). This can impress customers.
➜ Investors may be willing to buy shares because they should be able to sell
them later on relatively easily. There are usually many shares in public
limited companies and these are traded regularly. So if as an investor you
decide you want to sell your shares, you should be able to find someone who
wants to buy them.
Study tip
Disadvantages of becoming a public limited company
Private limited companies
➜ Although more media coverage can be good, it can also be bad. If a plc makes do not have to become
a mistake or does something wrong, the media are more likely to cover the public companies
story than if the business was a private limited company. unless they want more
investment from outside
➜ A plc cannot control who buys its shares, so managers may find that a
investors. During the
competitor buys control of the company and takes it over. process of flotation,
➜ A plc is more regulated than a limited company – it has more things it must do companies have to be
according to the law. For example, it must produce more detailed information sure that there will be
demand for their shares
on its finances each year and send it to shareholders. This can be expensive as
at the price they set. This
well as giving information away to potential competitors and the media. cannot be guaranteed
➜ When a private company becomes a public limited company, it brings in – it depends on what
more outside investors. The original owners may not agree with the views investors think the
business will earn in the
and objectives of the new owners – they may clash when trying to agree
future.
what the business should be doing.
16
Business insight
Fitbit The Fitbit company produces wearable technology.
For example, it produces a wristband that monitors
how many steps you have taken during the day, how
many calories you have burned and how far you have
travelled. In 2015, Fitbit sold its shares to the general
public to become a public company in the USA.
Fitbit had imagined its shares would sell for between
$14 and $16, but when they were put on sale the
price went up to $20. Having sold these shares, the
company was valued at over $4.1 billion. The funds
the company raised from the sale will be used for
research into new products. Fitbit made losses for
many years, but in 2014 made profits of $131.8 million.
In 2015, it sold over 10 million devices.
Analyse two factors that might have determined the
price of the shares Fitbit put on sale. (6 marks)
Share ownership
Many of the shares of public limited companies are owned by financial
institutions, such as insurance companies and banks. Only around 14 per cent
of plc shares in the UK are owned by individuals. The financial institutions
often put pressure on the managers of plcs to pay out a lot of their profits in
the short term; this is so that the financial institutions can reward their own
owners, but this does mean that the plcs have less funds to invest.
Business insight
Honest Burgers objective is to continue to grow quickly over the next
few years.
In 2011, Tom Barton, 29, and Philip Eeles, 32, who
were friends from university, joined up with an Annual sales rise over 3 years 205.67%
experienced restauranteur, Dorian Waite, 48, to start
2015 sales (£000s) 6,900
a business together. The three of them wanted to
create an upmarket burger chain. They spotted that Number of employees 252
there was a growing demand for ‘premium burgers’, Source: www.honestburgers.co.uk
using high-quality ingredients, and decided to target Table 1.4 Key data for Honest Burgers
this market segment with their restaurants. The three
of them set up Honest Burgers Ltd and within four Analyse the possible reasons why Tom, Philip and
years had grown their business to ten sites. Sales had Dorian created a company rather than forming a
grown to £6.9 million by 2015, making it one of the partnership. (6 marks)
fastest growing companies in the UK. The company’s
Maths moment
Look at the data for Honest Burgers in Table 1.4. What is the amount of sales per
employee? Use this formula:
sales
sales per employee =
number of employees
17
● Not-for-profit organisations
Not-for-profit organisations are set up to achieve objectives other than profit.
Key term
For example, a charity may be set up to help the homeless or people abroad after
an earthquake or someone might set up a youth club to provide facilities for A not-for-profit
young people in their area. Not-for-profit organisations will still have to raise organisation is set up to
achieve objectives other
funds and invest just like companies. However, the purpose of the business is than profit; for example, a
not to make profit for investors. A not-for-profit organisation often has social charity.
objectives – it is set up to help society rather than focusing on profits; any profits
made are invested into the business to help society further.
● Which is the right form Who are the

of business? owners? Are
they different
The right form of business will depend on the from the
managers?
situation of the organisation. For example,
when first setting up a business, many
individuals will operate as a sole trader. This is
How can the Comparing How are profits
because this form of business does not need to business raise forms distributed?
be registered and you can simply start trading. finance? Can of business Who receives
At this stage, the entrepreneur probably does it sell shares? ownership them?
not have many assets at risk and protecting

these through limited liability is not essential.
As the business grows, the owner has more What is the
liability of those
personal assets that could be lost and he or she who own
may want to attract outside investors. At this the business?
point, the entrepreneur may want to sell shares Limited or
unlimited?
to raise finance to help the business grow. To
attract investors, limited liability is likely to be Figure 1.5 Factors to consider when comparing forms of
important so that those buying shares know business ownership
there is a limit to their risk.
If the people have social objectives (that is, they want to help society) rather than
to make profits, it would make sense to set up as a not-for-profit organisation.
Summary
There are many different legal structures of a When a business wants to grow, it may change its
business. Each has advantages and disadvantages. status from a private limited company to a public limited
For example, a sole trader is easy to set up, but has company. This has advantages (for example, shares can
unlimited liability. A partnership has the benefit of be sold to the general public) and disadvantages (for
the input of several different people, but there is a example, the business is more vulnerable to takeover).
danger that they will not agree. A company has limited Owners will have to decide whether the benefits of plc
liability, but has to make information more public. status outweigh the disadvantages.
Choosing the right legal structure is an important
business decision when starting up.
18
Quick questions
1 State two reasons why an entrepreneur 6 State two advantages of a partnership
might want to be a sole trader. (2 marks) compared to being a sole trader. (2 marks)
2 State two possible problems of being a sole 7 What is a ‘partnership’? (2 marks)

trader. (2 marks)
8 State two possible problems of a
3 What is meant by ‘limited liability’? (2 marks) partnership. (2 marks)
4 What is a 'shareholder’? (2 marks) 9 What is meant by a ‘Deed of Partnership’? (2 marks)

5 State two differences between a private 10 Why might someone buy shares in a
limited company and a public limited company? (2 marks)
company. (2 marks)
Case study
Snapchat
C
The service, notably popular with younger people,
allows users to send pictures and videos of them
looking like dogs, zombies or with other strange
effects. It has around 58 million users. The Snapchat
app is designed so messages delete once they are
read or expire. With 10 billion videos being watched
every day, the site has seen a 350 per cent increase in
use between 2015 and 2016.
In September 2016, the company announced that it
was going to expand and launch Spectacles, glasses
that can record ten-second clips that can be sent
to smartphones. Its first hardware product became
available at the end of 2016.
1 What is meant by a ‘private limited
company’? (2 marks)
2 Explain two benefits to Snap of launching

products that are not apps. (4 marks)
Snap is the company that owns Snapchat, the picture-
3 Analyse the factors that might affect the
and video-sharing app. It is planning to sell its shares
price of the shares if Snapchat decided to
to the general public. It is estimated that the company
float. (6 marks)
will be worth $25 billion, depending on the price
people are willing to pay for the shares. 4 Imagine the managers of Snapchat are
considering how to raise funds for
The founder and Chief Executive Officer Evan Spiegel,
investment. Should they:
26, is said to be worth $2.1 billion. The company was
founded in 2011 and was expected to generate $366.7 ● float the company on the Stock Exchange, or
million in worldwide revenue from advertising in 2016.
● borrow from a bank?
In 2015, the company’s total revenue was a fraction of
that number at $60 million. Evaluate which option you would choose. (12 marks)
19
Topic 1.3
Setting business aims and
objectives
Whenever you set out to do something, it helps if you have a clear idea of
what you are trying to achieve. What grade do you want in your Business
GCSE, for example? If you are clear about what you want to achieve, you will
find it easier to sort out your priorities and make decisions, such as how
much time and effort to devote to a project.
● the difference between aims and objectives
● the purpose of setting objectives
● the types of business objectives
● the role of objectives in running a business
● how and why objectives may differ between businesses
● how and why the objectives set may change as businesses evolve
● how a business might use objectives to measure its success
● how the success of a business can be measured in other ways than just
profit.
● What are aims and objectives?

An aim is a general goal of the business; for example, the owners may aim to
grow the business or make it more profitable. Key terms
An aim is a general goal
An objective is a specific target that turns the aim into something that is easier
of a business.
to measure and assess progress. For example, the aim may be to grow, whereas
An objective is a specific
the objective set from this might be to grow sales by 25 per cent within three
target that is set for a
years. The aim may be to be more profitable, whereas the objective set from business to achieve.
this may be to increase profits by 30 per cent within five years. The aims and
objectives provide a focus for everything you do and will enable you to look
back and see whether you have done what you wanted to. You may, at any given
moment, have more than one objective. As a student, for example, you may have
20
1.3 Setting business aims and objectives
an objective to do well in your exams, while also continuing with your sports
and having a part-time job to earn money for your holidays. Entrepreneurs may
want to make sure that they provide a good service and earn enough money
to live on, while also having some time for their interests and their families.
Managers in bigger businesses may be trying to make enough profit for their
shareholders, while also looking after their employees and helping their
communities.
● The purpose of setting objectives

By setting objectives, managers will be clear about what they are trying to
achieve. This is important for the following reasons:
➜ It helps with decision-making and with establishing priorities. For example,
if the objective is to grow the business overseas, then there should be a focus
on looking for new orders abroad. If the objective is to stay local, there should
be a focus on potential customers nearby.
➜ It helps investors to understand the direction in which the business
is heading. This might mean they are more willing to agree to certain
decisions. For example, if there is an objective of doubling sales, investors
might be more willing to agree to an investment in a new factory. Having
clear objectives might help, therefore, when trying to raise money to set up a
business.
➜ It provides a target so that everyone can compare the actual results with the
planned results to decide how successful the business has been.
➜ It can motivate everyone connected with the business because they know
what they are trying to do and how they can measure their success.
Business insight
Google’s ‘10 things’ 3 Fast is better than slow.
4 Democracy on the web works.
5 You don’t need to be at your desk to need an answer.
6 You can make money without doing evil.
7 There’s always more information out there.
8 The need for information crosses all borders.
The founders of Google wrote ‘10 things’ when the 9 You can be serious without a suit.
company was just a few years old. They think these
10 Great just isn’t good enough.
aims are still relevant to the business today:
You can find out more about Google’s aims at
1 Focus on the user and all else will follow.
www.google.com/about
2 It’s best to do one thing really, really well. We do
Analyse the benefits to Google of setting
search.
out its ten aims. (6 marks)
21
● The role of objectives

The precise objectives of businesses will vary between organisations and over
time. In the same way, your objectives may be different from your friends and
what you are aiming to achieve may be different at different stages of your life.
However, objectives typically centre on the following areas.
Survival
Survival is particularly important when a business is being set up. Starting a
business is risky and presents many challenges. In the short run, at least, simply
surviving is an achievement. To get the business’s name known, it may be
necessary to charge lower prices and make lower profits than the entrepreneur
would like to make in the long run. Survival may also become important when
the economy is doing badly. If people are earning less money and spending in
the economy falls, some businesses may focus on surviving. For example, they
may accept lower prices (and profits) to get some sales.
Earning a profit
Although there may be times when a business does not make a profit, in
most cases this will be one of its long-term objectives. Profit occurs if the
value of what a business sells over a given time period is greater than the
costs of providing and selling these products. If a profit cannot be made,
the owners of businesses would usually take resources out of this business
and use them elsewhere. Of course, it may take time to generate profit –
companies such as Ocado have taken several years to build the brand and
become profitable – but if a profit simply cannot be generated in the long
term, the business is likely to close. However, it is not just making a profit;
the business needs to make enough profit to cover the opportunity cost of
these resources. How much is enough will vary depending on the owners
and what they are looking for.
Business insight
Tesla The US electric carmaker Tesla is widely admired
as one of the most highly innovative companies in
the world, but has yet to make a profit. It has had 13
consecutive quarters (three-month periods) of losses.
Tesla has been criticised recently for accidents that
have occurred in its autopilot cars. Computer hackers
have also managed to disrupt the cars from a distance
of 12 miles away. However, demand is up and it is now
producing over 100,000 cars a year.
Analyse why Tesla would carry on producing cars if
it is making a loss. (6 marks)
22
Shareholder value
A company is owned by its shareholders. The shareholders employ managers
to run the business on their behalf. Managers will aim to reward their
shareholders by:
➜ generating profits to pay dividends – a financial reward paid on each share
➜ running the business well so that people want to buy the shares. This
increases the demand for them and makes the price of them go up. The
people owning the shares, therefore, now own something worth more
than when they bought it and could sell it for more than they paid for it.
By increasing the price of the shares, managers will have increased the
shareholder value.
Customer satisfaction
Businesses may set targets that focus on achieving a particular level of customer
satisfaction by providing a better service or a wider range of products than
their competitors. This should hopefully lead to more profits in the long run. If
customers are satisfied, they are more likely to come back and buy more products.
They will also tell their friends to try the products as well. However, ensuring
features such as fast delivery, excellent customer information, a wide variety of
products and services may involve high costs and lower profits in the short run.
Market share
Businesses may set themselves a target in terms of the share of the market
they hope to achieve. The market share measures the sales of one product or
business as a percentage of the total market sales. A business may set out to
achieve, say, 20 per cent or 30 per cent of a market’s sales within five years.
Business insight
Next It aims to achieve this through activities such as:
● improving and developing Next product ranges –
the success of this is measured by the sales
● increasing its sales space, provided it is profitable
● increasing the number of profitable Next Directory
customers and their spending
● making sure the business is efficient through
efficient product sourcing, stock management and
cost control
● focusing on customer service and satisfaction levels.
Source: Next: www.nextplc.co.uk
Analyse the possible reasons why Next sets the

objective of earning long-term returns for its
According to its website, the main objective of the
shareholders. (6 marks)
Next group is to earn long-term returns for its
shareholders through the profits earned for each
share and the dividends paid.
23
Growth
Many businesses will have an objective of growth. The owners and managers
may want the business to open more stores, sell more products or increase its
revenue. Growth may come within the local region, for example, an independent
café gaining more customers, nationally (such as Costa opening more stores in
the UK) or internationally (such as Costa opening up in Asia). In each case, a
business must consider the likely demand and costs, and whether it is likely to
succeed. Operating abroad, for example, can be difficult due to differences in
people’s lifestyles, shopping habits and values. Sometimes it can be difficult
for an overseas business to understand these unless it changes what it does.
McDonald’s, for example, changes its menu in different countries.
For more about growth, see Topic 1.7.
Being ethical
The ethics of a decision are what is regarded as right or wrong. Some businesses
will want to behave in an ethical manner – for example, paying their staff
reasonable wages, treating their suppliers and customers with respect and
being honest with them about what is happening in their business. Unethical
businesses may be criticised by the media and lose customers.
By being ethical, a business may benefit by:
➜ getting favourable media coverage
➜ using the ethical message in its marketing
➜ attracting customers, investors and employees.
Acting ethically may sometimes increase costs, for example, when paying
employees more than the minimum required by the law, or when maintaining
production in the UK to protect jobs rather than relocating production to a
cheaper location overseas. Such increased costs must be weighed against the
likely costs of less ethical behaviour – the business could suffer a loss of demand
if employees and customers do not approve of its actions.
For more about ethical considerations, see Topic 2.2.
Environmental and sustainability targets

Businesses might want to make sure that their activities do not damage the
environment. They may set targets to limit the energy they use, to limit their
carbon footprint, to achieve certain recycling targets, to reduce wastage or to
reuse more of their supplies. They may also be interested in making sure the
materials are from sustainable sources (this means the sources are renewed or
will not run out). For example, a furniture company might only use wood from
a supplier that replants whenever it cuts down a tree; a retailer might try to use
wind or solar power to provide the energy for its stores. Resources such as oil
are non-sustainable (they cannot be used forever) and are running out. This is
why some businesses are trying to find alternative resources.
For more about environmental considerations, see Topic 2.2.
24
Business insight
M&S’s Plan A 2020 Plan A in 2007. This is a business plan, designed to
prepare the business for the future requirements of
According to Marks & Spencer (M&S), its customers its customers.
are increasingly aware of the impact of business
actions on the world and so companies need to work Having achieved many of its targets in the original
hard to build and maintain customers’ trust. Increased Plan A – including carbon-neutral operations,
pressure on natural resources and a failure to look sending zero waste to landfill and reducing packaging
after these resources can increase costs and make by 25 per cent – in 2014, M&S launched Plan A 2020.
accessing raw materials more difficult. This has 100 new, revised and existing environmental
commitments.
M&S believes a successful business needs to be
environmentally and socially sustainable. It launched
PLAN A 2020
OUR RESOURCES OUR RESOURCES

& RELATIONSHIPS & RELATIONSHIPS
& UNDERSTAND
>
FINANCIAL TEN ST NATURAL
Generating stakeholder returns LIS RA Sourcing responsibly and
> T
through effective management of using natural resources
EG
our financial resources
E
INSPIRATION efficiently
RV
Y
&
SE
Aim to inspire and
PLA
ET &
excite our customers
NNIN
MARK
CORE SOCIAL & RELATIONSHIP

MANUFACTURED INNOVATION
G>
IN TOUCH PURPOSE Building and nurturing relationships
Maintaining our channels and Listen and act ENHANCING Aim to improve with our customers and suppliers,
< REACH
supply chain infrastructure to
D
thoughtfully LIVES things for the
BR AN
meet customer demand better and in the communities in which
EVERY DAY
we operate
TED
INTEGRITY
IN G
Strive to do
US
OU
the right thing

TR
INTELLECTUAL
HUMAN
R
U
C
ST
<
Strengthening our brand through S Developing people and

OM P
creation and protection of our
ER
PLAN A
S HI
their knowledge
intellectual properties S < IO N
STRONG RELAT
THE M&S DIFFERENCE
Source: Marks & Spencer: https://corporate.marksandspencer.com/plan-a/our-approach/delivering-plan-a
Figure 1.6 M&S’s Plan A 2020
Analyse why M&S might want to become a sustainable business. (6 marks)
Maths moment
The equation for market share is:
sales of a product
market share = × 100
total market sales
If your sales are £20,000 and the total market sales are £400,000, your market
share is:
£20,000
market share = × 100 = 5%
£400,000
What would your market share be if your sales increased to £50,000 and the
market stayed the same size?
25
Effective objectives
To be effective, an objective should clearly state:
➜ what the target is – for example, to increase profits by 20 per cent
➜ when it has to be achieved – for example, to achieve the target within two
years
➜ who is to achieve it – who is in charge of making sure the target is hit
➜ how to achieve it – what is and what is not acceptable behaviour.
To be successful, businesses must set objectives that are achievable and involve
only those resources that are available. The resources involved may include the
following:
➜ Time. Managers often have many different tasks to complete so they must
feel they have a sufficient amount of time available to focus on a given target.
➜ People. Does the business have the staff it needs?
➜ Money. Does it have the necessary finance to buy the resources and materials
required?
➜ Equipment. Does it have the machinery and facilities needed to achieve the
target?
Key terms
Not-for-profit organisations
Private sector
For most private sector organisations, profit is an important objective. organisations are
However, not all organisations aim to make profits. For example, public sector owned by individuals.
organisations, such as schools and hospitals, aim to provide a free service Public sector
for the public. Within the private sector, not-for-profit organisations include organisations
social clubs and charities. There are over 180,000 registered charities in the are owned by the
UK, including Macmillan Cancer Support and the Isle of Wight Donkey government.
Sanctuary. Charities in England and Wales are monitored by the Charity
Commission and their objectives are to benefit the particular cause that they
were set up to help.
● Changing objectives
When an entrepreneur starts a business, the objectives are usually to survive
the first few months or years. Establishing a business can be difficult and so
surviving is often quite an achievement. It may be enough to win some orders,
prove the business idea works and begin to build a reputation. Given the costs
of starting up and of promoting the business to gain customers, as well as the
difficulty of gaining customers early on, it is likely that a new business will
make losses at first. Over time, it will be expected to make profits to cover the
opportunity cost (see Topic 1.1) of the resources involved.
As a business becomes more established, its objectives may change. One not-for-profit social
For example, it may want to grow. Managers and owners often want the enterprise, with the profits
business to get bigger in order to have more sales and profits. This growth going to help the homeless,
may involve developing more products so the range of goods and services it is The Big Issue.
26
offers may become wider. It may also involve expanding overseas to target
new customers.
Bigger, more established organisations are also usually open to more scrutiny
(attention) from the media and government than other businesses. Bigger
businesses will employ more people, have more suppliers and have a bigger
impact on the community. This means they may want to accept greater
responsibilities and be more likely to have environmental and social targets.
● Using objectives to measure success

You can only know whether someone is being successful if you know what they
Study tip
are trying to achieve. Consider a football match in which a team at the top of the
Premiership scores a draw with a team at the bottom. At first, you may think Always look for the
objectives of the people
they have done badly. However, when you discover they only needed a draw starting up a business.
to win the league this season, you can understand what they were doing. Only Only then can you judge
when you know what the desired result is can you make a proper judgement properly whether or not
about whether or not things are going well. The same is true in business. A they have succeeded. You
may not be happy with
business making profits of £25,000 a year may be a tremendous success to earnings of £20,000 a
the 18-year-old who started it up as a hobby and was only hoping to make a year, but someone else
maximum of £10,000 a year. However, it may be a major disappointment to might be.
a team of experienced investors who had set themselves a target of £200,000
profit a year.
Business objectives provide a point of focus, helping businesses to make
decisions about what to do and to review how things are going. This enables
them to take appropriate decisions if things get off track. Imagine you decide
to take a year out and go travelling. You will probably set targets about what
you hope to have seen and done by particular moments during the year. In
reality, you might spend longer than you imagined in various places. By having
objectives, you can see how to catch up the time to make sure you do everything
you want in the year. In the same way, in business, if sales are 10 per cent lower
than expected, it is possible to analyse the likely reasons for this and then take
steps to boost sales again.
Business insight
Sport England
Sport England is an organisation set up to build an active nation with more people
taking part in sport, whether this is going to the gym, walking or taking part in
team sports. Sport England’s mission is to enable everyone in England, regardless
of their age, background or ability, to take part in sport or an activity.
It wants to:
● increase the number of people in England taking part in sport and activity
and decrease the number of people who are physically inactive
● increase the proportion of young people (11–18) who have a positive attitude to
sport and being active
27
● ensure public facilities are used fully and effectively to get maximum use from communities
● increase the number of adults using the great outdoors for exercise and wellbeing.
14.8 m
18.9 m Key
15.1 m Participation in sport
Facilities
Developing talent
Administration
Sports development
75.8 m 324.9 200.3 m
million
Source: Sport England: www.sportengland.org
Figure 1.7 How Sport England spent its funds in 2014–15
1 Four things that Sport England wants to do are stated above. Explain why the way they are written means
they are not actually ‘objectives’. (4 marks)
2 Analyse how setting objectives might be useful for Sport England. (9 marks)
Summary
A business should have objectives. The objectives set as who owns the business and whether it is a new or
out what the business wants to achieve. They can be established business. The nature of the objectives may
used to measure performance and assess progress. change over time, for example, if the business has new
The nature of the objectives depends on factors such owners.
Quick questions
1 What is an ‘objective’? (2 marks) 6 What is meant by ‘profit’? (2 marks)
2 State two features of an effective 7 What is meant by ‘market share’? (2 marks)

objective. (2 marks)
8 How can objectives be used to measure
3 State two advantages for a business of performance? (2 marks)
setting an objective. (2 marks)
9 What is meant by an ‘aim’? (2 marks)
4 State two possible objectives of a
10 Why might a business have environmental
business. (2 marks)
targets? (2 marks)
5 State two reasons why a business might
change its objectives. (2 marks)
28
Case study C
Ben & Jerry’s
Ben & Jerry’s, the US company that makes The actions the company takes include reducing
ice-cream, was founded in Vermont in 1978 by waste, trying to adopt environmentally friendly
Ben Cohen and Jerry Greenfield, who described methods of production and respecting their
themselves as hippies. The two friends started their employees. It sets objectives in these areas.
ice-cream careers with a $5 ice-cream-making
Ben & Jerry’s believe it is important to make a
correspondence course from Pennsylvania State
profit as a business, but that it can do it ethically.
University and a $12,000 investment ($4,000 of which
was borrowed). Their ice-cream is now world famous 1 What is meant by 'business ethics’? (2 marks)
but, despite the growth, both Ben and Jerry have 2 Explain two benefits to a business of
always maintained their links with their community setting objectives. (4 marks)
and promoted a number of good causes. It is known
as a very ethical business. 3 Analyse the reasons why businesses
set profit as an objective. (6 marks)
One of the company’s mottos is: ‘Business has a
responsibility to the community in which it operates.’ 4 Evaluate the benefits of acting ethically
to a business such as Ben & Jerry’s. (12 marks)
29
Topic 1.4
Stakeholders
In this topic, we consider the various individuals and groups (called
stakeholders) that will be affected by the activities of a business. We examine
the impact a business can have on stakeholders and the way in which
stakeholders might affect business decision-making.
● who the main stakeholders of businesses are
● what the objectives of stakeholders are
● what the impact of business activity is on stakeholders
● what impact and influence stakeholders have on businesses.
● The main stakeholders of businesses

Employees
The government Shareholders
Stakeholders
Suppliers Customers
Community
Figure 1.8 The main stakeholder groups
30
1.4 Stakeholders
The objectives of a business should be set by the owners. It is their business and
everyone working within it should aim to meet their needs. If the owners want
more profits, this is what everyone should aim for. However, the final decisions
the owners take are likely to be influenced by the different stakeholders
connected to the business.
A stakeholder is an individual or organisation that affects and is affected by
the activities of an organisation. Stakeholders include the owners, employees,
customers, suppliers, the local community and the government.
All of these groups will have their own objectives and these may influence the Key term
targets set by businesses. For example:
➜ Owners may want to maximise their returns. For example, they may want Dividends are the
financial rewards paid
to be paid high dividends. out to shareholders each
➜ Employees may want to earn more as a reward for their efforts. They may year.
also want the business to grow so they have promotion opportunities.
➜ Suppliers may want to be paid on time. The business may, therefore, set a
target to pay all bills within a given period of time.
➜ The community may want the business to behave responsibly. The business
may, therefore, set a target in areas such as recycling, noise, waste reduction
and even try to employ local people. The local community may want to
reduce the environmental impact of the activities of a business.
➜ The customers can also have an important role to play. For example, small
firms may be reliant on relatively few customers and, therefore, these buyers
become quite powerful. A small firm selling to a large supermarket may
have to accept the terms offered by the supermarket if it wants to win the
order. This means the buyers can affect what constitutes a realistic objective
for a business in terms of, say, the likely level of sales and profits.
● The objectives of stakeholders

Table 1.5 shows the typical objectives of different stakeholder groups.
Stakeholder group Typical objectives
Employees Secure jobs, higher earnings
Owners/Shareholders High dividends and share price
Local community Local jobs, minimise environmental impact on the community (for example, little
pollution or congestion, investment in the community)
Government Legal behaviour, taxes paid, growth
Suppliers Paid on time, kept informed of any changes to the business (for example, any
proposed reduction in output)
Customers Useful, accurate information on the product, good service, value for money
Table 1.5 Objectives of different stakeholder groups
31
● How does a business have an impact on

stakeholders?
The activities of a business will have an impact on many stakeholders. For
example:
➜ The success of the business will affect the number of people employed and
how much they earn.
➜ The values of the owners and managers will affect how well treated
employees are and how much attention is given to the quality of their life
at work and their future careers; for example, does the business invest in
training and giving them skills for the next stage of their career?
➜ A business is likely to have an impact on the local community; for example,
it may decide to try to employ local people, it may invest in local facilities and
it may affect congestion levels in the area.
➜ The way a business treats its suppliers will affect their success. Does it pay
them on time? Does it pay them a fair price or does it try to use its power
to push down the price? Does it try to build a positive relationship with
suppliers or does it try to force suppliers to compete against each other for
orders?
➜ The success of the business may affect its share price and the dividends that
can be paid out affecting the rewards to shareholders.
➜ A business may try to reduce the amount of tax it pays by using whatever
legal means it can; companies such as Amazon have done this. Or a business
may decide to pay what it regards as a ‘fair’ amount of tax, even if it could
legally pay less. This will affect the government's revenue.
● How stakeholders can influence a

business
Stakeholders can influence a business in many ways:
Key term
➜ Negotiation. Employees may negotiate for better pay. Suppliers may demand
better terms and conditions. Negotiation occurs
when two sides discuss
➜ Direct action. Customers can stop buying the products of a business if they what they want and try to
are unhappy with the way it behaves. Employees can go on strike and refuse reach a solution.
to work if they do not get what they want.
➜ Refusal to co-operate. Local councils can refuse to co-operate with a
business if they do not like its behaviour. For example, they could refuse
planning permission for it to redevelop or expand its operations. Employees
could resist any changes that the owners suggest and could show they are
unhappy by not working hard.
➜ Voting. The owners of a business can make their views clear and can vote
on what the organisation should do next. For example, if three people set
up a business, it may be that two of the owners outvote the other one when
deciding what should be done.
32
1.4 Stakeholders
When dealing with stakeholders, a business may think about:

Study tip
➜ how it communicates with stakeholders. Does it need to keep them informed?
If so, how should it do this? Through newsletters? Organise meetings (such To decide how particular
stakeholders can affect
as the Annual General Meeting (AGM), which is a meeting that companies
the objectives of a
must have each year for their shareholders)? business, you need to
➜ whether it should involve different stakeholders in discussions. For example, consider what power
it may want to hold meetings where stakeholders can raise their points of that group has and what
actions they could take
view. Managers may want employee representatives on committees and in
to affect the business if it
meetings to make sure their views are heard. does not pay attention to
them.
Business insight
Post Office workers strike 118 of 305 offices in city and town centres due to a
lack of staff. Across the country as a whole, almost 99
In 2016, thousands of Post Office workers went on per cent of the 11,600 Post Office branches remained
a 24-hour strike (that is, they did not go to work) ‘open for business as usual’.
in a dispute over management decisions to close
branches, reduce the number of jobs and change their Analyse the possible impact of a 24-hour strike on
pension entitlements. This led to the closure of around the business and its stakeholders. (6 marks)
Summary
A stakeholder is any person or organisation that is will overlap with each other but sometimes they will
affected by the activities of a business. Stakeholders conflict.
will have their own objectives. Sometimes these
Quick questions
1 What is meant by a ‘stakeholder’? (2 marks) 7 Explain one possible objective of
suppliers. (2 marks)
2 State two stakeholders in a business. (2 marks)
8 Explain one possible objective of
3 Are all stakeholders also shareholders?
employees. (2 marks)
Explain your answer. (2 marks)
9 Explain one possible objective of
4 Show, with an example, how stakeholders
shareholders. (2 marks)
might have different objectives. (2 marks)
10 Explain one possible objective of the local
5 Show, with an example, how stakeholders
community around a business. (2 marks)
might have the same objectives. (2 marks)
6 Explain one way in which a stakeholder

might influence the business objectives. (2 marks)
33
Case study
Unilever
C
Dove is one of many Unilever brands
Paul Polman is Chief Executive of Unilever, one of the save money later and will increasingly prove popular
world’s biggest companies. Unilever produces a wide with investors. Polman says that around 70 per cent
range of products from washing powders to food. of the shareholders of Unilever have been with the
The company employs over 170,000 people and has a business since he has and that he is deliberately
market value of almost £90 billion. encouraging long-term investors.
Polman has encouraged all his team at Unilever to Polman is determined to prove that, whatever the
take a long-term view when making decisions. He economic or political situation in the world, Unilever
has stopped updating investors every three months can deliver revenue growth and profitability. He
because he thinks this is a distraction and leads to too believes Unilever can have a positive impact on the
much of a short-term focus. He has made everyone environment while also meeting the needs of its
in the business focus on environmental issues. For shareholders.
example, the company is committed to reducing the 1 What is a ‘shareholder’? (2 marks)
calories in its ice-cream and is aiming to remove coal
from its energy usage within five years. 2 Explain one possible reason why Polman
stopped updating investors every three
However, although Polman may want to focus on months. (4 marks)
long-term global issues, he also has to consider
the demands of the company’s shareholders who 3 Analyse the possible impact that a company
want dividends. Polman admits this is something such as Unilever can have on its
of a balancing act with the various stakeholder environment. (6 marks)
groups, but believes that investors are increasingly 4 Evaluate Polman’s view that looking after your
understanding the benefits of a long-term approach. stakeholders can improve the long-term
He believes that acting now to save the planet will profits of a business. (12 marks)
34
Topic 1.5
Business location
One of the key decisions a business faces is the choice of its location.
Location can affect costs and demand, and have a big impact on its overall
success. In this topic, we examine the factors influencing the location
decision for start-up businesses.
● why location is important
● the factors affecting location.
● Why is location important?

You have a brilliant business idea. You know there is a market and are sure you
can deliver good value for money. But where do you locate your business? Your
location decision is very important because it can affect the following:
➜ Costs. The amount to be paid in rent or to buy a premises varies according
to location. The rent for premises in the centre of London, for example, is
greater than for offices in central Wales. The costs of facilities can affect the
level of profit a business makes.
➜ Sales. Location may affect whether or not the business gets customers. A hotel
or theme park in the wrong location may struggle to attract visitors, for example.
➜ Image. For some products, where they are produced can have an important
impact on their image. A perfume from Southampton or a wine from
Bradford may struggle to sell. A language school on the coast or a gift shop
in a tourist town may be more successful.
● Factors influencing location

Factors that influence where a business should locate include the following.
The type of business

The type of business will have a big impact on where it should or where it can be
located. A web design business could probably be set up from a bedroom (and,
indeed, many have been). A shop, on the other hand, needs to be near potential
customers. A service delivering flowers to people’s homes would need to take
35
account of the road system. Generally speaking, factories are more concerned
about supplies and transport systems, whereas shops are more interested in
being close to their customers.
The proximity to the market

A business will want to know where its customers are located and ensure
that it can reach them easily. This is more important in some industries than
others. For example, an online price comparison site does not need to be near
its customers as they access its services via the internet. However, a service
business will often need to be near its customers. For example, a hairdresser, a
pub or a café will want to be easily accessible.
Competitors
It is important to consider the location of competitors. In some cases, a business
will not want to be too close to its rivals. Petrol stations, for example, may be
located some distance apart from each other. However, in other cases, competitors
do want to be relatively close to each other. A new hotel business, for example,
is likely to be more successful if it opens in an existing tourist area, perhaps with
other hotels nearby, as this draws in the visitors. A new restaurant may want to be
in an area of town known for its good eating places. When visitors come to that
part of town, they may end up choosing the new restaurant.
Availability of raw materials

Some businesses rely on raw materials. A wine business will want to be near the grape
vines that it uses to produce wine. A dairy business will want to be near its cows.
Availability and cost of labour

Some businesses, such as Microsoft and Google, want highly skilled and able
individuals. Such workers can often be recruited from the best universities,
and so these businesses often set up near, and make good links with, these
institutions. Other businesses have relocated production to countries, such as
China and Vietnam, where wages are lower.
Transport links
Businesses aiming to export (that is, sell abroad) might need to be near an airport
or a port so they can transport goods easily. If you want to do business in London
but cannot afford London rents, you might choose to locate somewhere outside
the city (with cheaper rents) but where the road or train links are effective so
you can get to London quickly.
Technology
Many businesses these days rely on good communications systems, such as internet
access and mobile communications. The availability of such good communications
36
1.5 Business location
means more businesses can be run from home. Anything that can be done online,
such as designing, writing, editing and programming, can be done from home.
Costs
Location decisions are often affected by costs and the amount of money the
business can afford. Start-up businesses often have limited funds available and
this restricts their options. For example, you may have to start your cleaning
business from home to begin with to save money. Later on, if the business
works, you may move into office premises. A business will compare the costs
of any location with the likely revenue it can earn. It may be that choosing a
higher-cost location actually leads to more profit; a prime site for a cafe, for
example, can lead to more visitors and more profits.
Costs
Availability Proximity to
of resources the market
Factors
affecting
location
Transport Type of
links business
Technology
Figure 1.9 Factors influencing choice of location
Overseas location
Advantages of locating overseas
➜ Cheaper labour. Wages in countries such as China and India are much
lower than in the UK. Key terms
➜ Access to resources that are not easily available in the UK. For example,
Protectionist
growing bananas is easier in South America than in England.
measures are policies
➜ Financial incentives from foreign governments. Some governments are that governments use
keen to attract foreign businesses to their country and so offer money or to protect their own
lower taxes to attract them. This may make it cheaper for the business to businesses against
foreign competition.
operate in that country.
➜ Avoids protectionist measures by foreign governments. Some governments A tariff is a tax on foreign
goods imported into a
want to help their own firms and so they protect them from overseas
country.
competition. This can done through taxes on foreign goods (called tariffs) or
37
by limiting the number of foreign goods (imports) allowed to enter the country
Key terms
(this is called a quota). By locating within the country, a business can usually
avoid these barriers and so can find it easier to sell in that country. Imports are goods and
services purchased from
➜ The market overseas may be growing fast. If the market in the home
overseas by consumers of
country is experiencing slow growth, or if the company cannot get much businesses.
bigger in the home country, moving abroad allows faster growth. Tesco is
A quota is a limit on the
already very big in the UK and sales of food are not likely to grow very number of foreign goods
quickly. This is why Tesco has expanded abroad into countries such as the imported into a country.
USA, China, Poland and Hungary.
Business insight
Disneyland opens in Shanghai In 2016, the entertainment business, Disney, opened
a theme park in Shanghai. It had taken over ten years
of planning and involved an investment of around $5.5
billion. The company is planning on China’s growing
middle class spending more on travel, tourism and
leisure.
The theme park includes two hotels, a shopping
district and six themed areas – Mickey Avenue,
Gardens of Imagination, Fantasyland, Adventure Isle,
Treasure Cove and Tomorrowland.
The park features storytelling and design features
that Disney hopes will appeal to a Chinese audience.
Shanghai’s traditional Shikumen-style architecture will
be highlighted, as will themes from the Chinese zodiac.
Analyse the factors Disney will have considered
Disneyland Shanghai before deciding on Shanghai as a location for one of
its parks. (6 marks)
Disadvantages of locating overseas

Study tip
➜ There may be different rules and regulations in other countries. These
can affect how a business treats its staff or advertises its products, and what When thinking about a
business’s decision to
safety tests must be passed. Managers must understand these differences,
relocate abroad, you
but it may be expensive to change what you do. need to consider how
➜ Customers may have different tastes. Products may need to be changed to different stakeholders are
suit different markets, which can be expensive. affected. Some may be
worse off and some may
be better off. Consider
Business insight
a business relocating
Burberry to a low-cost location in
Vietnam. Employees in
In 2007, the British clothing brand Burberry decided to stop production in the the UK may lose their jobs
Rhondda Valley in Wales and relocate to China. Three hundred workers lost their and the UK government
jobs. The company describes itself as a ‘luxury brand with a distinctive British may lose tax income.
sensibility’. It claimed that the manufacturing cost of each individual polo shirt in However, shareholders
Wales was £11, compared to a potential £4 in China. Each year that the factory was may make more profits
kept open in Wales, Burberry argued, would reduce its profits by £2 million. and the community in
Analyse the case for and against Burberry moving production to China. (6 marks) Vietnam may benefit.
38
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irreconcilable. When Dora dies recommending Agnes we know that
everything is wrong, at least if hypocrisy and artificiality and moral
vulgarity are wrong. There, again, Dickens yields to a mere desire to
give comfort. He wishes to pile up pillows round Dora; and he
smothers her with them, like Othello.
This is the real vulgar optimism of Dickens; it does exist, and I
have deliberately put it first. Let us admit that Dickens’s mind was far
too much filled with pictures of satisfaction and cosiness and repose.
Let us admit that he thought principally of the pleasures of the
oppressed classes; let us admit that it hardly cost him any artistic
pang to make out human beings as much happier than they are. Let
us admit all this, and a curious fact remains.
For it was this too easily contented Dickens, this man with
cushions at his back and (it sometimes seems) cotton wool in his
ears, it was this happy dreamer, this vulgar optimist who alone of
modern writers did really destroy some of the wrongs he hated and
bring about some of the reforms he desired. Dickens did help to pull
down the debtors’ prisons; and if he was too much of an optimist he
was quite enough of a destroyer. Dickens did drive Squeers out of
his Yorkshire den; and if Dickens was too contented, it was more
than Squeers was. Dickens did leave his mark on parochialism, on
nursing, on funerals, on public executions, on workhouses, on the
Court of Chancery. These things were altered; they are different. It
may be that such reforms are not adequate remedies; that is another
question altogether. The next sociologists may think these old
Radical reforms quite narrow or accidental. But such as they were,
the old radicals got them done; and the new sociologists cannot get
anything done at all. And in the practical doing of them Dickens
played a solid and quite demonstrable part; that is the plain matter
that concerns us here. If Dickens was an optimist he was an
uncommonly active and useful kind of optimist. If Dickens was a
sentimentalist he was a very practical sentimentalist.
And the reason of this is one that goes deep into Dickens’s
social reform, and like every other real and desirable thing, involves
a kind of mystical contradiction. If we are to save the oppressed, we
must have two apparently antagonistic emotions in us at the same
time. We must think the oppressed man intensely miserable, and, at
the same time, intensely attractive and important. We must insist
with violence upon his degradation; we must insist with the same
violence upon his dignity. For if we relax by one inch the one
assertion, men will say he does not need saving. And if we relax by
one inch the other assertion, men will say he is not worth saving.
The optimists will say that reform is needless. The pessimists will
say that reform is hopeless. We must apply both simultaneously to
the same oppressed man; we must say that he is a worm and a god;
and we must thus lay ourselves open to the accusation (or the
compliment) of transcendentalism. This is, indeed, the strongest
argument for the religious conception of life. If the dignity of man is
an earthly dignity we shall be tempted to deny his earthly
degradation. If it is a heavenly dignity we can admit the earthly
degradation with all the candour of Zola. If we are idealists about the
other world we can be realists about this world. But that is not here
the point. What is quite evident is that if a logical praise of the poor
man is pushed too far, and if a logical distress about him is pushed
too far, either will involve wreckage to the central paradox of reform.
If the poor man is made too admirable he ceases to be pitiable; if the
poor man is made too pitiable he becomes merely contemptible.
There is a school of smug optimists who will deny that he is a poor
man. There is a school of scientific pessimists who will deny that he
is a man.
Out of this perennial contradiction arises the fact that there are
always two types of the reformer. The first we may call for
convenience the pessimistic, the second the optimistic reformer. One
dwells upon the fact that souls are being lost; the other dwells upon
the fact that they are worth saving. Both, of course, are (so far as
that is concerned) quite right, but they naturally tend to a difference
of method, and sometimes to a difference of perception. The
pessimistic reformer points out the good elements that oppression
has destroyed; the optimistic reformer, with an even fiercer joy,
points out the good elements that it has not destroyed. It is the case
for the first reformer that slavery has made men slavish. It is the
case for the second reformer that slavery has not made men slavish.
The first describes how bad men are under bad conditions. The
second describes how good men are under bad conditions. Of the
first class of writers, for instance, is Gorky. Of the second class of
writers is Dickens.
But here we must register a real and somewhat startling fact. In
the face of all apparent probability, it is certainly true that the
optimistic reformer reforms much more completely than the
pessimistic reformer. People produce violent changes by being
contented, by being far too contented. The man who said that
revolutions are not made with rose-water was obviously
inexperienced in practical human affairs. Men like Rousseau and
Shelley do make revolutions, and do make them with rose-water;
that is, with a too rosy and sentimental view of human goodness.
Figures that come before and create convulsion and change (for
instance, the central figure of the New Testament) always have the
air of walking in an unnatural sweetness and calm. They give us their
peace ultimately in blood and battle and division; not as the world
giveth give they unto us.
Nor is the real reason of the triumph of the too-contented
reformer particularly difficult to define. He triumphs because he
keeps alive in the human soul an invincible sense of the thing being
worth doing, of the war being worth winning, of the people being
worth their deliverance. I remember that Mr. William Archer, some
time ago, published in his interesting series of interviews, an
interview with Mr. Thomas Hardy. That powerful writer was
represented as saying, in the course of the conversation, that he did
not wish at the particular moment to define his position with regard to
the ultimate problem of whether life itself was worth living. There are,
he said, hundreds of remediable evils in this world. When we have
remedied all these (such was his argument), it will be time enough to
ask whether existence itself under its best possible conditions is
valuable or desirable. Here we have presented, with a considerable
element of what can only be called unconscious humour, the plain
reason of the failure of the pessimist as a reformer. Mr. Hardy is
asking us, I will not say to buy a pig in a poke; he is asking us to buy
a poke on the remote chance of there being a pig in it. When we
have for some few frantic centuries tortured ourselves to save
mankind, it will then be “time enough” to discuss whether they can
possibly be saved. When, in the case of infant mortality, for example,
we have exhausted ourselves with the earth-shaking efforts required
to save the life of every individual baby, it will then be time enough to
consider whether every individual baby would not have been happier
dead. We are to remove mountains and bring the millennium,
because then we can have a quiet moment to discuss whether the
millennium is at all desirable. Here we have the low-water mark of
the impotence of the sad reformer. And here we have the reason of
the paradoxical triumph of the happy one. His triumph is a religious
triumph; it rests upon his perpetual assertion of the value of the
human soul and of human daily life. It rests upon his assertion that
human life is enjoyable because it is human. And he will never admit,
like so many compassionate pessimists, that human life ever ceases
to be human. He does not merely pity the lowness of men; he feels
an insult to their elevation. Brute pity should be given only to the
brutes. Cruelty to animals is cruelty and a vile thing; but cruelty to a
man is not cruelty, it is treason. Tyranny over a man is not tyranny, it
is rebellion, for man is loyal. Now, the practical weakness of the vast
mass of modern pity for the poor and the oppressed is precisely that
it is merely pity; the pity is pitiful, but not respectful. Men feel that the
cruelty to the poor is a kind of cruelty to animals. They never feel that
it is injustice to equals; nay, it is treachery to comrades. This dark,
scientific pity, this brutal pity, has an elemental sincerity of its own;
but it is entirely useless for all ends of social reform. Democracy
swept Europe with the sabre when it was founded upon the Rights of
Man. It has done literally nothing at all since it has been founded
only upon the wrongs of man. Or, more strictly speaking, its recent
failures have been due to its not admitting the existence of any rights
or wrongs, or indeed of any humanity. Evolution (the sinister enemy
of revolution) does not especially deny the existence of God; what it
does deny is the existence of man. And all the despair about the
poor, and the cold and repugnant pity for them, has been largely due
to the vague sense that they have literally relapsed into the state of
the lower animals.
A writer sufficiently typical of recent revolutionism—Gorky—has
called one of his books by the eerie and effective title “Creatures that
Once were Men.” That title explains the whole failure of the Russian
revolution. And the reason why the English writers, such as Dickens,
did with all their limitations achieve so many of the actual things at
which they aimed, was that they could not possibly have put such a
title upon a human book. Dickens really helped the unfortunate in the
matters to which he set himself. And the reason is that across all his
books and sketches about the unfortunate might be written the
common title, “Creatures that Still are Men.”
There does exist, then, this strange optimistic reformer; the man
whose work begins with approval and yet ends with earthquake.
Jesus Christ was destined to found a faith which made the rich
poorer and the poor richer; but even when He was going to enrich
them, He began with the phrase, “Blessed are the poor.” The
Gissings and the Gorkys say, as an universal literary motto, “Cursed
are the poor.” Among a million who have faintly followed Christ in this
divine contradiction, Dickens stands out especially. He said, in all his
reforming utterances, “Cure poverty”; but he said in all his actual
descriptions, “Blessed are the poor.” He described their happiness,
and men rushed to remove their sorrow. He described them as
human, and men resented the insults to their humanity. It is not
difficult to see why, as I said at an earlier stage of this book,
Dickens’s denunciations have had so much more practical an effect
than the denunciations of such a man as Gissing. Both agreed that
the souls of the people were in a kind of prison. But Gissing said that
the prison was full of dead souls. Dickens said that the prison was
full of living souls. And the fiery cavalcade of rescuers felt that they
had not come too late.
Of this general fact about Dickens’s descriptions of poverty there
will not, I suppose, be any serious dispute. The dispute will only be
about the truth of those descriptions. It is clear that whereas Gissing
would say, “See how their poverty depresses the Smiths or the
Browns,” Dickens says, “See how little, after all, their poverty can
depress the Cratchits.” No one will deny that he made a special
feature a special study of the subject of the festivity of the poor. We
will come to the discussion of the veracity of these scenes in a
moment. It is here sufficient to register in conclusion of our
examination of the reforming optimist, that Dickens certainly was
such an optimist, and that he made it his business to insist upon
what happiness there is in the lives of the unhappy. His poor man is
always a Mark Tapley, a man the optimism of whose spirit increases
if anything with the pessimism of his experience. It can also be
registered as a fact equally solid and quite equally demonstrable that
this optimistic Dickens did effect great reforms.
The reforms in which Dickens was instrumental were, indeed,
from the point of view of our sweeping, social panaceas, special and
limited. But perhaps, for that reason especially, they afford a
compact and concrete instance of the psychological paradox of
which we speak. Dickens did definitely destroy—or at the very least
help to destroy—certain institutions; he destroyed those institutions
simply by describing them. But the crux and peculiarity of the whole
matter is this, that, in a sense, it can really be said that he described
these things too optimistically. In a real sense, he described
Dotheboys Hall as a better place than it is. In a real sense, he made
out the workhouse as a pleasanter place than it can ever be. For the
chief glory of Dickens is that he made these places interesting; and
the chief infamy of England is that it has made these places dull.
Dulness was the one thing that Dickens’s genius could never
succeed in describing; his vitality was so violent that he could not
introduce into his books the genuine impression even of a moment of
monotony. If there is anywhere in his novels an instant of silence, we
only hear more clearly the hero whispering with the heroine, the
villain sharpening his dagger, or the creaking of the machinery that is
to give out the god from the machine. He could splendidly describe
gloomy places, but he could not describe dreary places. He could
describe miserable marriages, but not monotonous marriages. It
must have been genuinely entertaining to be married to Mr. Quilp.
This sense of a still incessant excitement he spreads over every inch
of his story, and over every dark tract of his landscape. His idea of a
desolate place is a place where anything can happen; he has no
idea of that desolate place where nothing can happen. This is a good
thing for his soul, for the place where nothing can happen is hell. But
still, it might reasonably be maintained by the modern mind that he is
hampered in describing human evil and sorrow by this inability to
imagine tedium, this dulness in the matter of dulness. For, after all, it
is certainly true that the worst part of the lot of the unfortunate is the
fact that they have long spaces in which to review the irrevocability
of their doom. It is certainly true that the worst days of the oppressed
man are the nine days out of ten in which he is not oppressed. This
sense of sickness, and sameness Dickens did certainly fail or refuse
to give. When we read such a description as that excellent one—in
detail—of Dotheboys Hall, we feel that, while everything else is
accurate, the author does, in the words of the excellent Captain
Nares in Stevenson’s “Wrecker,” “draw the dreariness rather mild.”
The boys at Dotheboys were, perhaps, less bullied, but they were
certainly more bored. For, indeed, how could any one be bored with
the society of so sumptuous a creature as Mr. Squeers? Who would
not put up with a few illogical floggings in order to enjoy the
conversation of a man who could say, “She’s a rum ’un, is Natur’....
Natur’ is more easier conceived than described”? The same principle
applies to the workhouse in “Oliver Twist.” We feel vaguely that
neither Oliver nor any one else could be entirely unhappy in the
presence of the purple personality of Mr. Bumble. The one thing he
did not describe in any of the abuses he denounced was the soul-
destroying potency of routine. He made out the bad school, the bad
parochial system, the bad debtors’ prison as very much jollier and
more exciting than they may really have been. In a sense, then, he
flattered them; but he destroyed them with the flattery. By making
Mrs. Gamp delightful he made her impossible. He gave every one an
interest in Mr. Bumble’s existence; and by the same act gave every
one an interest in his destruction. It would be difficult to find a
stronger instance of the utility and energy of the method which we
have, for the sake of argument, called the method of the optimistic
reformer. As long as low Yorkshire schools were entirely colourless
and dreary, they continued quietly tolerated by the public, and quietly
intolerable to the victims. So long as Squeers was dull as well as
cruel he was permitted; the moment he became amusing as well as
cruel he was destroyed. As long as Bumble was merely inhuman he
was allowed. When he became human, humanity wiped him out. For
in order to do these great acts of justice we must always realize not
only the humanity of the oppressed, but even the humanity of the
oppressor. The satirist had, in a sense, to create the images in the
mind before, as an iconoclast, he could destroy them. Dickens had
to make Squeers live before he could make him die.
In connection with the accusation of vulgar optimism, which I
have taken as a text for this chapter, there is another somewhat odd
thing to notice. Nobody in the world was ever less optimistic than
Dickens in his treatment of evil or the evil man. When I say optimistic
in this matter I mean optimism, in the modern sense, of an attempt to
whitewash evil. Nobody ever made less attempt to whitewash evil
than Dickens. Nobody black was ever less white than Dickens’s
black. He painted his villains and lost characters more black than
they really are. He crowds his stories with a kind of villain rare in
modern fiction—the villain really without any “redeeming point.”
There is no redeeming point in Squeers, or in Monck, or in Ralph
Nickleby, or in Bill Sikes, or in Quilp, or in Brass, or in Mr. Chester, or
in Mr. Pecksniff, or in Jonas Chuzzlewit, or in Carker, or in Uriah
Heep, or in Blandois, or in a hundred more. So far as the balance of
good and evil in human characters is concerned, Dickens certainly
could not be called a vulgar optimist. His emphasis on evil was
melodramatic. He might be called a vulgar pessimist.
Some will dismiss this lurid villainy as a detail of his artificial
romance. I am not inclined to do so. He inherited, undoubtedly, this
unqualified villain as he inherited so many other things, from the
whole history of European literature. But he breathed into the
blackguard a peculiar and vigorous life of his own. He did not show
any tendency to modify his blackguardism in accordance with the
increasing considerateness of the age; he did not seem to wish to
make his villain less villainous; he did not wish to imitate the analysis
of George Eliot, or the reverent scepticism of Thackeray. And all this
works back, I think, to a real thing in him, that he wished to have an
obstreperous and incalculable enemy. He wished to keep alive the
idea of combat, which means, of necessity, a combat against
something individual and alive. I do not know whether, in the kindly
rationalism of his epoch, he kept any belief in a personal devil in his
theology, but he certainly created a personal devil in every one of his
books.
A good example of my meaning can be found, for instance, in
such a character as Quilp. Dickens may, for all I know, have had
originally some idea of describing Quilp as the bitter and unhappy
cripple, a deformity whose mind is stunted along with his body. But if
he had such an idea, he soon abandoned it. Quilp is not in the least
unhappy. His whole picturesqueness consists in the fact that he has
a kind of hellish happiness, an atrocious hilarity that makes him go
bounding about like an indiarubber ball. Quilp is not in the least
bitter; he has an unaffected gaiety, an expansiveness, an
universality. He desires to hurt people in the same hearty way that a
good-natured man desires to help them. He likes to poison people
with the same kind of clamorous camaraderie with which an honest
man likes to stand them drink. Quilp is not in the least stunted in
mind; he is not in reality even stunted in body—his body, that is,
does not in any way fall short of what he wants it to do. His
smallness gives him rather the promptitude of a bird or the
precipitance of a bullet. In a word, Quilp is precisely the devil of the
Middle Ages; he belongs to that amazingly healthy period when even
the lost spirits were hilarious.
This heartiness and vivacity in the villains of Dickens is worthy of
note because it is directly connected with his own cheerfulness. This
is a truth little understood in our time, but it is a very essential one. If
optimism means a general approval, it is certainly true that the more
a man becomes an optimist the more he becomes a melancholy
man. If he manages to praise everything, his praise will develop an
alarming resemblance to a polite boredom. He will say that the
marsh is as good as the garden; he will mean that the garden is as
dull as the marsh. He may force himself to say that emptiness is
good, but he will hardly prevent himself from asking what is the good
of such good. This optimism does exist—this optimism which is more
hopeless than pessimism—this optimism which is the very heart of
hell. Against such an aching vacuum of joyless approval there is only
one antidote—a sudden and pugnacious belief in positive evil. This
world can be made beautiful again by beholding it as a battlefield.
When we have defined and isolated the evil thing, the colours come
back into everything else. When evil things have become evil, good
things, in a blazing apocalypse, become good. There are some men
who are dreary because they do not believe in God; but there are
many others who are dreary because they do not believe in the devil.
The grass grows green again when we believe in the devil, the roses
grow red again when we believe in the devil.
No man was more filled with the sense of this bellicose basis of
all cheerfulness than Dickens. He knew very well the essential truth,
that the true optimist can only continue an optimist so long as he is
discontented. For the full value of this life can only be got by fighting;
the violent take it by storm. And if we have accepted everything, we
have missed something—war. This life of ours is a very enjoyable
fight, but a very miserable truce. And it appears strange to me that
so few critics of Dickens or of other romantic writers have noticed
this philosophical meaning in the undiluted villain. The villain is not in
the story to be a character; he is there to be a danger—a ceaseless,
ruthless, and uncompromising menace, like that of wild beasts or the
sea. For the full satisfaction of the sense of combat, which
everywhere and always involves a sense of equality, it is necessary
to make the evil thing a man; but it is not always necessary, it is not
even always artistic, to make him a mixed and probable man. In any
tale, the tone of which is at all symbolic, he may quite legitimately be
made an aboriginal and infernal energy. He must be a man only in
the sense that he must have a wit and will to be matched with the wit
and will of the man chiefly fighting. The evil may be inhuman, but it
must not be impersonal, which is almost exactly the position
occupied by Satan in the theological scheme.
But when all is said, as I have remarked before, the chief
fountain in Dickens of what I have called cheerfulness, and some
prefer to call optimism, is something deeper than a verbal
philosophy. It is, after all, an incomparable hunger and pleasure for
the vitality and the variety, for the infinite eccentricity of existence.
And this word “eccentricity” brings us, perhaps, nearer to the matter
than any other. It is, perhaps, the strongest mark of the divinity of
man that he talks of this world as “a strange world,” though he has
seen no other. We feel that all there is is eccentric, though we do not
know what is the centre. This sentiment of the grotesqueness of the
universe ran through Dickens’s brain and body like the mad blood of
the elves. He saw all his streets in fantastic perspectives, he saw all
his cockney villas as top heavy and wild, he saw every man’s nose
twice as big as it was, and every man’s eyes like saucers. And this
was the basis of his gaiety—the only real basis of any philosophical
gaiety. This world is not to be justified as it is justified by the
mechanical optimists; it is not to be justified as the best of all
possible worlds. Its merit is not that it is orderly and explicable; its
merit is that it is wild and utterly unexplained. Its merit is precisely
that none of us could have conceived such a thing, that we should
have rejected the bare idea of it as miracle and unreason. It is the
best of all impossible worlds.
CHAPTER XII
A NOTE ON THE FUTURE OF DICKENS
The hardest thing to remember about our own time, of course, is

simply that it is a time; we all instinctively think of it as the Day of
Judgment. But all the things in it which belong to it merely as this
time will probably be rapidly turned upside down; all the things that
can pass will pass. It is not merely true that all old things are already
dead; it is also true that all new things are already dead; for the only
undying things are the things that are neither new nor old. The more
you are up with this year’s fashion, the more (in a sense) you are
already behind next year’s. Consequently, in attempting to decide
whether an author will, as it is cantly expressed, live, it is necessary
to have very firm convictions about what part, if any part, of man is
unchangeable. And it is very hard to have this if you have not a
religion; or, at least, a dogmatic philosophy.
The equality of men needs preaching quite as much as regards
the ages as regards the classes of men. To feel infinitely superior to
a man in the twelfth century is just precisely as snobbish as to feel
infinitely superior to a man in the Old Kent Road. There are
differences between the man and us, there may be superiorities in
us over the man; but our sin in both cases consists in thinking of the
small things wherein we differ when we ought to be confounded and
intoxicated by the terrible and joyful matters in which we are at one.
But here again the difficulty always is that the things near us seem
larger than they are, and so seem to be a permanent part of
mankind, when they may really be only one of its parting modes of
expression. Few people, for instance, realize that a time may easily
come when we shall see the great outburst of Science in the
nineteenth century as something quite as splendid, brief, unique, and
ultimately abandoned, as the outburst of Art at the Renascence. Few
people realize that the general habit of fiction, of telling tales in
prose, may fade, like the general habit of the ballad, of telling tales in
verse, has for the time faded. Few people realize that reading and
writing are only arbitrary, and perhaps temporary sciences, like
heraldry.
The immortal mind will remain, and by that writers like Dickens
will be securely judged. That Dickens will have a high place in
permanent literature there is, I imagine, no prig surviving to deny. But
though all prediction is in the dark, I would devote this chapter to
suggesting that his place in nineteenth century England will not only
be high, but altogether the highest. At a certain period of his
contemporary fame, an average Englishman would have said that
there were at that moment in England about five or six able and
equal novelists. He could have made a list, Dickens, Bulwer-Lytton,
Thackeray, Charlotte Brontë, George Eliot, perhaps more. Forty
years or more have passed and some of them have slipped to a
lower place. Some would now say that the highest platform is left to
Thackeray and Dickens; some to Dickens, Thackeray, and George
Eliot; some to Dickens, Thackeray, and Charlotte Brontë. I venture to
offer the proposition that when more years have passed and more
weeding has been effected, Dickens will dominate the whole
England of the nineteenth century; he will be left on that platform
alone.
I know that this is an almost impertinent thing to assert, and that
its tendency is to bring in those disparaging discussions of other
writers in which Mr. Swinburne brilliantly embroiled himself in his
suggestive study of Dickens. But my disparagement of the other
English novelists is wholly relative and not in the least positive. It is
certain that men will always return to such a writer as Thackeray,
with his rich emotional autumn, his feeling that life is a sad but
sacred retrospect, in which at least we should forget nothing. It is not
likely that wise men will forget him. So, for instance, wise and
scholarly men do from time to time return to the lyrists of the French
Renascence, to the delicate poignancy of Du Bellay: so they will go
back to Thackeray. But I mean that Dickens will bestride and
dominate our time as the vast figure of Rabelais dominates Du
Bellay, dominates the Renascence and the world.
Yet we put a negative reason first. The particular things for which
Dickens is condemned (and justly condemned) by his critics, are
precisely those things which have never prevented a man from being
immortal. The chief of them is the unquestionable fact that he wrote
an enormous amount of bad work. This does lead to a man being put
below his place in his own time: it does not affect his permanent
place, to all appearance, at all. Shakespeare, for instance, and
Wordsworth wrote not only an enormous amount of bad work, but an
enormous amount of enormously bad work. Humanity edits such
writers’ works for them. Virgil was mistaken in cutting out his inferior
lines; we would have undertaken the job. Moreover in the particular
case of Dickens there are special reasons for regarding his bad work
as in some sense irrelevant. So much of it was written, as I have
previously suggested, under a kind of general ambition that had
nothing to do with his special genius; an ambition to be a public
provider of everything, a warehouse of all human emotions. He held
a kind of literary day of judgment. He distributed bad characters as
punishments and good characters as rewards. My meaning can be
best conveyed by one instance out of many. The character of the
kind old Jew in “Our Mutual Friend” (a needless and unconvincing
character) was actually introduced because some Jewish
correspondent complains that the bad old Jew in “Oliver Twist”
conveyed the suggestion that all Jews were bad. The principle is so
lightheadedly absurd that it is hard to imagine any literary man
submitting to it for an instant. If ever he invented a bad auctioneer he
must immediately balance him with a good auctioneer; if he should
have conceived an unkind philanthropist, he must on the spot, with
whatever natural agony and toil, imagine a kind philanthropist. The
complaint is frantic; yet Dickens, who tore people in pieces for much
fairer complaints, liked this complaint of his Jewish correspondent. It
pleased him to be mistaken for a public arbiter: it pleased him to be
asked (in a double sense) to judge Israel. All this is so much another
thing, a non-literary vanity, that there is much less difficulty than
usual in separating it from his serious genius: and by his serious
genius, I need hardly say, I mean his comic genius. Such irrelevant
ambitions as this are easily passed over, like the sonnets of great
statesmen. We feel that such things can be set aside, as the
ignorant experiments of men otherwise great, like the politics of
Professor Tyndall or the philosophy of Professor Haeckel. Hence, I
think, posterity will not care that Dickens has done bad work, but will
know that he has done good.
Again, the other chief accusation against Dickens was that his
characters and their actions were exaggerated and impossible. But
this only meant that they were exaggerated and impossible as
compared with the modern world and with certain writers (like
Thackeray or Trollope) who were making a very exact copy of the
manners of the modern world. Some people, oddly enough have
suggested that Dickens has suffered or will suffer from the change of
manners. Surely this is irrational. It is not the creators of the
impossible who will suffer from the process of time: Mr. Bunsby can
never be any more impossible than he was when Dickens made him.
The writers who will obviously suffer from time will be the careful and
realistic writers; the writers who have observed every detail of the
fashion of this world which passeth away. It is surely obvious that
there is nothing so fragile as a fact, that a fact flies away quicker
than a fancy. A fancy will endure for two thousand years. For
instance, we all have fancy for an entirely fearless man, a hero: and
the Achilles of Homer still remains. But exactly the thing we do not
know about Achilles is how far he was possible. The realistic
narrators of the time are all forgotten (thank God); so we cannot tell
whether Homer slightly exaggerated or wildly exaggerated or did not
exaggerate at all, the personal activity of a Mycenæan captain in
battle: for the fancy has survived the facts. So the fancy of Podsnap
may survive the facts of English commerce: and no one will know
whether Podsnap was possible, but only know that he is desirable,
like Achilles.
The positive argument for the permanence of Dickens comes
back to the thing that can only be stated and cannot be discussed:
creation. He made things which nobody else could possibly make.
He made Dick Swiveller in a very different sense to that in which
Thackeray made Colonel Newcome. Thackeray’s creation was
observation: Dickens’s was poetry, and is therefore permanent. But
there is one other test that can be added. The immortal writer, I
conceive, is commonly he who does something universal in a special
manner. I mean that he does something interesting to all men in a
way in which only one man or one land can do. Other men in that
land, who do only what other men in other lands are doing as well,
tend to have a great reputation in their day and to sink slowly into a
second or a third or a fourth place. A parallel from war will make the
point clearer. I cannot think that any one will doubt that, although
Wellington and Nelson were always bracketed, Nelson will steadily
become more important and Wellington less. For the fame of
Wellington rests upon the fact that he was a good soldier in the
service of England, exactly as twenty similar men were good soldiers
in the service of Austria or Prussia or France. But Nelson is the
symbol of a special mode of attack, which is at once universal and
yet specially English, the sea. Now Dickens is at once as universal
as the sea and as English as Nelson. Thackeray and George Eliot
and the other great figures of that great England, were comparable
to Wellington in this, that the kind of thing they were doing,—realism,
the acute study of intellectual things, numerous men in France,
Germany, and Italy were doing as well or better than they. But
Dickens was really doing something universal, yet something that no
one but an Englishman could do. This is attested by the fact that he
and Byron are the men who, like pinnacles, strike the eye of the
continent. The points would take long to study: yet they may take
only a moment to indicate. No one but an Englishman could have
filled his books at once with a furious caricature and with a positively
furious kindness. In more central countries, full of cruel memories of
political change, caricature is always inhumane. No one but an
Englishman could have described the democracy as consisting of
free men, but yet of funny men. In other countries where the
democratic issue has been more bitterly fought, it is felt that unless
you describe a man as dignified you are describing him as a slave.
This is the only final greatness of a man; that he does for all the
world what all the world cannot do for itself. Dickens, I believe, did it.
The hour of absinthe is over. We shall not be much further
troubled with the little artists who found Dickens too sane for their
sorrows and too clean for their delights. But we have a long way to
travel before we get back to what Dickens meant: and the passage is
along a rambling English road, a twisting road such as Mr. Pickwick
travelled. But this at least is part of what he meant; that comradeship
and serious joy are not interludes in our travel; but that rather our
travels are interludes in comradeship and joy, which through God
shall endure for ever. The inn does not point to the road; the road
points to the inn. And all roads point at last to an ultimate inn, where
we shall meet Dickens and all his characters: and when we drink
again it shall be from the great flagons in the tavern at the end of the
world.
THE END
Transcriber’s Notes
Simple typographical errors were corrected.
Punctuation, hyphenation, and spelling were made
consistent when a predominant preference was found in the
original book; otherwise they were not changed.
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AQA GCSE 9 1 Business Second

Edition Malcolm Surridge

AQA GCSE (9-1) Business, 3rd Edition Malcolm Surridge

My Revision Notes: AQA GCSE (9-1) Business Malcolm

AQA GCSE 9 1 Geography Second Edition John Widdowson

Cambridge International AS & A Level Business 2nd

Edexcel GCSE 9 1 Biology Edexcel 9 1 GCSE Science 2016

Edexcel GCSE 9 1 Chemistry Edexcel 9 1 GCSE Science

Pearson Edexcel International GCSE (9-1) Business

AQA A Level Geography 5th Edition Malcolm Skinner

Approval message from AQA

1 Business in the real world

Welcome to your AQA GCSE Business course.

1. What you will study

3. What examinations will you have to take?

● The purpose of business

● Reasons for starting a

What are the objectives of entrepreneurs?

Factors of production – land, labour, capital, Key terms

Their favourite ski run was ‘La Face’ in Val D’Isere,

The founders of FatFace set up a business because

What are the characteristics of entrepreneurs? Study tip

● Types of business and their basic functions

Businesses can also be classified in terms of their stage in the production

The primary, secondary and tertiary sectors

The functions of a business

managing the restaurant, organising check outs. The activities

● The dynamic nature of business

there is – changes in incomes, changes in the number of people working, new

6 State two possible characteristics of an

Sole trader Partnership Company Not-for-profit

Figure 1.3 Types of business ownership

Advantages of being a sole trader

Advantages of a sole trader Disadvantages of a sole trader

● Partnership Key terms

Table 1.2 Summary of the advantages and disadvantages of forming a partnership

Advantages of a company Disadvantages of a company

Table 1.3 Summary of the advantages and disadvantages of forming a company

0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Source: Department of Business, Innovation and Skills: www.gov.uk

1 Estimate the total number of businesses in the UK at the start of 2015.

Private limited companies

Examples of private limited companies in the UK

➜ Accounts must be checked by an independent accountant (called an auditor),

Public limited companies

● Which is the right form Who are the

not have many assets at risk and protecting

2 State two possible problems of being a sole 7 What is a ‘partnership’? (2 marks)

4 What is a 'shareholder’? (2 marks) 9 What is meant by a ‘Deed of Partnership’? (2 marks)

2 Explain two benefits to Snap of launching

● What are aims and objectives?

● The purpose of setting objectives

● The role of objectives

Source: Next: www.nextplc.co.uk

Analyse the possible reasons why Next sets the

Environmental and sustainability targets

OUR RESOURCES OUR RESOURCES

Aim to inspire and

excite our customers