Page 24 - Business_Studies_F5

Student's Book Form Five

Chapter Two

Business units
FOR ONLINE READING ONLY

Introduction

The nature and forms of businesses operating in different countries depend on
size, ownership structures, and industrial sector. This brings us to the basic
aspects of a business unit. In this chapter, you will learn about the concept of
business unit, and the forms of business units according to size and ownership
structure. The competences developed will enable you to establish and operate a
company, franchise, joint venture, and co-operative.

Think
Operating a business of any form.

The concept of business unit
A business unit is an organisation, enterprise, or firm that deals with the production,
distribution, or exchange of products to make profits. It may be set up by an individual
or a group of individuals. Business units have different classifications as explained
throughout this chapter.

Size classification
Size classification of businesses is a method that is used to categorise businesses
according to metrics such as annual turnover, number of employees, or value of assets.
This classification aids stakeholders in understanding the business landscape and tailoring
regulations and policies to support different businesses according to their sizes. Globally,
businesses are also classified according to various measures including the nature of the
market, capital requirements, regulatory environment, and level of technology adapted
depending on the level of a country’s development. In Tanzania, the size classification
of businesses is guided by the indicators provided in the Tanzania Small and Medium
Enterprise (SME) Development Policy of 2003. The policy defines the business size
from micro to large enterprises as shown in Table 2.1.

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