1.1 Introduction to business managment Flashcards
Definition of a business
decision-making organization involved in the process of production of goods and services.
Definition of input
are the resources that a business uses in the production process (labour and raw material), these generate outputs (products).
Definition of Needs
are the basic necessities that a person must have to survive
Wants
are people’s desires - whats they would like to have
Main functions of a business
Human resources - managing personnel and organization - workforce planning, recruitment, training, appraisal, dismissals, redundancies, outsourcing human resource strategies.
Finance and accounts - managing the organization’s money, keeping track and reporting financial documentation for legal requirements and informing on the financial position of the business.
Marketing - identifying and satisfying the needs and wants of customers - market research, test marketing, advertisement & branding
Product - goods and services meet customers requirements
Price - pricing strategies
Promotion - making sure customers know about a product
Place - goods and services are convenient for customers to buy
Operations - responsible for the process of converting raw materials into finished goods.
what is a primary sector
businesses involved in the cultivation or extraction of natural resources,
-Large percentage of output and employment in less economically developed countries (LEDCs)
-There is little value added in primary production (the difference between value of inputs and the value of outputs)
What is secondary sector
firms that turn raw materials obtained from natural resources into processed products.
-It’s the wealth creating sector because manufactured foods can be exported worldwide to earn income for country
-Value is added to the natural resources during production
What is the tertiary sector
A tertiary sector is the firms that provide services to consumers and other businesses i.e. retailing, transportation, banking, finance, insurance, health care, leisure, entertainment etc.
-Most substantial sector in employment and as a percentage of gross domestic product (the value of the country’s output each year) in MEDC’s
what is the Quaternary sector (subcategory of the tertiary sector)
where businesses are involved in intellectual, knowledge-based activities that generate and share information
e.g. ICT, R&D, consultancy services, scientific research. It exists in MEDC’s as it requires a highly educated workforce.
definition of chain of production
the link through the business sectors which tracks the stages of an items production, from extractions of raw materials used to make the product all the way through to it being delivered to the customers. The sectors are interdependent.
definition of Sectoral change
refers to a shift in the relative share of national output and employment that is attributed to each business sector over time.
What are the four factors of production
Land - any natural resource
Labour - human input, workers
Capital - products that are made to produce
Enterprise - people who have ideas, take risk and get
paid for managing above three
Definition of Entrepreneurs
owners or operators of an organization who manage, organize and plan the other three factors of production (land labor capital). They are risk takers who exploit business opportunities in return for profits
Intrapreneurship
is the act of behaving as an entrepreneur but as an employee within a large business organization. Intrapreneurs work in an entrepreneurial capacity, with authority to create innovative products or new processes for the organization.
Reasons for Starting a Business - GET CASH
1.Growth - the value of a business owned by the entrepreneur grows
2.Earnings - they can pay themselves as much as they want
3.Transference - inheritance of family business to children
4.Challenge - high fliers need a challenge to reach their potential
5.Autonomy - some personality types prefer to maintain control of their own lives
6.Security - being your own boss can give a better sense of job security
7.Hobby - lifestyle choice to do something you love or compliment other commitments
