1.1 What is a Business? Flashcards
Define the term business
A term to describe a commercial or industrial enterprise as well as the people who constitute it.
Goods
Tangible items provided by businesses and sold to consumers.
Services
Tasks performed by people in the benefit of the consumer.
Need
The fundamental and necessary aspects
Want
Individual preferences and desires.
Costs
The monetary value put on something
Revenues
The net income generated by a business, prior to expenses being applied.
Value added
The decisions made for a good or service to add value before being marketed or provided to a consumer.
Production process
> Inputs: Raw materials, components, machinery, equipment
Processes: Turning inputs into manufactured goods/provision of services
Outputs: Output of provision into FINAL goods or services
Key business functions
> Operations: Overarching daily functions of a business and the logistics
Marketing: Serves as the impression and face of a company
> Coming up with product, promoting, selling, distributing (strategically)
HR: Managing recruitment, worker selections, performance, learning, relations
Financial Activities: Planning, managing, obtaining company funds
Interdependence
The way functions, concepts and factors relate and depend on each other to operate effectively
Customer/Consumer
The audience that businesses are satisfying/benefiting
> Business source of income and monetary value
> At best interests of companies
Consumer Good
Products used by consumer
Capital good
Used by business to then create a consumer good/product
Economic Sectors
Primary, Secondary, Tertiary, Quaternary
Primary
Business activity involved with extraction of natural resources
Secondary
Involved with manufacturing finished goods
Tertiary
Providing service to customer
Quaternary
Creation or sharing of knowledge and information
Chain of Production
Production
Manufacturing
Services
Consumers
Value adding process happens throughout
Entrepreneur
Person with idea + initiative to start a business and take personal/financial risks in doing so
Intrapreneur
An employee of a usually large business encouraged to take risks and innovate in order to improve product/service of the business
Equity
> Valued returned to company shareholders if all assets were liquidated + company debts paid off
To be fair
Decentralisation
Process where activities of an organisation, particularly activities regarding decision-making and planning are distributed and delegated away from a central authoritative location and given to smaller factions within it
SME
Small merchant establishment (Small + medium businesses)
+200 = Large business
How to encourage entrepreneurial behaviour:
> Profit Sharing
Equity
Recognition programs
Recognise + support mistakes
