3.1.1 Understanding the nature and purpose of business

Question 1

What is a business?

Answer 1

an organisation that exists to provide goods and services on a commercial basis to customers

Question 2

Benefits of a business

Answer 2

-provide jobs
-brings in taxes (to improve the public sector)
-innovation
-create wealth by providing returns on investment

Question 3

Objectives

Answer 3

a specific statement that defines a precise goal that can be measure and delivered within a given time

Question 3

SMART Objectives

Answer 3

-Specific
-Measurable
-Achievable
-Realistic
-Time-bound

Question 4

Objective types

Answer 4

-Mission
-Corporate/strategic
-Functional
-Team objectives
-Individual objectives

Question 5

Objectives can…

Answer 5

…help with business growth
…motivation for staff
…help monitor progress
…provides a target
…reduce uncertainty
…provides a sense of unity

Question 6

Influences on objectives

Answer 6

-competition
-unmotivated staff
-customers income
-not being SMART
-legalisation
-ownership
-location
-business size

Question 7

Strategic objectives

Answer 7

-focused on long-term
-set up by the board of directors
-difficult to change in the short term
-involve higher risk+uncertainty

Question 8

Tactical objectives

Answer 8

-focused on the short-term
-set up by line management
-relatively easy to change
-relatively low risk