Business Topic 1 Flashcards
What is a business?
A business is an organization that exists to provide goods and services on a commercial basis to customers.
What are goods in the context of a business?
Goods are physical or tangible products, such as consumer electronics, industrial components, and cars.
What are services in the context of a business?
Services are intangible products, such as insurance, dental services, and cleaning.
Who are the potential customers of a business?
Customers can be individuals, businesses, or other organizations.
Why do most businesses exist?
Most businesses exist to earn a return for the owners, with the potential for profit being a key motive for entrepreneurial activity.
What are some of the roles businesses play in society?
Businesses create and sustain employment, drive innovation, contribute to the infrastructure, pay taxes, and create wealth by providing returns on investment.
What is the role of entrepreneurs in business?
Entrepreneurs spot business opportunities, take calculated risks for potential returns, and act as catalysts for creating and growing new business enterprises.
How do businesses contribute to the government?
They pay taxes on profits and collect taxes on behalf of the government.
Why is innovation important in business?
Innovation is driven through research and development, leading to new products and advancements in various sectors.
What is one way businesses create wealth?
By providing returns on investment to owners and shareholders.
What is the hierarchy of objectives in a business?
Individual, Unit/Team, Functional, Corporate, Mission.
At what levels are objectives set within a business?
Objectives are set at various levels, including corporate (top), functional, and unit levels.
How are business objectives often expressed?
Objectives are often set in financial terms, aiming for specific financial outcomes.
What are examples of financial objectives for a business?
Examples include desired sales or profit levels, growth rates, cash generated, business value, and dividends paid to shareholders.
Do all business objectives have to be expressed in financial or measurable terms?
No, some objectives are non-financial and difficult to measure but still important, such as being innovative or a leader in customer service quality.
What is the “Mission” of a business?
The mission is the overall purpose of the business.
What is the “Vision” of a business?
The vision is the overall aspiration of the business.
What are “Aims or Goals” in a business context?
Aims or goals are general statements of what the business intends to achieve.
What are “Objectives” in a business context?
Objectives are more precise and detailed statements of the aims or goals.
What is the mission of a business?
The mission is the overriding goal of the business and the reason for its existence, providing a strategic perspective and a vision for the future.
What is one role of an effective mission statement?
It differentiates the business from its competitors.
How does an effective mission statement define a business?
It defines the markets or business areas in which the business wants to operate.
Why should a mission statement be relevant to all major stakeholders?
Because it should address the interests of stakeholders, not just shareholders and managers.
How should a mission statement impact employees?
It should excite, inspire, motivate, and guide employees.