Business Understanding business Flashcards
What are the sectors of economy and what do they do?
Private- owned by private individuals and aim to mke profit ans survive.
Public- Owned and controlled by the goverment and funded by taxes and aim to provide a service.
Third sector- Help a cause or provide a service. Aim to raise money and awareness for good casue.
what is stakeholder conflict and give example?
Shareholders seek nhigh profits which conflicts with employees.
Employees want a low rate of income tax whereas goverment may wish to raise it.
managers want the highest profit possible on sales whereas customers want low prces for high quality goods.
what is stakeholder interdependence.
managers need supliers to provide them with high quality stock when required and suppliers need managers to buy aupplies from them to keep them in business.
Customers need owners to provide them with goods and services and owners need customers to buy their products.
what is functional groupings and What are advantages of functional groupings and disadvantages?
functional groouping is a organisational structure it is when a business is divided into smaller groups based on spesialised funtional area such as IT, Fianance and marketing.
brings together employees with similar skills.
This arrangement allows for increased specialisation.
this can lead to slow responce due to external changes in the market
this can lead to slower decition making and poor communnication.
what is product/ service grouping?
this is when an organisation is divided into divisions based on a product they make or a product range.
what is advantages of product/ service grouping?
Easier to identify products that are poorly performing
It encourages customer loyalty
what is a disadvantages
There can be duplication of effort and resources
Difficult to share expertise and resources across departments
what is customer grouping?
This is when an organisation divides its operations by types of customer. It may divide its customers into:
retail (high street sales)
online operations
what are advantages of customer goruping.
Customer groups are more responsive to changing customer needs.
Easy to compare performance for each customer grouping and find out what works and what doesn’t.
what are disadvantages of customer grouping?
There can be duplication of effort and resources
Competition between departments may occur
What horizontal integration?
Is where two or more businesses agree to join together become
what is external growth?
WHEN ONE BUSINESS DOESNT USE ANY OUTLIDE HELP TO EXPAND
what is internal/organic growth?
it happens when a business expands its own operations rather than relying on takepvers and mergers.
what are the feartures of social enterprise?
is not about making a profit but rather making a difference in society.
What is vertical integration?
when a business takes over another business buy buying its assets or operations.
