'Chap 1' - Introducing Business

Question 1

What is a Profit?

Answer 1

A business makes a profit when the income earned (revenue) is greater than the costs of production (expenses).

Question 2

What is a Business?

Answer 2

A business is an organisation that provides goods and/or services to consumers in order to make a profit.

Question 3

What are Finished Goods?

Answer 3

Finished goods are those that are ready for customers to buy and use.

Question 4

For Profit Organisation

Answer 4

A business makes a profit when the income earned is greater than the costs of production (expenses).

Question 5

Not-For-Profit Organisation

Answer 5

Not-for-profit organisations may make a profit, but the main
reason they exist is to pursue a social objective, such as
helping others.

Question 6

Market Share

Answer 6

Market share refers to the business’s share of the total industry sales for a particular product.

Question 7

Multinational Corporation

Answer 7

A multinational corporation is a company that has branches in many different countries.

Question 8

Objective

Answer 8

An objective states what an organisation expects to achieve over a set period.

Question 9

Financial Objectives

Answer 9

A financial objective that is central to many business

organisations is making a profit.

Question 10

Social Objectives

Answer 10

Social objectives is related to improving human wellbeing.

Question 11

Personal Objectives

Answer 11

The nature and operation of the business tend to reflect the personal objectives of the owner.

Question 12

Economy

Answer 12

An economy is a system set up to determine what to produce, how to produce and to whom production will be distributed.

Question 13

Economic Growth

Answer 13

Economic growth occurs when the real value of goods and services increases over a set period of time.

Question 14

GDP

Answer 14

GDP is the total market value of all final goods produced by a country over a set period of time.

Question 15

Export

Answer 15

Exports refer to the sale of our goods and services to other countries.

Question 16

Import

Answer 16

Importing goods or services into a country from abroad for sale.

Question 17

Business Environment

Answer 17

The business environment refers to the surrounding conditions in which the business operates.

Question 18

Internal Environment

Answer 18

The internal environment, sometimes called the micro environment, includes those factors over which the business has some degree of control.

Question 19

External Environment

Answer 19

The external environment includes those factors over which the business has little control.

Question 20

Corporate Culture

Answer 20

The corporate culture is a set of mostly unwritten or informal rules that spell out how people are to behave most of the time.

Question 21

Policy

Answer 21

A policy is a general guide to help employees deal with recurring situations.

Question 22

Operating Environment

Answer 22

A business’s operating environment, sometimes called the task environment, refers to the specific outside stakeholders with whom the business interacts in conducting its business.

Question 23

Stakeholder

Answer 23

A stakeholder is any group or individual who has an interest in, or is affected by, the activities of a business.

Question 24

Supplier

Answer 24

A business’s suppliers are those organisations and individuals that supply the resources that the business needs to conduct its operations.

Question 25

Competition

Answer 25

Competition is rivalry among businesses that seek to satisfy a market.

Question 26

Competitors

Answer 26

Competitors are businesses that offer

rival products or services.

Question 27

Sustainable Competitive Adventage

Answer 27

A sustainable competitive advantage is the ability of a business to develop strategies that ensure it has an ‘edge’ over its competitors.

Question 28

Interest Groups

Answer 28

Interest groups are groups of people who attempt to directly influence or persuade an organisation to adopt particular policies.

Question 29

Macro Environment

Answer 29

The macro environment is made up of the broad conditions and trends in the economy and society within which a business operates.

Question 30

Workplace Diversity

Answer 30

Workplace diversity means the multitude of individual differences that exist among people in the workplace.

Question 31

Business Ethics

Answer 31

Business ethics is the application of moral standards to business behaviour.

Question 32

Socially Responsible Management

Answer 32

Socially responsible management is managing an organisation in such a way that the broader social welfare of the community is taken into consideration when making business decisions.

Question 33

Stakeholders

Answer 33

Stakeholders are individuals or groups with an interest in the success of the business.

Question 34

Conflict of Interest

Answer 34

Conflict of interest occurs when a person takes advantage of a situation or piece of information for his or her own gain rather than for the employer’s interests.

Question 35

Corruption

Answer 35

Corruption is a lack of honesty or integrity; using a position of trust or authority to receive favours, often financial bribes.

Question 36

Code of Conduct

Answer 36

A code of conduct is a set of ethical standards by which managers and employees should abide.