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BTF > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Why do organisations exist

A

overcome peoples individual limitations
let people specialise
save time (work together)
accumulate
pool expertise
enable synergy
enable people to be more productive

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2
Q

define organisation

A

a social arrangement for the controlled performance of collective goals which has a boundary separating it from its environment

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3
Q

Controlled performance meaning

A

performance is monitored against goals and adjusted as necessary to ensure goals are accomplished

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4
Q

Who owns private sector organisations

A

private investors/shareholders

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5
Q

Who owns public sector organisations

A

owned by the nation and managed by the government

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6
Q

Goal of a non-profit organisation

A

to provide goods and services for its beneficiaries

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7
Q

Secondary objective of profit oriented organisation

A

output goods/services

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8
Q

secondary objective of not-for-profit organisation

A

minimise cost of primary goals

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9
Q

Define business

A

an organisation that is oriented towards making a profit for its owners so as to maximise their wealth and that can be regarded as an entity separate from its owners

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10
Q

What is a stakeholder

A

A person who has a stake in the organisation. Meaning they have an interest to protect in respect of what the organisation does and how it performs

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11
Q

What is at stake for shareholders

A

capital invested - expect return on it

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12
Q

Primary objective of a business

A

maximise shareholder wealth

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13
Q

Secondary Objective
Market position

A

achieve a particular market share of each market in which the business operates (grow sales, customers, potential customers etc)

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14
Q

Secondary Objective
Product development

A

bring in new products, develop range, invest in R&D

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15
Q

Secondary Objective
Technology

A

Improve how much is produced from resources, reduce cost per unit of output, develop or exploit appropriate tech

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16
Q

Secondary Objective
Employees and management

A

train employees in necessary skill, reduce labour turn over

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17
Q

Why do managers not always maximise shareholder wealth

A

may have no personal interest in creating wealth
market may lack competitive pressure to be efficient (min cost max rev)

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18
Q

Profit satisfying explained

A

decisions taken by managers with own objectives in mind, achieving satisfactory profit by operating at levels acceptable to shareholders

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19
Q

Revenue maximise explained

A

act to maximise revenue to maintain or increase market share, ensure survival and discourage competition

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20
Q

How do managers benefit from revenue maximisation

A

revenue grows becomes bigger company, more prestige running large company and salaries and benefits often better

21
Q

Eight key areas where objectives are needed

A

market standing
innovation
productivity
physical and financial resources
profitability
manager performance and development
worker performance and attitude
corporate responsibility

22
Q

Environmental issues explained

A

organisation activities may have impact on natural environment. poor behaviour can lead to fines, loss of reputation and legal claims by those affected by poor environmental behaviour

23
Q

Social issues explained

A

refers to relationship with stakeholders and society as a whole - labour relations, modern slavery can impact reputation

24
Q

Governance issues explained

A

refers to how an organisation is managed and led - e.g. structure of BOD and how activities are monitored by other stakeholders. Poor governance can lead to significant problems

25
Q

Ethical behaviour explained

A

underlies all three factors of ESG, about doing the right thing form a moral perspective

26
Q

Mission definition

A

the business’s basic function in society expressed in terms of how it satisfies various stakeholdersq

27
Q

two types of goals

A

non-operational/qualitative
operational/quantitative

28
Q

Purpose of setting operational objectives in a business

A

implement the mission
publicise direction to managers and staff
appraise whether decisions are valid
assess and control actual performance by using objectives as targets

29
Q

Plan definition

A

state what should be done to achieve operational objectives

30
Q

Standard and targets definition

A

specify the desired level of performance

31
Q

three types of standards

A

physical
cost
quality

32
Q

sustainability definition

A

ability to meet the needs of the present without compromising the ability of future generations to meet their own needs

33
Q

what is sustainable development

A

aims to ensure that economic activity can continue without causing permanent harm to society and the planet. Describes a world of thriving economies and just societies based on what nature can afford

34
Q

Three categories of sustainability (SEE)

A

Social
environmental
economic

35
Q

what is social sustainability

A

meeting the needs of a wider group of stakeholders and society as a whole

36
Q

examples of socially sustainable behaviour

A

fair treatment of employees
avoiding unethical activities and relationships such as bribery and corruption
contributing to societies in which organisations operate

37
Q

Economic sustainability - economic activity and growth are sustainable if

A

they can occur without harming social and environmental sustainability

38
Q

when are organisations activities economically sustainable

A

if they can provide return to stakeholders over long erm while meeting obligations to society

39
Q

what is considered in the triple bottom line

A

people
planet
profit

40
Q

what is climate change

A

long term shifts in temperatures and weather patterns, some due to natural causes, some due to human activity

41
Q

what is the Paris agreement

A

legally binding treaty in which 193 parties have committed to reduce carbon emissions. limit increase ni global temperature

42
Q

business impact on environment examples

A

emission of GHG during production
manufacturing products with non recyclable material
use of fossil fuels for heating
petrol/diesel trucks for transports
sending waste to landfill

43
Q

How does climate change impact organisations

A

extreme weather
changing regulatory environment
reputational damage

44
Q

four Rs of sustainability

A

reduce
reuse
recycle
replace

45
Q

SMART

A

Specific
measurable
Achievable
Relevant
Time bound

46
Q

What questions should a mission statement answer

A

what is our business
what is our value to the customer
what do we want our business to become
what should our business be

47
Q

If directors have run way designed solely to increase prestige in business community - what is the directors aim

A

maximise sales revenue

48
Q

To determine whether an organisation should be classed as business or not, it would be necessary to enquire as to the nature of its

A

primary objective

49
Q

What is a company’s vision

A

how the organisation sees itself at some future time

BTF (14 decks)

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