Chapter 1 BTF Flashcards
What is an organisation?
A social arrangement for the controlled performance of collective goals, with a boundary separating it from its environment.
What are the two main categories of organisations?
Profit-oriented and Not-for-profit.
Give three examples of profit-oriented organisations.
A multinational car manufacturer, an accountancy firm, a mobile phone operator.
Give three examples of not-for-profit organisations.
A charity, a trade union, an army.
Why do organisations exist? (List at least three reasons)
To let people specialize in what they do best,
save time,
accumulate and share knowledge,
let people pool their expertise,
and enable synergy.
What do all organisations have in common?
They are social arrangements for controlled performance of collective goals, have a boundary separating them from the environment.
What is the purpose of having a boundary in an organisation?
To separate the organisation from its environment.
How is performance monitored in an organisation?
Performance is monitored against goals and adjusted as necessary to ensure the goals are accomplished.
What is the key feature of the social arrangement in organisations?
Individuals are gathered together for a purpose.
How do organisations differ?(7)
Organisations differ in ownership, (public vs private)
control, (Manage by who, owners themself?, workers?)
activity, what they do
profit orientation,
size, (small, sme, mnc)
legal status, (Company, partnership, sole trader)
and technology.(high or low use of technology)
What is a common feature of all organisations?
All organisations are designed to get things done.
How is performance controlled in an organisation?
Performance is monitored against goals and adjusted as necessary to ensure the goals are accomplished.
What is meant by ‘social arrangement’ in the context of an organisation?
It refers to individuals gathered together for a purpose.
What are the boundaries in an organisation?
Boundaries distinguish the organisation from its environment, both physically and socially.
Definition of a business
An organisation that is oriented towards making a profit for its owners to maximise wealth.
What are collective goals in an organisation?
Collective goals are the organisation’s goals above and beyond the goals of the individuals within it.
what is a stakeholder
A person or group of people who has a stake in the organisation, has an interest of protect of what the org does and how it performs
Difference between profit(business) and non profit Primary objective
Primary objective of a business: to maximise wealth of owners
Primary objective of a non profit orgranisation: to provide goods and services for its beneficiaries
What does profit maximization involve?
It involves creating value by ensuring revenue exceeds costs and managing acceptable levels of risk.
How do not-for-profit organisations generate revenue?
Not-for-profit organisations generate revenue mainly through taxation or donations, rather than sales of goods and services.
Primary stakeholder
what is at stake
what do they expect of the business
- Shareholder
2.Money invested - A return on their investment so that their wealth increases, growing profit paid out by the business, growth in capital value of their shares
Can the type of goods or services provided determine if an organisation is profit-oriented or not-for-profit?
No, the type of goods or services provided does not determine if an organisation is profit-oriented or not-for-profit.
What are some examples of secondary objectives?
Market position,
product development,
technology,
employees and management.
Secondary stakeholders?
Employees, customers, suppliers, lenders, government and agencies, analyst/advisers/expert, the local community, the natural environment
How does market position serve as a secondary objective?
By achieving a particular market share or reputation that supports long-term profitability.
(growth in sales, avoid reliance on a single customer for too big proportion of total sales, enter or leave market when the time is right）
Why can’t profit be pursued at any cost?
Businesses must adhere to laws and regulations and consider their social responsibilities.
How can technology serve as a secondary objective?
By improving production efficiency and reducing the cost per unit of output.
exploit appropriate tech
What is the importance of product development in business objectives?
Developing new products to expand product ranges and satisfy changing consumer demands.
Investing in research and development
How does employee management relate to business objectives?
Train employees in necessary skills, reduce number of employees leaving and having to replace them. create an innovative, flexible culture, employ high quality leaders
What is “profit satisficing”?
Achieving a satisfactory profit that is acceptable to shareholders without maximizing profits.
(satisfy+sacrifice)
What is revenue maximization?
Focusing on increasing market share or sales revenue, not just profits, to improve competitiveness.
Why is ESG important in business?
ESG factors are considered alongside financial performance to understand how they may affect the risk and return of investments.
What does the Environmental aspect of ESG include?
Issues relating to the quality and functioning of the natural environment and natural systems, such as biodiversity loss, greenhouse gas emissions, climate change, renewable energy, energy efficiency, air and water pollution, waste management, ozone depletion, changes in land use, ocean acidification, and changes to nitrogen and phosphorus cycles.
What are some specific issues included under the Social aspect of ESG?
Human rights, labor standards in the supply chain, child, slave, and bonded labor, workplace health and safety, freedom of association and freedom of expression, human capital management, employee relations, diversity, relations with local communities, activities in conflict zones, health and access to medicine, HIV/AIDS, consumer protection, and controversial weapons.
What does the Governance aspect of ESG focus on?
Governance issues include board structure, size, diversity, skills and independence, executive pay, shareholder rights, stakeholder interaction, disclosure of information, business ethics, bribery and corruption, internal controls and risk management, and dealing with the relationship between a company’s management, its board, shareholders, and stakeholders.
