Chapter 1 Enterprise And Business Functions

Question 1

Explain what is meant by enterprise

Answer 1

• enterprise is another word for a business
• it also refers to the actions of a risk taker who starts up his/her own business

Question 2

Explain what is meant by an entrepreneur

Answer 2

• an entrepreneur sees a opportunity which others don’t fully recognize
• an entrepreneur is a risk taker setting up their own business
• they would have always wanted to run his/her own business and will be prepared to take risks

Question 3

What can a self employed person be described as being ?

Answer 3

• hardworking
• competent
• diligent
• reliable

Question 4

What are the characteristics of an entrepreneur

Answer 4

• self belief
• confidence
• enthusiastic
• motivated
• ability to be comfortable with risk
• persistence and drive
• Ability to work under pressure

Question 5

Explain what is meant by the factors of production land, labour, capital and enterprise

Answer 5

This is the inputs that are used in the production of goods or services these are land, labour, capital and enterprise.

• land is the natural resources
• labour is the Human Resources
• capital is e.g. buildings, machinery, tools (what’s needed)
• enterprise is the entrepreneur who organizes the other 3 factors

Question 6

Evaluate the impact and importance of the availability of factors of production for the stakeholders of a business ?

Answer 6

• these factors are essential for a business so if there is a shortage of a particular factor its price will rise.
• this is a cost to the business and any rise in factor costs is not going to be welcome since it potentially reduces profit margins

Question 7

Explain the role of the entrepreneur in making business decisions?

Answer 7

-The business has to manage and make decisions based on issues such as whether to lower costs, accept the situation.
- they have to make decisions on what factor to use and in what quantities
- entrepreneurs aim is to make a profit so there decisions will be made based on factor costs.

Question 8

What is added value

Answer 8

This means a business can sell the product at a price that is higher than the cost of producing it.

Question 9

What is a constraint ?

Answer 9

A constraint is a restraining factor on a business (something that limits how a business operates)

Question 10

Constraints in a business

Answer 10

• the economy
• the environment
• legislation
• competition

Question 11

What are the functions in a business

Answer 11

Accounting and finance-
-this department monitors and controls the businesses financial resources
- it has a responsibility to ensure costs are being kept under control and that there are sufficient funds available to pay the day to day running costs of a business
- it sets budgets in order to control the business

Operations management and production-
-designing and controlling the process of production to make it as efficient as possible

Marketing and support services-
- role of marketing to ascertain the needs of consumers by conducting market research
- to attempt to satisfy the consumers in order to make a profit

Human resource management-
- this department is responsible for the wellbeing of the employees
- this includes recruitment and training if necessary terminating employment