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Business Studies > Chapter 1- Enterprise and Business Functions > Flashcards

Chapter 1- Enterprise and Business Functions Flashcards

1
Q

Enterprise (definition)

A
  • Another term for a ‘ business ‘
  • Refers to the actions of a risk taker who starts up their own business
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2
Q

Entrepreneur (definition)

A
  • Risk taker who sets up a business
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3
Q

Self-employed characteristics

A
  • Hard-working
  • Competent
  • Reliable
  • Diligent
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4
Q

Entrepreneur characteristics

A
  • Self-belief
  • Confidence
  • Ability to work under pressure
  • Creativity
  • Imagination
  • Leadership skills
  • Persistance and ‘drive’
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5
Q

Benefits of successful entrepreneurs to business’s stakeholders

A
  • More people are likely to be employed
  • Employees will have more secure jobs
  • Chance of better pay and conditions
  • Suppliers will receive larger and more regular orders
  • Start to export goods to other countries (improve UK’s trade balance)
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6
Q

Reason why government encourage enterprise/ entrepreneurship

A
  • Government will receive more tax revenue from sources such as income tax, VAT, corporation tax if businesses are thriving
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7
Q

Factors of production (definition)

A
  • Inputs that are used in the production of goods or services
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8
Q

What are the factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
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9
Q

Land

A
  • Natural resources
    E.g. fields (what lies below them, what can be grown on it)
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10
Q

Labour

A
  • All the Human Resources available (except entrepreneur)
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11
Q

Capital

A
  • Refers to buildings, machinery and tools
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12
Q

Enterprise

A
  • Entrepreneur who organises the other 3 factors
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13
Q

What will happen if there is a shortage of a particular factor?

A
  • It’s price will rise
  • No as it potentially reduces profit margins as factors price is a cost to the business
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14
Q

Why is a rise in factor costs not going to be welcome?

A
  • Reduces profit margins
  • It’s a cost to the business
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15
Q

How might the firm react to a rise in factor costs?

A
  • Raising prices
  • Business could lower some other costs
  • Cut back on non-essential areas of expenditure
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16
Q

What will rising prices depend on?

A
  • The amount of competitors there are in the market
  • Firms brand loyalty
17
Q

What will lowering some other costs impose?

A
  • It may impose worse terms and conditions on it’s suppliers in an attempt to do so
18
Q

Who will suffer when cutting back on non-essential areas of expenditure?

A
  • Local community may suffer in terms of fewer community initiatives (e.g. sponsorship)
19
Q

Adding value (definition)

A
  • Business can sell the product at a higher price than the cost of producing it
    (Extras added result in value added)
20
Q

How is value added?

A
  • Manufacturing raw materials into a product
  • Creating an image for a product
21
Q

Constraint (definition)

A
  • A restraining factor on a business
  • Something that limits how a business operates
22
Q

Constraints on a business?

A
  • Economy
  • Legislation
  • Competition
  • Environment
23
Q

Functions within a business

A
  • Accounting and finance
  • Operations management and production
  • Marketing and support services
  • Human resource management
24
Q

Accounting and finance

A
  • Monitors and controls the businesses financial resources
  • Keeps detailed records of products business has made/ sold
  • Responsible for ensuring costs are kept under control and there are sufficient funds available to pay all the day-day running costs of the business
  • Sets budgets and operates businesses payroll
25
Q

Operations management and production

A
  • Process of transforming resource ‘inputs’ into finished ‘outputs’
  • Designing and controlling the process of production to make it as efficient as possible
  • Encompasses maintenance of capital equipment, stock control, quality control.
26
Q

Marketing and support services

A
  • Role of marketing to ascertain the needs of consumers by conducting market research in an attempt to satisfy the consumers in order to make a profit
27
Q

Human resource management

A
  • Responsible for the wellbeing of employees
  • Includes recruitment, training and if necessary terminating employment
28
Q

What happens to the HRM as a business grows?

A
  • Need for HRM increases as there are more employees to look after
29
Q

What occurs if coordination between the functions are poor?

A
  • Business won’t be as profitable as it could be
  • Will impact negatively on it’s stakeholders
30
Q

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

A
  • (Customers) availability of factors of production influences the quality and quantity of goods and services produced.
  • When businesses can efficiently utilise these factors they can meet customer demand more effectively leading to better customer satisfaction and loyalty.
  • (Employees) Access to skilled labour and a conductive working environment affects employee satisfaction and productivity.
  • When businesses secure the right talent, it enhances job satisfaction, reduces turnover rates benefitting both the employee and the business.
  • (Community) The local community benefits from the availability of factors of production through job creation and economic development
  • Meaning when businesses thrive due to access to these resources, it can lead to increased infrastructure and services.
31
Q

Evaluate the impact on and the importance to the economy of entrepreneurship and enterprise?

A
  • (Job creation) Entrepreneurs create new business which leads to job opportunities for individuals in the community
  • This not only reduces unemployment
    rates but contributes to a more skilled workforce.
  • (Innovation and competition) Entrepreneurs drive innovation by introducing new products, services and technologies.
  • This fosters competition leading to better quality and lower prices for consumers.
  • Moreover a competitive market encourages existing businesses to improve and adapt, contributing to overall economic growth.
  • (Economic growth) Enterprises contribute to the economy by generating income and wealth. Successful businesses pay taxes, which fund public services and infrastructure.
  • Profits by entrepreneurs can also be reinvested into the economy, further stimulating growth and development.
32
Q

Explain the role of the entrepreneur in making business decisions?

A
  • Entrepreneurs establish the overall vision and direction for the business
  • They set long term goals and develop strategies to achieve them
  • They assess potential risks
  • They decide how to allocate resources
  • Team leadership helping to build and lead teams

Business Studies (7 decks)

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