Chapter 1: Introducing Businesses

Question 1

What is a Business?

Answer 1

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

Question 2

What are Finished Goods?

Answer 2

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

Question 3

What is a For profit organisations?

Answer 3

Produces good and/or services which is sold to buyers to make money.
When revenue is greater then expenses.
Profits go to owners or shareholders.
Employees get paid

Question 4

What is a Not-for-profit organisations?

Answer 4

-Social mission
-business which provides social, educational, religious or other benefits for people with the profits made go to expanding the organisation.
-employees can be paid or volunteers.
Eg. Salvation Army, the smiths family, world vision.

Question 5

What is a Market share?

Answer 5

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

Question 6

Multinational corporation

Answer 6

A multinational corporation (sometimes referred to as a transnational corporation) is a company that has branches in many different countries.

Question 7

What is an Objective?

Answer 7

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

Question 8

What are Financial objectives?

Answer 8

Make a profit

Question 9

What are Social objectives?

Answer 9

Help the community

Question 10

What are Personal objectives?

Answer 10

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Question 11

What is an Economy?

Answer 11

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

Question 12

What is Economic growth?

Answer 12

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

Question 13

What is GDP?

Gross domestic product

Answer 13

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

Question 14

What is Export?

Answer 14

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Question 15

What is Import?

Answer 15

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Question 16

What is a Business environment?

Answer 16

The business environment refers to the surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.

Question 17

What is an Internal environment?

Answer 17

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

Question 18

What is an External environment?

Answer 18

The external environment includes those factors over which the business has little control. It may be further divided into two categories: operating and macro.

Question 19

What is Corporate culture?

Answer 19

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 20

What is a Policy?

Answer 20

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

Question 21

What is an Operating environment?

Answer 21

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 22

What is a Stakeholder?

Answer 22

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

Question 23

What is a Supplier?

Answer 23

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

Question 24

What is Competition?

Answer 24

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

Question 25

What are Competitors?

Answer 25

Competitors are businesses that offer rival products or services.

Question 26

What is Sustainable competitive advantage?

Answer 26

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

Question 27

What are Interest groups?

Answer 27

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

Question 28

What is Macro environment?

Answer 28

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

Question 29

What is workplace diversity?

Answer 29

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

Question 30

What is Business ethics?

Answer 30

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

Question 31

What is a socially responsible management?

Answer 31

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 32

What is conflict of interest?

Answer 32

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 33

What is corruption?

Answer 33

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

Question 34

What is code of conduct?

Answer 34

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

Question 35

What is Profit?

Answer 35

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