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business > chapter 1 - people in business > Flashcards

chapter 1 - people in business Flashcards

1
Q

what is the definition of a business ?

A
  • a business is an organisation set up to provide goods and services to customers
  • people set up a business to make money
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2
Q

name 10 stakeholders in a business

A 
EEEItSCMISP Every elevated eagle in the sky can make individuals see pee
entrepreneur 
employee
employer 
investor 
interest groups 
supplier 
consumer 
manager 
producer 
service provider
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3
Q

what is the role of the entrepreneur in a business ?

A
  • the entrepreneur sees an opportunity and sets up a business to make money and a profit from the idea
  • the entrepreneur takes a big risk as if the business fails she will loose all of the money she puts into it
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4
Q

give the names of two entrepreneurs

A
  • Mary Ann O’Brien

- Bill Gates

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5
Q
  • explain how Mary Anne O’Brien set up her business
  • name the business
  • mention if she got any help
  • was it a success
  • where is she now
A
  • Mary Ann O’Brien set up Lily O’Brien’s chocolates
  • she was in south Africa on a holiday and spent 2 weeks in a kitchen making chocolate
  • when she returned back to Ireland she made the same batch
  • this inspired her to set up Lily O’Brien’s chocolates
  • she took a huge risk
  • AIB loaned her 40,000 euro
  • company is now a success
  • exports to countries all around the world
  • Mary sold her business for 40 million in 2018
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6
Q

explain why Bill Gates set up his company

name the company

A
  • In the 1970s Bill Gates predicted that computers would be used in every office and home in the future
  • therefore he set up Microsoft, a company that makes software
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7
Q

what is the role of an investor in a business ?

A
  • an investor is the person who gives the money (capital) to the entrepreneur that she needs to set up, run and grow her business
  • in exchange the investor expects a return on investment. The entrepreneur can pay him back with interest or give him shares in the company
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8
Q

explain the 2 different types of return on investment and give an example for each

A

INTEREST
-the investor can lend money (debt capital) to the entrepreneur which he expects to be payed back with interest
EXAMPLE
-allied irish bancks (AIB) lend Mary Ann O’Brien over 40,000 euro to set up her business
-therefore AIB was an investor in Lily O’Brien’s chocolates
SHARES
-the investor can give the entrepreneur capital in return for a share in her business
-this is called equity finance
-the return the investor receives is an annual share of the profits called a dividend
-the investor can sell his shares later
EXAMPLE
-to get money to set up her second shop, Anita Roddick sold a half share in her business to an investor for 5,000 pounds.

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9
Q

give 2 examples of investors

A
  • banks give loans to entrepreneurs

- LEOs give grants and cheap loans to entrepreneurs to help them set up their business

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10
Q

what does LEO stand for ?

A

Local Enterprise Office

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11
Q

who runs local enterprise offices ?

A

the government

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12
Q

what is the role of an employer in a business ?

A
  • an employer is a person who hires others to work for her
  • the employer rewards the employee for the work she does financially with pay, bonuses and commission and non-financially with more holidays
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13
Q

give an example of a famous employer

A

Aer Lingus hires pilots to fly it’s planes

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14
Q

what is the role of an employee in a business ?

A
  • an employee is a person that works for an employer for a wage
  • employees may also come up with ideas to make the business more successful. This is called intrapreneurship
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15
Q

give an example of an employee

A

a pilot in Aer Lingus flies planes for the airline in return for a wage

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16
Q

give a famous example of intrapreneurship

A
  • when Microsoft workers saw the success of the Sony PlayStation they thought up the idea of Microsoft making their own game console
  • They presented their idea to their employer, Bill Gates
  • Microsoft launched Xbox games console which was a worldwide success
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17
Q

what is the role of a manager in a business ?

A
  • a manager’s job is to run the business and make sure it achieves it’s objectives
  • She engages in the activities of planning, organising and controlling
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18
Q

give an example of a famous manager and say what he did

A

CEO at Ryanair, Michael O’leary

  • Ryanair began with just 1 route in 1985
  • MOL turned the company into one of the world’s most successful airlines
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19
Q

what is the role of the producer in a business ?

A
  • producers are manufacturers who take raw materials and use a manufacturing process to turn them into a finished product
  • producers operate in the secondary sector of the economy
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20
Q

name the 4 factors producers use to make a product

A
  • land (raw materials from nature)
  • labour (employees)
  • capital (man-made things such as machinery)
  • enterprise (ideas)
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21
Q

give 2 famous examples of producers

A
  • Cadbury takes milk & other ingredients and turns them into chocolate
  • Tayto takes potatoes and turns them into crisps
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22
Q

what is the role of a consumer in a business ?

A
  • a consumer is a person who buys goods & services from the entrepreneur for his own personal use
  • the consumer also provides the entrepreneur with market research information, by telling the entrepreneur what he likes/dislikes in a product or service
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23
Q

give an example of consumers

A

when parents pay for childcare for their children they are consumers

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24
Q

what is the role of a supplier in a business ?

A
  • suppliers are other firms the business buys (eg. its stock) from
  • suppliers provide the business with goods and raw materials (ingredients) and other things it needs to be successful
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25
Q

give an example of a supplier

A

pat the baker provides all major supermarkets with bread

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26
Q

what is the role of a service provider in a business ?

A
  • a service provider is a business that offers a range of helpful supports to an entrepreneur
  • service providers operate in the tertiary sector of the economy
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27
Q

primary sector of economy

A

extract materials out of nature

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28
Q

secondary sector of economy

A

make finished products (out of raw materials)

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29
Q

tertiary sector of economy

A

offer services

30
Q

give & explain 4 examples of service providers

A

1 BANK

  • offers financial services
  • enables entrepreneurs to deposit their money safely and pay for goods with debit cards

2 ACCOUNTANT

  • prepares the business’ financial statements
  • offers the entrepreneur advice on how to improve the business’ performance

3 SOLICITOR
-provides the entrepreneur with legal advice if she is sued and will defend her if the case comes to court

4 COURIER
-delivers documents and parcels for the entrepreneur

31
Q

what is the role of an interest group in a business?

A
  • an interest group is a group of people who come together to campaign for a common goal by pressurising those who make decisions
  • by joining forces they have more power, more money and more talents at their disposal and are more likely to be listened to by the decision-makers
32
Q

give 2 ways interest groups campaign

A
  • they organise negative publicity and boycotts of businesses they are campaigning against
  • lobby politicians to bring out new laws that will meet their demands
33
Q

define lobbying

A

lobbying is the deliberate effort to apply pressure to the decision maker by contacting her and meeting with her to persuade her to make the decision the interest group wants

34
Q

IBEC

A

Irish business and employers confederation

35
Q

ISME

A

Irish small and medium enterprises

36
Q

ICTU

A

Irish congress of trade unions

37
Q

IFA

A

Irish farmers association

38
Q

ICMSA

A

Irish creamery milk suppliers association

39
Q

CAI

A

consumers association of Ireland

40
Q

what does IBEC do ?

A
  • IBEC tries to help entrepreneurs by lobbying the minister for finance to do something positive for business people in his budget like lowering business taxes
  • Every year IBEC prepares a budget submission in which it sets out the actions it thinks the minister should take in his budget to improve the economy for Irish business people
41
Q

what does ICTU do ?

A
  • ICTU is an interest group representing almost all trade unions in Ireland - it represents and campaigns on the behalf of working people
  • It attempts to influence Government action in key areas such as; taxation, employment legislation, education and social policy to benefit workers
42
Q
  • where are most of the EU decisions made?
  • what affect does this have on interest groups ?
  • why do the interest groups do this ?
A

many EU decisions are made in Brussels, so special interest groups set up offices in Brussels so that they can easily and regularly access decision makers in the EU

43
Q

give an example of an irish interest group that has an office in Brussels ( 2 sentence answer required)

A
  • IFA has offices in Brussels close to the commission and the parliament
  • this allows it quick & regular access to the most influential people in the EU decision-making and it helps ensure their voice is heard by those who matter
44
Q

define a cooperative relationship

A
  • this means that the parties work together and help each other to achieve their goals
  • this is called a ‘win-win’ situation as it results in them both doing well
45
Q

describe 1 example of a cooperative relationship which could arise between an employer and employee

A
  • many irish employees agreed to voluntary pay cuts during the recent recession. This helped their employer to lower costs and thus lower prices in a bid to boost sales and survive the economic downturn
  • it also helped the employees as the survival of the business meant the employer could continue to provide them with jobs & wages
46
Q

describe 1 example of a cooperative relationship which could arise between an investor and manager

A
  • managers cooperate with investors by giving them honest and accurate information about how the business is doing. The investor can then make an informed decision about her investment in the business
  • in return for this the investor helps the manager expand the business by providing more capital
47
Q

describe 1 example of a cooperative relationship which could arise between a producer and a consumer

A
  • producers cooperate with consumers by carrying out market research to find out their likes/dislikes and then making excellent quality products at reasonable prices to satisfy them
  • consumers cooperate by buying more products from those producers who make what they are looking for, thus increasing sales & profits for those producers
48
Q

describe 1 example of a cooperative relationship which could arise between an entrepreneur and an investor

A
  • entrepreneurs cooperate with investors by giving them honest information about how the business is doing and sharing their profits with them by giving them a decent dividend
  • in return the investor cooperates with the entrepreneur by providing more capital
49
Q

give 2 examples of famous cooperative relationships

A

1 SMART CAR (swatch and Mercedes Benz)

  • SWATCH (watch producer) and Mercedes Benz (car producer) have a cooperative relationship. They combined the styling and designing ideas of swatch with the technological knowledge of Mercedes to form the smart car
  • by working together they could split the costs of designing and producing the car

2 THE BODY SHOP & CRUELTY FREE INTERNATIONAL

  • The body shop promotes the cause of Cruelty Free international, an animal rights interest group. They both benefit from this cooperation
  • The body shop increases it’s sales as consumers like that it cares about more than just money. The Cruelty Free International benefits from the free, high profile publicity in main streets in major cities all over the world
50
Q

define a competitive relationship

A
  • this means that 1 party in business wants to be more successful than another
  • this is called a win-loose situation as only one of them can win and so they fight against each other and become rivals.
51
Q

describe 1 example of a competitive relationship that could arise between entrepreneurs & investors

A
  • entrepreneurs have conflict with investors by reinvesting all the profits back into the business and paying no dividends
  • in return the investors may refuse to provide more capital
52
Q
  • describe 1 example of a competitive relationship that could arise between employers and employees
  • give a famous example
A

-employers and employees may compete when employees want higher pay but the employer may refuse to in order to keep the business’ costs down
-employees may respond by going on strike
-for example in 2018 Ryanair pilots went on strike
Ryanair responded by threatening to make job cuts in the airline

53
Q

give 2 famous examples of competitive relationships

A

COCA COLA V PEPSI

  • there is fierce competition between coca cola and pepsi each trying to win customers to increase market share
  • they do this bybring out new & improved products and engaging in price & advertising wars

TAYTO V WALKERS

  • Tayto and walkers both produce potato crisps. They compete against each other to win customers and increase market share
  • they do this by constantly improving their recipes and offering tastier & healthier crisps. They both invest money into quality control to ensure their crisps ae better than their rivals
54
Q

illustrate

A

give a famous business example

55
Q

evaluate

A

give an advantage

56
Q

product of your choice

A

say what a famous business does

57
Q

outline using examples the relationship that can exist between investors and entrepreneurs in business

A

notes

58
Q

the relationship between an enterprise and it’s stakeholders may be cooperative or competitive
Discuss this statement using examples

A

notes

59
Q

does the investor have to keep his shares in a business?

A

no! he can sell them later

60
Q

describe 1 example of a cooperative relationship and 1 example of a source of conflict that could arise between a supplier and a purchasing manager

A
  • cooperative means that the parties work together to help each other achieve their goals
  • this is called a ‘win-win’ situation as it results in them both doing well
  • the supplier delivers excellent quality products to the purchasing manager in return for which he pays him a fair price in full and on time
  • conflict means that 1 party in business wants to be more successful than another
  • this is called a ‘win-lose’ situation as only one of them can win so they fight against each other to become rivals
  • a purchasing manager would have conflict with the supplier is the goods were of poor quality. The purchasing manager then refuses to pay for them
61
Q

why do stakeholders often draw up a contract

A

to ensure good relationships in business

62
Q

to ensure good relationships in business, stakeholders will often draw up a …..

A

contract

63
Q

give the definition of a contract

A
  • a contract is a legally binding agreement between 2 or more people in which each promises to do something for the other
  • it is enforceable in law which means that if one person breaks the agreement, a judge would order her to pay compensation or force her to carry out the contract as originally agreed
64
Q

name the 8 essential elements of a contract

A
  • offer
  • acceptance
  • consideration
  • intention to contract
  • capacity to contract
  • consent to contract
  • legality of form
  • legality of purpose
65
Q

define an offer

A

-an offer is made when one person asks another to enter into a deal with her and promises to be bound by the contact if his offer is accepted
(-he must communicate the offer to the other person either by speaking it, writing it or by his conduct)
-a person can withdraw the offer at any time before the other party accepts it

66
Q

give an example of an everyday offer you make by your conduct

A

you are offering to buy the groceries at the supermarket when you place them on the conveyor belt

67
Q

define termination of an offer

A
  • a person can withdraw the offer at anytime before the other party accepts it
  • an offer also ends if a deadline for the acceptance passes
68
Q

give an example for an offer that ends if a deadline for the acceptance passes

A

if you don’t accept an offer from the CAO on time, you lose that college place

69
Q

also all offers end at a …

give an example for this

A
  • reasonable time

- for example if you are offered a job and don’t bother to reply you aren’t entitled to that job 5 years later

70
Q

do not confuse an offer with an ….

A

invitation to treat

71
Q

give examples of things that are not legal offers in Irish law but invitation to treats (4)

A
  • an advertisement
  • a price tag
  • a shop display
  • goods on a shelf
72
Q

define an invitation to treat

A

-

business (3 decks)

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