Chapter 1: Role of Business Flashcards
What are the four functions of a business?
- Marketing
- HR (Human Resources)
- Finance
- Operations
Define ‘business’
A business is an organised effort of individuals to produce and sell, for a profit, goods and services tat satisfy consumer wants and needs.
What is the production function of a business?
The production are the activities undertaken by the business that combine resources to created products for customers.
What does redundancy mean?
Redundancy occurs when a business needs to get rid of employees as the jobs they are doing are no longer required. Often technology replaces these employees.
How is profit play a role in businesses?
Profit is essential if a business is to meet day-to-day expenses (such as production
costs, wages, insurance, electricity and rent) and provide a return on the owners’ financial
investment.
How is employment a role in businesses?
Without employment (labour), businesses are unable to offer the community a diverse range of goods and services.
How does income play a role in businesses?
In return for their services, a business will pay a form of income to its workforce.
What is innovation’s role in businesses?
This is the process of introducing a new product or improving an existing one.
How does entrepreneurship and risk play a role in businesses?
Entrepreneurs take risks by developing strategies for their ideas to come to fruition.
How does quality of life play a role in businesses?
Business research and development has also contributed to a significant improvement in our quality of life.
What are the other eight functions of a business?
- Profit
- Employment
- Incomes
- Choice
- Innovation
- Entrepreneurship and risk
- Wealth
- Quality of life
What is a business’ profit?
Profit is what remains after expenses have been deducted from sales revenue.
Profit = revenue - business expenses
What are the different forms of income?
wages - money employees earn on an hourly or daily basis
salary - fixed regular payment made to permanent employees
dividends - the business’s profit divided among shareholders
Who is ASIC
Australian Securities and Investments Commission (ASIC)
