Introducing business (Chapter 1)

Question 0

What are the differences between for-profit and non-for-profit organisations?

Answer 0

They both have objectives but for-profit has financial objectives whilst non-for-profit organisations have social objectives, not only that for-profit usually have payed employees whereas non-for-profit have volunteers.

Question 1

What are the similarities between for-profit and non-for-profit organisations?

Answer 1

Setting objectives and also bills such as rent (generally things to keep the business going) not only that, they both usually have high ethical standards with behaviour (what’s acceptable, what’s not).

Question 2

Describe a small business?

Answer 2

Is usually a corner store, local mechanic or hairdressing salon, it consists of less than 20 employees and is independently owned and operated.

Question 3

Describe a medium business?

Answer 3

An example is a motel/hotel, or engineering factory and these businesses usually consist of 20-199 employes and is usually owned and operated by a few people and possibly even private shareholders.

Question 4

Describe a large business?

Answer 4

A large business would consist business’ such as Woolworths, Qantas and KFC just to name a few. These business’ have 200+ employees and are usually owned by thousands of public shareholders.

Question 5

What is an objective?

Answer 5

An objective is an outcome or result an organisation expects to achieve over a set period of time this can be in the form of profit (a financial objective) or even the amount of assistance given to people over a certain amount of time (which is a social objective). Essentially objectives state what an organisation expects to achieve over a set period with the hopeful outcome of increasing the chances of success, it’s a step but step plan to get to your desired achievement. (time frame, how this will be measured)

Question 6

What is a financial objective?

Answer 6

A financial objective is an objective set for the sole purpose of gaining money for the business to thrive and grow.

Question 7

What is a social objective?

Answer 7

A social objective is designed for the sole purpose of benefitting others in all different aspects. Including the outcomes of providing employment, ecological sustainability, or even social justice and of course community service
but really it can vary depending on what the actual objective aims for. It is pretty much an objective created for the goal of something other than a profit.

Question 8

Define what a business is?

Answer 8

businesses are organisations that provide goods and/or services to fulfil our needs and wants.

Question 9

How does a business make profit?

Answer 9

when the income earned (in other words revenue) is larger than the costs of production (expenses). eg. r-e=p or d (deficit)

Question 10

What is the percentage of Australian business’ classified as small?

Answer 10

Over 96%

Question 11

What are the main activities of a business?

Answer 11

.Management
.Production
.Marketing products
.Controlling production
.Forecasting sales (expenses and profit)
.Planning finances
.Distributing goods and services 
.Organising natural, capital and human resources

Question 12

What is a business environment?

Answer 12

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

Question 13

Describe internal environment?

Answer 13

it is also known as a micro environment and includes factors with which the business has some degree of control over such are employees, managers, management style, corporate culture and company policies.

Question 14

Describe external environment?

Answer 14

It can be divided into two categories operating and macro but never the the less they are both factors over which the business has little control over, such as customers, suppliers, competitors, weather. TILES (technological forces, international forces, legal/political forces, economic forces and social forces)

Question 15

What are stakeholders?

Answer 15

Stakeholders are individuals or groups with an interest or stake in the performance and activities of an organisation. Stakeholders will place different demands on the business. An example of stakeholders is customers because they expect an acceptable standard of the goods and services purchased.

Question 16

What do you need to remember that the macro environment contains that can influence decisions in a business?

Answer 16

TILES
Technology
International forces
Legal and political forces
Economic forces
Social forces

Question 17

What are some examples of stake holders?

Answer 17

Suppliers, shareholders, government, international community, customers, creditors, employees and local community

Question 18

How much do small business’ contribute to the economy?

Answer 18

.small business’s employ 4.7 million people
.employment leads to wages, which leads to money spent on goods and services to meet their needs and wants, supporting more business’s, and repeating the cycle
.small business contribute to revenue through taxation
.which benefits the community such as providing a better education system

Question 19

Ethically responsible management definition?

Answer 19

Also known as business ethics. With being ethically responsible it’s following or abiding by certain moral standards of behaviours to business such as honesty in business dealings.

Question 20

Socially responsible management definition?

Answer 20

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 21

What is a for profit organisation?

Answer 21

A for profit organisation is a organisation which makes profits for the sales of its goods and services and one of the business’ basic goals is to gain profit.

Question 22

What is a not-for-profit organisation?

Answer 22

it is a organisation with the sole purpose to benefit the wider community. The main reason they exist is to pursue a social objective, such as helping others.

Question 23

How does a business make a profit?

Answer 23

when the income earned (revenue) is greater than the costs of production (expenses)

revenue - expenses = profit or deficit

Question 24

What is a finished good?

Answer 24

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

Question 25

how do small business contribute to the economy?

Answer 25

. contribute to employment and taxation revenue
. economic growth
. export earnings

Question 26

How can internal environment affect a business’ performance?

Answer 26

. employees
- most important resource
- with high employee satisfaction comes high levels of output
. managers
- every business (big or small, for profit or not for profit) needs managers
- they largely determine whether the objectives of the business are met

Question 27

How can operating environment affect a business’ performance?

Answer 27

This environment is made of up stakeholders external to the business who have a direct impact on the operation of the business. this includes
. customers
. suppliers
. competitors
. interest groups
because the business sometimes would have to alter how they do things based on what these groups do or say

Question 28

how can macro environment affects a business’ performance?

Answer 28

This is the wider environment in which and organisation operates. business’ often have to adapt their ways due to these forces.

Technological forces 
International forces 
Legal/political forces
Economic forces 
Social forces