Introducing business (Chapter 1) Flashcards
What are the differences between for-profit and non-for-profit organisations?
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.
What are the similarities between for-profit and non-for-profit organisations?
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).
Describe a small business?
Is usually a corner store, local mechanic or hairdressing salon, it consists of less than 20 employees and is independently owned and operated.
Describe a medium business?
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.
Describe a large business?
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.
What is an objective?
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)
What is a financial objective?
A financial objective is an objective set for the sole purpose of gaining money for the business to thrive and grow.
What is a social objective?
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.
Define what a business is?
businesses are organisations that provide goods and/or services to fulfil our needs and wants.
How does a business make profit?
when the income earned (in other words revenue) is larger than the costs of production (expenses). eg. r-e=p or d (deficit)
What is the percentage of Australian business’ classified as small?
Over 96%
What are the main activities of a business?
.Management .Production .Marketing products .Controlling production .Forecasting sales (expenses and profit) .Planning finances .Distributing goods and services .Organising natural, capital and human resources
What is a business environment?
The surrounding conditions in which the business operates and can be divided into two broad categories: internal and external.
Describe internal environment?
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.
Describe external environment?
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)
What are stakeholders?
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.
What do you need to remember that the macro environment contains that can influence decisions in a business?
TILES Technology International forces Legal and political forces Economic forces Social forces
What are some examples of stake holders?
Suppliers, shareholders, government, international community, customers, creditors, employees and local community
How much do small business’ contribute to the economy?
.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
Ethically responsible management definition?
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.
Socially responsible management definition?
is managing an organisation in such a way that the broader social welfare of the community is taken into consideration when making business decisions.
What is a for profit organisation?
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.
What is a not-for-profit organisation?
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.
How does a business make a profit?
when the income earned (revenue) is greater than the costs of production (expenses)
revenue - expenses = profit or deficit
What is a finished good?
Finished goods are those that are ready for costumes to buy and use.
how do small business contribute to the economy?
. contribute to employment and taxation revenue
. economic growth
. export earnings
How can internal environment affect a business’ performance?
. 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
How can operating environment affect a business’ performance?
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
how can macro environment affects a business’ performance?
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
