Introducing Business - Chp 1 Flashcards
(86 cards)
1
Q
What are the two types of organisations?
A
For profit and not for profit organisations
2
Q
What is a business?
A
A for-profit organisations that sells good and services to consumers in order to make a profit.
3
Q
Not-for-Profit organisations
A
May make a profit but the reason for they exist is to pursue their social mission
4
Q
Profit
A
When the businesses revenue is greater than their expenses
5
Q
Revenue
A
Comprises of all sources of income to be earned by the business.
6
Q
Sales
A
The amount of money received for selling good and services
7
Q
What are the 8 main activities of a business?
A
Management Organising resources Distribution Planning finances and business needs Forecasting sales Controlling production (quality&quantity) Marketing products Production
8
Q
Finished goods
A
Goods that are ready for the customer to buy and use
9
Q
Objectives of for-profit organisations
A
To aim of the organisation is to make a profit
10
Q
Objectives of not-for-profit organisation
A
The main goal of this organisation is to achieve its social mission
11
Q
Owners of For-Profit Organisations?
A
Sole Traders, Partnerships, and Shareholder
12
Q
Owners of Not- For-Profit Organisations?
A
No one in particular except for the stakeholders
13
Q
How profits are distributed in a For-Profit Organisation
A
Distributed to the owner of shareholders, through dividends
14
Q
Employees of For-Profit Organisations
A
Employees are paid for their work
15
Q
Employees of Not-For-Profit Organisations
A
Employees are either paid or unpaid (volunteers)
16
Q
The different sizes of businesses
A
Small, SME, Medium, and Large
17
Q
Enterprise
A
Another name of a business
18
Q
Franchise
A
Individual purchases the right to operate under a business name
19
Q
What is an organisation?
A
A group of people who come together to achieve a common goal or set of objectives
20
Q
Do for-profit organisations make a profit?
A
For profit organisations can make a profit, it its just put back into the organisation to fund other services
21
Q
Market Share
A
The portion of total market sales the business had compared to its competitors
22
Q
Sole Trader
A
One owner
23
Q
Partnership
A
Owned by several people (up to 20)
24
Q
Multinational Corporation
A
Company has branches in many different countries
25
Number of Employees in:
Small
Medium
Large
Small - less that 20
Medium - 21 to 199
Large - 200+
26
Ownership:
Small
Medium
Large
Small - up to 5 owners
Medium - 6 to 199 owners
Large - owned by thousand of public shareholders
27
Legal Structure:
Small
Medium
Large
Small - Sole Trader or Partnership
Medium - Partnership or Private Company
Large - Public Company
28
Decision Making:
Small
Medium
Large
Small - owner responsible for majority of decisions
Medium - owner basically responsible for decisions, more compacted decisions, influence of directors
Large - complex decision making due to division of responsibilities among directors & management.
29
Sources of finance:
Small
Medium
Large
Small - owner equity or loan, difficulties accessing loan due to unlimited liability
Medium - owner/partner equity, or loan which are now easier to access, or private shareholders
Large - many resources; cash reserves, retained profit, sale of shares and loans from domestic and overseas institutions
30
Market Share:
Small
Medium
Large
Small - small, usually occupy local area; not dominant in industry
Medium - medium sized, dominance in a certain region; some market dominance
Large - large, multinational corporations that dominate the markets of many countries
31
Corporation
A company or group of people
32
Objective
States what the organisation expects to achieve over a set period of time
33
Three main types of Objectives
- Financial
- Social
- Personal
34
What do all objective have in common?
They are the motivating force behind an organisation.
35
Financial Objective
Ways to maximise profit
- Increase Sales
- Increase Market Share
- Expand the Business
36
Return on Investment
A positive of negative percentage that relates the money gain or lost on an investment. The return on the investment occurs over a 12 month period.
37
Why is the return on investment important to investors?
The profit gained by the business in returned it its investors, therefore the return on the investment is important
38
Social Objectives
Ways in which to benefit the community as well as achieving financial objectives
- community service
- providing employment
- social justice
- sustainability
39
Personal Objectives
The objectives of the business owner of manger not usually made public. To motivate them to and their persist for success.
40
Economy
A system set up to determine; what products to produce, how these are to be produced and how these products will be distributed and to who.
41
What type of economic system does Australia use?
Market Capitalist Economy.
| Where private buyers and sellers provide the system.
42
What contributions do small businesses have on the economy?
- provide employment
- contribute to taxation revenue
- boost economic growth
- export earnings
43
Tax revenue
A tax on income earned.
Small businesses pay tax on certain aspect according to the way their run their business, as do their employees on the income they make.
44
What does taxation provide?
Taxation is used to provide findings for essential services that benefit the whole community.
45
Economic Growth
Occurs when the nations real value of good and services increases over a set period of time.
46
GDP
Gross Domestic Product
| The total market value of all final good produced by a country over a set period of time.
47
Exports
Refers to the sale of our goods and services to other countries.
48
Product
Refers to a good or a service that is being sold in the market
49
Small business export earnings?
Small businesses in agribusiness, manufacturing, professional services and entertainment are all experiencing rapid export growth contributing approximately $1.2 billion to Australia’s export earnings.
50
What makes small businesses favourable by overseas buyers?
The flexibility of small businesses makes them more responsive to the needs of overseas markets.
51
Business Environments
Refers to the surrounding conditions in which the business operates in.
52
What are the two categories that business environments can be divided into?
Internal and External Environments
53
Internal Environments
Includes those elements that make up the business itself, such as the people within the business.
- employees
- managers
- management style
- corporate culture
- company policies
54
Management Style
Ways in which the manager manages his/her employees
55
Corporate culture
A set of unwritten rules that spell out how people are to behave most of the time.
56
Company policy
A general guide to help employees deal with recurring situations
57
External Environment
Includes those factors over which the business has little control over.
58
What are the two further categories the external environment divides into?
External operating environment and external macro environment.
59
External Operating Environment
Refers to the outside stakeholders with whom the business interacts with in conducting its business, and may also have a direct impact on the business operations.
60
Stakeholder
A group or individual who have a particular interest in or are affected by the activities of the business
61
Who are the four main stakeholders?
- customers
- suppliers
- interest groups
- competitors
62
Customers
The individual or organisation purchasing your products,
To ensure success and profitability, a business needs to recognise and asses changes in customer tasted so it can constantly satisfy their needs and wants
63
Suppliers
Organisation or individuals that supply the resources needed to conduct business operations.
64
Competitors
Other businesses that offer rival products
65
Competition
The rivalry among business that seek to satisfy a smiliar market
66
Sustainable competitive advantage
The ability of a business to develop strategies that ensure it has an edge over its competitors.
67
Interest groups
Groups of people who try to influences the organisation to act in a certain way and persuade them to change its policies
68
Types of Interest Groups
- Trade Unions
- Consumer Groups
- Specific issue groups
69
The External Macro Environment
The broad conditions and trends in the economy and society within which a business operates.
70
Examples of external macro factors:
- Political Forces
- Economic Forces
- Legal Forces
- Technological Forces
- Social Forces
71
Political Forces
Government imposes its own direct and indirect regulations to which all businesses must adhere.
72
Free Trade
When trading in and out of the county is possible with any restrictions.
73
Tariff
A tax imposed on imported goods.
74
Economic Forces
The level of economic activity from periods of growth to recession affects both the business and their customer. In the businesses ability to compete and customers willingness and ability to spend.
75
Legal Forces
Changes that occur to the legal framework within which the business must operate. Such as interpretations of current laws and a large number of new statues being introduced which will all affect businesses conduct
76
Technological Forces
The development of new products and processes to create new opportunities for the business. Although failure to adopt new technology will result in the businesses products being out dated and very much obsolete
77
Social Forces
Changes that have occurred within society that have a direct affect on business operations, such as certain demographics and ethics.
78
Workplace diversity
Means that a multitude of individual differences exist among people in the workplace
79
Business Ethics
The application of moral standards and values to business behaviour
80
Socially Responsibilty
Giving back to the community above and beyond what is expected by law.
81
Socially Responsible Management
Managing an organisation in such a way that the social welfare of the community is taken into account when making business decisions.
82
Examples of Ethical Issues?
- Behaving fairly and honestly in business
- Truthful communication in business
- Dealing with employees ethically
- Conflict of Intrest
83
Conflict of Interest
When a person takes advantage of a situation or piece of information for his or her own personal gain
84
Corruption
The lack of honestly or integrity; by using a position of trust or authority to receive favours such as bribes
85
Workplace relations
The relationship between the employer and employee
86
Code of Conduct
A set of ethical standards by which mangers and employees should abide by.
