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Business > Introducing Business - Chp 1 > Flashcards

Introducing Business - Chp 1 Flashcards

1
Q

What are the two types of organisations?

A

For profit and not for profit organisations

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2
Q

What is a business?

A

A for-profit organisations that sells good and services to consumers in order to make a profit.

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3
Q

Not-for-Profit organisations

A

May make a profit but the reason for they exist is to pursue their social mission

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4
Q

Profit

A

When the businesses revenue is greater than their expenses

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5
Q

Revenue

A

Comprises of all sources of income to be earned by the business.

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6
Q

Sales

A

The amount of money received for selling good and services

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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
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8
Q

Finished goods

A

Goods that are ready for the customer to buy and use

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9
Q

Objectives of for-profit organisations

A

To aim of the organisation is to make a profit

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10
Q

Objectives of not-for-profit organisation

A

The main goal of this organisation is to achieve its social mission

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11
Q

Owners of For-Profit Organisations?

A

Sole Traders, Partnerships, and Shareholder

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12
Q

Owners of Not- For-Profit Organisations?

A

No one in particular except for the stakeholders

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13
Q

How profits are distributed in a For-Profit Organisation

A

Distributed to the owner of shareholders, through dividends

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14
Q

Employees of For-Profit Organisations

A

Employees are paid for their work

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15
Q

Employees of Not-For-Profit Organisations

A

Employees are either paid or unpaid (volunteers)

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16
Q

The different sizes of businesses

A

Small, SME, Medium, and Large

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17
Q

Enterprise

A

Another name of a business

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18
Q

Franchise

A

Individual purchases the right to operate under a business name

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19
Q

What is an organisation?

A

A group of people who come together to achieve a common goal or set of objectives

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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

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21
Q

Market Share

A

The portion of total market sales the business had compared to its competitors

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22
Q

Sole Trader

A

One owner

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23
Q

Partnership

A

Owned by several people (up to 20)

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24
Q

Multinational Corporation

A

Company has branches in many different countries

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25
Q

Number of Employees in:
Small
Medium
Large

A

Small - less that 20
Medium - 21 to 199
Large - 200+

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26
Q

Ownership:
Small
Medium
Large

A

Small - up to 5 owners
Medium - 6 to 199 owners
Large - owned by thousand of public shareholders

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27
Q

Legal Structure:
Small
Medium
Large

A

Small - Sole Trader or Partnership
Medium - Partnership or Private Company
Large - Public Company

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28
Q

Decision Making:
Small
Medium
Large

A

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.

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29
Q

Sources of finance:
Small
Medium
Large

A

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

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30
Q

Market Share:
Small
Medium
Large

A

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

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31
Q

Corporation

A

A company or group of people

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32
Q

Objective

A

States what the organisation expects to achieve over a set period of time

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33
Q

Three main types of Objectives

A
  • Financial
  • Social
  • Personal
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34
Q

What do all objective have in common?

A

They are the motivating force behind an organisation.

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35
Q

Financial Objective

A

Ways to maximise profit

  • Increase Sales
  • Increase Market Share
  • Expand the Business
36
Q

Return on Investment

A

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
Q

Why is the return on investment important to investors?

A

The profit gained by the business in returned it its investors, therefore the return on the investment is important

38
Q

Social Objectives

A

Ways in which to benefit the community as well as achieving financial objectives

  • community service
  • providing employment
  • social justice
  • sustainability
39
Q

Personal Objectives

A

The objectives of the business owner of manger not usually made public. To motivate them to and their persist for success.

40
Q

Economy

A

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
Q

What type of economic system does Australia use?

A

Market Capitalist Economy.

Where private buyers and sellers provide the system.

42
Q

What contributions do small businesses have on the economy?

A
  • provide employment
  • contribute to taxation revenue
  • boost economic growth
  • export earnings
43
Q

Tax revenue

A

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
Q

What does taxation provide?

A

Taxation is used to provide findings for essential services that benefit the whole community.

45
Q

Economic Growth

A

Occurs when the nations real value of good and services increases over a set period of time.

46
Q

GDP

A

Gross Domestic Product

The total market value of all final good produced by a country over a set period of time.

47
Q

Exports

A

Refers to the sale of our goods and services to other countries.

48
Q

Product

A

Refers to a good or a service that is being sold in the market

49
Q

Small business export earnings?

A

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
Q

What makes small businesses favourable by overseas buyers?

A

The flexibility of small businesses makes them more responsive to the needs of overseas markets.

51
Q

Business Environments

A

Refers to the surrounding conditions in which the business operates in.

52
Q

What are the two categories that business environments can be divided into?

A

Internal and External Environments

53
Q

Internal Environments

A

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
Q

Management Style

A

Ways in which the manager manages his/her employees

55
Q

Corporate culture

A

A set of unwritten rules that spell out how people are to behave most of the time.

56
Q

Company policy

A

A general guide to help employees deal with recurring situations

57
Q

External Environment

A

Includes those factors over which the business has little control over.

58
Q

What are the two further categories the external environment divides into?

A

External operating environment and external macro environment.

59
Q

External Operating Environment

A

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
Q

Stakeholder

A

A group or individual who have a particular interest in or are affected by the activities of the business

61
Q

Who are the four main stakeholders?

A
  • customers
  • suppliers
  • interest groups
  • competitors
62
Q

Customers

A

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
Q

Suppliers

A

Organisation or individuals that supply the resources needed to conduct business operations.

64
Q

Competitors

A

Other businesses that offer rival products

65
Q

Competition

A

The rivalry among business that seek to satisfy a smiliar market

66
Q

Sustainable competitive advantage

A

The ability of a business to develop strategies that ensure it has an edge over its competitors.

67
Q

Interest groups

A

Groups of people who try to influences the organisation to act in a certain way and persuade them to change its policies

68
Q

Types of Interest Groups

A
  • Trade Unions
  • Consumer Groups
  • Specific issue groups
69
Q

The External Macro Environment

A

The broad conditions and trends in the economy and society within which a business operates.

70
Q

Examples of external macro factors:

A
  • Political Forces
  • Economic Forces
  • Legal Forces
  • Technological Forces
  • Social Forces
71
Q

Political Forces

A

Government imposes its own direct and indirect regulations to which all businesses must adhere.

72
Q

Free Trade

A

When trading in and out of the county is possible with any restrictions.

73
Q

Tariff

A

A tax imposed on imported goods.

74
Q

Economic Forces

A

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
Q

Legal Forces

A

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
Q

Technological Forces

A

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
Q

Social Forces

A

Changes that have occurred within society that have a direct affect on business operations, such as certain demographics and ethics.

78
Q

Workplace diversity

A

Means that a multitude of individual differences exist among people in the workplace

79
Q

Business Ethics

A

The application of moral standards and values to business behaviour

80
Q

Socially Responsibilty

A

Giving back to the community above and beyond what is expected by law.

81
Q

Socially Responsible Management

A

Managing an organisation in such a way that the social welfare of the community is taken into account when making business decisions.

82
Q

Examples of Ethical Issues?

A
  • Behaving fairly and honestly in business
  • Truthful communication in business
  • Dealing with employees ethically
  • Conflict of Intrest
83
Q

Conflict of Interest

A

When a person takes advantage of a situation or piece of information for his or her own personal gain

84
Q

Corruption

A

The lack of honestly or integrity; by using a position of trust or authority to receive favours such as bribes

85
Q

Workplace relations

A

The relationship between the employer and employee

86
Q

Code of Conduct

A

A set of ethical standards by which mangers and employees should abide by.

Business (5 decks)

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