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Business studies > Introduction To Business > Flashcards

Introduction To Business Flashcards

1
Q

Explain what’s meant by entrepreneur and enterprise

A

Entrepreneur - a person that takes the risk of starting their own business
Enterprise - actions of a risk taker starting their business

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2
Q

Explain what’s meant by factors of production

A

Land - natural resources
Labour - workers in the business
Capital - machinery and tools
Enterprise - individuals prepared to take risks

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3
Q

Evaluate the importance of entrepreneurship on an economy

A

More entrepreneurs in an economy mean the government receive more taxes because theirs more businesses to tax

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4
Q

Explain the characteristics of entrepreneurs

A

Determination, hard working,using their initiative, resilience, confident, good decision making

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5
Q

Distinguish between primary, secondary and tertiary organisations

A

Primary - using natural resources
Secondary - converting raw materials
Tertiary - provision of services

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6
Q

Distinguish between private, public and third sector organisations

A

Private - businesses are owned by individuals and are ran for profit
Public - business run on behalf of the public/government and aren’t ran for profit
Third - value driven, not motivated by profit but a desire to achieve social goals

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7
Q

Distinguish between local, national and international/global markets

A

Local - targets an audience based in the same town or region as your business
National - domestic marketplace for goods and services operating within the border
International - any market outside a company’s home country

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8
Q

Distinguish between a national and multinational business

A

National - a company that operates in a particular country and provides goods or services
Multinational - a company that does business in a select few countries around the world and operates facilities

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9
Q

Explain the legal structure of businesses (different ways of setting up a business)

A

Sole trader - an individual owning the business on their own
Partnership - a business owned by two or more people
Limited liability partnership - a business owned by two or more people in which some or all partners have limited liability
Private limited company - any type of business entity in private ownership
Public limited company - a business managed by directors and owned by shareholders

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10
Q

Explain what’s meant by limited and unlimited liability

A

Limited - where people’s assets are safe in the event the business fails
Unlimited - an owners assists can be taken to cover the money owned

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11
Q

Evaluate factors affecting the choice of legal structure of a business

A

Ease of setup
Legal requirements
Personal liability and risk
Scalability of your business tax, income and profits

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12
Q

Explain what’s meant by a franchise

A

Where a well known business name lets a smaller business use their brand name to set up

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13
Q

Distinguish between franchisers and franchisees

A

Franchisers - the well known brand name
Franchisees - the company using that brand name to let them start up

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14
Q

Evaluate factors affecting the use of franchises to a business

A

Allows expansion without spending money
Under they’re control
Applicants can be selected with suitability
Possibility of conflict
Control issues
The costs involved

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15
Q

Explain what’s meant by co-operatives

A

Owned and run by members and the profits are shared between members than being distributed to shareholders

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16
Q

Evaluate the impact and importance of co-operatives

A

Legally straight forward to establish
Limited liability for members
Higher quality of service
Customers are loyal and supportive
Limited capital
Weak management
Slower decision making
Employees may want more money

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17
Q

Evaluate the impact and importance of franchising for the franchisee

A

Lower risk
Support, advice and training
National marketing
Easier to obtain finance
Shared profits
Less control and independence
Need permission to sell
May be for a fixed period

18
Q

Distinguish between small medium and large businesses

A

Small - less than 10 employees
Medium - less than 50 employees
Large - les than 250 employees

19
Q

Explain how and why the business size is measured

A

How - on the amount of employees, the companies turnover, the amount on their balance sheet
Why - they want to compare the size of the business with close competitions to find out it they’re growing quickly or not

20
Q

Evaluate the factors affecting the size of a business

A

Market size
Nature of the product
Ability to access resources for expansion

21
Q

Explain why businesses want to grow

A

Benefit from economies of scale
Entrepreneurs want a greater challenge
Owners want higher returns on investment
Growth into new markets can spread risks
A bigger business is a better place to fight risks

22
Q

Explain what’s meant by a joint venture

A

Two or more businesses pooling their resources and expertise to achieve a particular goal

23
Q

Explain whats meant by a strategic alliance

A

An arrangement between two companies that decide to share resources

24
Q

Evaluate the concept of a joint venture

A

You gain from each others expertise and resources
Reduces the risk of a growth strategy
Synergy - combined effect greater than the sum of their separate effects
Risk of a clash in organisational structures
Objectives of the partner may change
Could be an imbalance in levels of expertise, investments or assets bought
Potential redundancy and lack of motivation

25
Q

Organisational aims

A

The long term plan of the business - survival, growth, market share and profit

26
Q

Corporate objectives

A

Objectives for the business as a whole, covers a wide range of areas

27
Q

Strategic objectives

A

How a business plans to achieve its long term goals and aims

28
Q

Tactical objectives

A

The immediate short term desired result of a given activity, task or mission

29
Q

Operational objectives

A

Short term goals set as a means of achieving a larger longer term goal

30
Q

Explain the importance of setting SMART objectives

A

It keeps the project moving forward. Helps with accountability and timing and lets you know what you’re accomplishing

31
Q

Explain whats meant by the hierarchy of objectives

A

A tool to help analyse and communicate project objectives

32
Q

Explain how objectives can be communicated

A

Email - sending an email with key details on what needs to be said
Speaking - say what needs to be said

33
Q

Evaluate the consequence of mis-communicating objectives

A

It could lead to employees doing the wrong thing which could waste time or money for the company

34
Q

Evaluate ways in which objectives can be better communicated

A

Instead of have it go through lots of different people bring them in for a meeting so that everyone gets the same message and they know it is correct, however this takes valuable time

35
Q

Explain why objectives of a business may need t change

A

They’ve completed previous objectives
Market conditions may change
The businesses competitors
The proportion of small and large businesses in the market

36
Q

Explain whats meant by the term ‘stakeholder’

A

Individuals or groups who have a vested interest in the business

37
Q

Identify internal and external stakeholders of a business

A

Internal - employees, managers, board of directors, owners, shareholders
External - suppliers, government, customers, trade unions

38
Q

Explain reasons for conflict between stakeholders

A

Each stakeholder would have different types of objectives, therefore they would want theirs to be priority

39
Q

Explain why a business needs to manage conflicting objectives of its stakeholders

A

Stakeholder groups cold leave which negatively impacts the business
It could de-motivate the workforce

40
Q

Analyse the objectives of different stakeholders in a business

A

Shareholders/owners - ensure the business is successful and are interested in the amount of profit they make
Managers/employees - job security and working conditions
Customers - high product quality for the money they pay for the good/service

41
Q

Evaluate the influence different stakeholders have on a business

A

Customers - if they don’t buy as much it could negatively affect performance
Managers/employees - if they’re motivated they’ll produce products more efficiently, so they’d receive more sales which benefits the business
Shareholders/owners - if they put money into the business, they can buy the most efficient machinery

Business studies (9 decks)

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