Introduction to Business

Question 1

What are the elements of an organisation? (4)

Answer 1

1. Social arrangement
2. Collective goals
3. Controlled performance
4. Boundary that distinguishes the organisation from its environment

Question 2

What distinguishes a business from a not-for-profit organisation?

Answer 2

1. Profit-oriented

2. Primary objective is to maximise the owner’s wealth

Question 3

What distinguishes a not-for-profit from a business?

Answer 3

1. Not-for-profit-oriented

2. Primary objective is to maximise benefits to beneficiaries

Question 4

What are the elements of a mission statement? (4)

Answer 4

1. Purpose
2. Strategy
3. Policies
4. Values

Question 5

Define the mission statement purpose

Answer 5

1. Why does the organisation exist?

2. What does it aim to achieve for its stakeholders?

Question 6

Define the mission statement strategy

Answer 6

1. What RESOURCES give the company a competitive advantage?
2. What COMPETENCIES give the company a competitive advantage?
3. What GENERIC STRATEGY gives the company a competitive advantage?

Question 7

Define the mission statement policies

Answer 7

1. What STANDARDS are adopted within the organisation?

2. What BEHAVIOURAL PATTERNS are adopted within the organisation?

Question 8

Define the mission statement values

Answer 8

What beliefs do managers and employees share?

Question 9

Define the mission statement objectives

Answer 9

Quantitative operational goals

Question 10

What are the elements of objectives? (5)

Answer 10

SMART

1. Specific
2. Measurable
3. Achievable
4. Relevant
5. Timed

Question 11

Define specific objectives

Answer 11

1. Clear statement

2. Easy to understand

Question 12

Define measurable objectives

Answer 12

Success or failure can be quantified

Question 13

Define relevant objectives

Answer 13

1. Appropriate to the mission

2. Appropriate to stakeholders

Question 14

Define timed objectives

Answer 14

Have a time period for achievement

Question 15

What is the hierarchy of objectives?

Answer 15

1. Primary objectives

2. Secondary objectives

Question 16

Examples of primary objectives (2)

Answer 16

1. Maximise shareholder wealth for profit orientated organisations
2. Maximise the benefit to the target stakeholder for NFP organisations

Question 17

Examples of secondary objectives (5)

Answer 17

CIMPS

1. Corporate responsibility
2. Innovation
3. Market standing
4. Productivity
5. Staff development

Question 18

What are alternative objectives to profit maximisation? (2)

Answer 18

1. Profit satisficing

2. Revenue maximisation

Question 19

Define profit satisficing

Answer 19

Making only satisfactory profits

Question 20

Define revenue maximisation

Answer 20

Focusing on increasing sales rather than profits

Question 21

Define plans

Answer 21

State what should be done to achieve the operational objectives

Question 22

Define standards and targets

Answer 22

Specify the desired level of performance

Question 23

What are the types of standards? (3)

Answer 23

1. Physical
2. Cost
3. Quality

Question 24

Define stakeholder

Answer 24

A person or group of persons who has a stake in an organisation

Question 25

Define primary stakeholders (2)

Answer 25

1. Shareholders | 2. Owners

Question 26

Define secondary stakeholders (8)

Answer 26

1. Management 2. Employees 3. Customers 4. Suppliers 5. Lenders 6. Government 7. Society as a whole 8. Environment

Question 27

Define sustainability

Answer 27

The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs

Question 28

Define natural capital

Answer 28

The world's stocks of natural assets, which includes geology, soil, air, water, and all living things

Question 29

Define business sustainability

Answer 29

Considers how far a business goes to operate in a sustainable way and how it interacts with others to do so

Question 30

Define corporate responsibility

Answer 30

The actions, activities, and obligations of a business in achieving sustainability

Question 31

What are the key goals for businesses included in the UN's 2015 Global Goals for Sustainable Development?

Answer 31

1. Decent work and economic growth 2. Industry, innovation, and infrastructure 3. Responsible consumption and production