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BUSINESS P1 > Micro Environment > Flashcards

Micro Environment Flashcards

1
Q

Components

A

Vision, mission, strategy, goals and objectives

Organizational : resources, culture, structure

Management and leadership

8 business functions

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2
Q

Capital resources

A

Money that is invested so that the business can acquire capital goods

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3
Q

Human Resources

A

Work people do to produce products

Labor

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4
Q

Natural resources

A

All natural assets used by a business to produce products and services

Examples: water, coal, gold

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5
Q

Entrepreneurial resources

A

People that combine all factors of production in such a way the the business becomes operational and profitable

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6
Q

8 business functions

A 
Purchasing 
Production 
Public relations 
Financing 
Human Resources
Administration 
General management 
Marketing
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7
Q

Alignments between levels of management

A

Top:
Sets the direction of the business

Middle:
Serves as a link between top and lower level
Carries out strategic decisions made by top

Lower:
Carries out tactical decisions made by middle

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8
Q

Management responsibilities

A

Top:
Long term planning
Making strategic decisions
Managing change and risk

Middle:
Medium term planning
Making tactical decisions
Managing each department

Lower:
Short term planning
Making operational decisions
Setting daily performance targets

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9
Q

Steps for controlling risks

A

Identify from all environments

Determine the extent to which the business is exposed

Evaluate risk

Control risk

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10
Q

Different organizational structures

A

Line

Functional

Line and staff

Project or matrix

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11
Q

Responsibilities of administrations

A

Collecting data and info

Handling data and info

Managing info

Office practice

Info Tech

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12
Q

Responsibilities of financing

A

Plan how money will be spent

Get financing if necessary

Follow up on outstanding money

To pay the businesses accounts

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13
Q

Types of financing

A

Own capital

Borrowed capital

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14
Q

What is budgeting

A

Serves as the business’s financial planning

Indicates possible future income and expenditure

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15
Q

Two types of budgeting

A

Capital budgeting:

  • long term
  • determines businesses fixed capital and how money will be spent

Cash budgeting:

  • short term
  • determines businesses working capital and how money will be spent
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16
Q

What is investments

A

Refers to the use of money to generate wealth and income without having to work

Businesses invest surplus funds

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17
Q

What is an investment portfolio

A

Refers to the different kinds of investments made by a business

18
Q

Money can be invested in:

A 
Property 
Unit trusts 
Foreign currency 
Shares
Gold
19
Q

Two kinds of capital

A

Fixed capital:

  • capital that is invested in non-current assets
  • vehicles, equipment, land and buildings

Working capital:
- capital used to grant credit, buy stock and pay for expenses

20
Q

Responsibilities of purchasing

A

To purchase everything a business needs

Managing stock

Finding best suppliers

Follow up on orders that were placed with suppliers

21
Q

Employees will engage in the following purchasing activities:

A

Finding out the business’s needs

Looking for best suppliers

Enough stock

Getting best terms of payment with suppliers

Placing orders

Sending damaged goods back

22
Q

What is the purchasing procedure

A

Requisition

Enquire

Select supplier

Order

Accept delivery

Store new stock

Distribute

23
Q

Advantages of cash trading

A

Cash traders don’t have problems with unsettled debts

No account has to be sent to debtors

The cash purchaser can qualify for a chase discount

24
Q

Disadvantages of cash trading

A

The cash trader can lose the support of customers who don’t have enough money to make cash purchases

If a cash trader makes a payment, there is less money in the business’s bank account that can earn interest

25
Q

Advantages of credit trading

A

Credit trader is entitled to charge more for his products to compensate for the time he waits for payment

Credit purchasing enables people who can’t afford to pay on the spot to satisfy urgent needs immediately

26
Q

Definition of stock control

A

To monitor stock levels to ensure that the business keeps the right amount of stock

27
Q

Purpose of stock control

A

To determine the number and value of stock

To ensure sufficient stock to meet normal demand for customers at all times

To compare stock on shelves with stock records to detect obsolescence and theft

28
Q

What is stock holding costs

A

The cost of keeping stock

29
Q

What are the costs associated with storage

A

Rent, electricity, heating and light

30
Q

Businesses that have too much stock may suffer losses,

Such as:

A

Losses owing to dated and perished goods

Losses owing to theft

Losses owing to fire

Insurance on stock in the store room

31
Q

The role of public relations

A

Aims to create a good image for the business

32
Q

Why is public relations important to a business

A

It will help a business to:

Attract customers
Satisfy shareholders
Attract good employees
Gain goodwill of community

33
Q

What are the different methods of public relations

A 
Use of the telephone
Word of mouth 
Publicity 
Media
Exhibitions
Social responsibility
34
Q

Definition of a public organization

A

And organization that is owned and managed by the government

35
Q

Definition of private organization and who it is managed by

A

An organization that is owned and managed by private persons

  • depends on type of business

Sole proprietorship - members
Partnership- members
Cc- members
Companies- directors

36
Q

Definition of quality

A

Refers to the features and characteristics of goods

37
Q

What is quality control

A

Involves control of material, workmanship and machinery used in production process

Aim is to ensure that products are of high standards and are delivered to consumers

38
Q

Advantages of quality control

A

Dealers and consumers are assured that products are of good quality

Encourages workers to continue to produce quality products

Production costs can be reduced through elimination if poor products

Leads to improved quality and product design

39
Q

What are the four basic management activities in the general management function

A

Planning
Organizing
Leading
Control

40
Q

Main responsibility of the market function

A

Distributing and selling products

41
Q

Main responsibility of Human Resources function

A

Recruiting, selecting and appointing new employees

BUSINESS P1 (5 decks)

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