Topic 1 Business Organisation and Environment

Question 1

1.1 Define a Business

Answer 1

An organisation that is involved in the production of goods and/or the provision of services

Question 2

1.1 Define Consumers

Answer 2

Consumers are the people or organisations that actually use a product and/or service.

Question 3

1.1 Customers

Answer 3

Customers are the people or organisations that buy that product

Question 4

1.1 Entrepreneurs

Answer 4

Entrepreneurs are owners or operators of an organisation who manage, organise and plan the other three functions of production. They are risk takers who exploit business opportunities in return for profits.

Question 5

1.1 Factors of Production

Answer 5

Factors of production are the resources needed in
the production process, i.e. land, labour, capital and
entrepreneurship.

Question 6

1.1 Goods

Answer 6

Goods are physical products produced and sold to customers.

Question 7

1.1 Intrapreneurship

Answer 7

Intrapreneurship is the act of behaving as an entrepreneur

but as an employee within a large business organisation.

Question 8

1.1 Primary Sector

Answer 8

Primary sector refers to businesses involved in the cultivation
or extraction of natural resources

Question 9

1.1 Secondary Sector

Answer 9

Secondary sector is the section of the economy where business
activity is concerned with the construction and manufacturing
of products.

Question 10

1.1 Tertiary Sector

Answer 10

Tertiary sector refers to the section of the economy where
business activity is concerned with the provision of services to
customers.

Question 11

1.1 Quaternary Sector

Answer 11

Quaternary sector is a subcategory of the tertiary sector,
where businesses are involved in intellectual, knowledge-based
activities that generate and share information.

Question 12

1.1 Sectoral Change

Answer 12

Sectoral change refers to a shiſt in the relative share of gross
domestic product (or national output) and employment that is
attributed to each business sector.

Question 13

1.2 Cooperatives

Answer 13

Cooperatives are for-profit social enterprises set up, owned
and run by their members, who might be employees and/or
customers.

Question 14

1.2 Partnerships

Answer 14

Partnerships are a type of private sector business owned by
2-20 people (known as partners). They share the responsibilities
and burdens of running and owning the business.

Question 15

1.2 Limited Liability

Answer 15

Limited liability is a restriction on the amount of money that
owners can lose if their business goes bankrupt, i.e. shareholders
cannot lose more than they invested in the company.

Question 16

1.2 Unlimited Liability

Answer 16

Unlimited liability is a feature of sole traders and ordinary
partnerships who are legally liable for all monies owed to their
creditors, even if this means that they have to sell their personal
possessions to pay for their debts.

Question 17

1.2 Private Limited Company

Answer 17

A private limited company is a business owned by shareholders
with limited liability but whose shares cannot be bought by or
sold to the general public.

Question 18

1.3 Aims of a Business

Answer 18

Aims are the long-term goals of a business, oſten expressed in
the firm’s mission statement. Tey are a general statement of a
firm’s purpose or intentions and tend to be qualitative in nature.

Question 19

1.3 Mission Statement

Answer 19

A mission statement refers to the declaration of an
organisation’s overall purpose. It forms the foundation for
setting the objectives of a business.

Question 20

1.3 Objectives

Answer 20

Objectives are the relatively short term targets of an

organisation. They are oſten expressed as SMART objectives.

Question 21

1.3 Vision Statement

Answer 21

A vision statement is an organisation’s long-term aspirations.

Question 22

1.4

Question 23

1.4

Question 24

1.4