Topic 1 - What is Business? Flashcards
Mission
An organisation’s aims or long-term intentions (ultimate purpose).
Mission Statement
A qualitative statement of an organisation’s aims that uses language intended to motivate employees and convince customers and those outside of firm of its commitment.
Business Objectives
Goals must be achieved in order to realise the stated aims of an organisation, department or individual team. Medium or Long term and can be corporate or functional objectives.
Corporate Objectives
Goals of the whole organisation rather than different elements of the organisation.
Functional objectives
Goals of each of the functional areas of a business.
My - Marketing
Fingers - Finance
Have Rings - HR
On - Operations
Strategy
The medium- to long- term plans through which an organisation intends to achieve its objectives.
Cash Flow
The amounts of money flowing in and out of a business over a period of time.
Price
The amount paid by a consumer to purchase one unit of a product.
Total Revenue (AKA what?) + Equation
AKA = turnover or sales revenue
The income received from the organisation’s activities.
Total Revenue = price per unit x quantity of units sold
Fixed Costs + example
Costs that do not vary directly with output in the short run. (e.g rent)
Variable Costs + example
Costs that vary directly with output in the short run. (e.g raw materials)
Total Costs
The sum of fixed costs and variable costs.
Profit
The difference between the income of a business and its total costs.
Unincorporated Business
There’s no distinction in law between the individual owner and the business itself.
Incorporated Business
This has a legal identity that is separate from the individual owners.
