Topic 1.1 - Introduction to business management

Question 1

Adding value

Answer 1

the practice of producing a good or service that is worth more that the cost of the resources used in the production process.

Question 2

Business Plan

Answer 2

the document that sets out the business idea, its goals and objectives and other details of how the business will operate.

Question 3

Businesses

Answer 3

Organizations involved in the production of goods and/or the provision of services.

Question 4

Consumers

Answer 4

the people or organizations who actually use a product

Question 5

customers

Answer 5

the people or organizations that buy the product

Question 6

Entrepreneurs

Answer 6

owners or operators of an organization who manage, organize and plan the other three factors of production.

Question 7

Entrepreneurship

Answer 7

the collective knowledge, skills and experiences of entrepreneurs

Question 8

Factors of production

Answer 8

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

Question 9

Goods

Answer 9

physical products produced and sold to customers, e.g. laptops, contact lenses, perfume, and toys

Question 10

Intrapreneurship

Answer 10

the act of behaving as an entrepreneur but as an employee within a large business organization

Question 11

Needs

Answer 11

the basic necessities that a person must have to survive, e.g. food, water, warmth, shelter, and clothing

Question 12

Primary sector

Answer 12

businesses involved in the cultivation or extraction of natural resources , e.g. farming, mining, quarrying, fishing, oil exploration and forestry

Question 13

Product

Answer 13

refers to what both goods and services produce

Question 14

Production

Answer 14

the process of creating goods and/or services using factors of production to add value

Question 15

Quaternary Sector

Answer 15

a sub-category of the tertiary sector where businesses are involved in intellectual, knowledge based activities that generate and share information, e.g. information communication technology and research organizations

Question 16

Secondary sector

Answer 16

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

Question 17

Sectoral changes

Answer 17

a shift in the relative share of gross domestic product (or national output) and employment that is attributed to each business sector

Question 18

Services

Answer 18

intangible products sold to customers e.g. air flights, restaurants, cinemas.

Question 19

Tertiary Sector

Answer 19

the section of the economy where business activity is concerned with the provision of services to customers

Question 20

Wants

Answer 20

People’s desires

Question 21

Problems a new business may face

Answer 21

Lack of finance, cash flow problems, marketing problems, unestablished customer base, people management problems, legalities, production problems, high production costs, poor location, external influenced

Question 22

Steps in the process of starting up a business

Answer 22

1. Write a business plan
2. Obtain start-up capital
3. Obtain business registration
4. Open a business bank account
5. Marketing