understanding the nature and purpose of business Flashcards
what do business provide?
goods-a physical product
services - a tangible item they provide
product-something you buy then re sell
what’s the adding value process?
inputs (raw materials, people ,finance )
transformation process (adding value , packaging ,design ,brand)
outputs ( goods ,service, waste products )
what do business create?
create employment
create income
create new products
enhance country reputation
what are the sectors of business?
primary-agriculture ,forestry, fishing
secondary-manufacturing ,construction
tertiary-the supply of services
what is gross domestic product ?
gdp measure the value of a country’s total output of goods and services over a period of time normally a year
what do mission staments refer to?
the organisations values
non financial goals
the benefits of the business to the community
how consumers are to be satisfied
what is a mission statement?
sets out a business overall purpose to direct and stimulate the entire organisation
what are aims?
they are long term plans for the business from which its corporate objectives are derived
what are objectives?
they are medium to long term goal established to coordinate the business
what is the hierarchy of objectives?
mission statement
corporate aims
corporate objectives
functional objectives
what are SMART objectives?
Specific-define exactly what the firm is measuring
Measurable-quantifiable target
Agreed -agreed by all employees
Realistic-they need to be achievable
Time specific-they need to know how long they have to achieve the target
what is profit?
is the surplus of total revenue over total cost for a buisness over a trading period
what is cash flow?
the movement of cash in and out of the business over a time period
what are stakeholders?
are individuals or groups who have an interest in the business
what is revenue?
the income or earning generated by a business trading activities
