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IB Business Management > Unit 1: 1.1 + 1.2 > Flashcards

Unit 1: 1.1 + 1.2 Flashcards

1
Q

Business functions

A

human resource, marketing, finance, operations.

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2
Q

What is a business?

A

organization that tries to meet the needs and wants of people.

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3
Q

What is an entrepreneur?

A

someone who takes the financial risk. (also reap the rewards)
invests
idea for new business
accepts responsibility
accepts possible risk of failure

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4
Q

What does human resources do?

A

management of people within company. (includes recruitment and workforce planning) to work towards organizational objective.

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5
Q

What does finance do?

A

management of money, credit banking, and investments. keeping track of cash flows in the company.

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6
Q

What does marketing do?

A

promoting company’s products/services to more customers this is what connects the customers to the company.
does so by getting the right product at the right price in the right place with the right promotion.

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7
Q

What does operations do?

A

or some times referred to as production and controls the procedures of the production process. converts materials into finished product, making them ready for sale.

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8
Q

What is the secondary sector?

A

manufacturing of goods… ADD VALUE to natural resources to sell.

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8
Q

What is the primary sector?

A

extraction/conversion of resources

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9
Q

What is the tertiary sector?

A

provide a service. (transportation, wholesale/retail, advisor/consult)

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10
Q

What is the quaternary sector?

A

knowledge based/research heavy and development, highly educated

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11
Q

Horizontal integration

A

business merge with another business in the same sector. they do this to ADD VALUE or make their service better.

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12
Q

Vertical integration

A

business merge with another business in a different sector. they do this so that it is efficient and don’t make extra.
ex: wegmans working in all sectors

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13
Q

Why start a business? (pros)

A
  1. losing a job may provide needed push
  2. independence
  3. financial security
  4. seeing a market opportunity
  5. social connections may urge them to start
  6. risk-taking or challenge-seeking personality
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14
Q

The problems faced by businesses in the first years? (cons)

A
  1. competition
  2. building the customer base
  3. lack of money
  4. lack of record keeping
  5. poor management skills
    6.changes in the working environment
    *these problems can appear at any stage of business but usually fail during the first months being riskiest of all.
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15
Q

What is a business plan?

A

a written document that describes a business, its objectives and strategies, the market it is in, and its financial forecasts.

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16
Q

Advantage of a business plan?

A

allows you to fully investigate own business idea and to clarify thoughts and ideas. allows others to examine plan and give feedback

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17
Q

Economic development and its connection to business sectors?

A

the more economically developed a place is, the higher up in the sectors they are.

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18
Q

How does one start a business?

A

business plan to present to potential investors
get money (capital) loans savings investments, IPO
register with government organization
set-up bank account, way that customers pay
market, outreach selling service

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19
Q

What four things are important for the success of a business?

A

CESC
change
ethics
sustainability
creativity
to ADD VALUE and make better

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20
Q

The creativity in CESC

A

vital for a business to remain innovative, relevant, and competitive.
there is two types of creativity: adaptive and innovative

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21
Q

Adaptive creativity

A

ADD VALUE to a product or service

22
Q

Innovative creativity

A

create a brand NEW product/service

23
Q

The sustainability in CESC

A

conserving resources, make things last longer.
there are three types of sustainability: environmental, social, economic

24
Q

Environmental sustainability

A

natural resources, using them wisely

25
Q

Social sustainability

A

using resources in such a way that benefits the community that we live in, maximize the quality of life

26
Q

Economic sustainability

A

use resources responsibly/effectively in terms of money

27
Q

The ethics in CESC

A

what is right. fair or unfair?

28
Q

The change in CESC

A

modification or change through creativity = ADD VALUE

29
Q

Types of businesses

A

public sector or private sector

30
Q

Public sector

A

is government operated which means:
access for everyone
funded by TAXES
not worried about profit

31
Q

Private sector

A

owned by individuals which means:
driven by profit
add value to make better

32
Q

Types of private sector businesses

A

sole-trader
partnership
small/mid sized businesses
large corporations and multinationals
professional and trade associations
trade unions

33
Q

What is a sole trader?

A

business that is owned/operated by ONE.

34
Q

Advantages of sole traders

A

autonomy
get all profit
easy to start and costs less
decisions made FAST
personalize for customer
do not have to share financial records with public

35
Q

Disadvantages of sole traders

A

competition
unlimited liability
workload
lack of continuity (consistent operation of business)
higher cost of production compared to large scale companies

36
Q

What is a partnership?

A

business operated/owned by 2 or more people.

37
Q

Advantages of a partnership

A

specialize (divide work the 4 functions of business)
continuity (consistency of business)
more financial strength
do not have to publicize financial records

38
Q

Disadvantages of a partnership

A

unlimited liability
conflict between owners and on decisions
there must be a large amount of mutual trust
may still face money problems

39
Q

What are companies?

A

business that is owned by its shareholders

40
Q

Types of limited companies?

A

private and public

41
Q

What are private limited companies?

A

business operated/owned by family and friends. only family and friends can invest money

42
Q

Advantages of private limited companies

A

limited liability (only responsible for what they invest in)
control (by ONLY family and friends)

43
Q

Disadvantages of private limited companies

A

lack of investment opportunities creating money problems

44
Q

What are public limited companies? (join-stock companies)

A

business operated/owned by investors. anyone can invest and get a share

45
Q

Advantages of public limited companies

A

limited liability
access to money by investment

46
Q

Disadvantages of public limited companies

A

loss of control over the company and decisions bc so many people are owners
regulations and laws to obey

47
Q

Floatation

A

private company move to public using an IPO (initial public offering) where the PLC sells all or part of its company to the stock market to gain capital.

48
Q

Privatization

A

public move to private meaning they buy all the shares back

49
Q

Why would investors buy shares in limited company?

A

dividends
capital growth
voting power

50
Q

Dividends

A

payment to shareholders based on the profit of the company.

51
Q

Capital growth

A

overtime shares may increase or decrease and the shareholders hope to in the future sell the share for higher

52
Q

Voting power

A

able to influence decisions made in company and vote more the more shares they hold.

IB Business Management (7 decks)

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