Unit 1 Flashcards
1.1 business
aims to meet the needs and wants of individuals
or organizations by combining human, physical,
and financial resources (1.1)
1.1 business activit
Resource inputs (human, physical, financial,
enterprise)–processes to add value
(production)–Product outputs (goods and
services) (1.1)
1.1 business
functions
human resources, finance and accounts,
marketing, operation (production) (1.1)
1.1 Role of Human
resources
Ensure: appropriate people are employed to
make the product or service and that the people
are suitably rewarded. Recruitment, training,
dismissal, determine compensation (1.1)
1.1 Role of Finance
and accounts
Ensure: appropriate funds are available. forecast
requirements, keep accurate records, procure
financial resources from various providers, and
ensure proper payment for operation (1.1)
1.1 Role of
Marketing
Ensure: business offers a product/service that is
desired by a sufficient # of people (operation is
profitable) Appropriate strategies to promote,
price, package, and distribute (1.1)
1.1 Role of
Operations
Management or
Production
Ensure: appropriate processes are used to make
product of desired quality. Control quantity and
flow of stock, determine method of production,
look for ways to produce more efficiently (1.1)
chain of production
the steps through the different sectors that must
be made to turn raw materials into a consumer
good that is marketed
corporate social
responsibility
business practice that involves participating in
initiatives that benefit society
horizontal
integration
a business acquiring or merging with another
business same line off business and same stage of production
–›increased market share
vertical integration
involve in earlier or later stages in the chain of
production either through acquiring other
business or internal growth
benefit of vertical
integration (6)
lower transaction cost, reliable supply, avoid
regulation, increasing market power (gain
flexibility in pricing), better promotion, eliminate
other business
sectoral change
size of each sector changes, change in
composition in economy–social technology
(social context supporting certain sectors to
grow)
impact of sectoral
change (5)
factor substitution, some businesses are obsolete,
strain on human resources, reallocation of finance,
demand for physical resources, environmental
impacts
business plan
set out how org will meet its objectives, applies to
specific period, include long-term and short-term
objectives, should be reviewed and updated,
detailed budget planning
purpose of business
plan (5)
support launch of new org or business idea;
attract finance; support strategic planning
provide a focus for development, work as a
measure of business success
element of business
plan (6)
business idea, aims and objectives (set out the
idea in a context: USP, how to develop
idea);business organization (location, structure,
type, decision-making, profit-sharing, legal
requirement to set up);HR (HR plan, type of
contract, responsibility and reward;finance (start
up capital, projected budgets, income statement,
cash-flow forecasts);marketing (market research,
sales forecast, 4P);operations (lead time, supply
chain)
Criteria for business type identification
the owner of the business, the runner of the
business, no legal distinction/limited liability,
close/less communication, access to finance,
privacy and accountability, start-up paperwork
and expense
benefit of sole
trader (7)
complete control, flexible working hours and
change, privacy, minimal formalities, close ties to
customer, fast decision-making, responsive to
change
disadvantage of
sole trader (7)
100% liability, stress and responsibility, lack of
continuity, limited growth, limited access to
finance, challenging competition in market, false
decision-making,
Partnerships
formed by 2~20 people, joint decision-making
owned and managed by more than one person,
no legal distinction, more finance, sleeping
partners, offer more varied service, greater
accountability, maybe don’t share profit equally
advantage of
partnership (5)
creativity and innovation, specialization and
division of labor, expertise, stability and lower
risk, continuity, more access to finance
disadvantage of
partnership (4)
slower decision-making and conflicts, not enough
access to finance, profit it shared, unlimited
liability
why become a
company? (5)
limited liability, enhanced status and recognition,
sell share to purchase capital, stability and
continuity, access to finance