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business > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

Private Sector

A

Business that belong to private individuals or groups and aim to make profit

Efficient, but not socially-oriented

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2
Q

4 Major Business Functions

A

Operations Management - Manage the resources which are dedicated to the production and delivery of goods and services

Finance - In charge of managing the company’s money

Marketing - Identify and satisfy the needs and wants of customers and in charge of what the company sells

Human Resources - In charge of managing the personnel

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3
Q

SMART Objectives

A

Specific

Measurable

Achievable

Relevant

Time-specific

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4
Q

Goals, Objectives, Strategies, and Tactics

A

Goals: Where the company wants to be in the future

Objectives: Short or medium-term tasks the company will do in order to achieve their goal

Strategies: The action plan of the business to achieve their goals

Tactics: The specific measurable steps of the business to achieve objectives

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5
Q

Chain of Production

A

The process where a product goes through all 3 (sometimes 4) sectors

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6
Q

Joint Ventures Advantages and Disadvantages

A

Advantages: Splitting costs and risks and reducing competition

Disadvantages: Slower decision making, too much reliance on a partner

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7
Q

Joint Ventures

A

When companies create a third company for their mutual benefits

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8
Q

Examples of Inputs

A

CELL

Capital - Financial Resources

Entrepreneurship

Land - Physical Resources

Labor - Human Resources

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9
Q

Mergers

A

Two or more companies form together to make a larger company

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10
Q

Business Plan

A

A document that outlines the potential development of the business

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11
Q

Liability

A

The extent in which you risk losing your personal possessions based off if your business fails

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12
Q

Reasons to Start a Business

A

Independence

Responsibility

Financial Rewards

Innovation

Work-life Balance

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13
Q

Reasons to Become MNC

A

Increased customer base

Cheaper production costs

Spreading risks

Global economies of scale

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14
Q

CSR

A

A concept where companies consider the interests of society and perform ethical behaviours

The advantages of this are that there will be a better corporate image, and it will increase recruitment and customer loyalty

The disadvantages are that there will be lower profits, stakeholder conflicts, and the fact that ethics aren’t universal and they don’t need to do it

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15
Q

Publicly Held Companies

A

Previously Privately Held Companies that went public and allowed people to buy shares.

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16
Q

Stakeholder

A

People who have taken an interest in a business and therefore are affected by their decisions

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17
Q

External Stakeholders and their Common Objectives

A

Government: Stable tax revenues and compliance with law

Media: Publicity

Local Community: Employment opportunities and no harm to the environment

Suppliers: Constant orders with short credit period

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18
Q

Partnership Advantages and Disadvantages

A

Advantages: Likely continuity, higher capital

Disadvantages: Unlimited liability, slower decision making

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19
Q

Publicly Held Companies Advantages and Disadvantages

A

Advantages: Higher capital, limited liability, shares can be easily exchanged

Disadvantages: Loss of control, no direct control over share price

20
Q

Globalization

A

The expansion and integration of multinational companies across international borders

21
Q

External Economies of Scale

A

New advancements in technology

Higher education levels in the country

Improvement or addition in infrastructure

22
Q

Entrepreneur

A

Someone who has a business idea, takes a risk, and sells by combining all three factors of production

23
Q

Internal Stakeholders and their Common Objectives

A

Shareholders: Maximizing shareholder value

Managers: Achieving objectives as fast as possible and with the lowest costs

Employees: Good working environment and maximum pay for minimum work

CEO: Keeping shareholders happy

24
Q

Business Growth

A

The increase in the size of a business

25
Q

Cost Scale Efficiency Formulas

A

AC = TC / Q
AC = AFC + AVC
AFC = TFC / Q
AVC = TVC / Q

26
Q

Mergers Advantages and Disadvantages

A

Advantages: Economies of scale, market leadership

Disadvantages: Hard to control and redundancies

27
Q

Sole Trader Advantages and Disadvantages

A

Advantages: Easy setup, easy decision making, all profit goes to one person, closer to customers

Disadvantages: Risky (unlimited liabilities), no continuity, limited finance

28
Q

Privately Held Companies

A

Companies with small amount of shareholders that are usually owned by families and aren’t transparent

29
Q

Internal Growth and External Growth

A

Internal is when a company grows using their own resources and capabilities

External is when a company grows through dealing with other organizations

30
Q

What is a Business

A

A decision-making organization that delivers goods and services to customers in a profitable or non-profitable way

31
Q

For-profit and Non-profit

A

For-profit is when a business’ primary goal is to make profit

Non-profit is when a business’ primary goal is not to make profit, and instead reinvests it to grow the business

32
Q

Privately Held Companies Advantages and Disadvantages

A

Advantages: Control is not lost due to large amount of shareholders, limited liability, higher continuity

Disadvantages: Shares can’t be exchanged or sold,

33
Q

Partnership

A

When two or more people join together to run a business

Made official through a deed of partnership

34
Q

Internal Economies of Scale

A

Suppliers provide a discount in exchange for buying more

Increase advertising to lead to more customers purchasing

Diversify product portfolio

Hire specialized managers in their respective fields

35
Q

Differences with Organic and Inorganic Growth

A

Low Risk
High Risk

Slow
Rapid

Lower Potential Benefits
Higher Potential Benefits

Inexpensive
Requires Significant Finance

Fully Controlled
Hard to Control

36
Q

Sole Trader

A

A business that is run by one person who accumulates all profits and liabilities

37
Q

Public Sector

A

Business that is run and financed by the government and provides public services

Not efficient, however socially-oriented

38
Q

Intrapreneur

A

Same as entrepreneurs but work in an organization

39
Q

Public and Private Companies

A

Companies that have unlimited shareholders, and shareholders have limited liability due to the company being a legal entity with the only risk being losing the initial investment

Highest amount of continuity

40
Q

MNCs

A

A company that operates in two or more countries

41
Q

Economic Sectors

A

Primary - Harvesting of Materials

Secondary - Transforming Materials into Goods

Tertiary - Selling of Goods

Quaternary - Data and Knowledge Services

42
Q

Challenges When Starting a Business

A

Lack of finance

Lack of organizational skills

Recruitment issues

Limited expertise

High competition

43
Q

Vision Statement

A

Describes where the company wants to be in the future

44
Q

Economies of Scale

A

Increasing scale of operations and decreasing cost of production to improve efficiency

45
Q

Mission Statement

A

Purpose of the business and how the vision statement will be achieved

46
Q

Capital and Labor Intensive

A

Capital intensive relies on machines

Labor intensive relies on human labor

business (4 decks)

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