Unit 1 Flashcards
Private Sector
Business that belong to private individuals or groups and aim to make profit
Efficient, but not socially-oriented
4 Major Business Functions
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
SMART Objectives
Specific
Measurable
Achievable
Relevant
Time-specific
Goals, Objectives, Strategies, and Tactics
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
Chain of Production
The process where a product goes through all 3 (sometimes 4) sectors
Joint Ventures Advantages and Disadvantages
Advantages: Splitting costs and risks and reducing competition
Disadvantages: Slower decision making, too much reliance on a partner
Joint Ventures
When companies create a third company for their mutual benefits
Examples of Inputs
CELL
Capital - Financial Resources
Entrepreneurship
Land - Physical Resources
Labor - Human Resources
Mergers
Two or more companies form together to make a larger company
Business Plan
A document that outlines the potential development of the business
Liability
The extent in which you risk losing your personal possessions based off if your business fails
Reasons to Start a Business
Independence
Responsibility
Financial Rewards
Innovation
Work-life Balance
Reasons to Become MNC
Increased customer base
Cheaper production costs
Spreading risks
Global economies of scale
CSR
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
Publicly Held Companies
Previously Privately Held Companies that went public and allowed people to buy shares.
Stakeholder
People who have taken an interest in a business and therefore are affected by their decisions
External Stakeholders and their Common Objectives
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
Partnership Advantages and Disadvantages
Advantages: Likely continuity, higher capital
Disadvantages: Unlimited liability, slower decision making
Publicly Held Companies Advantages and Disadvantages
Advantages: Higher capital, limited liability, shares can be easily exchanged
Disadvantages: Loss of control, no direct control over share price
Globalization
The expansion and integration of multinational companies across international borders
External Economies of Scale
New advancements in technology
Higher education levels in the country
Improvement or addition in infrastructure
Entrepreneur
Someone who has a business idea, takes a risk, and sells by combining all three factors of production
Internal Stakeholders and their Common Objectives
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
Business Growth
The increase in the size of a business
