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IB Business And Management HL > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

Public sector

A

Services that non-payers also benefit from, funded by taxes or the state, delivers public services (transport, education, healthcare)

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2
Q

Private Sector

A

Motivated by money, run by private individuals, legally regulated by the state and laws of the country

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3
Q

Public-Private sector

A

High cost public infrastructure projects funded with private sector money. Normally involves a long term maintenance contract. Also known as private finance initiative

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4
Q

Aim of PPPs

A

To share skills and resources to provide public services

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5
Q

Not for profit businesses are….

A

Non governmental organisations (NGOs) and Charities

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6
Q

For profit commercial businesses….

A

Sole traders, partnerships, and cooperations

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7
Q

For profit social businesses….

A

Cooperatives, Microfinance providers, PPPs

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8
Q

Sole Trader

A

For profit business ran and controlled by one person. Liable for their firm’s depts known as unlimited liability

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9
Q

Sole trader advantages

A

They have full control, they only have to invest a small amount of capital as companies are easy to set up, relationships with customers

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10
Q

Sole trader disadvantages

A

No one to share responsibilities with, may be forced to see personal assets

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11
Q

Partnership

A

Formed by two or more people with shared capital investment and responsibilities and unlimited liability

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12
Q

Examples of a partnership

A

Google, Twitter, Ben and Jerrys, Warner Bros

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13
Q

Examples of a sole trader

A

Taxi driver, plumbers, builder, butchers, small retailers

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14
Q

Partnership advantages

A

Can consult others, start-up funds decrease, share responsibilities

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15
Q

Partnership disadvantages

A

Each partner is equally liable, shared profit, disagreements, shortage of capital

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16
Q

Companies/Corporations

A

A group of individuals that have continuous existence independent of owners and investors

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17
Q

Examples of companies/corporations

A

Acer, Red Bull

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18
Q

Advantages of Companies/Corporations

A

Large amounts of finance from multiple sources, more stable business, shareholders have limited liability

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19
Q

Disadvantages of Companies/Corporations

A

Large fees and legal costs, double taxation, easy dysfunction within company

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20
Q

Cooperatives

A

Firm owned, controlled, and operated by a group comprising of employees, customers, and tenants

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21
Q

Advantages of Cooperatives

A

Ownership of business and share in profits, equal voting right regardless of involvement, easy to form, operation costs are low

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22
Q

Disadvantages of Cooperatives

A

Shared ownership is a risk, arguments, harder to exit

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23
Q

Microfinance prodiders

A

Small loan given to impoverished people to help them start a business or become employed

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24
Q

Advantages of Microfinance prodiders

A

Helps imperished back on their feed, low interest rates, those who don’t have resources gain access

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25
Q

Disadvantages of Microfinance prodiders

A

Clients may not be able to benefit from credit, large debt can occur because of borrowing, higher interest than normal loans

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26
Q

Non governmental organisations (NGOs)

A

A volunteer based organisation to meet a goal for the betterment of society with no profit

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27
Q

Advantages of NGOs

A

Can experiment with views, adapt to local needs, communicate on all levels, recruit anyone with no restrictions

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28
Q

Disadvantages of NGOs

A

Workers don’t earn income, Restrictions of approaching a problem or area

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29
Q

Charity

A

Works to raise money for those in need

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30
Q

Advantages of charities

A

Free of taxes, help people, public recognition and trust

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31
Q

Disadvantages of charities

A

Workers volunteer, sometimes aim is missed, restriction of work, dependent on others

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32
Q

Primary sector

A

Also known as “extractive production,” involves gaining access to raw materials before any modifications have been made to them. EG: drilling of oil from the ground

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33
Q

Secondary sector

A

process entails both assembly and manufacturing, involves taking the raw materials from the primary production and creating something else out of them. EG: turning oil into plastic Another component of the process is the assembly of products

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34
Q

Tertiary Sector

A

Describes the commercial side of business production and distribution - selling products created from both the primary and secondary sectors. EG: storage, transportation, insurance, finance, sales and marketing. Also known as the “service sector”

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35
Q

Quaternary sector

A

represents consultancy, information, support and technological services.

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36
Q

Entrepreneur

A

Someone who creates a business and is willing to take full responsibility for its success or failure. Starts a business based on dream and uses personal money, generates jobs for others

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37
Q

Intraperneur

A

Like an entrepreneur generating an idea but to benefit another person’s business

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38
Q

Vision statement

A

The preferred future, what an organisation would like to achieve in the long run, where they want to be

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39
Q

Mission statement

A

The present state of a company to its stakeholders and how they can reach the vision

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40
Q

Objectives

A

The specific ends an organisation must achieve to carry on its mission

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41
Q

Tactics

A

Daily functioning of certain business operations that help implement strategies

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42
Q

Strategies

A

The way and steps to be taken to achieve objectives

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43
Q

Aims

A

Long term goals a business wants to achieve

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44
Q

Order of business procedures

A

Aims - objectives - strategies - tactics

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45
Q

Cooperate social responsibility

A

As well as a priority of maximising profit, a business has legal and moral responsibilities- allowing businesses to adopt ethical code

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46
Q

A SWOT analysis….

A

Analyses the current situation of an organisation through both internal and external factors provides a realistic analysis of the business in relation to its environment. An important step in the planning process. Assists in the development of business strategies

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47
Q

Internal aspects of a SWOT

A

Strengths, Weaknesses

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48
Q

External aspects of a SWOT

A

Opportunities, Threats

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49
Q

Examples of strengths

A

Extensive training programme, resulting skilled employees, Modern technology, leading to the development of innovative products, Well-known brand, providing a large customer base.

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50
Q

Internal factors

A

Factors that can be controlled

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51
Q

External factors

A

Factor that can’t be controlled

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52
Q

Examples of weaknesses

A

Lack of innovation, out-dated products Obsolete technology, making workers less productive, High turnover rate of employees

53
Q

Examples of Oppertunities

A

A strong economy, Falling trade barriers in foreign markets.

54
Q

Examples of threats

A

Adverse demographic changes, economic recession

55
Q

Inverted Y chart structure (Analysis/Evaluation)

A

Advantages, Disadvantages, recommendation

56
Q

Evaluation steps:

A

Analyse each factor with advantages and disadvantages, Come to overall judgement

57
Q

What is a steeple analysis?

A

A STEEPLE analysis analyses external environmental and global factors that may effect the business

58
Q

Why are STEEPLEs used?

A

STEEPLEs are used to review a business’s objectives and strategies before a major decision to analyse the place in the external market

59
Q

Example of when to use STEEPLE

A

When expanding into a new market

60
Q

Factors of a STEEPLE

A

Sociocultural, Technological, Economic, Environmental, Political, Legal, Ethical

61
Q

Sociocultural

A

Refers to social changes impacting the business, in addition to cultural aspects such as lifestyle, tradition, and attitude

62
Q

Technological

A

The impact of a new or developing technology on a business

63
Q

Economic

A

An analysis of the potential economic factors within the business location and relates it to how it may affect the business

64
Q

Environmental

A

Supplies and dangers and other environmental factors, these could include resources like: energy, materials, and land

65
Q

Political

A

Discusses how a change in leadership or power could have an affect on the business and their strategy.

66
Q

Legal

A

Similar to the political analysis as it discusses the rules, regulations, and expectations as put in place by a government or leadership party

67
Q

Ethical

A

Regulations within a specific area or culture. For example: Child labour, discrimination of those employed, bribery

68
Q

Culture in organisations

A

In an organisation background, values and culture can influence the way that Stakeholders focus and how they work

69
Q

Benefits of CSRs

A

Competitive advantage by applying more ethical policies, bad publicity is less likely, will attract more motivated employees

70
Q

Drawbacks of CSRs

A

Running costs increase, shareholders will be reluctant to accept lower short term profits

71
Q

What are Stakeholders?

A

Groups of people who have particular interest in a business organisation

72
Q

How are Stakeholders categorised?

A

As either internal or external to the organisation

73
Q

Internal stakeholders

A

Groups within the business / part owners: Managers/Directors, employees, Shareholders

74
Q

External stakeholders

A

Groups outside the business who are still impacted by it: customers, suppliers, competitors, government, special interest groups

75
Q

Stakeholders can….

A

Belong to both the internal and external category. EG: Manager can be a shareholder

76
Q

Manager interest

A

To maximize profits, reach sales targets, have a steady income, and be responsible

77
Q

Employee interest

A

Steady income and benefits, satisfactory working conditions, job security and professional development

78
Q

Shareholder interest

A

To maximize dividends and the price of the share

79
Q

Customer interest

A

To buy products or services to the highest quality and lowest prices as possible (+ varying ethical concerns).

80
Q

Supplier interest

A

Regular orders and steady payments.

81
Q

Competitor interest

A

Maximize profit, sometimes at the expense of the other businesses.

82
Q

Government interest

A

To control a society in a way that benefits the public good. Ex: secure financial stability

83
Q

Special interest groups interest

A

Achieving a solution to the issue the group is campaigning for.

84
Q

What are special interest groups?

A

A group campaigning for a specific issue.

85
Q

Economies of scale

A

The more goods produced, the less cost per unit

86
Q

Reasons for economies of scale

A

Specialisation, division of labour, reduced price in purchase in bulk (volume cost)

87
Q

Reasons for diseconomies of scale

A

Over hiring, external factors such as bad weather, higher transport costs

88
Q

Internal ways to reach economies of scale

A

Technical advances, bulk, specialised staff, diversifying, forming a reliable network of suppliers, finances

89
Q

External ways to reach economies of scale

A

Develop new infrastructure, when government improves transportation, when suppliers relocate

90
Q

Ansoff Matrix

A

used to categorise different strategies that are implemented by a business. For a business to grow and achieve long-term business success. - to evaluate a growth strategy

91
Q

How many options for growth are there?

A

According to Ansoff, a business is presented with four options for growth

92
Q

Variables that growth has to consider

A

The product(s) intended for sale, The market in which the business operates

93
Q

Two options for growth in terms of market

A

To remain in the existing market, to enter new markets

94
Q

Two options for growth in terms of product

A

Sell existing products, develop new products

95
Q

Market penetration (top left)

A

The business attempts to sell a greater quantity of an existing product to consumers in an existing market.

96
Q

Product development (top right)

A

Involves selling new products to existing customers.

97
Q

Market development (bottom left)

A

Requires the business to sell an existing product to new consumers

98
Q

Diversification strategy (bottom right)

A

This is the process of selling new products to new consumers

99
Q

What can Ansoff’s Matrix be used for?

A

Effectively asses the appropriateness of a particular strategy: the risk that will be taken, by referring to current state, whether it is a good idea

100
Q

What is a Gantt chart?

A

A visual way to keep an organisation’s projects organised. It is a bar chart that clarifies what needs to be done and when. Roles, time restrictions, order, and amount of time required

101
Q

Benefits of a Gantt Chart

A

Visual with clear objectives, useful, realistic times, helps with goal setting, helps collaboration

102
Q

Limits of a Gantt chart

A

Overwhelming, confusing, constantly updated, timely, inefficient modifications

103
Q

What is a force field analysis?

A

A tool to uncover the force behind change, it weighs up multiple factors to make decisions

104
Q

What is in a force field analysis?

A

Internal and external factors identified as a driving or restraining force - users numbers 1-5 to identify the influence of the factor, maybe analysis at the end with reasoning

105
Q

Advantages of a force field analysis

A

Both perspectives, clear layout with causes and effects, uses numbers

106
Q

Disadvantages of a force field analysis

A

A consensus may not be reached, requires full participation and accuracy

107
Q

Fishbone diagram

A

Investigates the causes of an event, (a problem) to implement strategies and identify areas for investigation (causes and sub-causes of an issue to identify solutions to a problem)

108
Q

In a fishbone diagram….

A

Problem as the head, major causes as the bones, sub causes, analysis

109
Q

Advantages of a fishbone

A

Clear, broken down / condensed, versatile

110
Q

Disadvantages of a fishbone

A

Hard to follow with amount of points, works better in team with multiple opinions

111
Q

Decision tree

A

Flow chart diagram made from nodes and branches

112
Q

Node

A

Represents an event - in or our of company control. In company control - to do with decisions (decision note) shown with a square. Out of company control - shown with circle, probability, (chance node)

113
Q

Branches

A

Lines to connect nodes as a potential path a business can take (various decisions from decision nodes, outcomes from chance nodes)

114
Q

Decision tree diagrams go….

A

Left to right with calculations right to left

115
Q

Advantages of decision trees

A

Can trace a path, show difference between in control and not in control factors, accurate info

116
Q

Disadvantages of decision trees

A

Based on past experiences, hard to apply, complex, little significance

117
Q

External Growth

A

When a business externally expands profits by mergers with a main goal of achieving greater market share through the provision of external finances

118
Q

Merger

A

The combination of two different companies combining in order to make a new, more effective company with the aim of expansion or gaining market share

119
Q

Takeover

A

The purchase of one company by another

120
Q

Joint Venture

A

An agreement between multiple companies to combine resources in order to complete a task

121
Q

Strategic alliance

A

An agreement between multiple companies to move forward as seperate organisations yet complete the same mutually beneficial project

122
Q

Franchise

A

A special license that allows the franchiser to giv e certain rights to a franchisee

123
Q

Franchisee

A

The franchisee buys the franchise and the rights to it. They also have to stick to decisions made by the franchiser

124
Q

Franchisor

A

The company that has the final decision in allowing the franchisee to open up a branch of the franchise

125
Q

Globalisation

A

The process of taking a business from the domestic market within one country to function within multiple

126
Q

Multinational corporation

A

A business that operates in more than one country

127
Q

Acquisition

A

When a company buys most of another company with the aim of gaining control over it

128
Q

Organic growth

A

The maximum growth rate in which a company is able to achieve as a result of internal sales and an increase of quality (output) - revenues and earning higher than the year before

129
Q

External growth

A

also know as inorganic growth. This is when instead of rising because of business activity, it rises because mergers or takeovers.

IB Business And Management HL (9 decks)

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