Unit 1: Business Organization & Environment Flashcards
business
a business is an entity which tries to combine human, physical, and financial resources into processing goods & services to respond and satisfy customer needs
the role of human resource
responsible for managing the personnel of the organization
the role of finance and accountants
manages organization’s money
the role of marketing
meeting customers needs and ensuring product’s sell
the role of operations
manages resources dedicated to production and delivery of products
primary sector
raw materials
secondary sector
manufactures goods
tertiary sector
services
quaternary sector
provides info
entrepreneur
someone who takes financial risk of starting and managing a new business venture
intrapreneur
someone who turns ideas into profitable products and services as an employee of a company
reasons for starting up a business or an enterprise
- pursuing a passion
- opportunity
- a good idea
- income potential
- new lifestyle
- autonomy/ own boss
- challenge
- creativity
what is a business plan
a written document that describes a business, its objectives and strategies, the market, and its financial forecasts
the distinction between the private and the public sector
a private sector is a business owned and controlled by individuals or groups of individuals
a public sector is an organization accountable to and controlled by central or local government
sole traders
- easy to set up
- owner has full control and keeps the profit
- flexible
- unlimited liability
- limited access to finance
- no benefit of economies of scale
partnership
- partners bring different expertise to the organization and share in decision-making
- flexible
- additional finance
- unlimited liability
- profit is shared
- conflict between partners
companies/corporations
- limited liability: the shareholder’s potential loss is the amount invested in the company
- legal personality: company is legally recognized as having an identity separate from that of its owner
- continuity: death of an owner does not end the company
cooperative
an organization jointly owned by a group of people (members) who democratically run the organization to meet the needs and aspirations of its members
- motivation because of democratic decision making
- income goes to members
- income can be reinvested to the enterprise
- slow decision making
- managers do not have full control
microfinance
provides financial services to poor or low-income customers who do not have access to normal banking services
- helps people get out of poverty
- improve healthcare, education, and employment
- unethical since you earn profit from low-income individuals
- unlikely to make a big difference in society
- struggle to attract or retain employees and managers
public-private partnerships (PPP)
public sector organization has a contract with a private sector business to support the provision of a public service
- aim to make a profit, therefore, operate services as efficiently as possible
- schools, roads, and prisons have been funded by PPP schemes
- the private sector is profit-oriented
- lack of experience needed to operate
- large profit comes from rent charges that comes from taxpayers pockets
non-governmental organizations (NGO’s)
include non-governmental organizations and charities (they don’t aim to make profits)
charities
not-for-profit organizations set up to provide money and support for people in need
vision statement
an inspiring statement that provides all stakeholders with information about the business’s purpose, values, and what it wants to achieve in the future (long-term)
mission statement
organizations formally set out and publicize their core objectives. a mission statement declares an organization’s purpose, or why it exists (present)