UNIT 1: FIRMS AND CSR

Question 1

What is an ORGANIZATION?

Answer 1

A deliberate arrangement of people assembled to accomplish some specific purpose. An organization has a deliberate structure and a distinct goal.

Question 2

What is a FIRM?

Answer 2

Is an economic and social unit made by a set of elements whose function is to produce, and developing this function to achieve certain objectives.

Question 3

What does production mean?

Answer 3

Transformation of certain goods into other goods (from inputs to outputs), that are more suitable for satisfying human needs.

Question 4

What are the 3 main elements of a firm?

Answer 4

1. Tangibles, which are materials and financial assets
   - they have a physical existence, easier to liquidate
2. Intangibles, which are human capital, structural capital and relational capital
   - they don’t have a physical existence, cost is much harder to determine
3. Human Resources, which contains owners, managers and staff.

Question 5

Organizational assets: economic structure

Answer 5

These assets are the FACTORS
1. Non-current assets: assets that won’t be converted to cash within 1 year, and will generate economic benefit into future periods. (Befektetett eszközök)

2. Current assets: assets, that will be converted into cash within a year. (Forgóeszközök)

Question 6

Organizational assets: financial structure

Answer 6

These assets are the SOURCES OF FACTORS

1. Shareholder’s equity: is an account on a company’s balance sheet, that consists of shared capital+retained earnings. It is an essential information for financial reports.
2. Liabilities: any debts that a company has: bank loans, unpaid bills etc.

Question 7

What is structural capital?

Answer 7

It is an intangible asset within human resource,
which is a set of authority, coordination and communication relationships that determines the behavior of people within the company and how they interact with the environment.

Question 8

What is corporate social responsibility? What are the 3 main dimensions?

Answer 8

Is a voluntary integration in the firm’s governance, strategy, policies, procedures and management of social, labour, environmental and respect to human rights values.
It has 3 dimensions: Environmental, Economical and Social

Economical: how the company uses its resources efficiently and responsibly
Social: to achieve a good social well-being in long-term with improving the labour conditions, integrating the disabled people, respect and support employees to that can motivate them and increase employee satisfaction
Environmental: use the natural resources propriety, recycle, social actions and support those organizations that helps maintaining sustainability.

Question 9

What is profit?

Answer 9

Profit is the amount of money left over after expenses are paid. It measures the real flow.
Revenues-costs

Question 10

What is cash flow?

Answer 10

Is the net balance of cash moving in and out of a business at a specific period of time.
Collections-payments

Question 11

Describe the primary sector

Answer 11

Is an economic sector that revolves around the extraction of raw materials.

Question 12

Describe the secondary sector

Answer 12

Is an economic sector that revolves around manufacturing. Transforms raw materials into artificial resources, human created objects for use by people.

Question 13

Describe the tertiary sector

Answer 13

Is an economic structure, that revolves around service and retail. Makes use of the finished product created via activity in the primary and secondary sector