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IB BUSINESS HL > Unit 1. Introducion to business management > Flashcards

Unit 1. Introducion to business management Flashcards

1
Q

What is a business? AO2

A

A decision making organization, that combines human, physical, and financial resources to provide goods and services.

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2
Q

What are the inputs of a business? AO2

A
  • Land
  • Labour
  • Capital
  • Enterprise
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3
Q

What are the main business functions? AO2

A
  • Human resources
  • Finance
  • Marketing
  • Operation
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4
Q

What are the functions of Human Resource Management? AO2

A

Function of using, managing, and developing an organization’s worforce to meet the companie’s obajectives.

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5
Q

What’s the function of finance? AO2

A

Managing the organization’s money and assests and recording financial documentation.

(Informs the stakeholders about the companie’s fiancial position)

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6
Q

What is the function of marketing? AO2

A

Identifying and meeting the needs and wants of the customers in a profitable manner.

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7
Q

What is the function of operations? AO2

A

Providing the right goods and services of the right quantity and quality in a cost-effective way.

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8
Q

What are the business sectors? AO2

A
  • Primart
  • Secondary
  • Tertiary.
  • Quaternary.
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9
Q

What’s the primary sector about? AO2

A

Extraction, Harvesting, and conversion of natural resorces.

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10
Q

What’s the secondary sector about? AO2

A

Manufactiuring or construction of products.

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11
Q

What’s the tertiary sector about? AO2

A

Prioviding services and retail.

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12
Q

What’s the quaternary sector about? AO2

A

Knowledge bassed and innovation based activities

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13
Q

What is sectoral change? AO2

A

Shift in relative share or national output and employment to the business sectors.

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14
Q

What are the impacts of sectoral change? AO2

A
  1. More potential.
  2. Increases standard of education.
  3. Increases job opportunities.
  4. Greater focus on customer service.
  5. Higher household income.
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15
Q

What is an entrepreneur? AO3

A

Infividual who plans, organizes and manages a business, taking financial risk.
(Rewarded with profit)

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16
Q

What is an Intrapreneur? AO3

A

The same as an entrepreneur but as an employee of an organization.
( Rewarded with pay and remunaration)

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17
Q

What are the reason to start a business? AO2

A
  • GET CASH
  • Growth.
  • Earnings.
  • Inheritance.
  • challenge.
  • Segurity.
  • Hobby.
  • Autonomy.
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18
Q

What are the steps to start a business? AO2

A
  1. Find niche markets.
  2. Write a business plan.
  3. Obtain start up capital.
  4. Register.
  5. Market yourself and your products.
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19
Q

What are the problems new businesses face? AO2

A
  • Lack of finance (cash flow problems)
  • Lack of menpower.
  • Complex legal system.
  • High production cost.
  • External issues in the economy.
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20
Q

What is a private sector business? AO2

A

Owned and controlled by private individuals and businesses
(Goal: Profit-maximaxation)

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21
Q

what is a public sector business? AO2

A

Provission of essential goods and services that would not be provided efficiently by private sectors.

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22
Q

What is a sole trader? AO3

A
  • Business controlled by one person.
  • Simplest form of business.
  • Single owner takes all profits and liabilities.
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23
Q

what are the advantages and disadvantages of a sole trader? AO3

A

Advantages:
- Little legal requirements.
- All profits to the owner.
- Fast decision making.
- Personalized service.
- Privacy.

Disadvantages:
- Limited sources of finance.
- Limites economies of scale.
- Lack of expertise.
- Pressure of responsability.

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24
Q

What is a partnership? AO3

A
  • Business run by two or more individuals who form a partnership.
  • the owner shares responsabilities and raise finance collectively.
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25
Q

what are the advantages and disadvantages of a partnership? AO3

A

Advantages:
- Financial strength.
- Specialization and division of labour.

Disadvantages:
- Unlimited liability.
- Slower decision making.
- Disagreement and conflict.

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26
Q

What is a company/coorporation? AO3

A

A business owned by shareholders.

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27
Q

What are the cahracteristics of a Company? AO3

A
  • Legal difference between owners and business’ identity.
  • Limited liability
  • More bureaucracy.
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28
Q

What is a private limited company (LTD)? AO3

A
  • Shareholders are usually related or friends.
  • Shares can’t be traded on public stock exchange.
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29
Q

What are the advantages and disadvantages of private limited companies? AO3

A

Advantages:
- Limted liability.
- Higher capital and expansion capacity.
- Continuity

Disadvantages:
- More legal requirements.
- Coorporate taxes.
- Less privacy.

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30
Q

What’s a public limited company (PLC)? AO3

A
  • Shares can be traded on a public stock exchange
  • Required to publish financial accounts and reports to the public.
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31
Q

What are the advantages and disadvantages of a public limited company? AO3

A

Advantages:
- Limited liabilities.
- More capital raised.
- Continuity after death.
- Higher credibility.

Disadavantges:
- Possible hostile takeovers.
- More restrictions.
- Coorporate tax.
- Have to pay more dividends.

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32
Q

What are the types of for-profit social organizations? AO3

A
  • Cooperatives
  • Microfinance.
  • Public private parterships.
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33
Q

What is a Cooperative? AO3

A

Jointly owned and run by members who sare profits and benefits.

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34
Q

What are the advantages and disadvantages of a Cooperative? AO3

A

Advantages:
- Shareholder help run the organization.
- Equal voting rights among all share holders.

Disadvantages:
- Very slow decision making.
- Profits are spread out among all.

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35
Q

What are Microofinance providers? AO3

A

Small-loam providers to poor businesses and businessmen who have no access to conventional baking services.

36
Q

What are the advantages and disadvantages of a microofinance provider? AO3

A

Advantages:
- Job creation.
- Social well-being.

Disadvantages:
- Limited finance.
- Limited eligibility.

37
Q

What are the Private-Public partnerships? AO3

A

Government jointly works with the private sector companies.

38
Q

What are the advantages and disadvantages of a public-private company? AO3

A

Advantages:
- More prodcutove while providing merit goods.

Disadvantages:
- Government must subsidize when coast of production increases.
Confluct between public and pricate sector interests.

39
Q

What are the types of non-profit social organization? AO3

A
  • NGO’s
  • Charities
40
Q

What are the characteristics of NGO’s? AO3

A
  • Exist in the private sector.
  • Participate in humanitarian projects.
41
Q

What are the characteristis of charities? AO3

A
  • They are exempted from taxes.
  • They have charitable objectives.
42
Q

What are the advanatges and disadvanatges of charities? AO3

A

Advantages:
- Social benefits.
- Taxes exemption.
- Pubtylic recognition.
- Limited liability.

Disadvantages:
- Charity faruds.
- Ineffciency.

43
Q

What is a vision statement? AO3

A

A statemet that outlines the desired position of the company in a distant future.

44
Q

What is a mission statement? AO3

A

Statement that outlibes the purpose of an organization.

45
Q

What are the aims of a company? AO3

A

The long terms goals of what it wants to achieve.
- Vague.
- Unquantifiable.

46
Q

What are the objectives of a company? AO3

A

Short-term goals that are specific and measurable.

47
Q

What are the stratgies of a business? AO3

A

Plans of action to achieve the organization’s long term objectives.

48
Q

What are the tatics of a buisness? AO3

A

Short term plans of action to achieve the short-term objectives.

49
Q

What are the intenal fators that can change the organization’s obejectives? AO3

A
  • Coorporate culture.
  • Type and size of organization.
  • Age of the business.
  • Finance.
  • Risk profile of shareholders.
  • private and public sectors.
50
Q

What are the external factors that can change the organization’s objectives? AO3

A
  • State of Economy.
  • government constraints.
  • New technologies.
  • New laws.
51
Q

What is CSR?

A

Corporate social responsability is a concept where organizations consider the interests of society and take responsabilities for the impact of their activities on other stakeholders

52
Q

What are thge advantages and disadvantages of CSR?

A

Advanatges:
- Better employee recruitment and less turnover.
- Better reputation.
- Relaxes preassure groups.
- Brand differentiation.
- Customer loyalty.

Disadvantages:
- High compliance costs lower profits.
- Forced to use ethically produced raw material.
- Ethics are no universal.
- Lower profits demotivates employess.

53
Q

What is a SWOT analysis?

A

Decison making tool used to assess current and future implications of a business decision, based on internal and external business factors.

Internal factors:
- Strengths.
- Weaknesses.

External factors:
- Opportunities.
-Threats

54
Q

What is the ANSOFF matrix?

A

Tool to help managers choose and devise growth strategies for products and markets.

55
Q

What’s market penetration?

A

Existing market + Existing product (low risk)

56
Q

What’s product development?

A

New product + Existing market (medium risk)

57
Q

What’s market development?

A

Existing product + New market (medium risk)

58
Q

What’s diversification?

A

New product + New market (high risk)

59
Q

What are stakeholders?

A

People who can be affected by the business and therefor have an interest or stake in the company.

Internal:
- Employees
- Managers
- Directors.
- Shareholders.

External:
- Customers.
- Suppliers.
- Pressure groups.
- Competitors.
- Government.

60
Q

What is the stakeholder conflict resolution?

A

Arbitration: both sides agree to an indeoent party’s decision.
- Decision is binding.
- Neither stakeholder will likely recieve what they want.

61
Q

What is the stakeholder mapping?

A

Tool that helps to analyze which stakeholder to prioritize for a given issue.

62
Q

What is STEEPLE analysis?

A
  • Tool for understanding a business external enviroment by analyzing opporunities and threats.
  • It looks at social, technological, enviromental, Ethical, political, legal and Economic.
63
Q

What’s economies of scale?

A

As a business becomes larger and more efficient, the average cost of production decresases, allowing to have lower prices and be more competitive.

64
Q

What are the types of economies of scale?

A

Internal: achieved by organizatio itself
- Bulk buying economies.
- Technical economies.
- Financial economies.
- Managerial economies.
- Marketing economies.

External: achieved by the industry.
- Improved infrasturcture.
- More trained worforce.
- Technological achievement.

65
Q

What’s diseconomies of scale?

A

When the peak of economies of cale is passed, diseconomies of scale is experienced by the overexpansion of industries.

66
Q

What are the consequences of diseconoies fo scale?

A
  • Poor communication.
  • Overworked laborers.
  • Slower decision-making
  • Alienation of workforce demotivates workers.
67
Q

What are the advantages of small businesses

A
  • Not or little bureaucracy
  • Owner has control.
  • Ability to offer personalized services.
  • Better employee-worker relationships.
  • Faster decision making.
68
Q

What are the disadvantages of small businesses?

A
  • No benefit of division of labour.
  • No economies of scale-
  • Lower access to financial sources.
  • Can’t afford R&D.
69
Q

What are the adavantages of Large businesses?

A
  • There’s division of labour.
  • Economies of scale.
  • Access to various sourcs of finance.
  • Diversify risks.
  • Can afford R&D.
70
Q

What are the disadvantages of large businesses?

A
  • Difficult to manage.
  • Diseconomies of scale.
  • Can’t offer persobalized services.
  • Poorer employee-manager relationships.
  • More bureaucracy.
  • Slower decision making.
71
Q

What’s internal (organic) growth?

A

When businesses use their own resources to increase sales and profits.

72
Q

How is internal growth achieved?

A
  • improving products and services.
  • Better marketing.
  • Investment in R&D
  • Improve worforce training.
  • Expand number of offices, factories, ot outlets.
73
Q

What’s external (inorganic) growth?

A

When a businnes growths by merging or taking over another business.

74
Q

What are the types of external growth?

A
  • Mergers and acquisition.
  • Joint ventures.
  • Strategic alliances.
  • Franchising
75
Q

What’s mergers and acquisition?

A

Merge: Two firms decide to merge to form a new company.
- Horizontal merge: firms in the same industry
- Vertical merge: firms in different sectors.

Acqusition: when one form buys the other either voluntary ot hostile (takeover)

76
Q

What’s joint venture?

A

Two or more companies make a deal to work together on a particular project

77
Q

What’s strategic alliances?

A

Collaborative agreement between companies to work on a project together

78
Q

What’s franchising?

A

An inidividual buys the rights to operate under another business name.
- Can be offer to individuals of karge business.
- Frnachisee pay a franchise fee and it is given a license to operate.
- Franchise provides marketing and production equipment.

79
Q

What are the adavantgaes of a franchisor?

A
  • Growth cheaper and quickly.
  • Less menpower to manage.
  • Income from royalty
80
Q

What are the disadvantages of a franchisor?

A
  • Less control over quality and performance.
  • Conflict in prfit vs. Volume.
  • Franchisee can steal the business model and create a competition.
81
Q

What are teh advantages of a Franchisee?

A
  • Known brand leads to start-up sales.
  • Franchisor support and guidelines.
  • Lower cost od suplies due to economies of scales.
82
Q

What are the disadvantages of a franchisee?

A
  • Little freedom.
  • Franchise loyalty fee.
  • Still no guarantee success.
83
Q

What’s the role of gloablization on business?

A

The spread of ideas and tech over the world led to grater integration between businesses and countries.

84
Q

What are multinational coorporations (MNC’s)?

A

Businesses with operation in two or more countries.

85
Q

What are the advantages of MNC’s?

A

Advantages:
- Exapnd customer base
- Grater economies of scale
- Cheaper material and labour
- Spread risks through diversification

86
Q

What are the impacts of MNC’s on domestic businesses?

A
  • Increase of competition
  • Dominate the market and leave small businesses outside.
    + Allow local businesses to acces to foreign capital and shareholders.
    + Can provide R&D and technological advacements.
87
Q

What are the impacts of MNC’s on the host country?

A

+ Foreign investment.
+ Balance of trade.
+ More option for the customers.
+ Job creation.

  • Threats local businesses.
  • Degradation of the nature.
  • Increase of waste

IB BUSINESS HL (6 decks)

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