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Business > Unit 1 - Understanding Business > Flashcards

Unit 1 - Understanding Business Flashcards

1
Q

What is land?

A

All the natural resources of the earth, as well as the physical land that a business is located on.

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2
Q

What is labour?

A

Men and women who make up the workforce for any business or organisation.

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3
Q

What is capital?

A

Machines, equipment and resources used in the business.

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4
Q

What is enterprise?

A

The idea behind the business, usually provided by an entrepreneur. Without the enterprising idea there wouldn’t be a business.

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5
Q

How do businesses create wealth?

A

Businesses create wealth by adding value to products as they go through the various stages in the production process.

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6
Q

What are the sectors of industry?

A

Primary, secondary and tertiary.

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7
Q

What is the primary sector?

A

The primary sector involves taking raw materials from the natural habitat. These raw materials are then passed on to the next sector in the production process.

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8
Q

What is the secondary sector?

A

This involves taking raw materials and making them into finished products, and often called manufacturing.
Examples- washing machines, cars, food or computers.

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9
Q

What are the three sectors of economy?

A

The public sector, the private sector and the third sector.

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10
Q

What is the public sector?

A

The public sector of economy is owned and controlled by the government and local councils. It provides services such as schools, hospitals, the armed forces and social services.

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11
Q

How is the public sector funded?

A

Taxes

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12
Q

What is the private sector?

A

This sector of the economy is owned and controlled by private individuals and is made up of types of businesses known as sole traders, partnerships, limited companies, franchises etc.

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13
Q

How is the private sector funded?

A

Private individuals and share holders.

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14
Q

What is the third sector?

A

This is made up of charities and other community organisations that aim to raise money for good causes and to help people. The third sector also includes social enterprises and co-operatives,

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15
Q

How do the third sector earn money?

A

They are not ‘owned’ by anyone: they raise money from donations, fundraising activities and grants from the lottery.

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16
Q

What is the importance of good customer service?

A
  • increased customer loyalty.
  • increased sales and profits.
  • a good reputation
  • increased competitiveness
  • increased staff morale and effectiveness.
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17
Q

What are the 4 factors of production?

A

Land, Labour, Capital and Enterprise.

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18
Q

What is customer loyalty?

A

A business should provide the same standard or a higher standard of products an services at competitive prices.

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19
Q

What are private sector businesses?

A

Sole traders, partnerships and private limited companies.

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20
Q

What are sole traders?

A

Sole traders are businesses that are owned and controlled by one individual. They provide the finance and run the business on a daily bases.

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21
Q

What is a partnership?

A

A partnership is a business that is owners by two to twenty partners. The partners provide the finance and run the business on a Dailey basis.

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22
Q

What is a private limited company?

A

A private limited company is owned by shareholders. The company name is usually followed by Ltd. The share ownership of the company is by invitation only and the shares are not sold on the stock exchange.

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23
Q

What are public sector organisations?

A

Public sector organisations are owned by the public but are controlled by either the local or central government. Such as education, recreation and leisure facilities, housing and social services.

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24
Q

Who is in controls it a private limited company?

A

Board of directors

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25
Q

Who are the profits split amongst in a private limited company?

A

Shareholders

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26
Q

What is a limited liability?

A

If the business fails the shareholders can only lose the value of their investment in the company.

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27
Q

What is unlimited liability?

A

This means that is the business fails then the owners must pay all the debts and liabilities. Even to the point that their personal possessions can be sold off.

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28
Q

What is a social enterprise?

A

A social enterprise are businesses that trade to tackle social problems and improve the life of the community. They make money from selling goods and services but they reinvest a large portion of their profits back into the business or the local community. Social enterprises do not make profits for shareholders because they do not have any.

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29
Q

What is an entrepreneur?

A

Usually comes up with the original business idea, and uses their skulls and abilities to turn the idea into a business reality.

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30
Q

Why do charities exist?

A

Aim to raise money to fun research for their particular cause or to help support those in need.

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31
Q

What is the private sectors objectives?

A
  • providing a good service or quality product for their customers
  • surviving in the market
  • growing the size of the business
  • having a strong brand that customers will continue to buy
  • being the market leader
  • being socially responsible by caring for the environment and reducing waste.
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32
Q

What are the public sectors objectives?

A
  • meet the needs of local residents, for example by improving roads and providing leisure centres.
  • having a good reputation as a council or government
  • cover their costs
  • stick to their budget.
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33
Q

What are the third sectors objectives?

A
  • help those in need of assistance
  • help relieve poverty
  • increase access to education
  • increase donations and grants for their cause
  • promote their message or cause
34
Q

What does PESTEC stand for?

A
  • political
  • economic
  • social
  • technological
  • environmental
  • competition
35
Q

What are political factors?

A

The government can introduce new laws that affect every business in the UK. Businesses have to comply with these laws and this usually costs them money. This in turn reduces their profits. Examples of sun laws are minimum wage, health and safety regulation and corporation tax.

36
Q

What are economic factors?

A

Economic factors refer to changes in the economy during periods of boom and slump. If their is a boom in the economy then businesses do well as they can charge higher prices and make bigger profits.

37
Q

What are social factors?

A

Social factors refer o the structure of the population over all. Businesses need to respond to the needs of the age and structure of the population but also working patterns. Women make up a high percentage of the working population so this has an increase in child care provision. People are living longer there fore old people have needs and wants that need to be provided for.

38
Q

What are technological factors?

A

Businesses must keep up with changes in technology. The introduction and availability of new technology will enable a business to produce new products and provide new services.

39
Q

What are environmental factors?

A

All businesses face pressure to be environmentally friendly. They have to reduce waste and pollution. They also have to suffer for extremes of weather, such as floods, storms and extreme ice and snow. Often these weather conditions cause a drop in the business trading and therefore a drop in profits.

40
Q

What are competitive factors?

A

All businesses face competition from other businesses in the U.K and abroad. Competitors can attract customers by offering better products, services and prices. All businesses need to stay competitive by lowering prices and making sure that customers get the very best deal.

41
Q

Examples of internal stake holders?

A
  • Owners
  • Employees
  • Managers
42
Q

Examples of external stakeholders?

A
  • Customers
  • Suppliers
  • Banks
  • The government
  • The local community (including pressure groups)
43
Q

What interest do owners/shareholder have?

A

That are interested in the profits the business makes, as this determines their share.

44
Q

What interest do employees have in the business?

A

They are interested in the future of the business as they have a job they want to keep.

45
Q

What is the interest of managers in the business?

A

They are interested in Theo job, salaries and bonuses.

46
Q

What are the interest of the customers in a business?

A

They want value for money- good quality products at good prices.

47
Q

What are the interests of the banks in a business?

A

They are interested in the overall profitability of the business, which could be affected if they have provided loans to the business.

48
Q

What are the interest of suppliers in a business?

A

They want to provide goods to the business so that they will have continued custom and to ensure they get paid.

49
Q

What is the interest of the Government to a business?

A

They want to make sure that the business pays taxes and obeys the law.

50
Q

What are the interest it Local community’s for a business?

A

They want jobs for the local area but they also want their local community to be free from pollution and environmentally safe.

51
Q

What is the INFLUENCE that the Owners/shareholders have on a business?

A

Owners make decisions that affect the business on a Dailey basis. Shareholders vote at the annual general meeting (AGM) to appoint directors and influence profit sharing.

52
Q

What is the INFLUENCE that the employees have on a business?

A

Employees can choose to work gat and produce good-quality products and services. The can also take industrial action.

53
Q

What is the INFLUENCE that the managers have on a business?

A

They make decisions every day that affect the business, for example new employees to hire, new products to develop, new procedures, etc.

54
Q

What is the INFLUENCE that the customers have on a business?

A

They can choose to buy or not to buy produce and pass on the word-of-mouth either their pleasure or displeasure.

55
Q

What is the INFLUENCE that the suppliers have on a business?

A

They can provide good-quality raw materials at responsible prices. However, they can also provide poor-quality products and can increase their prices.

56
Q

What is the INFLUENCE that the Banks have on a business?

A

They can refuse to provide finance, which may put the business in a difficult position.

57
Q

What is the INFLUENCE that the local community have on a business?

A

They can complain to the local council about the actions a business.

58
Q

What is the INFLUENCE that the The Government have on a business?

A

The government can pass laws at any time, and the business has to comply with these laws.

59
Q

Advantages of a sole trader?

A
  • Relatively easy to set up
  • The owners make the decisions
  • The owners keep the profit
60
Q

Disadvantages of a sole trader?

A
  • it is harder to get loans form the bank
  • unlimited liability
  • long working hours with few holidays
  • sole responsibility
  • problems if owners fall ill even for a short period of time.
61
Q

Advantages of a partnership?

A
  • Workload can be shared
  • Partners can specialise in different areas
  • more money can be invested in the business
62
Q

Disadvantages of a partnership?

A
  • unlimited liability
  • arguments mag occur
  • profits must be shared between partners
  • partner may leave, upsetting the running of the business
63
Q

Advantages of a private limited company?

A
  • control of the company not lost to outsiders

- more finance can be raised from shareholders and lenders.

64
Q

Disadvantages to private limited companies?

A
  • Profits shared amongst more people
  • Shares can’t be sole to the general public
  • must abide by the companies act.
65
Q

Internal factors within a business are?

A
  • finance available
  • labour available/ staff
  • information available
  • ICT and technology available
  • management and leader ship
66
Q

What is the finance available?

A

The lever if finance available to support a decision will impact upon the decision that can be made.
The finance being invested in a decision should be justifiable in terms of the benefits it brings.

67
Q

What is the labour available?

A

Expert and capable staff will b more productive at their work.

68
Q

What is the information available?

A

if a business possesses good quality market research information a business will be more capable of responding to customers needs.

69
Q

What is the ICT and technology available?

A

The degree of ICT used within a business can influence the quality and quantity of products produced,

70
Q

What is the management and leadership?

A

Good decisions made by management can have a positive influence on a business.

71
Q

Advantages of a sole trader?

A
  • Relatively easy to set up
  • The owners make the decisions
  • The owners keep the profit
72
Q

Disadvantages of a sole trader?

A
  • it is harder to get loans form the bank
  • unlimited liability
  • long working hours with few holidays
  • sole responsibility
  • problems if owners fall ill even for a short period of time.
73
Q

Advantages of a partnership?

A
  • Workload can be shared
  • Partners can specialise in different areas
  • more money can be invested in the business
74
Q

Disadvantages of a partnership?

A
  • unlimited liability
  • arguments mag occur
  • profits must be shared between partners
  • partner may leave, upsetting the running of the business
75
Q

Advantages of a private limited company?

A
  • control of the company not lost to outsiders

- more finance can be raised from shareholders and lenders.

76
Q

Disadvantages to private limited companies?

A
  • Profits shared amongst more people
  • Shares can’t be sole to the general public
  • must abide by the companies act.
77
Q

Internal factors within a business are?

A
  • finance available
  • labour available/ staff
  • information available
  • ICT and technology available
  • management and leader ship
78
Q

What is the finance available?

A

The lever if finance available to support a decision will impact upon the decision that can be made.
The finance being invested in a decision should be justifiable in terms of the benefits it brings.

79
Q

What is the labour available?

A

Expert and capable staff will b more productive at their work.

80
Q

What is the information available?

A

if a business possesses good quality market research information a business will be more capable of responding to customers needs.

81
Q

What is the ICT and technology available?

A

The degree of ICT used within a business can influence the quality and quantity of products produced,

82
Q

What is the management and leadership?

A

Good decisions made by management can have a positive influence on a business.

Business (3 decks)

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