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Business AQA Alevel > UNIT 1 - understanding nature and purpose of business > Flashcards

UNIT 1 - understanding nature and purpose of business Flashcards

1
Q

bs exist in many shapes and sizes and for different

A

purposes

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2
Q

wht is an important reason why businessses exist

A

the opportunity for making profit

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3
Q

but the opppportunity for making profit is not the only reasons why

A

businesses exist

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4
Q

Uwhat are the 3 other reasons businesses can exist

A

provide goods and services

develop a good idea

provide help and support for others - most notably charities that raise funds in various ways

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5
Q

in terms of providing goods and services this includes

A

pubic services e.g nhs /polic / fire services

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6
Q

developing a good idea is also known as

A

enterprise

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7
Q

charities raise funds in various ways to help and support

A

the lives of others

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8
Q

mission statement aka

A

vsion statment

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9
Q

what is missiona statemnt

A

broad qualitative descripion about the organisation so stkh understand its intent

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10
Q

give example of nike mission statement

A

bring inspiration and innovation to overy athelete in the world

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11
Q

why do we have mission satemt

2 things

A

bring focus and meaning to business

act as a guide when making critical descisons that may affect direction of a business

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12
Q

when looking at objectives of a business its important to rember they are quite

A

complex and will vary according to circumnstances and type of organisaton

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13
Q

state the 5 common business objectives

A

profit
growht
survival
cashflow
social/ethical objectives

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14
Q

over recent years global nature of business and intense competition in many markets mean 2 other obj become increasingly importtant what are these

A

customer service
CSR

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15
Q

each functional area set objectives that should

A

conrtibute to the business achieving its overall objectives

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16
Q

what are corp obj/corporate iams

A

goals that help a business achieve its mission

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17
Q

corp obj drive what objectives

A

functional obj

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18
Q

what are functional obj

A

objectives of eahc department , more detailed and specific to eahc dpt

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19
Q

why do we have all these obj

A

can be a measure of success - success in mkting dpt needs a functional obj and cant get this from geenric mission statement

allows coord between managment and employees therfore giveing focus and direction to employees and maangers to help broader def of mission statemtn

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20
Q

mission statement outlines bigger picture nd generally establishes teh

A

core values and principles that help guide and conduct action of staff

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21
Q

how do objectives differ from mission statement

A

theyre actionable and measurable

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22
Q

without missio statemtn objectives have no

A

direction

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23
Q

but without objectives the mission statement is

A

unachievable

24
Q

in addition to being actionable and measurable objectives hould have what charactersitics

A

smart characteristics

25
Q

outline SMART ojective

A

Specific
Measurable
Achievable
Relasitic
Time bound

26
Q

what does Specific mean

A

objective must be clear precise and well defined

27
Q

what does Measurable mean

A

must be possible to know when an objective has been completed

28
Q

what does Achievable mean

A

objectives must be within capabialities and have sufficient resources

29
Q

what does realistic mean

A

an objective must be challenign but possible o achieve given capabilities and resources

30
Q

what does time based mean

A

must be a dealdine to work to

31
Q

give an exmaple of smart objective for coffe shop and say why smart

A

increase mkt share by 2.5% a year for the next 5 years

got clearly defined and measurable goal

32
Q

business objectives arent all about making

A

profit

33
Q

business objectives are lieklt to

A

change over time

34
Q

the relative importance of different objectives is likely to

A

vary over time depending on circumntances

35
Q

the relaive importance of diff objectives e.g in difficult economic times what is liekly to be more important

A

survival tha profit or enviro targets

36
Q

relative impoartace of diff objectives i in booming economt what objective will be more important

A

profit

growth

37
Q

why do business set obj reason 1 - the fact theyre measurable ….

A

the fact theyre measurable and time based means they can be used to evaluate performace

  • if good business can reward them
    *if bad implement training or diff methods of approaching task
38
Q

why do bs set objectives reason2 - if theyre realistic and achievable …

A

if theyre realistic and achievable they can provide motivation for those responsible which will lead to increased productivity

39
Q

why do bs set objectives reason 3 objectives should be specific ….

A

should be specific and as a result will give meaning to plannign and ensure that a busines remains focused on its mission

40
Q

link - mission and objectives of a business can be a driver of decision making and strategy but importance is likely to

A

vary according o the opportunities and threats the business faces

41
Q

profit

A

Money remaining once all costs deducted from revenue

42
Q

profit canbe thought of as reward

A

owners/sh of a business recieve for taking risk of investing in business

43
Q

as profit is a reward it provides an incentive for

A

setting up in business

44
Q

revenue

A

moeny recieed from sales

45
Q

revenue

A

selling price x quanity sold

46
Q

variable costs

A

costs that vary directly with output

47
Q

what are fixed costs

A

costs that dont vary as a result of changes in level of output

48
Q

fixed costs dont chang ein teh

A

short term

49
Q

total costs

A

fixed costs and variable costs

50
Q

total costs represent the

A

total costs of production in a given time period

51
Q

profit

A

TR-TC

52
Q

Why is profit imprortant 4

A

reward for taking on risks

motivate employees

sign of financial stability

indicator of sucess

shareholders

53
Q

explain profti importance in terms of reward for taking risks

A

owner takes risk as an entrepreneur and look for reward for profit which provides an incentive to set up business

in terms of sh they take risk which helps with expansino and D2D

54
Q

explain profit importanc in terms of motivating employees

A

you can profit share

this can increase motivation , productivity and output and herfore sales which shoudl lead to more profit

have to be profitable to pay dividend and bs needs o grow in future and one of best sources of finance is retained profit as cheap

but takes a long time to build up

depedns on dividedns shareholders expecting and how st as opposed to lt they are

55
Q

explain retined profits in terms of shareholders

and some it depends and eval points

A

have to be profitable to pay dividend and bs needs o grow in future and one of best sources of finance is retained profit as cheap

but takes a long time to build up

depedns on dividedns shareholders expecting and how st as opposed to lt they are

56
Q

explain importance of profit as a sign of financial stability

A

if got profit and lots

suppleirs are more likely to trust the bs

and therfore extends trade credit

this improves cashflow and working capital

furthermore banks re more liekly to five loan

57
Q

explain profit importance in terms of indicator of success

A

if its primary objective it shows the bs is achievinvg it

Business AQA Alevel (23 decks)

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