Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

IB Business Management > Unit 1.1, 1.2, 1.3 > Flashcards

Unit 1.1, 1.2, 1.3 Flashcards

1
Q

What is the aim of a business? How do they achieve that common aim? (What is a business?)

A

An organization that aims to meet consumer demands via:
- extracting raw materials
- creating a product
- providing a service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What could be a considered a business?

A

Any organization that uses their resources in order to generate output for people’s demands
- What resources?: Enterprise, physical, human, financial..
- NGOs, churches/religious orgs, etc. can be considered businesses
- because they invest resources in order to create their services/goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How do businesses add value to resource inputs?

A

By creating outputs (products/services)
- Because that is how they gain profits (for the resources that they put in)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Outline the 4 types of resource inputs.

A

Human, Financial, Enterprise, Physical ( -> similar to capital + land)
- Similar to the FoPs aka the diff kind of resources in econ (with the exception of finance, otherwise they’re similar-ish)
- Side note: I wonder why they’re classified a little differently? Like why do physical resource input include both the FoP of Land AND Capital? Why are they separated into two FoPs? (this side not is tbd until I get the answer)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Explain the human resource input

A

It is the quality AND quantity of people required in the business
- ALL businesses, even heavily automated ones, require at least one person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Explain the physical resource input.

A

It is the right quality and quantity of materials/machinery/land space required
- Similar to the FoP of “capital”.
- All businesses (such as internet services) need phys resource input (such as office, computers, etc.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Outline the financial resource input.

A

It is the right quantity of finance (e.g. cash) required
- ALL businesses need this (as the other resource inputs are not free)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Explain the enterprise resource input.

A

The least tangible input but important and always present.
Also called “entrepreneurship”
- includes:
- business ideas
- turning those ideas into a reality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Outline the two types of production processes.

A

*8Labour-intensive and capital-intensive**

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain the labour-intensive production process,

A

Labour refers to human contributions.
- Labour-intensive = uses a large portion of labour relative to other inputs
- especially land + machinery (physical resource inputs, kind of like opposites)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Explain the capital-intensive production process.

A

Capital (like in Econ) refers to the physical resource inputs in business
- Capital- intensive = uses a large prop. of land + machinery relative to other resources
- Especially labour (human resource inputs).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Outline the two different types of product outputs

A

Goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Explain what are goods?

A

Product outputs that are tangible/physical

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Explain what are services?

A

Product outputs that are non-tangible
- are actions rather than an item

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Outline the 4 business functions.

A

Human Resources (HR), Marketing. Finance and accounts, Operations management/production
- Notice that most of these (except marketing?) relate to the 4 resource inputs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the difference of how small businesses and large businesses deal with the business functions?

A

Owners of smaller businesses deal with the functions themselves

Owners of bigger businesses can hire specialized managers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Explain what HR (Human Resources) does

A

Ensures that employees are rewarded becomingly.
- In order to make them suitable for reward, they must be fit for the job
- SO, HR: trains employees, recruits them, dismisses them, determine appropriate compensation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Explain the role of finance and accounts.

A

Ensuring appropriate funds are available to make the product or service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Explain the role of marketing.

A

Goal: To ensure that the business’ products/services is desired by a sufficient amt of people/businesses for profitable operations
- How do they accomplish this goal?: Marketing promotes, prices, packages and distributes the product
- Why?: These will make the products/services desirable (e.g. good ads, relatively accessible prices, good-looking and functional packaging, distribution to a large audience)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Explain the role of operations management or production.

A

Goal: To ensure appropriate processes are used in the producing of the product/service
- How?: determine the quantity and flow of stock, determine methods of production
- Why?: Similar to the second question of the main Econ problem, they ensure the efficiency of the production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Examine interdependence of the business departments/functions

A

(use collanote for the map)
- Marketing determines demands > If there’s a change, Op. management deals with the production > Finance and accounds finds funds for redesign > If redesign requires more/less people and/or people with different expertise, then HR deals w/ the training, hiring, compensating, dismissing of employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Explain how priorities change when a small business becomes big.

A

At first, small businesses w/ their departments prioritize survival

When a business becomes big, they may prioritize other things other than survival.”
- Like what?: Diversifying their business ventures (e.g. expanding to a new market) and controlling/growing a market
- Why?: These are opportunities for the business to grow larger. Because larger businesses have enough resources, they can chase those opportunities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Explain how the strength of a business is determined.

A

It is determined by the successful alignment of the four functions
- For example: (to be explained by sir, BECAUSE what does it mean by “alignment”?)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Distinguish between the private and the public sectors.

A

Public sector - government-ran, has meaningful economic implications
Private sector - individual/company-ran, not from government. Usually for profit.

25
Q

Outline the main features of the types of organizations.

A

1.) Sole traders
- the owners own and run the business. May have employees but owners take ultimate responsibility for it.
-no legal distinction between business and the sole trader (unlimited liability)
-limited finances (limited to owner)
- banks are reluctant to know because of credit.
-Businesses are geographically close to customers, so owners can get to know their customers.
-sole trader has a high level of privacy and limited accountability.
- sole traders don’t have to disclose their finances to anyone except tax authorities and lenders (if they are lending)
-Starting a business as a sole trader is usually quicker and inexpensive

2.) Partnerships
- need a deed of partnership
- Partners decide (there’s another consultant)
-Owned and managed by more than one person)
-No legal distinction exists between the businesses and partners
-More finance than a sole-trader business
-sleeping partners contribute some finance and expect a share of the profit
-offers a more varied service than the sole trader
- different partners bring different expertise and the products/services can vary
- Partners can share accountability
-typically more stable and more likely to continue

3.) Privately held companies
-limited liability to owners, only to their contribution to the business
-shareholders cannot sell their shares to shareholders outside their company unless they have been offered.
- basically not everyone can join the business (as a shareholder)

4.) Publicly held companies
-offers limited liability as well
-anyone can be a shareholder

26
Q

Explain primary sector.

A

The acquiring of raw materials
- extraction, mining, farming, hunting, etc.

27
Q

Explain the secondary sector.

A

the processing of raw materials (usually by manufacturing)

28
Q

Explain the tertiary sector.

A

all services fall under here, sometimes use manufactured products

29
Q

Explain the quaternary sector

A

Subgroup of tertiary. Deals with information (e.g. media, IT, etc.). Web-based.

30
Q

Define chain of production

A

The steps through different sectors to make consumer goods

31
Q

Outline the four main types of organizations

A

1.) Sole traders/proprietors

2.) Partnerships

3.) Companies/Corporations

4.) Profit/Non profit/Governmental

32
Q

Describe the advantages of a sole trader

A

1.) Easy to set up — therefore they’re the most common type of business
- requires no paperwork

2.) owners have complete control and keep all of the profits.
- therefore, they have the freedom to choose their time and patterns of work.

3.) Is more able to create close relationships with customers and staff (if any are employed)

4._ Business can be based on interest and skills of the owner instead of following the interest of a larger business

33
Q

Describe the defining characteristic of the sole trader

A

One person owns and runs the business (though they may hire staff)

34
Q

Describe the disadvantages of the sole trader

A
  • Unlimited liability — all of the owner’s assets are potentially at risk
  • Face intense competition from bigger firms e.g. karenderyas vs. Tablo
  • Owners have to cover all aspects of managing and running the business — unable to specialize.
  • Long hours often necessary to make business pay.
  • Lack of continuity - if owner dies, the business dies. Even if it’s passed down to their descendant. It will be a new business.
35
Q

Describe the characteristics of a partnership

A

Two or more people own and run a business. This requires a deed of partnership which establishes the rights and responsibilities between partners
- e.g. distribution of profits, voting rights, roles, contract signing…

36
Q

Describe the advantages of partnerships

A
  • Partners could specialize
  • Shared decision making
  • Additional capital injected by each partner.
  • Business loss shared between partners
  • Greater privacy and fewer legal formalities than corporate organizations (companies)
37
Q

Describe the disadvantages of Partnerships

A
  • unlimited liability
  • shared profits
  • no continuity if even one of the partners die
  • all partners are bound to the decisions of one another — lose independence of decision making.
  • not possible to raise capital from selling shares
38
Q

Describe the characteristics of a limited company

A
  • A business where the owners have a separate legal personality from the business.
  • Owned by shareholders (they own a “share” or part of a company)
39
Q

Explain limited liability

A

Legal and financial protection in case the company fails or there is any legal action being taken against the company (or LC)

40
Q

Define legal personality

A

“Being one’s own person” in the eyes of the law.

41
Q

Define continuity

A

A company being able to exist event after the death of its owners

42
Q

Describe the characteristics of a Private Limited Company (PLC)

A
  • tend to be relatively small
  • business name ends in Limited or Ltd.
    IE: JP solutions Ltd.
  • Shares are transferred privately and all shareholders must agree to the transfer (like a clique!)
  • PLCs are often between relates/close people such as friends
  • Comprise many manufacturing firms
  • limited liability

-more capital bc no limit to no. of shareholders.

-control of companies cannot be lost to outsiders

-has continuity

43
Q

Describe the disadvantages of PLCs

A
  • shared profits among a larger number of members
  • legal procedures required to set up the business.
  • shares cannot the sold to the public thus restricts the amount of capital that can be raised.
  • financial info. filed with the SEC can be inspected by any member of the public (?)
    • competitors can use this to their advantage
44
Q

Describe the characteristics of a Public Limited Company

A

It is a company that issues its shares to the public via stocks with the share prices quoted on the stock exchange.
- In order to represent those shareholders, a representative is elected for the board of directors

45
Q

Describe the advantages of Public Limited Companies (aka corporations)

A
  • via issuing shares of stock to the public, they gain more money
  • offers owners limited liability
  • owners only liable to the amount of their investments (not sure for private lc’s though)
  • the business can hire experts to professionally manage each aspect of the business
46
Q

Describe the disadvantages of Corporations (Private and Public Limited Company)

A
  • Costly start up — also needs legal assistance to make a business a corporation/public limited comp.
  • more gov. regulations than partnerships or sole proprietorships
  • share prices fluctuate; risk of takeover
  • income is taxed twice (?)
  • Short-term profit are the objectives of major shareholders.
47
Q

Define what are organizational objectives

A

The overall goals, purpose and mission of a business that have been established by its management and communicated to its employees.

48
Q

Explain why are organizational objectives important

A

Because businesses are social organizations, they need a set of objectives to star focused and properly allocate resources such as money and time.

49
Q

Outline the hierarchy of organizational objectives

A

VMGSTO

50
Q

Define the functions of a vision statement and give the question it asks

A

The question: ”What do we want to become?”

  • identifies where the organization intends to the in the future
  • business’ guiding image of success
  • a compass of company aspirations
51
Q

Outline what makes a good vision statement

A
  • short simple powerful
  • inspiring with emotional impact
  • clear direction and mental image of what the company wants to become.
  • provides a sense of belonging to the members of the org
52
Q

Explain what a mission statement (or creed statement) is and what question does it answer.

A

Answers the question: ”What is our business?”
(because business is used to achieve vision)

  • describes what the organization does, who it serves (market), and unique point from its competitors
  • reason why a company exists.
  • main focus of main business activity.
53
Q

Distinguish a mission statement vs. a vision statement

A
54
Q

Distinguish between goals and objectives

A
  • Objectives: concrete; goals: tangible (concrete vs tangible)
  • goals: long term; objectives: shorter period (length)
  • Objectives depend on reality and ideas; goals: imagination and creativity (reality vs imagination)

E.g.:
Goal - I will graduate college
- long term, not specific
Objective - I will get a bachelor’s degree in X and graduate with honors
- specific goals (honors and specific subject)

55
Q

Outline the characteristics of an objective

A
56
Q

Explain the 3 basic types of objectives

A
57
Q

Explain why are ethical objectives important

A
  • Build costumer loyalty
  • Positive image
  • Create a positive work environment
  • Reduce the risk of legal redress
  • Meet the customer’s ever increasing expectations for ethical behavior (related w/ image and loyalty somewhat…)
  • increase profits
58
Q

Define what is corporate social responsibility

A

CSR = ethical behavior of a company towards society (e.g. sustainability, social, etc.)

IB Business Management (18 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions