Unit 1.1 Flashcards
What is the role of a business?
An organization that uses resources to produce a good or service that satisfies the needs of consumers
Business ‘add value’ Turn raw materials into final goods (e.g. fruit) Or raw materials into inputs for other goods (e.g. rubber)
What are the 4 main business functions
Human resources
Finance and Accounts
Marketing
Operations management
The main functions of human resources
recruitment,
training,
contracts,
motivation etc
The main function of finance and accounts
Managing the organization’s money
The main function of marketing
Identify and satisfy wants and needs of consumers.
The main function of operations management
Purchase of resources,
quality management
production efficiency
Distinguish between the primary, secondary and tertiary sectors of an economy
Primary is extraction of raw materials
Secondary sector is manufacturing and production of products from raw materials
Tertiary is the section in the service industry
Define the term Quaternary sector
Business involves in intellectual knowledge based activities regarding information
Define sectoral change
A shift in the relative share of GDP and employment in each sector of the economy
Define industrialization
Movement from Primary to Secondary sector
Define deindustrialization
Movement from Secondary to Tertiary sector
What is an entrepreneur?
Someone who takes the financial risk starting and managing a new company in return for profit
What is an intrapreneur?
Someone acting as an entrepreneur but is an employee within a large business organization.
List 5 reasons why someone may wish to start their own business
Cash
Challenge – personal satisfaction and self-esteem
Autonomy – can do what want – hours, salary
Security – can’t be fired, earn for retirement
Just lost a job
An opportunity comes up
Hobbies
Transference and inheritance – passing on to next generation - e.g. Walton family
Problems that a new business or enterprise may face
Financial problems – Lack of own start up capital, Lack of cash flow (liquidity)
A poor business plan fails to attract investors or persuade banks
Strong Competition
Wrong Marketing – product, price etc.
Poor management – people, cash, costs etc
Hiring the wrong people Legalities – is it legal?
Copyright and patent
High Production costs
External influences – oil crisis, economic recession
