Ib Bm Unit One

Front 1

1.1 Nature of business activity:

Identify three inputs in a business

Back 1

Land

Labour

Capital

Staff

Enterprise

...

Front 2

1.1 Nature of business activity:

Identify four business activities.

Back 2

Production or operations

Human resources

Marketing

Research and development

Administration

Finance

Front 3

1.1 Nature of business activity:

Identify two outputs of a business.

Back 3

Goods or services

Waste

Front 4

1.1 Nature of business activity:

Which three kind of resources are employed in the business activities?

Back 4

Human, physical and financial resources.

Front 5

1.1 Nature of business activity:

Explain the role of Operation activities inside a business.

Back 5

In involves the process of changing natural resources into a product or the supply of a service.

Front 6

1.1 Nature of business activity:

Explain the role of Marketing inside a business.

Back 6

It is concerned with identifying consumer needs ans satisfying them.

Front 7

1.1 Nature of business activity:

Explain the role of Finance inside a business.

Back 7

Department responsible for the control of money in a business.

Front 8

1.1 Nature of business activity:

Explain the role of Human Resources inside a business.

Back 8

This fuction involves the management of people, looking after the welfare of the workforce and carrying activities such as recruitment, selection, training, safety....

Front 9

1.1 Nature of business activity:

Explain the nature of business activity in each sector.

Back 9

Primary: extraction of natural resources

Secondary: manufacturation of products by the transformation of raw materials.

Tertiary: provision of services to the consumers.

Front 10

1.2 Types of organizations

Dintinguish public sector and private sector.

Back 10

The private sector focuses more on profit maximization. The activities they undertake require a capital that is gained usually from the owners or the retained profit that the business has.

The public sector is held by the state and runs with the money that is collected from citizens through taxes. Their objective is to supply services to citizens without making a profit from it.

Front 11

1.2 Types of organizations

State reasons for setting up a business

Back 11

Potentially high rewards

Offers the option of doing something different.

Independence

Satisfaction of working for yourself.

Passion for the product or service that is supplied.

Front 12

1.2 Types of organizations

Explain the process a business will have to go through to start up.

Back 12

First having an idea

The preparation of a business plan where an overview of the business, planning and resources needed have to be stated.

Front 13

1.2 Types of organizations

State three problems a business could face when it starts-up.

Back 13

Lack of initial finance

Lack of experience.

Unexpected external factors influencing the business.

Biased market research and few costumers.

Operational problems when finding suppliers.

Unpredicter delays on the supply of material.

Cashflow problems.

Lack of profitability.

Front 14

1.2 Types of organizations

Define sole trader

Back 14

A business organisation which has a single owner.

Front 15

1.2 Types of organizations:

State three advantages of being a sole trader

Back 15

· Lack of legal restriction.

·Setting-up is not costly.

·All profit after tax is kept by the owner.

· Complete control of the business.

·Flexibility for the owner.

·Can offer personal service.

·Usually supported by the government.

Front 16

1.2 Types of organizations:

State three disadvantages of being a sole trader

Back 16

·Unlimited liabilities

·Risky for their owners.

·Easiness of disappearing, because it depends only on one person.

·Money used is usually the owners savings.

·Independence may be a disadvantage also.

·Business activities can be stopped by illness.

·The customer can sue the owner because it is a unincorporate business.

·Non specialised workers.

·Small business no economy of scales

Front 17

1.2 Types of organizations:

State three advantages of a partnership

Back 17

·No legal formalities when setting-up.

·Not public accounts.

·Each partner can specialise.

·More finance can be raised.

·Partners can share the work.

·Easier to raise money from outside the business.

Front 18

1.2 Types of organizations:

State three disadvantages ofa partnership

Back 18

·Unlimited liabilities.

·Profits are shared.

·Partners may disagree.

·The size is limited to 20.

·The partnership ends when one dies.

·Partnership must be wound up.

·Any decision of a partner represents all partners.

·Unincorporated, the can be sued by customers.

Front 19

1.2 Types of organizations:

Define partnership

Back 19

Business organisation that is owned by between 2-20 people. The business control depends on the agreement.

Front 20

1.2 Types of organizations:

Define Private Limited Company (Ltd.)

Back 20

Ownership divided among shareholders, whose degree of control over the decision making of the company will depend on the agreement signed. Shares can only be transferred privately and all shareholder should agree.

Front 21

1.2 Types of organizations:

State three advantages of Private Limited Company (Ltd ).

Back 21

·Limited liability.

·More capital can be raisen.

·Control cannot be lost.

·The business goes on even the owners die.

·Benefits on taxes.

Front 22

1.2 Types of organizations:

State three disadvantages of Private Limited Company (Ltd ).

Back 22

·Profits have to be shared.

·There is a legal procedure when setting-up.

·Not allowed to sell shares, restricts the capital raisen.

·Public financial info.

·Difficulties when selling shares.

Front 23

1.2 Types of organizations:

State three advantages of Public Limited Company (plc.).

Back 23

·Huge amount of money can be raisen.

·Economies of scale

·Often dominates the market.

·Easier to raise finance from financial inst.

·Pressure encourage to perform well.

Front 24

1.2 Types of organizations:

State three disadvantages of Public Limited Company (plc.)

Back 24

·Very expensive setting-up.

·Easy to lose control.

·Accounts are inspected.

·Less able to deal with customers.

·Controlled decisions.

· Inflexible in front change

Front 25

1.2 Types of organizations:

Define Public Limited Company (plc. ).

Back 25

Control spread and easy to lose. Shareholders will vote at AGM to decide on board of directors and dividend to be paid or retained. Public sector; is regarded as bureaucratic and structured by a tall hierarchy. Shares can be transferred freely.

Front 26

1.2 Types of organizations:

Analyse the impact of the division between control and ownership on internal and external stakeholders.

Back 26

The internal stakeholders have a bigger impact. The owners, keep the ownership of the business but lose the degree of control over the decision making of the business -that on the other hand is gained by the managers and directors. Workers aren’t really affected by this division. External stakeholders such as customers and communities are not so affected, though they can find changes in the final product.

Front 27

1.2 Types of organizations:

Define NOG or non-profit organisations.

Back 27

Organisation that are run according to business principles, but that do not aim to make a profit. The actions undertaken affect on the decision making and objectives of politicians, businesses and society.

Front 28

1.2 Types of organizations:

Define and explain the nature of public-private partnerships

Back 28

Involvement of private enterprise in the government projects aimed at public benefit. It is believed that private companies are more efficient and better run than bureaucratic public bodies. In trying to bring the public and private sector together, the government hopes that the management skills and financial acumen of the business community will create better value for money for taxpayers.

Front 29

1.2 Types of organizations:

Analyse the costs and benefits of cooperation between the public and private sector.

Back 29

For the private sector...

Costs: more competition in the market

Benefits: The state becomes a new consumer of goods. The state provides services that otherwise would be expensive for the business such as health.

For the public sector...

Costs: It is expensive and financed by all the citizens, even those who don’t enjoy the product.

Benefits: Monopolies are avoided.Basic services are assured. Citizens are more satisfied with the government.

Front 30

1.3 Organizational objectives

Define objective.

Back 30

A objective is a target outcome for a business which allows it to achieve its aims. Objectives are related with the business survival, cost minimization, growth (market share), profit maximization and profit satisficing… any change in the internal or external environment would mean a change in objectives.

Front 31

1.3 Organizational objectives

Explain the importance of objectives for a firm.

Back 31

Objectives help businesses to achieve their aims and improve its overall activity. Having an objective means that you have a way of achieving your scopes, and more probabilities of success.

Front 32

1.3 Organizational objectives

Define mission statement

Back 32

Mission statements: a brief statement written by the business, where it is described its reason of existence. Ex.: Google’s mission is to organize world’s information and make it universally available.

Front 33

1.3 Organizational objectives

Define vision statement

Back 33

Vision statements: defines where the company sees itself moving to in the future. Ex.: Ford: Our vision is to become the world’s leading company for automotive products and services.

Front 34

1.3 Organizational objectives:

Explain the role of mission and vission statements within a business.

Back 34

It can help clarify in the minds of stakeholders the purpose of the business.

Vision can reassure shareholders that the business is forward looking and willing to create and pursue new opportunities.

Even though, visions and missions must be credible, realistic and achievable.

Front 35

1.3 Organizational objectives:

Define strategies of a business

Back 35

Planning used by a business in order to achieves its goals.

Front 36

1.3 Organizational objectives:

Define tactics of a business

Back 36

Short-term specific ways in which the short term objectives can be achieved.

Front 37

1.3 Organizational objectives

Explain the relation between objectives, strategies and tactics.

Back 37

These terms are interrelated as long as for achieving the objectives of the business it is needed a strategy in a long run and tactics for the short-run.

Front 38

1.3 Organizational objectives

Explain the reasons for setting ethical objectives.

Back 38

Pressure from stakeholder to “do the right thing” in business after a number of high-profile and damaging corporate scandals

The need for the company to differentiate itself from the competition by building a credible ethical stance.

Front 39

1.3 Organizational objectives

Analyse advantages and disadvantages of setting ethical objectives.

Back 39

Improves the brand image -customers and pressure groups are more satisfied.

It motivates workers

Rises problems between the different stakeholders’ scopes (some want more profit)

It can be really expensive (when trying to be more environmentally friendly)

Front 40

1.3 Organizational objectives

Discuss the impact of implementing ethical objectives.

Back 40

It depends on the business. In some cases being ethical may mean more profit as sales increase, but in other cases costs can be extremely expensive. Also it may motivate some workers, but these may get less paid.