Understanding Business Flashcards

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What is an entrepreneur?
Someone who thinks of a business idea and develops it.
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Identify the four factors of production.
Land, Labour, Capital & Enterprise.
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What is capital?
The money the owner has invested in the business and all the man made equipment, machinery and tools this money has been used to buy.
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Explain the difference between needs & wants.
Needs are essential - eg. water, air, food & shelter. Wants are what people demand after their needs have been satisfied.
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What are the four sectors of industry?
Primary, Secondary, Tertiary & Quarternary.
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Describe the primary sector.
Businesses that extract materials from the ground, eg. farming, fishing & coal mining.
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Describe the tertiary sector.
Businesses that provide a service, eg. supermarkets & airlines.
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What is the main aim of a private sector organisation.
To make a profit.
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What is the main aim of a public sector organisation.
To provide services, improve communities and society and to act in the best interests of the general public.
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What are objectives?
Targets or goals an organisation has.
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Identify five different stakeholders.
Management, Employees, Customers, Government, Local Community, Suppliers
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Explain the difference between a merger and a takeover.
Merger is when two businesses of around the same size join together, whereas a takeover is when one larger business takes ownership and control of a smaller one.
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Describe the term de-merger.
De-mergers occur when one business splits into two separate organisations.
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Identify two political factors that impact on an organisation.
UK, EU & International Law. Government policies .Provision of essential infrastructure, eg. roads & schools. Rates of taxation. Provision of grant funding.
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Identify two economic factors that impact on an organisation.
Interetst Rates, Exchange Rates, Levels of Inflation, Levels of unemployment, The business cycle (periods of booms and slumps in the economy.)
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Identify five functions of managers in decision making.
Planning, Organising, Commanding, Commanding, Co-ordinating, Controlling, Delegating & Motivating.
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Identify three internal factors that impact on decision making.
Quality of info available. Company Policy. Knowledge & Experience of Staff. Willingness to take risks. Urgncy of decision & time available. Resources (financial & human) available. Availability & Quality of Technology. Resistance to change by staff.
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What does SWOT stand for?
Strengths, Weaknesses, Opportunities and Threats
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Identify two resources required when implementing a decision.
Time, Finance, People, Technology, Information,
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What is mean by external factors?
Factors outwith an organisation's control that will impact upon the organisation.
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Iddentify two activities carried out by the human resources department.
Recruitment, selection, arranging training, advising on terms & conditions, reviewing pay, creating and upfating policies and procedures, supporting the appraisal process, managing grievance and discipline procedures, maintaining records
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Iddentify two activities carried out by the finance department.
Paying bills, paying wages, preparing budgets, preparing final accounts, ratio analysis, preparing info for decision making or stakeholders
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What is an organisation chart?
A diagram showing how an organisation is structured.
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What is the difference between a wide and a narrow span of control?
A wide span of control will mean that many people report to one person, while a narrow span of control means that very few people report to one person.
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Why might a matrix structure be used?
Matrix structures are use to bring people together from various departments to work on a specific project or task.
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Suggest two advantages of delayering.
Allows quicker communication, quicker decision making, and can allow the organisation to adapt to changing market conditions when necessary.
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Other cards in this set

Card 2

Front

Identify the four factors of production.

Back

Land, Labour, Capital & Enterprise.

Card 3

Front

What is capital?

Back

Preview of the front of card 3

Card 4

Front

Explain the difference between needs & wants.

Back

Preview of the front of card 4

Card 5

Front

What are the four sectors of industry?

Back

Preview of the front of card 5
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