UNIT 1: BUSINESS ORGANISATION AND ENVIRONMENT

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What is STEEPLE?
Social, Technological, Economic, Environmental, Political, Legal & Ethical
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What is a business plan?
A business plan is a written document, describing the business, its objectives, strategies, the market it's in & its financial forecasts. Usually made for investors
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What is a business?
Any organisation that uses resources to meet the needs of consumers by providing a product or service that they demand
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Define the terms; Consumer goods, Consumer services & Capital goods
Consumer goods; Physical & tangible goods, sold to the general public. Consumer goods; non-tangible, sold to the general public. Capital goods; Physical goods, used by the industry to aid production
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Name the 4 inputs of a business
Land, Labour, Capital & Enterprise
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Name the 4 functional areas
Human Resource Management; employment, Finance & Accounts; finance in & out of the business, Marketing; analysing market research etc & Operations Management; 'production function
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What are the 3 stages of production?
Primary; extraction of natural sources, Secondary; manufacturing & process from natural sources & Tertiary; provides a service to consumers
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What is the difference between a public sector organisation and a private sector organisation?
Public; an organisation controlled by central or local goverment. Private; a business owned or controlled by an individual or groups of
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Define the term; Sole trader, and name at least 1 advantage and at least 1 disadvantage of become a sole trader.
A single owner that provides permanent finance & had full control over the business. Advantage; owner can keep all profits, flexible working times & easy to set up. Disadvantage; unlimited liability, long hours & lack of continuity
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Define the term; Partnership, and name at least 1 advantage and at least 1 disadvantage of joining a partnership
Formed by 2 or more people with shared capital investment & responsibility. Advantage; partners may be specialised in different areas, less legal formalities & shared loss. Disadvantages; unlimited liability, shared profit & no continuity
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Define the term; Public Limited Company (ltd), and name at least 1 advantage and at least 1 disadvantage of becoming a ltd.
Small/medium sized business, owned by shareholders, often related. Advantage; limited liability & separate legal identity. Disadvantage; inability to sell shares to general public & legal formalities involved
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Define the term; Private Limited Company (plc), and name at least 1 advantage and at least 1 disadvantage of becoming a plc.
Often a large business, with legal rights to sell shares to general public, share price is on national stock exchange. Advantage; limited liability. Disadvantage; share prices subject to fluctuation
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Define the term; Franchise, and name at least 1 advantage and at least 1 disadvantage of joining a franchise.
A business that uses the same name, logo & trading system of an existing business. Advantage; high chance of success. Disadvantage; lack of control
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Define the term; Cooperative, and name at least 1 advantage and at least 1 disadvantage of joining a cooperative.
A group of people, sharing ownership & making decision democratically. Advantage; separate legal identity & inexpensive to register. Disadvantage; difficult to find investors & limited surplus
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Define the term; Charity, and name at least 1 advantage and at least 1 disadvantage of starting a charity.
A non-profit organisation. Advantage; limited liability, public recognition & trust. Disadvantage; limited surplus & no equity investment
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How do you find profit within a business?
Total Revenue - Total Costs = Profit
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State the hierarchy of objectives.
Survival, Growth, Profit Maximisation, Sales Maximisation & Diversification
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Define the terms; Surplus, Vision statement & Mission Statement
Surplus; the money earned by a non-profit organisation. Vision Statement; an image of the future. Mission Statement; what is our business, the purpose, our reason for being?
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Name 3 types of objectives.
Strategic; long term, overall business objectives. Tactical; shorter term, functional area objectives. Operational; day to day, broken down objectives in functional areas
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How can you achieve Profit Maximisation?
Increase customer base, Reducing labour turnover, Reduced absenteeism, Improved skill levels, Increased labour productivity, Widen product range, Increase market share, Reduce waste, Brand loyalty, Capacity utilisation, cashflow & budgeting
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Name at least 3 Internal & 5 External Stakeholder groups.
Internal Employees, Managers, Shareholders (owners) & Directors. External; Suppliers, Government, Shareholders, Customers & Pressure Groups
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Why is Stakeholder Mapping used by businesses?
To identify the conflict between stakeholders and resolve it & to identify which stakeholder objectives are most important & will have the largest impact on the business if not met
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Define the terms; Stakeholder Approach & Shareholder Approach.
Stakeholder; an outward looking approach that recognises that meeting stakeholder objective can be mutually beneficial. Shareholder; a more traditional, inward looking approach to meeting shareholder objectives which can in fact, lead to lower profit
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What is Ansoff's Matrix?
A business model used by firms to analyse the growth strategies and they can choose their strategies according to risk. Market Penetration, Product Development, Market Development & Diversification.
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Define the term; Internal Growth.
Natural growth as a result of the profits of a business being reinvested into the business in terms of; new equipment, more workers, targeting new markets, etc.
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What is External Growth? Name the different types of External Growth.
Growth achieved by joining other businesses. Merging; a+b=c, Takeover; x+x=x and Joint Ventures & Strategic Alliances; a+b=a+b+c
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What are the 3 different types of integration?
Horizontal; where a business joins with another firm in the same industry at the same stage of production. Vertical; where a business joins with another firm in the same industry within the chain of production. Conglomerate; different industry
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What are Ethical Objectives & what are some advantage and disadvantages of being ethical?
'Doing the right things', based on moral code. Advantage; improving brand image, qualified staff may want to work with you, avoid court cases. Disadvantage; expensive (short term), paying fair wages, accepting its wrong to fix prices with competitors
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What is Corporate Social Responsibility (CSR)?
Objectives that focus on meeting social responsibilities & considers the interests of society by taking responsibility for their actions
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How do you measure CSR?
With Social Audits; assessing the impact a business has on society & how ethical behaviour matches ethical objectives
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What determines ethics?
Influence on society, Personal experience, Parental behaviour, Guilt, Empathy, Sympathy, Religion, Culture & Socio-Economic grouping
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What is a Multinational Business? and why become Multinational?
Multinational companies produces goods & services in more than one country. Why? closer to main markets, lower production cost, avoid import restrictions, access to local natural resources, etc.
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What are the problems that Multinational Businesses face?
Miscommunication, Cultural differences, Coordination with other plants need to be monitored, Skill level of local employees may be poor (investment in training)
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What impact do Multinational Businesses have on their 'Host Countries'?
Benefit; foreign currency being brought in, improvements of local workforce, generation of additional jobs, tax revenues to gov are boosted, raise in GDP. Drawbacks; exploitation of local work force, pollution, natural resources become limited
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What is globalisation?
the growing integration of countries through increased freedom of global movement of goods, capital & people
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What is a Decision Tree?
A business model that aids strategic decision making through consideration of all possible options, identifying likelihood of these options occurring, identifies the most beneficial option
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What is in a Decision Tree's Key?
Decision Node, Chance Node, Probability & Rejected Option
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What is SWOT analysis?
A business tool of strategic analysis that measures; Internal; Strength, Weakness & Internal; Opportunities, Threats
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Define; Internal Economies of Scale & Name the 6 internal economies of scale.
Financial benefit that a firm experiences as that firm grows. Technical; efficiency of capital equipment, Marketing; sales generation, Managerial; specialisation, Purchasing; bulk buying, Risk Bearing; small firms have high risk, Financial; investors
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Define; External Economies of Scale & Name the 3 external economies of scale.
Financial benefit that a firm experiences as the industry as a whole grows. Supply of skilled labour turnover; more employment, reduced AC, Co-operation; sharing resources, reduced AC & Supporting firms; increases efficiency & capacity utilization
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Define; Internal Diseconomies of Scale & Name the 6 internal diseconomies of scale.
The disadvantages that a single firm experiences as it grows beyond its MES. Bureaucracy; slows down efficiency, Co-ordination; isolation of departments, Morale; feeling of alienation & Communication; miscommunication
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Define; External Diseconomies of Scale & Name the 6 external diseconomies of scale.
The disadvantages that individual firms experiences as the industry grows (usually in a specific area). Congestion; literal traffic jam & Land Prices; a lot of firms want to relocate to a specific area, rent goes up
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Define the terms; Code of Conduct, Dividend & Legal identity
Code of Conduct; Rules of an organisation, ethical, honour, moral codes that a business must follow. Dividend; annual money paid to shareholders by the company (from profit). Legal Identity; legal rights & obligations of a business
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Card 2

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What is a business plan?

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A business plan is a written document, describing the business, its objectives, strategies, the market it's in & its financial forecasts. Usually made for investors

Card 3

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What is a business?

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Preview of the front of card 3

Card 4

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Define the terms; Consumer goods, Consumer services & Capital goods

Back

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Card 5

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Name the 4 inputs of a business

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