1.1 Introduction to Bus
State the four factors of production.
Land, labour, capital, enterprise
Explain the difference between a private limited and public limited company.
Private = sell shares to family, friends or employees
Public = listed on the stock exchange
What is this term?
An inspiring declaration of what an organization ultimately strives to be, or to achieve, in the distant future.
Vision statement
State the 7 STEEPLE factors
Social, technological, economic, ethical, political, legal and environmental
Differentiate between internal and external growth
Internal = business own resources
External = utilizing resources from other businesses too
Differentiate between an entrepreneur and intrapreneur.
Entrepreneur = A business-minded person who manages, organizes and plans the production process, taking risks with business decision-making.
Intrapreneur = The traits of individuals who work for an organization (so are not self-employed) but act as entrepreneurs.
What is the type of organization called where it is owned by members for their own benefit?
Cooperative
Which motivational theorist highlights the importance of having aims / objectives in order to motivate?
Pink's intrinsic theory - "purpose"
Which factor is the coronavirus pandemic an example of?
Social
Define economies of scale.
Average costs begin to fall and production increases.
Examples include specialization, purchasing, managerial, marketing, financial, technical, risk-bearing EOS.
Identify and explain all 4 sectors of the economy.
Primary - extraction of raw materials
Secondary - manufacturing
Tertiary - provision of services
Quaternary - R&D
Two characteristics of non-profit organizations (apply to PU!)
Social objectives (inclusivity, social responsibility, excellence, perseverance, commitment, resilience, ambition and creativity.)
Profits reinvested back into the business. (e.g. expansion to country B)
Define CSR.
The value, decisions and actions that impact society in a positive way.
It is about an organization’s moral obligations to its stakeholders, the community, society as a whole and the environment.
PU: There is an ongoing and prolonged economic recession in Country A (line 62).
Which STEEPLE factor is this? Opportunity or threat?
In what ways will this affect PU?
Economic threat.
Distinguish between strategic alliance and joint venture.
Strategic alliance = 2 or more businesses join together WITHOUT a new legal identity.
Joint venture = two or more organizations agreeing to create a new business entity, usually for a finite period of time.
Explain two purposes of a business plan.
Explain why public-private-partnerships exist.
When public projects are required but efficiencies are needed for the project.
The financial burden of a PPP is often borne by the government while the expertise is provided by the private sector partner (such as the Walt Disney Company).
Identify the following to SWOT:
1. There is growing interest in this category of products from developing countries.
2. Profit margin is eroding due to intensifying competition.
3. Business has a loyal customer base.
4. Profit tax increasing.
1. Opportunity
2. Weakness
3. Strength
4. Threat
List possible stakeholder conflicts between:
1. Employees and shareholders
2. Suppliers and managers
3. Local community and business
1. Employees demand higher wages -> raises production costs -> reduce dividend payments.
2. Higher profit margins -> cost efficiencies
3. Ecological sustainability -> profits
Explain 2 opportunities and 2 threats that globalization brings. (to any stakeholders)
Opportunities: increased market size, more choices for consumers, increase job opportunities, diversification of risks
Threats: increased competition, loss of cultural identity, interdependence of global economies
Explain four problems that new businesses face.
Lack of finance
Lack of human capital
Lack of market research
Poor marketing strategy
Lack of entrepreneurial skills
Identify the 2 types of organizations that unlimited liability applies to.
Explain why unlimited liability can be an advantage.
Sole trader & partnerships.
This is because it forces entrepreneurs to be more cautious with their decision making in order to minimize risks.
Identify the 4 different growth strategies on the Ansoff Matrix.
Explain why there are different risks involved in each one of the growth strategies.
Market penetration - lowest
Market development - medium
Product development - medium
Diversification - highest
List all the internal and external stakeholders. (generic)
List all the internal and external stakeholders for PU.
Internal: employees, managers, directors, CEO, BOD, shareholders
External: customers, suppliers, government, pressure groups, trade unions, competitors
PU Internal: Adriana, Jim, BOT, Patricia, Di Jones, lecturers, head of departments, support staff
PU External: local/international students, guest speaker, political activists, pharmaceutical company, software company, company funding PU's medical research
Explain why some businesses prefer to stay small, whilst some businesses prefer to grow.
Small = easier and cheaper to set up, complete control and ownership of the business, enjoy greater privacy, provide more personalized services to customers, greater specialization of goods
Large = economies of scale, greater access to a wider range of sources of finance, customers are generally attracted to well-known brands, lower risks,