general
What is the primary sector of business activity?
Extraction of natural resources, e.g., farming, mining, fishing
What does HRM stand for?
Human Resource Management
What is the difference between revenue and profit?
Revenue = total sales income; Profit = revenue – costs
What is the main disadvantage of being a sole trader?
unlimited liability
What are the four factors of production?
Land, Labor, Capital, Entrepreneurship
What is the main difference between on-the-job and off-the-job training?
On-the-job = training at the workplace; Off-the-job = training away from the workplace, e.g., courses
What is the difference between fixed and variable costs?
Fixed = do not change with output, Variable = change with output
What type of organization is owned by shareholders but run by directors?
Private limited company or public limited company, depending on share structure
Name two external factors in a SWOT analysis.
opportunities and threats
Which motivational theorist is known for the two-factor theory (hygiene factors and motivators)?
Herzberg
What is the break-even point?
The level of sales where total revenue = total costs, no profit or loss
What are economies of scale?
Reduction in average costs as output increases
What is CSR?
Corporate Social Responsibility (CSR) is a business concept where companies voluntarily integrate social, environmental, and ethical concerns into their operations and interactions with stakeholders, going beyond just economic profit to create a positive impact on society and the planet.
How can job enrichment improve employee motivation compared to job enlargement?
Job enrichment = adds responsibility/decision-making → higher motivation; Job enlargement = increases task variety but not responsibility
Why is liquidity important for a business, and how is it measured?
Liquidity = ability to meet short-term obligations; measured using current ratio and acid-test ratio
What are cooperatives, and what is their main purpose?
Organizations owned and run by members, who share profits and decision-making, often to benefit the group/community
Which external factor in a PEST analysis would most directly affect consumer spending power, and why?
Economic factors, because they include inflation, interest rates, income levels, and unemployment that influence how much consumers can spend.
According to Charles Handy’s model, which type of organizational culture is most likely to be found in a law firm, and why?
Role culture → structured, hierarchical, defined responsibilities, and rules-based work environment
What is working capital, and why is it important for a business?
Working capital = current assets – current liabilities; it shows the ability to pay short-term debts and maintain day-to-day operations
What is the main difference between a joint venture and a strategic alliance?
Joint venture = creation of a new business entity owned by two or more firms; Strategic alliance = cooperation between firms without creating a new entity