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Business Management
Test #1
| Question | Answer |
|---|---|
| What are the features common to all organisations? | All organisations have a defined purpose, relationships externally and internally, both human and physical resources, and they are all 'open' meaning that they are all influenced by external factors such as the law and other organisations. |
| What are the types of organisations? | There are three types of organisations: 1) Sole Proprietorship - a business owned by one person 2) Partnership - a business owned by between 2 - 20 people 3) Private company - a business that exists as a separate legal entity from the owners. |
| What are some objectives of businesses? | Contributing to the local economy, limiting their ecological footprint, meeting consumer needs, meeting employee expectations. |
| What are the four commonly used measures to determine the size of a business? | 1) The level of independence of operation 2) The level of employment 3) The market share 4) The sources of finance |
| What does level of independence of operation mean? | The level of independence of operation determines how independent business are when making decisions. Business with a lot of independence of operation are able to make their own business decisions & are not reliant on policies/directions of others. |
| What is the difference between the level of independence of operation of a small business and of a large business? | Small businesses r generally able 2 make their own decisions and r not reliant on policies & directions of others within the organisation. Large businesses arn't usually very independent -esp. if they r franchises, as they r told what they must sell & do. |
| How can you determine the size of a business by the level of employment? | According to the australian bureau of statistics, business are normally defined as: - Small if they employ less than 20 ppl - Medium if they employ b/ween 20-199 ppl - Large if they employ over 200 |
| What is the market share? | Relates 2 the amount of the market that is held by a specific business & is expressed as a percentage. If a business is the only supplier of a product/service, it will have a big influence ova the availability of that product to ppl & will b medium/large. |
| What is sources of finance of all sizes of businesses? | Large businesses -draw on large pools of finance small businesses -draw on the cash reserves of the owner/can borrow funds. Medium businesses-easier 2 secure external finance private companies-shareholders contribute funds. |
| How do businesses contribute to the economy? | By meeting consumer needs (i.e. small business having closer relationships with consumers), providing employment, Technological and innovative development, exporting income (by selling to overseas markets). |
| What are the three types of environments of business? | 1) The Macro Environment 2) The operating environment 3) The internal environment |
| What is the macro environment and what is it made up of? | The Macro environment is a range of broad and general factors that affect all businesses that they have little/no control over. It includes: -Social, legal, technological, economic, political factors |
| What is the Operating environment and what is it made up of? | The operating environment are groups that a business will interact with for which they may have some capacity to influence. It includes: -Customer Factors -Supplier Factors - Competitor Factors - Interest Group Factors |
| What does the internal environment include? | It includes factors that exist 'inside' a business. -Business Structure -Policies -Processes -Planning -Staff/Employees |
| What are some examples of social factors? | -The ageing australian population -the emergence of a multicultural society and the related issue of equal opportunity -the increase in number of married women in the workforce |
| What are the impacts of social factors on businesses? | -Longer trading hours in a range of industries - particularly retailing -Development of food products that require minimal preparation time -Increased demand for home services |
| Examples of economic factors that affect businesses? | - Interest rates : the price of money - taxes -inflation: the rate of price increases - employment levels and the availability of labour - the distribution of wealth |
| What is the connection of political and legal factors that affect businesses? | Political factors relate to the activities and decisions of the 3 levels of govt. : federal, state and local. The decisions of governments often results in laws or regulations, so there is a strong connection b/ween political and legal factors. |
| Examples of legal and political factors that could affect businesses? | -Zoning and building regulations at the local level of govt. - Anti-discrimination laws at both federal and state levels - Occupational health and safety laws at both federal and state levels |
| Examples of technological factors? | -Machinery/Robots -Email -Internet |
| What kind of a relationship does a business have with its customers and suppliers? | Customers - A business needs to keep up to date w/ customers needs and tastes. Suppliers - Must build a positive relationship w/ suppliers so that there aren't any delays with stock/raw materials. |
| What kind of a relationship does a business have with its competitors? | A conflict based relationship. A business will aim to provide a product or service better than their competitors. |
| What are interest groups? | Also known as 'pressure groups'. These groups take action to influence the behaviour of businesses because of a perceived concern - for example: environment/ethical issues. |
| Can the internal environment be influenced by an external factor? | Int. enviro. is mostly controlled by the owner. However, a change in the ext. enviro. can result in a change in the internal enviro. E.g. : -The need 2 comply w/ health & safety legislation 4 staff may result in a change of policies within the business. |
| What are business ethics and socially responsible management? | Business ethics and socially responsible management embody the values and standards that guide the behaviour of owners, managers and employees. |
| Examples of areas that can be subject to ethical and socially responsible management? | -Internal and external financial procedures -Treatment of employees and contractors -Possible conflicts of interest -Investment decisions and appropriate risk of shareholder-provided funds -Pricing processes and policies -Global operations and growth |
| How are business ethics governed? | Business ethics are often governed by laws - but laws can't cover everything! |
| Examples of state and federal laws that businesses are regulated by ? | -The Corporations act : regulates companies in terms of starting them,takeovers,fundraising -Trade Practices act: Stops activities that mislead/deceive in advertising/selling -Fair Work act: Protects workers rights -Environmental Protection Act |
| What is Social Responsibility? | Acting in a way that is 'above and beyond' legal obligations to contribute in a positive way to the community or environment. |
| Shareholder concept of ethics? | A shareholder has a direct financial interest in a business. Therefore, the activities and decisions made in the business are done in the interest of making profit. |
| Stakeholder concept of ethics? Who does he/she think about when making decisions? | Recognises that there are a range of people who affect or are affected by decisions/actions made by a business. When making decisions,he/she thinks about how they will affect the: -Local Community -Govt. -Staff -Suppliers -Consumers -Shareholders |
| Factors that influence the ethical behaviour of a business? | - Personal Value Systems , e.g. religions, beliefs - Laws introduced by the governments to influence the behaviour of businesses in particular, e.g. environmental protection legislation. |
| How can Ethically and Socially responsible management improve profits in a business? Give a real life example. | B/c people gravitate towards businesses that behave ethically, more so than to ones who don't. - E.g.Body shop do not test their products on animals, this could attract ppl who r passionate bout animalrights 2 only buy from body shop-raising profits. |
Created by:
businessgal
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