Introduction to business Flashcards
Definition of organisation and main elements
A social arrangement which pursues collective goals.
- Social arrangement
- Collective goals
- Controlled performance
- Boundary
Definition of a business
primary objective is to maximise owner wealth
Primary objective of an organisation
maximise benefits to society
Contents of a mission statement
- Purpose - why and for who
- Strategy - What and the how
- Policies - how mission statement affects behaviour
- Values - what principles are important to the business
Aims vs objectives
Aims - Qualitative
Objectives - Quantitative
Objectives should be SMART
Specific Measurable Achievable Relevant Timed
Primary vs secondary objectives
Primary - maximise owners wealth
Secondary - increasing market share, new products, productivity, staff development
Other primary objectives
Profit satisficing - a level of profit to keep shareholders happy
Revenue maximisation - to maintain/ increase market share
Multiple objectives
Business constraints
Primary vs secondary stakeholders
Primary - Shareholders or owners
Secondary - Everyone else e.g Management, employees, customers, suppliers, lenders, government, society, environment
Business sustainablilty
How far a business goes to operate in a sustainable way
