1.1 What Is A Business?

Question 1

Define ‘Business’

Answer 1

A decision-making organisation involved in the process of using inputs to produce goods and/or provide services.

Question 2

Define ‘inputs’

Answer 2

The resources that a business uses in the production process, such as labour and raw materials.

Question 3

Define ‘outputs’

Answer 3

Goods and/or services.

Question 4

Define ‘products’

Answer 4

Goods and/or services

Question 5

Define ‘goods’

Answer 5

Tangible/physical products.

Question 6

Define ‘services’

Answer 6

Intangible products.

Question 7

Define ‘entrepreneur’

Answer 7

The individual who plans, organises, and manages a business and its operations1 taking on financial risk in long so.

Question 8

Define ‘entrepreneurship’

Answer 8

The trait of business leaders who venue lo be distinctive in their temperament, attitude, and outlook, who drive the business to achieve its organisational goals.

Question 9

What are traits that an entrepreneur may exhibit?

Answer 9

Creativity, innovation, and passion. They search for and exploit business opportunities by forecasting and/or responding no changes in the marketplace.

Question 10

What is the nature or purpose of business activity?

Answer 10

To generate added value. This occurs when there is a positive difference between the selling price of the product and the cost of producing the good or service. Added value exists when products are appealing no customer, so they are willing to pay a higher price for it.

Question 11

What is the role of a business?

Answer 11

To combine human, physical, and financial resources lo create goods and services in order to satisfy the needs and wants of people, organisations, and governments.

Question 12

Define ‘needs’

Answer 12

The basic necessities that people must have to survive. This includes food, water, shelter, clothing, etc.

Question 13

Define ‘wants’

Answer 13

People’s desires. Things that people would like no have such as a new smartphone or a larger home.

Question 14

Distinguish between the terms ‘consumer’ and ‘customer’.

Answer 14

Customers are the people or organisations that purchase a product whereas consumes are the ones who actually use the product. These could be the same entity but not necessarily.

Question 15

Define ‘consumer goods’

Answer 15

Products sold to the general public rather than to other businesses.

Question 16

Define ‘consumer durables’

Answer 16

Products that last a long time and can be used repeatedly.

Question 17

Define ‘consumer non-durables’

Answer 17

Goods that need to be consumed shortly after their purchase as they do not last or cannot be reused.

Question 18

Define ‘capital goods/producer goods’

Answer 18

Physical products bought by businesses to produce other goods and/or services.

Question 19

List the 4 functional areas of a business.

Answer 19

1. Human resource management
2. Finance and accounts
3. Marketing
4. Operations management

Question 20

What is the role of the HR management department?

Answer 20

Responsible for managing the personnel of the organisation, this includes roles such as human resource planning, organisational structures management and leadership, motivation and demotivating and dealing with industrial/employee relations.

Question 21

What is the role of the finance and accounts department?

Answer 21

Responsible for managing the organisation’s money, ensuring compliance with legal requirements and informing those interested in the financial position the of business.

Question 22

What is the role of the marketing department?

Answer 22

Responsible for identifying and satisfying the needs and wants of cissomes. It is ultimately in charge of ensuring that the firm’s products sell. This is done through a series of activities such as market research, promotion, pricing, branding, and dismibution.