Chapter 1

Question 1

Why do organisations exist

Answer 1

overcome peoples individual limitations
let people specialise
save time (work together)
accumulate
pool expertise
enable synergy
enable people to be more productive

Question 2

define organisation

Answer 2

a social arrangement for the controlled performance of collective goals which has a boundary separating it from its environment

Question 3

Controlled performance meaning

Answer 3

performance is monitored against goals and adjusted as necessary to ensure goals are accomplished

Question 4

Who owns private sector organisations

Answer 4

private investors/shareholders

Question 5

Who owns public sector organisations

Answer 5

owned by the nation and managed by the government

Question 6

Goal of a non-profit organisation

Answer 6

to provide goods and services for its beneficiaries

Question 7

Secondary objective of profit oriented organisation

Answer 7

output goods/services

Question 8

secondary objective of not-for-profit organisation

Answer 8

minimise cost of primary goals

Question 9

Define business

Answer 9

an organisation that is oriented towards making a profit for its owners so as to maximise their wealth and that can be regarded as an entity separate from its owners

Question 10

What is a stakeholder

Answer 10

A person who has a stake in the organisation. Meaning they have an interest to protect in respect of what the organisation does and how it performs

Question 11

What is at stake for shareholders

Answer 11

capital invested - expect return on it

Question 12

Primary objective of a business

Answer 12

maximise shareholder wealth

Question 13

Secondary Objective
Market position

Answer 13

achieve a particular market share of each market in which the business operates (grow sales, customers, potential customers etc)

Question 14

Secondary Objective
Product development

Answer 14

bring in new products, develop range, invest in R&D

Question 15

Secondary Objective
Technology

Answer 15

Improve how much is produced from resources, reduce cost per unit of output, develop or exploit appropriate tech

Question 16

Secondary Objective
Employees and management

Answer 16

train employees in necessary skill, reduce labour turn over

Question 17

Why do managers not always maximise shareholder wealth

Answer 17

may have no personal interest in creating wealth
market may lack competitive pressure to be efficient (min cost max rev)

Question 18

Profit satisfying explained

Answer 18

decisions taken by managers with own objectives in mind, achieving satisfactory profit by operating at levels acceptable to shareholders

Question 19

Revenue maximise explained

Answer 19

act to maximise revenue to maintain or increase market share, ensure survival and discourage competition

Question 20

How do managers benefit from revenue maximisation

Answer 20

revenue grows becomes bigger company, more prestige running large company and salaries and benefits often better

Question 21

Eight key areas where objectives are needed

Answer 21

market standing
innovation
productivity
physical and financial resources
profitability
manager performance and development
worker performance and attitude
corporate responsibility

Question 22

Environmental issues explained

Answer 22

organisation activities may have impact on natural environment. poor behaviour can lead to fines, loss of reputation and legal claims by those affected by poor environmental behaviour

Question 23

Social issues explained

Answer 23

refers to relationship with stakeholders and society as a whole - labour relations, modern slavery can impact reputation

Question 24

Governance issues explained

Answer 24

refers to how an organisation is managed and led - e.g. structure of BOD and how activities are monitored by other stakeholders. Poor governance can lead to significant problems

Question 25

Ethical behaviour explained

Answer 25

underlies all three factors of ESG, about doing the right thing form a moral perspective

Question 26

Mission definition

Answer 26

the business's basic function in society expressed in terms of how it satisfies various stakeholdersq

Question 27

two types of goals

Answer 27

non-operational/qualitative operational/quantitative

Question 28

Purpose of setting operational objectives in a business

Answer 28

implement the mission publicise direction to managers and staff appraise whether decisions are valid assess and control actual performance by using objectives as targets

Question 29

Plan definition

Answer 29

state what should be done to achieve operational objectives

Question 30

Standard and targets definition

Answer 30

specify the desired level of performance

Question 31

three types of standards

Answer 31

physical cost quality

Question 32

sustainability definition

Answer 32

ability to meet the needs of the present without compromising the ability of future generations to meet their own needs

Question 33

what is sustainable development

Answer 33

aims to ensure that economic activity can continue without causing permanent harm to society and the planet. Describes a world of thriving economies and just societies based on what nature can afford

Question 34

Three categories of sustainability (SEE)

Answer 34

Social environmental economic

Question 35

what is social sustainability

Answer 35

meeting the needs of a wider group of stakeholders and society as a whole

Question 36

examples of socially sustainable behaviour

Answer 36

fair treatment of employees avoiding unethical activities and relationships such as bribery and corruption contributing to societies in which organisations operate

Question 37

Economic sustainability - economic activity and growth are sustainable if

Answer 37

they can occur without harming social and environmental sustainability

Question 38

when are organisations activities economically sustainable

Answer 38

if they can provide return to stakeholders over long erm while meeting obligations to society

Question 39

what is considered in the triple bottom line

Answer 39

people planet profit

Question 40

what is climate change

Answer 40

long term shifts in temperatures and weather patterns, some due to natural causes, some due to human activity

Question 41

what is the Paris agreement

Answer 41

legally binding treaty in which 193 parties have committed to reduce carbon emissions. limit increase ni global temperature

Question 42

business impact on environment examples

Answer 42

emission of GHG during production manufacturing products with non recyclable material use of fossil fuels for heating petrol/diesel trucks for transports sending waste to landfill

Question 43

How does climate change impact organisations

Answer 43

extreme weather changing regulatory environment reputational damage

Question 44

four Rs of sustainability

Answer 44

reduce reuse recycle replace

Question 45

SMART

Answer 45

Specific measurable Achievable Relevant Time bound

Question 46

What questions should a mission statement answer

Answer 46

what is our business what is our value to the customer what do we want our business to become what should our business be

Question 47

If directors have run way designed solely to increase prestige in business community - what is the directors aim

Answer 47

maximise sales revenue

Question 48

To determine whether an organisation should be classed as business or not, it would be necessary to enquire as to the nature of its

Answer 48

primary objective

Question 49

What is a company's vision

Answer 49

how the organisation sees itself at some future time