Chapter 1: Introducing Business

Question 1

What is a business?

Answer 1

A business is an organisation that provides goods and services to consumers in order to make a profit.

Question 2

What are finished goods?

Answer 2

Finished goods are those that are ready for customers to buy and use.

Question 3

What is market share?

Answer 3

Market share refers to the business’s share of the total industry sales for a particular product.

Question 4

What is a profit?

Answer 4

A business makes a profit when the income earned (revenue) is greater than the costs of production (expenses).

Question 5

What is a Multinational Corporation?

Answer 5

A Multinational Corporation (sometimes referred to as a transnational corporation) is a company that has branches in many different countries.

Question 6

What is an objective?

Answer 6

An objective states what an organisation expects to achieve over a set period.

Question 7

What is an economy?

Answer 7

An economy is a system set up to determine what to produce, how to produce and to whom production will be distributed.

Question 8

What is Economic Growth?

Answer 8

Economic growth occurs when the real value of goods and services increases over a set period of time.

Question 9

What is GDP? (Gross Domestic Product)

Answer 9

GDP is the total market value of all final goods produced by a country over a set period of time.

Question 10

What are exports?

Answer 10

Exports refer to the sale of our goods and services to other countries.

Question 11

What is a business environment?

Answer 11

The business environment refers to the surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.

Question 12

What is an internal environment?

Answer 12

The internal environment, sometimes called the micro environment, includes those factors over which the business has some degree of control.

Question 13

What is an external environment?

Answer 13

The external environment includes those factors over which the business has little control. It may be further divided into two categories: operating and macro.

Question 14

What is Corporate Culture?

Answer 14

The corporate culture is a set of mostly unwritten or informal rules that spell out how people are to behave most of the time.

Question 15

What is a policy?

Answer 15

A policy is a general guide to help employees deal with recurring situations.

Question 16

What is operating environment?

Answer 16

A business’s operating environment, sometimes called the task environment, refers to the specific outside stakeholders with whom the business interacts in conducting its business.

Question 17

What is a stakeholder?

Answer 17

A stakeholder is any group or individual who has an interest in, or is affected by, the activities of a business.

Question 18

What is a supplier?

Answer 18

A business’ suppliers are those organisations and individuals that supply the resources that the business needs to conduct its operations.

Question 19

What is competition?

Answer 19

Competition is rivalry among businesses that seek to satisfy a market.

Question 20

What are competitors?

Answer 20

Competitors are businesses that offer rival products or services.

Question 21

What is a sustainable competitive advantage?

Answer 21

A sustainable competitive advantage is the ability of a business to develop strategies that ensure it has an ‘edge’ over its competitors.

Question 22

What are interest groups?

Answer 22

Interest groups are groups of people who attempt to directly influence or persuade an organisation to adopt particular policies.

Question 23

What is a macro environment?

Answer 23

The macro environment is made up of the broad conditions and trends in the economy and society within which a business operates.

Question 24

What is workplace diversity?

Answer 24

Workplace diversity means the multitude of individual differences that exist among people in the workplace.

Question 25

What are business ethics?

Answer 25

Business ethics is the application of moral standards to business behaviour.

Question 26

What is socially responsible management?

Answer 26

Socially responsible management is managing an organisation in such a way that the broader social welfare of the community is taken into consideration when making business decisions.

Question 27

What is conflict of interest?

Answer 27

Conflict of interest occurs when a person takes advantage of a situation or piece of information for his or her own gain rather than for the employer’s interest.

Question 28

What is corruption?

Answer 28

Corruption is a lack of honesty or integrity; using a position of trust or authority to receive favours, often financial bribes.

Question 29

What is a code of conduct?

Answer 29

A code of conduct is a set of ethical standards by which managers and employees should abide.

Question 30

What is a for profit organisation?

Answer 30

A for profit organisation is a business that aims to make a profit.

Question 31

What is a not for profit organisation?

Answer 31

A not for profit organisation is a type of organisation that does not earn profits for its owners. All of the money earned by or donated to a not for profit organisation is used to pursue the organisation’s objectives.

Question 32

Import

Answer 32

To import is to obtain goods or services from other countries.

Question 33

What is a financial objective?

Answer 33

A financial objective is to make a profit by increasing sales, increasing market share or expanding the business.

Question 34

What is a social objective?

Answer 34

All organisations have social responsibilities and often develop social objectives that will fulfil these responsibilities such as community service, provision of employment, social justice and ecological sustainability.

Question 35

What is a personal objective?

Answer 35

A personal objective is an objective made by the managers and owners of a business.