Paper 1 Term 2 Flashcards
(28 cards)
Types of Capital
Fixed Capital
Working capital
Own Capital
Borrowed Capital
What is the purpose of Organizational Culture
Influences people’s actions and attitudes.
Determines the way things are done.
Is the personality of the business.
Shared Understanding of how things are done.
What is Misson
Explains the reason of the businesses existence.
Enables the business to develop strategies to achieve their vision.
Explains what the business does to achieve its vision.
Describes the purpose and basic activities of the business.
What is vision
Explain what the business aims to achieve.
sets out where the business needs to go to be successful.
gives the business a clear idea of what they want to achieve.
the dream of the business and what it wants to achieve in the future.
What are Organisational Resources
Physical- the raw materials equipment machinery and furniture necessary to operate the business successfully
Financial-money invested in the business to acquire production goods such as land buildings and machinery
Human Resources- the people needed to perform the work and keep the organisation functioning
IT Resources- resources that include computers emails and production technology that gives the business an advantage over its competitors
Interrelationship between business and competitors
Competitors are businesses that produce the same product for the same target market
the business needs to be aware of its competitors prices and products
competitors influence the prices and quality of products
business must ensure that they keep abreast of the new trends
Primary Sector
It is the first stage of the production process
deals with the extraction of raw materials from nature
is involved in collecting resources directly from nature
the raw materials are then supplied to other businesses for further processing
Secondary Sector
Is responsible for converting processing and manufacturing of raw materials into final products
it is the link between primary sector where raw materials are extracted from nature
deals with distribution to other businesses
includes the manufacturing factories construction and energy generation
Tertiary sector
Distributes goods processed in the secondary sector to consumers
aims to bring products and services within the reach of the consumer
activities include all activities that distribute products from the secondary sector
industry that offers services to consumers and other businesses
Formal Sector
Refers to businesses that are registered and pay tax
is within the mainstream of the economy
includes small medium and large businesses
keeps accounting records and audit their books
Informal Sector
Refers to businesses that are not registered and do not pay tax
Includes activities by people who cannot find jobs
Fall outside mainstream economy
Not added to GDP figures
What are the business Functions
General management
Administration
Financial
Purchasing
Public relations
Production
Marketing
Human resources
National Credit act (NCA)
Was introduced to provide both credit providers and credit applicants guidelines regarding their rights and responsibilities
Applies to all businesses that sell on credit
Purpose of National Credit Act
Promotes the development of the credit market that is accessible to all South Africans
Encourages responsible buying
Discourages reckless credit granting
Educate consumers on making the right choice
Rights outlined in the NCA
Consumers have the right to apply for credit
Consumers have the right to receive info in one’s official languages
Consumer has the right to be protected from unfair discrimination in credit granting
Consumer has a right to be given reasons on why an application for credit has been refused
Sources of finance
Bank overdraft -short term loan added onto the account of the entrepreneur
Asset-based loan: money lent to successful businesses that want to expand further
Grants : money provided to small businesses by the government
Bank loan : money borrowed from the bank and has paid over a period of time
What is Quality
The ability to satisfy consumer needs
Includes learning from mistakes and continuously improving all aspects of the business
A degree of excellence to which a product satisfies the required needs of the consumer
Refers to the products that satisfy/exceed expectations
Quality control
Inspection of the final product to ensure that it meets all required standards
Quality assurance
Carried out during and after the production process to ensure required standards have been met at every stage of the process
Quality indicators in public relations
Contribute to community
Release good quality press releases
Improve positive image of business
What is leadership
Inspires people
People Orientated
Motivational approach
Leader does not hold a managerial position
What is management
Ensures that tasks given to subordinates are completed
Task Orientated
Instructional approach
Manager holds a managerial position
Responsibilities of Top management
Reports to a board of directors
Takes long term strategic decisions
Determines the vision of the business
Oversees activities of the other functions
Responsibilities of middle management
Responsible for specific departments in the business
Implements vision and plans for top management
Takes medium term tactical decisions
Concerned with implementing plans made by top management
