U1 - The Business Environment

Question 1

What is a business?

Answer 1

The organised effort of a singular people to produce and sell goods to make a profit and satisfy others.

Question 2

What is the main aim of a business?

Answer 2

To make a profit (Money)

Question 3

The 8 benefits of business

Answer 3

Profit
Employment
Incomes
Choice
Innovation
Entrepreneurship and risk
Wealth
Quality of life

Question 4

What is the PIECE acronym

Answer 4

Production, Investment, Employment, Careers, Enterprise

Question 5

Production - PIECE

Answer 5

Production is an activity undertaken by business combining resources to create a good or service to satisfy customer needs and wants.

Reliance on R&D
Reliance of investment
Contribution to GDP
Choice
Contribution to innovation (quality of life)

Question 6

Employment - PIECE

Answer 6

Financial security, slowing crime and drug use allowing stronger community.

Small to medium enterprise (SME) employ a lot of people which allows more money (Disposable income) to circulate locally which creates more employment.

Question 7

Careers - PIECE

Answer 7

Businesses provide careers and long term jobs for people within a community.

Question 8

Enterprise - PIECE

Answer 8

Another word for business and can also mean a project undertaken or to be undertaken

Question 9

Investment - PIECE

Answer 9

Investment occurs through private and public sources.

Question 10

Business Goals and objectives need to be…

Answer 10

SMART objectives

Specific
Measurable
Achievable
Realistic
Timebound

Question 11

Financial goals

Answer 11

Maximise profits
Production efficiency
Maximise growth
Improve share price
Increase market share

INCREASING REVENUE AND PROFITS

Question 12

Non-financial goals

Answer 12

Social Goals - being socially responsible through community service and providing employment

Environmental goals - Sustainable development

Personal goals - Early retirement, personal efficiency

Question 13

Conflicting goals

Answer 13

• Cheap place to operate may be far away.
• Sourcing environmentally friendly resources (cutlery) may not be the cheapest option.

Question 14

Types of business

Answer 14

Size - micro, small, medium, large
Geographical spread - local, national, global
Industry sector - primary, secondary, tertiary
Legal structure - sole trader, partnership, private and public company

Question 15

Classification by legal structure

Answer 15

Sole trader and partnership - Unincorporated
Company (private, public) - Incorporated

Question 16

Limited Liability

Answer 16

Limits each owner’s financial liability to the amount of money he or she ahs paid for business shares.

Question 17

Debt finance

Answer 17

relates to the short and long term borrowing from external sources by a business

Question 18

Overdrafts

Answer 18

When the bank allows a business to overdraw their account up to an agreed limit for a specific time to overcome a temporary cash shortfall.

Question 19

PESTLE External influences

Answer 19

Political - policy and laws on access to resources

Economic - economic cycle, demand, exchange rates

Social - Demographic features, change in interests and trends, change in habits

Technology - Leading edge and established tech as well as the growth of tools and systems (DOM pizza)

Legal - Taxation, Work health, and safety, equal employment

Environmental - Impact of weather, greenhouse gasses, climate change, sustainable business practices

Question 20

Internal Influences on the business

Answer 20

Product
Location
Management
Resources
Business Culture

Question 21

Stakeholders

Answer 21

Any group or individual who has interest in or is affected by the activities of a business.

Shareholders
Managers
Employees
Customers
Community and society
The environment

Question 22

Internal and External stakeholders

Answer 22

Internal - Managers, shareholders, employees

External - Customers, consumers, community, society

Question 23

Entreprenuership

Answer 23

Someone who starts, operates, and assumes the risk of a business venture in the hope of making a profit.

Question 23

Entrepreneurship

Answer 23

Someone who starts, operates, and assumes the risk of a business venture in the hope of making a profit.

Question 24

Why is entrepreneurship risky?

Answer 24

Bankrupcy, financial risk, competitive risks, economic risks

Question 25

Triple Bottom Line

Answer 25

Financial profitability, social impact, and the environmental impact of a business.

Question 25

Corporate Social Responsibility (CSR)

Answer 25

Open and accountable business actions based on respect for people and the community/society. Businesses doing more than just complying with the laws and regulations.