Unit 1: 1.1 + 1.2

Question 1

Business functions

Answer 1

human resource, marketing, finance, operations.

Question 2

What is a business?

Answer 2

organization that tries to meet the needs and wants of people.

Question 3

What is an entrepreneur?

Answer 3

someone who takes the financial risk. (also reap the rewards)
invests
idea for new business
accepts responsibility
accepts possible risk of failure

Question 4

What does human resources do?

Answer 4

management of people within company. (includes recruitment and workforce planning) to work towards organizational objective.

Question 5

What does finance do?

Answer 5

management of money, credit banking, and investments. keeping track of cash flows in the company.

Question 6

What does marketing do?

Answer 6

promoting company’s products/services to more customers this is what connects the customers to the company.
does so by getting the right product at the right price in the right place with the right promotion.

Question 7

What does operations do?

Answer 7

or some times referred to as production and controls the procedures of the production process. converts materials into finished product, making them ready for sale.

Question 8

What is the secondary sector?

Answer 8

manufacturing of goods… ADD VALUE to natural resources to sell.

Question 8

What is the primary sector?

Answer 8

extraction/conversion of resources

Question 9

What is the tertiary sector?

Answer 9

provide a service. (transportation, wholesale/retail, advisor/consult)

Question 10

What is the quaternary sector?

Answer 10

knowledge based/research heavy and development, highly educated

Question 11

Horizontal integration

Answer 11

business merge with another business in the same sector. they do this to ADD VALUE or make their service better.

Question 12

Vertical integration

Answer 12

business merge with another business in a different sector. they do this so that it is efficient and don’t make extra.
ex: wegmans working in all sectors

Question 13

Why start a business? (pros)

Answer 13

1. losing a job may provide needed push
2. independence
3. financial security
4. seeing a market opportunity
5. social connections may urge them to start
6. risk-taking or challenge-seeking personality

Question 14

The problems faced by businesses in the first years? (cons)

Answer 14

1. competition
2. building the customer base
3. lack of money
4. lack of record keeping
5. poor management skills
   6.changes in the working environment
   *these problems can appear at any stage of business but usually fail during the first months being riskiest of all.

Question 15

What is a business plan?

Answer 15

a written document that describes a business, its objectives and strategies, the market it is in, and its financial forecasts.

Question 16

Advantage of a business plan?

Answer 16

allows you to fully investigate own business idea and to clarify thoughts and ideas. allows others to examine plan and give feedback

Question 17

Economic development and its connection to business sectors?

Answer 17

the more economically developed a place is, the higher up in the sectors they are.

Question 18

How does one start a business?

Answer 18

business plan to present to potential investors
get money (capital) loans savings investments, IPO
register with government organization
set-up bank account, way that customers pay
market, outreach selling service

Question 19

What four things are important for the success of a business?

Answer 19

CESC
change
ethics
sustainability
creativity
to ADD VALUE and make better

Question 20

The creativity in CESC

Answer 20

vital for a business to remain innovative, relevant, and competitive.
there is two types of creativity: adaptive and innovative

Question 21

Adaptive creativity

Answer 21

ADD VALUE to a product or service

Question 22

Innovative creativity

Answer 22

create a brand NEW product/service

Question 23

The sustainability in CESC

Answer 23

conserving resources, make things last longer.
there are three types of sustainability: environmental, social, economic

Question 24

Environmental sustainability

Answer 24

natural resources, using them wisely

Question 25

Social sustainability

Answer 25

using resources in such a way that benefits the community that we live in, maximize the quality of life

Question 26

Economic sustainability

Answer 26

use resources responsibly/effectively in terms of money

Question 27

The ethics in CESC

Answer 27

what is right. fair or unfair?

Question 28

The change in CESC

Answer 28

modification or change through creativity = ADD VALUE

Question 29

Types of businesses

Answer 29

public sector or private sector

Question 30

Public sector

Answer 30

is government operated which means: access for everyone funded by TAXES not worried about profit

Question 31

Private sector

Answer 31

owned by individuals which means: driven by profit add value to make better

Question 32

Types of private sector businesses

Answer 32

sole-trader partnership small/mid sized businesses large corporations and multinationals professional and trade associations trade unions

Question 33

What is a sole trader?

Answer 33

business that is owned/operated by ONE.

Question 34

Advantages of sole traders

Answer 34

autonomy get all profit easy to start and costs less decisions made FAST personalize for customer do not have to share financial records with public

Question 35

Disadvantages of sole traders

Answer 35

competition unlimited liability workload lack of continuity (consistent operation of business) higher cost of production compared to large scale companies

Question 36

What is a partnership?

Answer 36

business operated/owned by 2 or more people.

Question 37

Advantages of a partnership

Answer 37

specialize (divide work the 4 functions of business) continuity (consistency of business) more financial strength do not have to publicize financial records

Question 38

Disadvantages of a partnership

Answer 38

unlimited liability conflict between owners and on decisions there must be a large amount of mutual trust may still face money problems

Question 39

What are companies?

Answer 39

business that is owned by its shareholders

Question 40

Types of limited companies?

Answer 40

private and public

Question 41

What are private limited companies?

Answer 41

business operated/owned by family and friends. only family and friends can invest money

Question 42

Advantages of private limited companies

Answer 42

limited liability (only responsible for what they invest in) control (by ONLY family and friends)

Question 43

Disadvantages of private limited companies

Answer 43

lack of investment opportunities creating money problems

Question 44

What are public limited companies? (join-stock companies)

Answer 44

business operated/owned by investors. anyone can invest and get a share

Question 45

Advantages of public limited companies

Answer 45

limited liability access to money by investment

Question 46

Disadvantages of public limited companies

Answer 46

loss of control over the company and decisions bc so many people are owners regulations and laws to obey

Question 47

Floatation

Answer 47

private company move to public using an IPO (initial public offering) where the PLC sells all or part of its company to the stock market to gain capital.

Question 48

Privatization

Answer 48

public move to private meaning they buy all the shares back

Question 49

Why would investors buy shares in limited company?

Answer 49

dividends capital growth voting power

Question 50

Dividends

Answer 50

payment to shareholders based on the profit of the company.

Question 51

Capital growth

Answer 51

overtime shares may increase or decrease and the shareholders hope to in the future sell the share for higher

Question 52

Voting power

Answer 52

able to influence decisions made in company and vote more the more shares they hold.