BUSINESS MANAGEMENT CHAPTER 1 QUESTIONS AND ASWERS A+
GRADED. Buy Quality Materials!
Entrepreneur
An individual who takes a concept or idea and some resources to produce a profit
Intrapreneur
An individual employed by a large organisation to develop new products and services
Unincorporated
Owner/s = Business - One entity - SOLE/PARTNERSHIP
Incorporated
Owner and Business are two separate entities - COMPANY
Merger
Two businesses combine to form a larger business
Acquisition
One business takes over another
Takeover
An unwanted acquisition
Joint Venture
When two business agree to combine resources for a specific goal and time by creating
a 'separate' business
Strategic Alliance
When a group of businesses agree to work together for mutual benefit
Stakeholder
An individual with a vested interest in the business
Shareholder
An individual who owns shares in a company
Franchising
Selling the right to sell a concept/product
Globalisation
The process by which the world's regional economies are becoming one integrated
global unit
Profits =
Total Revenue - Total Costs
Total Cost =
Fixed Cost + Variable Cost
Average Cost =
Total Cost/Quantity Produced
4KBF's
Operations, Marketing, HR, Finance
Primary Sector
Raw Materials
Secondary Sector
Consumer Goods
Tertiary Sector
General Services
, Quaternary Sector
IT and Media Services
Horizontal Integration
2 businesses in the same line integrate
Forward Vertical Integration
1 business integrates forward in production chain
Backward Vertical Integration
1 business integrates backward in production chain
Conglomeration/Diversification
2 unrelated businesses integrate
Business Plan
1. Business Idea + Unique Selling Point
2. Business Organisation - Logistics
3. 4KBF's
4 Resource Inputs
Human, Physical, Financial, Enterprise
Capital Intensive Production Process
Use a large proportion of land and/or machinery
Labour Intensive Production Process
Uses a large proportion of labour and can involve either low-skilled or highly skilled
workers
Ads and Disads of Sole Traders
Ads and Disads of a Partnership
Ads and Disads of a Company
Private Company
PTY/PTY Limited - Can only sell shares in the company privately
Public Company
LTD/Limited - Can sell shares on the share market
Cooperative
• Business is owned and run by all members.
• Priority is not to make profit but to further their social purpose and cover costs.
Microfinanciers
• Like a bank
• Small loans - Low interest
• Help poor people
Public-Private Partnerships (PPP)
• Business created between public and private sector
• Usually public provides finance and private provides expertise
Non-Government Organisation (NGO)
Enterprise which supports a social cause
Charity
GRADED. Buy Quality Materials!
Entrepreneur
An individual who takes a concept or idea and some resources to produce a profit
Intrapreneur
An individual employed by a large organisation to develop new products and services
Unincorporated
Owner/s = Business - One entity - SOLE/PARTNERSHIP
Incorporated
Owner and Business are two separate entities - COMPANY
Merger
Two businesses combine to form a larger business
Acquisition
One business takes over another
Takeover
An unwanted acquisition
Joint Venture
When two business agree to combine resources for a specific goal and time by creating
a 'separate' business
Strategic Alliance
When a group of businesses agree to work together for mutual benefit
Stakeholder
An individual with a vested interest in the business
Shareholder
An individual who owns shares in a company
Franchising
Selling the right to sell a concept/product
Globalisation
The process by which the world's regional economies are becoming one integrated
global unit
Profits =
Total Revenue - Total Costs
Total Cost =
Fixed Cost + Variable Cost
Average Cost =
Total Cost/Quantity Produced
4KBF's
Operations, Marketing, HR, Finance
Primary Sector
Raw Materials
Secondary Sector
Consumer Goods
Tertiary Sector
General Services
, Quaternary Sector
IT and Media Services
Horizontal Integration
2 businesses in the same line integrate
Forward Vertical Integration
1 business integrates forward in production chain
Backward Vertical Integration
1 business integrates backward in production chain
Conglomeration/Diversification
2 unrelated businesses integrate
Business Plan
1. Business Idea + Unique Selling Point
2. Business Organisation - Logistics
3. 4KBF's
4 Resource Inputs
Human, Physical, Financial, Enterprise
Capital Intensive Production Process
Use a large proportion of land and/or machinery
Labour Intensive Production Process
Uses a large proportion of labour and can involve either low-skilled or highly skilled
workers
Ads and Disads of Sole Traders
Ads and Disads of a Partnership
Ads and Disads of a Company
Private Company
PTY/PTY Limited - Can only sell shares in the company privately
Public Company
LTD/Limited - Can sell shares on the share market
Cooperative
• Business is owned and run by all members.
• Priority is not to make profit but to further their social purpose and cover costs.
Microfinanciers
• Like a bank
• Small loans - Low interest
• Help poor people
Public-Private Partnerships (PPP)
• Business created between public and private sector
• Usually public provides finance and private provides expertise
Non-Government Organisation (NGO)
Enterprise which supports a social cause
Charity
