Business Studies - Factors of Production and Entrepreneurship

Flashcards about Factors of Production, Capital, Natural Resources, Labour, Entrepreneurship, Trade Unions, Labour Laws, and Entrepreneurial Characteristics.

Factors of Production

Resources (CELL) people use to produce goods and services; Land, Labour, Capital, and Entrepreneurship.

Capital

The machinery, tools, and buildings humans use to produce goods and services.

Capital Characteristics

Capital formed through savings and profits, initially supplied by the owner(s), and depreciates due to wear and tear.

Own capital

Investment made by the owner (sole trader, partners, shareholders).

Borrowed capital (foreign capital)

Capital borrowed over different periods (long term or fixed capital - repaid over more than 12 months and / or over shorter periods of time – working capital is repaid in less than 12 months).

Fixed capital

Used to buy/invest in fixed assets such as land & buildings, vehicles, and equipment. Remains in the business for a long period of time (long term assets).

Working Capital

Used to purchase stock and to keep cash in the business to pay for everyday expenses. Used to cover the day -to day running of the business.

Capital Budget

A long -term financial planning tool to determine fixed capital requirement e.g. how much money will be needed to buy land & buildings, vehicles and equipment.

Cash Budget

A short -term financial planning tool used to plan working capital requirements.

Natural Resources

Include all raw materials that are converted into finished products. Limited and usually can't be replaced by humans.

Labour

All efforts (mental and physical) to create goods and services. Also referred to as human resources.

Unskilled labour

No formal qualifications. Examples: Gardener, Packer, Porter.

Semi-skilled labour

Limited education, might have on-the-job training. Examples: Cashier, Forklift operator.

Skilled labour

Completion of matric and additional training. Examples: Hairdresser, Plumber, Electrician.

Professional labour

Minimum tertiary qualification (degree or diploma). Examples: Lawyer, Accountant, Civil Engineer.

Wage

Weekly payment.

Salary

Monthly payment.

Salary plus benefits

The business pays a fixed salary and adds additional benefits like medical aid, pension, and other perks.

Cost to company

The business pays a total amount that includes all the costs (salary plus any benefits like medical aid, pension fund, travel allowances, etc.).

Remuneration (Employer Responsibility)

Ensuring that employees are paid fairly and on time.

Employee Benefits (Employer Responsibility)

Offering perks such as health care, retirement plans, and wellness programs.

Workplace Safety (Employer Responsibility)

Creating a safe and healthy working environment.

Professional Development (Employer Responsibility)

Offering opportunities for skills training, workshops, and career growth.

Trade union

An organisation made up of employees within a specific industry or occupation, formed to protect and advance their members' rights and improve working conditions.

Collective bargaining

The process where employees (usually represented by trade unions) negotiate with employers to address issues like wages, working conditions, and grievances.

Strike

Occurs when employees refuse to work in an effort to compel the employer to meet their demands.

Lockout

When an employer denies employees access to the workplace, typically as a response to a strike.

Picketing

Involves employees protesting outside the workplace to make their voices heard. The demonstration must be peaceful and organized by a registered trade union.

Stay away

A form of protest where employees refuse to come to work to support socio-economic issues. The action must be authorized by a registered union.

Work-to-rule (Go-slow)

Employees continue to work, but they only perform the minimum required tasks at a much slower pace.

Essential services

Employees in essential services may not strike and employers may not lock out such employees.

Employer organisations

Seeks to coordinate the behavior of their member companies in matters of mutual interest.

Fair employment practices - Labour Laws

Basic Conditions of Employment Act, Employment Equity Act, Broad-Based Black Economic Empowerment.

Basic Conditions of Employment Act (BCEA)

Aims to improve the working conditions of vulnerable workers. Includes: working hours, leave, sick leave, public holidays, notice of termination of contract, deductions.

Working hours (BCEA)

A max of 45 hours per week may be worked, with a meal interval after 5 hours of work.

Annual Leave (BCEA)

21 consecutive days of paid leave after 12 months of full-time employment.

Maternity (now parental leave) leave (BCEA)

Four consecutive months.

Sick leave (BCEA)

30 working days per 36 month cycle (3 year) is allowed.

Employment Equity Act (EEA) - 1998

Aims to eliminate discrimination and promote fairness in employment by implementing affirmative action policies.

Broad-based Black Economic Empowerment (BBBEE)

A policy that goes beyond the Employment Equity Act to promote the economic participation of historically disadvantaged groups in business ownership, management, and economic development.

Creative (Entrepreneurial Characteristic)

Need to constantly come up with new ideas and innovative solutions. Think outside the box and don't settle for the status quo.

Passionate (Entrepreneurial Characteristic)

Drives entrepreneurs to push through challenges. Without passion, there’s no purpose or motivation to overcome the many obstacles they will face.

Motivated (Entrepreneurial Characteristic)

Self-driven and don't need others to push them. Their motivation comes from a deep belief in their ideas and goals.

Optimistic (Entrepreneurial Characteristic)

Need to remain hopeful and positive, focusing on opportunities rather than obstacles. They view challenges as chances to grow and improve, not as roadblocks.

Future-oriented (Entrepreneurial Characteristic)

Focused on the future, setting clear goals and striving to achieve them. They have a vision that drives their decisions.

Persuasive (Entrepreneurial Characteristic)

Often need to convince others to believe in their ideas—whether it's customers, investors, or potential employees. Being persuasive helps secure buy-in from stakeholders.

Flexible (Entrepreneurial Characteristic)

Need to be adaptable, adjusting to changing market conditions or customer needs. They are willing to learn new skills and change strategies if required.

Resourceful (Entrepreneurial Characteristic)

Problems will arise, and entrepreneurs must be able to solve them efficiently. Entrepreneurs are good at making the most of available resources—whether time, money, or people.

Adventurous (Entrepreneurial Characteristic)

Often involves taking calculated risks. Entrepreneurs are willing to step into the unknown, but they do so with careful planning and foresight.

Decisive (Entrepreneurial Characteristic)

Entrepreneurs make quick decisions. Procrastination is their enemy; they act fast and take the necessary steps to seize opportunities.

Intrapreneur

An employee who acts like an entrepreneur within an existing organization. They take on the innovative and entrepreneurial spirit of an entrepreneur, helping to create and drive new projects or innovations within a company.

Sociopreneur

A person that uses innovative business ideas to solve social (community) problems. The aim is not to create a profit for themselves, but rather to use profits to achieve widespread social improvements.

Ecopreneur

This person creates an entrepreneurial business by looking at ways to solve environmental problems. They use innovation to create environmental products/ services and processes that assist in solving environmental problems.

Tenderpreneur

This person will develop an entrepreneurial business based around a tender he/she would like to apply.

Technology Developer (Technopreneur)

A person who develops a new unique technology concept that can drive a business.

Technology User (Technopreneur)

A person who can identify a new technology development and understands how the concept can best be applied to meet customers' needs/wants (market needs).