Chapter 1 – Business Environments part 2

Question & Answer flashcards covering micro environment elements, all eight traditional business functions (plus two newer ones), key management tasks, purchasing ‘five rights’, production considerations, marketing activities, financial capital types, administration duties, HR legislation, and public-relations goals.

What are the three levels of a business environment?

Micro (internal), Market (external), and Macro (external) environments.

Which environment is completely internal to the business?

The Micro environment.

Name any three elements found in the micro environment besides business functions.

Possible answers: business policy, business culture, structure, resources.

How many traditional business functions are normally identified in a firm?

Eight business functions.

Which business function develops the strategic plan and overall direction of the company?

General Management.

What four components usually make up a strategic plan?

Vision, Mission, Goals & Objectives, and Business Strategy.

Define a business’s Vision.

A future-oriented road map describing where the business wants to be, based on its history and current situation.

Define a business’s Mission.

A refinement of the vision explaining why the business exists—who we are, what we do, and our values.

Differentiate between Goals and Objectives.

Goals are long-term accomplishments; Objectives are short-term targets that help achieve the goals.

What does the business strategy outline?

The overall plan of action and allocation of resources needed to achieve goals and objectives.

List the classic management tasks performed by General Management (any four).

Planning, Organising, Leading, Controlling, Communicating, Coordinating, Decision-making, Delegating, Disciplining, Motivating.

Which management task involves comparing actual results with standards to find deviations?

Controlling.

Which task focuses on combining factors of production to meet business objectives?

Organising.

What is the purpose of Delegating?

To distribute work, reduce management’s burden, and empower employees while the manager retains final responsibility.

State the primary aim of the Purchasing function.

To obtain the right resources of the correct quality, quantity, price, place, time, and from the right supplier.

List the ‘Five Rights’ (plus one) of Purchasing.

Right Quality, Right Quantity, Right Price, Right Place, Right Time, Right Supplier.

Which function combines natural resources, labour, capital, and entrepreneurship to make products?

Production function.

Why must manufacturing cost (input) be kept as low as possible?

To maximise profit without sacrificing product quality (output).

Name three production methods a firm might choose from.

Mass production, Batch production, Jobbing (job production).

Give four qualities a product should have to satisfy customers as noted by the Production function.

Safe, Reliable, Durable, Good after-sales service.

What does the product life cycle concept help Production and Marketing do?

Develop or evolve products over time to meet target-market needs and maintain customer loyalty.

What is the first major task of the Marketing function?

Conduct market research to identify demand, price, place, and promotion methods for a product/service.

List at least four variables often used to define a target market.

Age, Disposable income (LSM), Hobbies/interests, Gender, Occupation, Marital status.

Name three promotional tools the Marketing department might use.

Advertising, Sales promotion, Personal selling, Listening to customers and monitoring feedback.

Differentiate between Fixed Capital and Working Capital.

Fixed Capital (long-term) buys fixed assets like land, buildings, equipment; Working Capital (short-term) funds inventory, pays creditors, and covers operating expenses.

Why must the Financial function prepare budgets?

To plan, monitor finances, and prevent overspending.

Which function collects, processes, stores, and supplies accurate information for decision-making?

Administration function.

What is the main responsibility of the Human Resources (Human Capital) function?

Recruiting, selecting, developing, remunerating, and retaining employees with the right skills and numbers.

Name two pieces of legislation that directly affect the HR function.

Any two: Labour Relations Act (LRA); Basic Conditions of Employment Act (BCEA); Broad-Based Black Economic Empowerment Act (BBBEE); Employment Equity Act; Skills Development Act (SDA).

State the primary goal of the Public Relations function.

To ensure the business’s image (brand) is strong, positive, ethical, and to build good relationships with internal and external stakeholders.

Identify the two additional business areas suggested by some theorists beyond the original eight functions.

Risk Management and Information Systems.