Business Activity

What is the purpose of business activity?

To provide goods/services, meet needs and wants, and create value.

What is a business function?

A department's tasks that help a business achieve its goals.

Why do businesses have different functions?

Different functions have different skills and responsibilities.

What is an organisational structure?

A diagram showing how people and departments are organised.

What does an organisational structure show?

Who reports to whom and how work flows.

What is general management?

Planning, organising, leading and controlling the business.

What does top-level management do?

Sets overall goals and makes major business decisions.

What does middle management do?

Turns top management's plans into actions for departments.

What does lower-level management do?

Supervises employees and manages day-to-day work.

What does the purchasing function do?

Buys the resources, materials and goods a business needs.

What does the production function do?

Turns resources into finished goods or services.

What does marketing do?

Identifies customer needs and promotes products to customers.

What does PR do?

Builds and maintains a positive relationship and reputation.

What does HR do?

Manages employees, including hiring, training and wellbeing.

What does the finance function do?

Manages money and provides financial information for decisions.

What does the administration function do?

Handles information, records and office support for the business.

Why must business functions work together?

Coordination helps the business achieve its objectives efficiently.

Why is communication between functions important?

It prevents mistakes and helps departments coordinate their work.

What is a business objective?

A stated, measurable target that a business aims to achieve.

Why are business objectives important?

They give the business direction and help measure success.

What are common business objectives?

Profit, growth, survival, market share and customer satisfaction.

Can business objectives change over time?

Yes. Changes in the economy, business size or priorities can change them.

What is an entrepreneur?

Someone who starts and runs a business and takes financial risks.

What qualities can an entrepreneur need?

Creativity, determination, confidence, risk-taking and problem-solving.

What is business enterprise?

The activity of starting and running businesses to provide goods/services.

How can businesses help develop a country?

They create jobs, income, products, tax revenue and economic growth.

What is added value?

The increase in a product's value created by a business.

What is the formula for added value?

Added value = selling price − cost of inputs.

How can a business add value?

Improve quality, branding, design, convenience or customer service.

What is a stakeholder?

Anyone with an interest in or affected by a business.

What is an internal stakeholder?

Someone inside the business, such as an employee or manager.

What is an external stakeholder?

A person or organisation outside the business with an interest in it.

What are employees interested in?

Pay, job security, working conditions and career opportunities.

What are owners/shareholders interested in?

Profit, growth and the value of their investment.

What are customers interested in?

Good-quality products, fair prices and good service.

What are suppliers interested in?

Regular orders, reliable payments and long-term relationships.

What is stakeholder conflict?

When different stakeholders want different outcomes.

Why might employees and owners conflict?

Employees may want higher wages while owners want higher profits.

Why might customers and owners conflict?

Customers may want lower prices while owners want higher profits.

What is the triple bottom line?

Measuring business performance using people, planet and profit.

What does 'people' mean in the triple bottom line?

Considering the effects of business decisions on people and society.

What does 'planet' mean in the triple bottom line?

Considering the environmental effects of business activities.

What does 'profit' mean in the triple bottom line?

Considering the business's financial performance and profit.

What is corporate social responsibility (CSR)?

Responsible business behaviour considering social, economic and environmental impacts.

Why is CSR an important business objective?

It can improve reputation and consider impacts on people and the environment.

What are business ethics?

Principles about what is considered right and fair in business.

What is an ethical issue in business?

A situation where a business must decide what is right or fair.

What are common ethical issues in business?

Fair pay, worker conditions, misleading advertising and environmental damage.

Why can ethical decisions be difficult?

Ethical choices may increase costs or conflict with profit goals.

How can marketing create value?

By understanding customer needs and communicating the product's benefits.

How can HR improve employee wellbeing?

Through safe conditions, support, training and fair treatment.

How does finance support decision-making?

It provides information about costs, revenue, profit and budgets.

How does administration support operations?

It manages records, information and communication needed for daily work.