Business Management Flashcards

Flashcards based on lecture notes covering the role of organizations, economic systems, need-satisfying institutions, entering the business world, small businesses, and business management as a science.

What role do organizations play in satisfying the needs of society?

They transform limited resources into products and services that satisfy societal needs.

How do organizations allocate resources to satisfy needs?

By efficiently using scarce resources like natural, human, and capital resources to produce goods and services.

What is the economic principle guiding business management?

Achieving maximum output with minimum input.

How do organizations contribute to society beyond producing goods and services?

By creating jobs, distributing income, innovating, adapting to changing needs, and promoting sustainability/social responsibility.

What are the main types of economic systems?

Market economy, command economy, socialism, and mixed economy.

What are the key features of a market economy?

Private ownership of resources, decisions made by supply and demand, self-interest-driven actions, and limited government intervention.

What are the pros and cons of a market economy?

Pros: Encourages innovation and efficiency, high consumer choice. Cons: Can lead to inequality and poor public service access.

What are the key features of a command economy?

Government ownership and control of resources, state-determined production and pricing.

What are the pros and cons of a command economy?

Pros: Ensures equal access to basic needs, reduces unemployment/poverty (in theory). Cons: Inefficiency, limited personal freedom/innovation.

What are the key features of socialism?

State-owned industries/services combined with private sectors, focus on reducing inequality and providing social welfare.

What are the pros and cons of socialism?

Pros: Emphasizes social equality and welfare, universal access to essential services. Cons: High taxes, inefficient public services, limited incentive for personal enterprise and profit.

What are the key features of a mixed economy?

Combination of market and command economy features, both private and public sectors, government regulation to correct imbalances.

What are the pros and cons of a mixed economy?

Pros: Balances freedom and fairness, government intervention in healthcare/education/welfare. Cons: Inefficiencies or corruption from government intervention.

What is the role of need-satisfying institutions?

To use limited resources to produce goods and services that meet the needs and wants of society.

Besides businesses, what other institutions contribute to satisfying needs?

Government organizations (e.g., education, policing) and non-profit organizations (e.g., charities, NGOs).

What are some ways to enter the business world?

Starting your own business (entrepreneurship), buying an existing business, franchising, joining a family business, partnership/joint venture, becoming an intrapreneur, joining the corporate sector.

What skills are required for starting your own business?

Innovation, planning, risk-taking, leadership.

What are the benefits of buying an existing business?

Existing customer base, suppliers, and operational systems.

What is franchising?

Buying the rights to operate under a successful business model and brand.

What are the challenges of joining a family business?

Balancing personal and professional relationships.

What are the benefits of becoming an intrapreneur?

Lower risk than entrepreneurship with potential for high reward and career growth.

What is the role of small businesses in the economy?

Satisfying specific/local needs, creating jobs, driving economic growth, fostering innovation, encouraging entrepreneurship, and supporting larger businesses.

How do small businesses contribute to need satisfaction?

By offering customized services, niche products, and personalized customer care.

How do small businesses contribute to economic growth and development?

Through GDP growth, expanding the tax base, and promoting regional development.

Why is business management considered a science?

It has a clearly defined subject of study, a systematic body of knowledge, and principles that are tested and practically applied.

What is the focus of business management as a science?

How organizations can achieve their financial and non-financial goals efficiently.

What is the normative nature of business management?

It sets guidelines or norms for how things should be done to achieve goals.

In what way is business management also an art?

It relies on creativity, intuition, and experience in addition to data, strategy, and logic.