Business Operations, Environments, and Management Lecture Notes

Comprehensive practice flashcards covering business environments (micro, market, macro), management levels and tasks, leadership, credit purchasing, stock control, public relations, and organisational structures.

What are the advantages of credit purchasing?

No discrimination, buying on an affordable repayment, and damaged goods can be replaced.

What are the disadvantages of credit purchasing?

The risk of unsettled debts, credit can be refused, and debtor accounts should be sent out to debtors.

Why is stock control important?

It keeps correct levels of stock, records the cost and selling prices of stock, and identifies theft.

What are the four types of capital and their characteristics?

Fixed capital (fixed assets), working capital (pays for daily activity), own capital (from owner), and borrowed capital (from financial institutions).

How does owned capital differ from borrowed capital?

Owned capital comes from the owner, is not a liability, and is permanent capital. Borrowed capital comes from financial institutions, is a liability, and is temporary capital.

What is the difference between internal and external public relations?

Internal public relations promotes a good image to employees, while external public relations promotes a good image to those outside the company.

What are the methods used for public relations?

Media, direct contact, brochures, and telephone.

What activities demonstrate the importance of public relations?

Volunteering, annual reports, and sponsoring community events.

What are the steps in the purchasing procedure?

1. Determine need for product, 2. Determine price, 3. Choose suitable supplier, 4. Place order, 5. Collect order, 6. Pay supplier, 7. Distribute stock.

What are the eight business functions?

Administration, financial, purchasing, public relations, human resources, production, general management, and marketing.

What are the roles and characteristics of top management?

Consists of the board of directors; responsible for long-term strategic decisions, directing, controlling, and managing risks.

What are the responsibilities of middle management?

Making medium-term tactical decisions and implementing the vision and plans.

What are the focus areas of lower management?

Motivating employees and handling short-term tasks.

What are the five core management tasks?

Planning, organizing, leadership, controlling, and risk management.

What is the primary role of the administration function?

Handling information and data, and managing general office work.

What is the difference between data and information?

Data consists of raw facts that must be processed before use, while information is processed data that must have a backup.

What is the purpose of the financial function?

Determining how much capital the business needs and ensuring the business generates enough income.

What are three sources of finance?

Grants, investments, and angel funding.

What are the components of the market environment?

Market, suppliers, competitors, intermediaries, and civil society.

What is a strategic alliance and why is it formed?

A joint venture between two or more businesses working together to obtain expertise or become more competitive in the market.

Why does competition pose a challenge to a business?

It keeps prices low and reduces profit, businesses may close if unable to compete, and it reduces market share and target market.

What is the macro environment?

Also known as the external environment, it exists outside the business, cannot be controlled, but influences the business.

What are the components of the macro environment?

Physical, economic, legal and political, and institutional.

How does leadership differ from management in business operations?

Leadership is people-orientated, uses a motivational approach, and influences human behaviour. Management is task-orientated, uses an instructional approach, and guides human behaviour.

What are the four types of organisational resources?

Physical, financial, human, and information and technological.

What is the definition of leadership?

The ability of an individual to inspire, influence, and motivate subordinates.

What is the purpose of organisational structures?

To ensure smooth and efficient functioning, work towards goals, and show connections between positions and tasks.

What factors influence an organisational structure?

Size of company, technology, resources, and strategic goals.

What are the four types of organisational structures?

Line, project, matrix, and functional organisational structures.

What is the micro environment?

The environment where the business operates that consists of the business itself and includes everything inside the business.

What are the components of the micro environment?

Organisational structure, organisational resources, organisational culture, the eight business functions, vision, mission, goals, and objectives.

How are vision, mission, goals, and objectives defined?

Vision is a statement explaining what the business wants to achieve; mission is the reason for business existence; goals are long-term objectives; and objectives are short-term tasks.

What is organisational culture?

How things are done in the business.