Chapter 1 – Business Environments (Grade 10)

24 question-and-answer flashcards covering risk management, MIS, resources, business policy, culture, structure, market environment elements, and their impacts.

What is the main goal of risk management in a business?

To identify, monitor and minimise the risks to which the business is exposed.

Why should risk management not be viewed as a separate business function?

Because every functional area must incorporate risk-reduction strategies into its daily activities.

What role does Management Information Systems (MIS) play across business functions?

Ensures the required technology and information are available where and when needed in all eight business functions.

Give an example of how the Public Relations function might use MIS.

Providing stakeholders with information through the website, email, Skype, etc.

Name the four internal resources (factors of production) a business needs to operate.

Capital, labour (human resources), entrepreneurship and raw materials (natural resources).

Why are business policies formulated?

To provide direction and a framework for all business functions based on the vision, mission, goals and objectives.

From where do business policies originate?

Top management.

What must management do when circumstances inside or outside the business change?

Review policies to ensure they remain relevant.

Why is it essential that different business policies align with one another?

Policies that contradict each other create confusion and chaos.

Define business culture.

The shared beliefs and values that guide the behaviour and attitudes of internal stakeholders.

List two benefits of a positive business culture.

Teamwork and general buy-in of management decisions (synergy).

What is meant by organisational structure?

The way human resources, authority, responsibility and information are arranged to achieve organisational goals.

How does a clear structure help employees and managers?

It clarifies roles, reporting lines and information flow within the business.

Name four possible organisational structure types.

Functional, line, line-and-staff, matrix (project or divisional structures based on product or region are also options).

What is the market environment?

External elements that affect the business but are outside its control.

List seven key elements of the market environment covered in the notes.

Suppliers, consumers, competitors, strategic alliances, intermediaries, NGOs, and industry regulators.

How can suppliers exert power over a business?

By increasing prices or failing to deliver on time, affecting costs and sales.

Why must a business monitor consumer trends?

To ensure its products continue to meet customer demands and remain competitive.

What two groups must be convinced when the buyer is not the consumer?

Both the buyer and the ultimate user of the product.

What is a competitive advantage and give three factors that can create it?

An edge over rivals; achieved through quality, price, technology, service levels, superior resources or favourable location.

Explain a strategic alliance with one example from the notes.

Two or more firms join forces to exploit market opportunities, e.g., Discovery Vitality card holders getting movie discounts at Ster-Kinekor.

What is the primary role of intermediaries?

Act as ‘middlemen’ linking the business with consumers and providing easier market access.

How do NGOs influence businesses?

They demand ethical behaviour and often seek sponsorships for social or environmental causes.

Give two examples of industry regulators mentioned.

SABS and SACOB (plus Ombudsmen or trade unions).