Business Studies: Key Concepts from Lecture Notes (VOCABULARY Flashcards)

Role and nature of a business

• Role of business in society
  • Producing goods and services to satisfy needs and wants
  • Key outcomes: profit, employment, incomes, choice, innovation, entrepreneurship and risk, wealth and quality of life
• Nature of a business (core purposes and activities)
  • Create value through output of goods and services
  • Interactions with customers, suppliers and communities

Types of businesses and classification

• Classification by size
  • Small to medium enterprises (SMEs)
  • Large enterprises
• Classification by geography
  • Local, national, global
• Classification by industry (economic sectors)
  • Primary, secondary, tertiary, quaternary, quinary
• Classification by legal structure
  • Sole trader, partnership, private company, public company, government enterprise

Legal structure and factors influencing choice

• Factors influencing choice of legal structure
  • Size of the business
  • Ownership considerations
  • Finance considerations
  • Influences in the broader business environment
• External influences on legal structure
  • Economic, financial, geographic, social, legal, political, institutional, technological factors
  • Competitive situation and markets
• Internal influences on legal structure
  • Products, location, resources, management and business culture
• Voluntary and involuntary cessation
  • Liquidation as a possible outcome

Stakeholders, growth and decline; life cycle of a business

• Stakeholders and their interests
• Growth and decline dynamics
• Stages of the business life cycle
  • Establishment
  • Growth
  • Maturity
  • Post-maturity
• Responding to challenges at each stage
• Factors that can contribute to business decline

Nature of management

• Features of effective management
• Skills of management
  • Interpersonal, communication, strategic thinking, vision, problem-solving, decision-making, flexibility, adaptability to change
  • Reconciling conflicting stakeholder interests
• Achieving business goals and goal mix
  • Profits, market share, growth, share price, social and environmental outcomes
  • Achieving a balance among these goals
  • Staff involvement, innovation, motivation, mentoring, training
• Management approaches
  • Classical approach: planning, organising and controlling; hierarchical structure; autocratic leadership
  • Behavioural approach: leading, motivating, communicating; teams; participative/democratic leadership
  • Contingency approach: adapting to changing circumstances

Management process and key functions

• Management process involves coordinating key business functions and resources
• Core operations function
  • Goods and/or services; the production process; quality management
• Marketing function
  • Identification of the target market; marketing mix
• Finance function
  • Cash flow statement; income statement; balance sheet
• Human resources function
  • Recruitment, training, employment contracts, separation (voluntary/involuntary)
• Ethical business behaviour as a baseline

Management of change and external/internal influences

• Responding to internal and external influences
• Managing change effectively
  • Identifying the need for change
  • Business information systems
  • Setting achievable goals
  • Resistance to change
  • Management consultants
• Influences in establishing a small to medium enterprise (SME)

Personal qualities and information sources for SMEs

• Personal qualities relevant to SME founders and managers
  • Qualifications, skills, motivation, entrepreneurship, cultural background, gender
• Sources of information for decision-making
• The business idea and competition

Establishment options and market considerations

• Establishment options
  • New, existing, franchise
• Market considerations
  • Goods and/or services; price; location
• Finance considerations
  • Source of funds; cost of finance
• Legal considerations
  • Business name; zoning; health and other regulations
• Human resources considerations
  • Skills; costs; wage and non-wage
• Taxation considerations
  • Federal and state taxes; local rates and charges

The business planning process

• Sources of planning ideas
  • Situational analysis
• Vision, goals and/or objectives
  • Vision; long-term growth goals
• Organising resources
  • Operations; marketing; finance; human resources
• Forecasting
  • Total revenue; total cost
  • Break-even analysis
  • Cash flow projections
• Monitoring and evaluations
  • Sales; budgets; profit
• Taking corrective action
• Key formulas and concepts
  • Total revenue: $TR = P imes Q$
  • Total cost: $TC = FC + VC imes Q$
  • Break-even point (units): $BE_{units} = \frac{FC}{P - VC}$
  • Profit: $ext{Profit} = TR - TC = P imes Q - (FC + VC imes Q)$

Critical issues in business success and failure

• Importance of a business plan
• Management: staffing and teams
• Trend analysis
• Identifying and sustaining competitive advantage
• Avoiding over-extension of finance and other resources
• Using technology
• Economic conditions

Connections to foundational principles and real-world relevance

• Links to economic theory: supply/demand, opportunity costs, and efficiency
• Links to management theory: classical, behavioural, and contingency perspectives
• Real-world relevance: planning, risk management, innovation, and sustainable growth

Note on content scope

• The notes above cover the major and minor points listed in the transcript across Pages 1–3, including concepts of life cycle stages, management styles, planning processes, and critical success/failure factors. Formulas are provided for common planning and financial calculations where applicable.