Business Environment and Structure

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6 Questions

What are the five external factors that affect a business?

Economic, Social, Technological, Political, and Environmental factors

What are the four main types of business ownership?

Sole Proprietorship, Partnership, Corporation (public and private), and Cooperative

What are the three main management functions, excluding controlling?

Planning, Organizing, and Leading

What are the four elements of the marketing mix?

Product, Price, Place, and Promotion

What are the two main financial statements used in financial management?

Balance Sheet and Income Statement

What is the autocratic leadership style characterized by?

Making decisions without input from others

Study Notes

Business Environment

  • The external factors that affect a business, including:
    • Economic factors (e.g. recession, inflation)
    • Social factors (e.g. demographics, lifestyle changes)
    • Technological factors (e.g. innovations, automation)
    • Political factors (e.g. government policies, laws)
    • Environmental factors (e.g. sustainability, climate change)

Business Structure and Organization

  • Types of business ownership:
    • Sole proprietorship
    • Partnership
    • Corporation (public and private)
    • Cooperative
  • Business organization:
    • Functional structure (e.g. marketing, finance, HR)
    • Divisional structure (e.g. product-based, geographic)
    • Matrix structure (combination of functional and divisional)

Management and Leadership

  • Management functions:
    • Planning (e.g. goal-setting, strategy)
    • Organizing (e.g. resource allocation, delegation)
    • Leading (e.g. motivation, communication)
    • Controlling (e.g. monitoring, feedback)
  • Leadership styles:
    • Autocratic
    • Democratic
    • Laissez-faire
    • Transformational

Marketing and Finance

  • Marketing mix:
    • Product (e.g. features, branding)
    • Price (e.g. pricing strategies, discounts)
    • Place (e.g. distribution channels, logistics)
    • Promotion (e.g. advertising, sales promotions)
  • Financial management:
    • Financial statements (e.g. balance sheet, income statement)
    • Financial ratios (e.g. profitability, liquidity)
    • Budgeting and forecasting
    • Investment and financing decisions

Human Resource Management

  • HR functions:
    • Recruitment and selection
    • Training and development
    • Performance management
    • Compensation and benefits
  • Motivation theories:
    • Maslow's Hierarchy of Needs
    • Herzberg's Two-Factor Theory
    • McClelland's Acquired Needs Theory

Operations and Supply Chain Management

  • Operations management:
    • Production planning and control
    • Inventory management
    • Quality management
    • Supply chain management
  • Supply chain management:
    • Procurement
    • Logistics and transportation
    • Inventory management
    • Supply chain risk management

Business Environment

  • Economic factors that affect a business include recession, inflation, and interest rates.
  • Social factors that influence a business include demographics, lifestyle changes, and cultural trends.
  • Technological factors that impact a business comprise innovations, automation, and ICT advancements.
  • Political factors that affect a business consist of government policies, laws, and regulations.
  • Environmental factors that influence a business include sustainability, climate change, and natural resource depletion.

Business Structure and Organization

  • Sole proprietorship is a type of business ownership where one individual owns and operates the business.
  • Partnership is a type of business ownership where two or more individuals own and operate the business.
  • Corporation is a type of business ownership where the business is a separate legal entity from its owners.
  • Cooperative is a type of business ownership where the business is owned and controlled by its members.
  • Functional structure is a type of business organization where departments are organized by function (e.g., marketing, finance, HR).
  • Divisional structure is a type of business organization where departments are organized by product or geographic region.
  • Matrix structure is a type of business organization that combines functional and divisional structures.

Management and Leadership

  • Planning is a management function that involves setting goals, developing strategies, and allocating resources.
  • Organizing is a management function that involves allocating resources, assigning tasks, and structuring the organization.
  • Leading is a management function that involves motivating, communicating, and influencing employees.
  • Controlling is a management function that involves monitoring, evaluating, and correcting performance.
  • Autocratic leadership style involves making decisions without input from others.
  • Democratic leadership style involves involving employees in decision-making.
  • Laissez-faire leadership style involves giving employees a lot of freedom and autonomy.
  • Transformational leadership style involves inspiring and motivating employees to achieve a shared vision.

Marketing and Finance

  • Product is a key element of the marketing mix, involving features, branding, and product life cycle.
  • Price is a key element of the marketing mix, involving pricing strategies, discounts, and revenue management.
  • Place is a key element of the marketing mix, involving distribution channels, logistics, and supply chain management.
  • Promotion is a key element of the marketing mix, involving advertising, sales promotions, and public relations.
  • Financial statements include the balance sheet, income statement, and cash flow statement.
  • Financial ratios include profitability, liquidity, and solvency ratios.
  • Budgeting and forecasting involve planning and managing financial resources.
  • Investment and financing decisions involve allocating resources and managing risk.

Human Resource Management

  • Recruitment and selection involve attracting, selecting, and hiring employees.
  • Training and development involve improving employee skills and knowledge.
  • Performance management involves evaluating and improving employee performance.
  • Compensation and benefits involve providing rewards and incentives to employees.
  • Maslow's Hierarchy of Needs involves five levels of human needs: physiological, safety, social, esteem, and self-actualization.
  • Herzberg's Two-Factor Theory involves two types of motivation: hygiene factors and motivation factors.
  • McClelland's Acquired Needs Theory involves three types of motivation: achievement, affiliation, and power.

Operations and Supply Chain Management

  • Production planning and control involve managing the production process to meet customer demand.
  • Inventory management involves managing inventory levels to minimize costs and maximize service.
  • Quality management involves ensuring that products or services meet customer requirements.
  • Supply chain management involves managing the flow of goods, services, and information from raw materials to end customers.
  • Procurement involves sourcing and acquiring goods and services.
  • Logistics and transportation involve managing the movement of goods and services.
  • Supply chain risk management involves identifying and mitigating risks in the supply chain.

This quiz covers the external factors that affect a business, including economic, social, technological, political, and environmental factors, as well as the different types of business ownership and structure.

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