Economic Principles and Industrial Revolutions

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Questions and Answers

Which technological advancement primarily contributed to the increase in iron production processes?

Railroads

Web-based services

Biotechnology

Steam power (correct)

What was a significant outcome of the rapid growth in the textile industry?

Decreased standard of living

Increased employment opportunities (correct)

Reduced production efficiency

Isolation of production

Which industrial revolution is characterized by the development of nanotechnology?

First industrial revolution

Third industrial revolution

Fourth industrial revolution (correct)

Second industrial revolution

How did the structure of the economy change following the worldwide recession in 2008?

Changes became structural in nature Signup and view all the answers

Which of the following technologies were emerging during the earlier industrial revolutions?

Steam power Signup and view all the answers

What new processes were introduced that allowed for mass-customization?

Three-dimensional printing Signup and view all the answers

Which industries did technologies converge in, causing disruption?

Banking and transportation Signup and view all the answers

What is implied by the structural change in the economy after 2008?

New thinking is essential for business adaptation Signup and view all the answers

What is the primary aim of pro t companies?

To make money for their shareholders Signup and view all the answers

Which type of company allows the general public to take up shares?

Public companies Signup and view all the answers

What are the four basic resources used by businesses to manufacture and deliver goods and services?

Natural resources, human resources, capital, entrepreneurship Signup and view all the answers

What economic principle influences consumers and businesses alike when faced with limited resources?

Obtaining greatest benefit with limited resources Signup and view all the answers

Which of the following describes the responsibility of directors in a personal liability company?

They are personally liable for company debts Signup and view all the answers

What is generally considered a natural resource?

A piece of land suitable for farming Signup and view all the answers

Which type of company is characterized by shares that cannot be publicly traded?

Private companies (Pty, Ltd) Signup and view all the answers

What might help a business maximize its profits relative to competitors?

Offering unique products or lowering production costs Signup and view all the answers

What has traditionally been the primary focus of managers in organizations?

Increasing financial performance Signup and view all the answers

Which of the following best defines primary stakeholders?

The closest groups directly affected by the organization Signup and view all the answers

What is a consequence of neglecting stakeholder interests mentioned in the content?

Potential for organized boycotts from customers Signup and view all the answers

What role do secondary stakeholders play for an organization?

They can have a significant influence through legislation. Signup and view all the answers

What change is currently expected of big businesses in relation to society?

To take on more responsibilities towards the environment and society Signup and view all the answers

Which of the following groups is explicitly mentioned as a special interest group that acts as stakeholders?

Environmentalists Signup and view all the answers

How has the social contract between organizations and stakeholders changed over the years?

It has evolved to include greater corporate social responsibility. Signup and view all the answers

Which statement best describes the relationship between businesses and society?

Businesses must integrate their operations within the societal context. Signup and view all the answers

What does the formal contract in a business's social responsibilities entail?

Following global laws and local industry codes. Signup and view all the answers

How does the semi-formal contract differ from the formal contract?

It includes spoken expectations that may evolve. Signup and view all the answers

What characterizes the frontier expectations related to business?

They refer to issues affecting future business landscapes. Signup and view all the answers

What socio-economic issue is highlighted as a concern regarding the social contract?

Political alienation is on the rise. Signup and view all the answers

What implication arises from the volatility of economic, political, social, and ecological systems?

Threats to economic growth and stakeholder relationships. Signup and view all the answers

Which of the following trends indicates a failing social contract?

Growing anger and frustration among citizens. Signup and view all the answers

What must businesses address in response to the increasing populism of the people?

Changing agendas generated by public dissatisfaction. Signup and view all the answers

What is a consequence of the increasing dependence on governmental support for social needs?

Complications in fulfilling the social contract. Signup and view all the answers

Which type of control focuses on performance standards before actions take place?

Pre-control Signup and view all the answers

What is a primary objective of effective logistics management?

Reducing delivery times Signup and view all the answers

Which management principle focuses on addressing bottlenecks in production?

Operations improvement Signup and view all the answers

What is a characteristic of a flexible budget?

Adjusts based on actual levels of activity Signup and view all the answers

What is the goal of total quality management (TQM)?

Continuous improvement across all operations Signup and view all the answers

Which statement best describes collective bargaining?

A formal discussion between labor and management to reach an agreement Signup and view all the answers

Which of the following is NOT a component of stakeholder control?

Market share analysis Signup and view all the answers

What does the balanced scorecard primarily help organizations to do?

Integrate performance measures across various perspectives Signup and view all the answers

What is a key focus of the human resource management process?

Developing talent and assessing performance Signup and view all the answers

What does the term 'reverse logistics' refer to?

The process of returning goods from customers Signup and view all the answers

Which of the following is an example of a financial control?

Budget variance analysis Signup and view all the answers

Which marketing concept prioritizes the needs and preferences of consumers?

Consumer orientation Signup and view all the answers

What aspect of operations management focuses on reconciling supply and demand?

Operations planning Signup and view all the answers

What is a primary focus of ethical motivation in organizations?

Aligning employee values with organizational goals Signup and view all the answers

Study Notes

The Economic Principle

Businesses aim to make profit by making money for their shareholders
There are limited resources to satisfy unlimited needs and wants
Businesses must make profits that cover the cost of capital, leaving profit to the business

Factors of Production

Resources used to produce goods and services:
- Natural resources: Land for farming, plantations, or mineral deposits
- Human resources (labor): Workers with knowledge and skills
- Capital: Financial resources, physical assets, and intangible assets
- Entrepreneurship: Ability to combine the above factors to create a venture

Evolution of Industrial Revolutions

First industrial revolution: Steam power, mechanization, infrastructure
Second industrial revolution: Railroads, global connection, infrastructure
Third industrial revolution: Computers, internet, automation, web-based services
Fourth industrial revolution: Artificial intelligence, robotics, internet of things

Businesses have a social responsibility to stakeholders
Impact of business actions on stakeholders must be considered
Businesses need to be socially responsible by being concerned about their effect on society and the environment.

Stakeholder Groups

Primary stakeholders: Customers, employees, suppliers, and shareholders
Secondary stakeholders: Government, the broader community, and special interest groups (e.g., environmentalists)

The social contract between businesses and stakeholders has changed over time:
- Formal contract: Adherence to law, industry codes and norms
- Semi-formal contract: Newer expectations, often stemming from societal criticism
- Frontier expectations: Future impacts on businesses like health effects of obesity

Volatile economic, political, social, and ecological systems threaten the social contract
Political and economic alienation of citizens: Rising unemployment and social unrest
Increased government reliance for social support, growing state employment, and a large state wage bill

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Description

This quiz explores the foundational economic principles governing businesses, including profit-making and resource limitations. It also examines the evolution of industrial revolutions, highlighting key technological advancements and their impact on production. Test your understanding of these crucial concepts in economics and industrial development.