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Unit 1: Business Organization and Environment - Coggle Diagram
Unit 1: Business Organization and Environment
Business Inputs:
anything that goes into a business
Business Outputs:
anything that is produced/offered by the business
Consumer Goods
: any physical/ tangible goods sold to the regular public
Consumer Services
: non-tangible goods that are sold to the public
Capital Goods
: physical goods that are used to produce other goods
Primary Sector of Business
: extraction of natural resources so they can be used by other companies.
Secondary Sector of Business
: manufacturing/ processing of natural resources into products
Tertiary Sector of Business
: providing services to other businesses
Quaternary Sector of Business
: focuses on information technology and information service providers
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Public Sector:
organizations and businesses run by the local or central government
Private Sector:
organizations and businesses run by entrepreneurs (individuals/ groups)
Free-market Economy:
economic resources are mostly run by the private sector, with very little government intervention
Mixed Economy
: the economic resources are owned by both the private and public sector, with moderate interference from the government
Command Economy
: economic resources are owned by the state, this type of economy is more common in communist governments
For-Profit Organizations
: all profit goes to the business owners
Social Enterprise
: some of the profit goes to the owners, while the rest goes towards society and social goals
Non-Profit
: the company has profit, but it's all reapplied to the business, so that no one makes money off of it
Sole Trader
: a business that is owned by only one person, they have 100% ownership and liability
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Stakeholders
: groups of people that have interests/relationships with your company
Internal Stakeholders
: employees, labor managers, enterprise
External Stakeholders
: customers, suppliers, government, banks and other creditors, pressure groups and competitors
Stakeholder Conflicts
: conflicts in interest between two stakeholders
Mapping Matrix
: matrix separated between two variables
Mission Statement
: states the core reason(s) to why you are operating. Guides all future business actions
Vision Statement
: broad idea of where your company sees itself in the long run
Objectives
: plans for how to achieve mission and vision, change occasionally
Strategies
: smaller plans to achieve the objectives, usually one or a few more per year
Tactics
: daily tasks to achieve the strategies and objectives, change often
Ethical Code
: a document detailing a company’s rules and guidelines on staff behaviour that is followed by employees
Stakeholders
: people or groups that can be affected by the action of an organization
Auditing
: independent report on the impact that a business has on society
SMART Objectives
: most efficient business objectives have specific, measurable, achievable, realistic and relevant, and time-specific objectives
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STEEPLE Analysis
: looks at the external environment of a company through 7 lenses:
s
ocial,
t
echnological,
e
conomic,
e
nvironmental,
p
olitical,
l
egal and
e
thical
Lense 1- Social
: aging population, size, structure, lifestyle, age groups, education levels and culture
Lense 2- Technological
: state and advancements of new technologies
Lense 3- Economic:
GDP growth rate, inflation, interest rates, exchange rates and anything to do with money and the economy
Lense 4- Environmental
: weather and climate, flora and sauna, pressure groups
Lense 5- Political
: government’s ideology and effect on business activity
Lense 6- Legal
: what laws are in place that can affect my business
Lense 7- Ethical
: culture and ethical code of conduct in the area
Fishbone Diagram
: defines the possible causes of an effect with the 6Ms: methods, machines, manpower, materials, measurements and mother nature
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Scale of Business
: determines the size of your business
Small Operations
: business’ that are smaller in scale
Large Operations
: business’ that are larger in scale
Economies of Scale
: unit costs and fixed costs, show how much a business spends in production
Growth
: A company becomes more successful and expands its operations for increasing profits
Internal Growth
: opening new shops and branches on your own
External Growth
: you buy other operations or merge
Backwards Vertical
: buying a company that’s your supplier
Forwards Vertical
: buying a company that is your consumer
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Globalization
: the interaction and integration of people, businesses’ and governments all over the world
Positive Effects of Globalization
: wider availability of products, content and people. Increased competition means improvement and innovation. Specialization leads to economies of scale. Increase access to external capital. Social inequalities and human rights violations are exposed
Negative Effects of Globalization
: ideological shocks are common and prove to be a great source of friction. Increased competition means higher operating risk for companies. Specialization leads to higher competition. Stakes are higher for acquiring external capital. Social inequalities and human rights violations are exploited
Multinationals
: businesses that have a headquarter in one country, but are operating in other countries with branches, factories and/or stores
Positive Effects of Multinationals
: access to foreign currency and further investments. Higher employment opportunities and professional development. Economic growth and increased tax revenues for the government. Increased innovation due to competition
Negative Effects of Multinationals
: exploitation of the workforce with cheap labor and low quality job conditions. Pollution and environmental hazards into the local flora and fauna. Competition can drive out local players and smaller firms. Cultural appropriation or disrespect