SQA Higher Business Management Understanding Business overview quiz quiz

Capital, the man-made resources such as machinery and finance

Land, the natural resources used by the business

Labour, the physical and mental effort of the workforce

Enterprise, the entrepreneur who takes the risk

The primary sector, because it extracts raw materials from nature

The secondary sector, because it manufactures a finished product

The tertiary sector, because it provides a service to customers

The quaternary sector, because it carries out research and development

It is owned and run by the government to provide a public service

Its owners have unlimited liability for all of the company's debts

It can sell its shares to the general public on the stock exchange

It is run for a social aim and reinvests any surplus in a cause

The owners are personally responsible for all of the firm's debts

It applies to sole traders and partnerships but not to companies

It means the firm pays a limited amount of tax on its profits

Shareholders can only lose the amount they have invested

Survival, staying in business while it builds a customer base

Profit maximisation, making the largest possible profit at once

Becoming a multinational operating in several countries

Maximising the dividends paid to its shareholders this year

Backward vertical integration, taking over a supplier

Horizontal integration, two firms at the same stage of the same industry

Conglomerate integration, two firms in unrelated industries

Forward vertical integration, taking over a retail outlet

Horizontal integration with a direct competitor in brewing

Conglomerate integration into a completely unrelated market

Forward vertical integration, taking over a customer or outlet

Internal (organic) growth funded from the brewer's own profits

A rise in interest rates set by the central bank

A new law passed by the government on packaging

A competitor launching a cheaper rival product

The level of finance and the skills of the staff it employs

Interest rates, inflation, unemployment and the trade cycle

Laws on employment, consumer rights and health and safety

Changing tastes, demographics, lifestyles and social values

Regulation on emissions, waste, packaging and pollution

Interest is the money it invests; influence is the profit it receives

Interest is what it wants from the firm; influence is its power to affect the firm

Interest applies to internal stakeholders; influence applies to external ones

They mean exactly the same thing and can be used interchangeably

Customers wishing that prices were a little lower than they are

Employees hoping for a pay rise at some point in the future

Owners wanting the value of their shares to keep on rising

Employees taking industrial action such as a strike over pay

Many layers of management and a narrow span of control

Few layers of management and a very wide span of control

Decisions made entirely by one owner in a small business

Staff working in project teams with two different managers

It guarantees that every decision is identical across the firm

Local managers make quicker, better-informed decisions and feel motivated

It removes the need to employ any junior managers at all

It keeps all important decisions in the hands of head office

Ordering more stock for next week from a regular supplier

Arranging the staff rota for the coming weekend shift

Deciding to expand the business into overseas markets

Dealing with a single customer complaint at the counter

Strengths and Weaknesses, which are internal to the firm

Opportunities and Threats, which come from the external environment

Strengths and Opportunities, the two most positive factors

Weaknesses and Threats, the two most negative factors