Business Functions
Define budgets
A budget is a written document showing the planned income and estimated expenses of a business for a specified period.
Define cost accounting
Business use cost accounting to calculate how much it will cost to make a product or deliver a service.
Define purchasing
Buys goods and services that are needed by all other departments in the business from a variety of suppliers
Define information
Data that has been processed
What is the importance of information management?
Information management allows a business to plan, make decisions and decide on a course of action that allows the business to reach their goals.
Name 2 sources of capital
Own Borrowed
Instalment sale
Used when buying machines or vehicles Business pays a deposit, then the difference + interest is paid back in monthly instalments (money) over an agreed period
List the different types of tools that businesses can use to manage their information effectively
Accounting records Budgets Statistics Cost accounting
Which business function is responsible for the following tasks? Responsible for collecting and processing information used for decision-making as well as general office work such as filing and storing of information. It includes the process of finding data, handling and interpreting data and presenting it to management.
Administration Function
What is Centralised Administration?
All administration is done at one office E.g.: Head office is in Johannesburg
What is Decentralised Administration?
All branches do their own administration E.g.: Johannesburg, Durban, Cape Town and Port Elizabeth all do their own administration
Which source of capital do you pay interest on?
Borrowed
What is the purpose of budgets?
Budgets are essential in planning for a business. It assists management in controlling the spending of each department and ensures that expenditure does not exceed income.
What is the purpose of the business function?
Business functions are necessary for a business to achieve its goals and objectives by dividing the work amongst the staff. By doing this, it allows the business to work more efficiently and get more work done.
Provide an example of Top Level Managment
CEO (Chief Executive Officer) MD (Managing Director)
List the 3 steps required to handle information
Collect data Process data into information Store information
What type of skills does Top Level Management posses?
Conceptual (Abstract) skills
What does CPA stand for?
Consumer protection act
Which management task relates to the following activities? • Check whether work is done • Carry out random check on quality, timing, security
Control
Define business Function
Daily activities of the business that fall into specific categories
Businesses invest money in buying debentures from public companies Business earns money (interest) because its lending money to other businesses
Debentures
Issued when the business needs funds Borrowed from the public Holders receive fixed interest on their money Businesses repay loan after end of lease agreement
Debentures
Range
Difference between the highest and lowest value
How does the businesses purchasing function benefit from the NCA?
Every business is now protected against misleading credit suppliers that charge high costs and interest rates on credit agreements.
List some of the rights consumers have according to the NCA
Fair credit marketing practices Apply for credit Protected from unfair discrimination in granting credit Given a reason why an application for credit is refused Informed about the interest rate and any other costs before consumer enters into a credit agreement Receive a credit contract in plain, understandable language Apply for debt counselling if a customer has too much debt
Which business function is responsible for the following tasks? Responsible for planning (budgeting) and managing all the funds (money) and assets in the business as well as investments. This function is responsible for any use of funds in the business and controls the spending of all the other business functions.
Financial Function
Define financial statements
Financial statements are documents that show how much money a business has and how much it is spending
Money is saved for a fixed period Interest higher than short term loans Longer the time period, higher the interest
Fixed deposit
List the different types of long term investments available to a business
Fixed deposits Debentures Government bonds Property Shares
Might not charge interest & flexible about repayments
Friends loan
List the types of borrowed capital available to a business owner
Friends loan Term loans Bank overdraft Trade credit Instalment sale Lease Debentures
What type of decision does Middle Level Management make?
Functional/ Tactical decisions Medium Term 1-3 years
Which business function is responsible for the following tasks? Manage and oversees the other seven business functions. This is done by planning, organisation, leading and control so that business vision, mission, goals and objectives set by management can be achieved.
General Management
Similar to debentures Business lends money to the government and receives interest
Government Bonds
List the responsibilities of the administration function
Handle information Manage information Ensure good office practice and information technology
Which business function is responsible for the following tasks? Responsible for finding (recruiting) suitably qualified employees as well as training, evaluating and remunerating (paying) them. The selection procedure forms part of the human resource function. The human resource function deals with all aspects related to employees.
Human Resource Function
What are the benefits of using the IT administrative function?
Improved communication Improved computer software Improved financial systems
What is the effect of positive publicity?
Increased sales Profit Business growth Investors interest
What type of skills does Middle Level Management posses?
Interpersonal and intellectual skills
Define own captial
Investment made by owner in the business from savings or profit of business
Define stock control
Knowing at all times what products you have available
Which management task relates to the following activities? • Provide direction • Activate workers • Inspire workers • Set up communication channels
Leading
Businesses rents (leases) an item instead of buying it After the lease ends the item is returned to the supplier
Lease
What are some of the responsibilities of credit providers?
Lend money in a responsible manner Make sure consumers don't borrow more than they can afford, by asking customers to give details of income and expenditure when they apply for credit Ensure the full costs of the credit are shown including all fees and interest Ensure customers understand the costs, risks and obligations of the credit agreement Ensure that documents are written in plain, clear language for all customers to understand
What are credit providers not allowed to do?
Make use of misleading advertising Harass customers to apply for credit Increase customers credit limit without their permission Charge customers more that the specified fees and charges required to be paid
Which business function is responsible for the following tasks? Responsible for the sale of goods and services to meet the needs of consumers. The right product must be sold at the right price in the right place and using the best communication mix (Advertising, personal selling, sales promotion and publicity).
Marketing Function
Provide an example of Top Level Managment
Marketing Manager (any business function)
Term loans
Money borrowed from financial institutions Money must be paid back over a specific period A fixed interest rate is usually charged
Define borrowed capital
Money borrowed from the bank or buying on credit
What does the NCA stand for?
National Credit Act
Frequency distribution
Number of times a value appears in a range of data
Median
Number that appears in the middle Arrange from highest - lowest
Mode
Number that appears most often
What type of decision does Lower Level Management make?
Operational decisions Short Term Daily/ Monthly (Day-to-day decisions)
How can a business earn income?
Operations Interest - if the business is owed money by creditors Rent - if business has property rented out Commission - if they work for a fee
Which management task relates to the following activities? • Assigning everyone jobs within specific departments • Provide expectations • Allocate resources • Assign authority & responsibility • Set up feedback channels
Organising
What does a notice account include?
Owner notifies the bank before they want to withdraw money
List the different types of stakeholders
Owners Consumers Consumers Suppliers Community Government Employees Competitors
What are stakeholders?
People who have an interest in the business (interest groups); those who are involved with the business in some way
What does management do with the budgets?
Plan ahead and set financial goals Compare actual income & money spent with budgeted figures Control expenditure and spend money wisely Check whether budgeted income is enough to cover expenditure
Which management task relates to the following activities? • Get all the information • Analyse information • Think of best plan to achieve goals • Choose the best option • Have back-up plan • Implement plan • Follow up plan
Planning
What are the duties of Top Level Management
Planning Set objectives & goals Develop strategic plans
What type of mediums can the public relations function use to get their messages across
Print media Newspaper Magazines Digital media Radio TV Social media Direct communication Shows and exhibitions
Which business function is responsible for the following tasks? Transforms raw materials into finish products by combining raw materials with labour, capital and entrepreneurial skill. Production methods include mass production, batch production and jobbing. Products are standardised and checked for quality using inspection or sampling.
Production Function
Invest in a piece of land at a low price and sell high or keep the land/building and rent it out to tenants
Property
What is the purpose of the CPA?
Protect consumers from dishonest or misleading marketers/businesses Offer consumer protection on the same level as consumer protection in other 'first' world countries Help historically disadvantaged people to know their rights and be treated fairly as consumers
Which business function is responsible for the following tasks? Responsible for creating a positive image of the business to the public. The public includes consumers, customers, suppliers, government and the wider community. Public Relations often deals with customer complaints, also online customer complaints such as the ones on hellopeter.com.
Public Relations
What is the job of the purchasing department?
Purchase the right quality and quantity of goods at the right price and at the right time
Which business function is responsible for the following tasks? Responsible for buying goods and services needed by all the other functions so that the business can operate efficiently. Goods and services must be bought from the best supplier available at the right price and time, in the right quantities and of the right quality. Purchasing includes placing orders for stock for the departments that need it, receiving goods, sorting, storing and distributing stock to the different departments
Purchasing Function
List the steps involved in the purchasing procedure
Purchasing requisition Gather information Choose suitable supplier Place order Follow up Receive stock ordered Distribution of goods Pay supplier and file documents
Define data
Raw facts that have not yet been process
What are the duties of Lower Level Management
Report to middle management Supervise employees Co-ordinate day-to-day activities
What are the duties of Middle Level Management
Report to top management Turn goals into action Monitor activities within their department
What are the responsibilities of Middle Level Management
Responsible for business functions
What are the responsibilities of Lower Level Management
Responsible for smaller work areas like teams
What are the responsibilities of Top Level Management
Responsible for the business as a whole
List some of the rights consumers have under the CPA
Right to equality - market equally based on race, sex, geographic location Right to privacy - by limiting unwanted direct marketing Right to choose and authorise the purchase of goods or services Right to disclose information - information on product must be in plain, understandable language
What a savings account include?
Save money in savings account Withdraw money when needed
List the different types of short term investments available
Savings accounts Notice accounts Money market accounts
Business can buy shares in companies Business receives dividends or can make profit off selling shares at a higher price Dividends is the profit that is divided between all the owners of a business
Shares
Bank overdraft
Short term loan banks offer The bank allows the business to withdraw a negotiated amount more than the business has in the bank Trade credit Suppliers who allow a business to buy goods and services and pay for them later on
What is the purpose of statistics?
Statistics assist management in identifying trends within a particular industry and therefore assist management in decision-making.
Define statistics
Statistics is a collection, analysis and interpretation of numerical data or information over a certain period. This data is represented in tables, graphs and charts.
What type of decision does Top Level Management make?
Strategic decision Long term 5 - 10 years
Provide an example of Top Level Managment
Supervisor
What type of skills does Lower Level Management posses?
Technical Skills
What is the consumer protection act?
The National Consumer Protection Act gives consumers far more rights and many ways to hold suppliers accountable.
What is the purpose of the NCA?
The National Credit Act gives rights to CONSUMERS by helping them to be informed and make the right decisions before BUYING on credit
What are the main activities of the purchasing function?
The right quality The right quantity The right supplier The right price
What is the purpose of the public relations function?
To create a good name and a positive image for the business in the eyes of their stakeholders
List the 3 levels of management
Top Middle Lower
What will determine whether businesses have centralised or decentralised administration?
Type and size of business Quality of staff Where business functions are carried out
Mean
Values are added up and divided by the number of values
What does a money market account mean?
Withdraw money when needed Minimum amount must be left in account for account to remain open Banks and financial institutions lend out of the funds from the short-term savings for short periods
