Chapter One - SAC STUDY

Question 1

what are 3 characteristics of LSO’s?

Answer 1

• 200+ employees
• Earns revenue in the millions
• Multiple locations (stores)

Question 2

what are 4 management functions? “Our Family Has Many Relatives”

Answer 2

operations - production of goods and services

Finance - management of financial aspects of the organisation

human resources - managing staff or employees

marketing - marketing mix (price, product, promotion, place)

research and development - innovation

Question 3

what are 2 positive contributions LSO’s make to the economy?

Answer 3

contribution to employment

contribution to economic growth

Question 4

what are 2 negative contributions LSO’s make to the economy?

Answer 4

• outsourcing

- damage to environment

Question 5

what are 2 people in the internal environment and what interests may they have in the business? (employees and shareholders)

Answer 5

employees - if bus is profitable it creates opportunity for higher wages and lowers risk of outsourcing & downsizing which could make them redundant

shareholders - want the organisation that they have invested in to be profitable as they receive a proportion of the dividends

Question 6

what are 2 external stakeholders and what interests may they have in a business? (suppliers and customers)

Answer 6

suppliers - if the company is performing well the supplier will be making more money
customers - expect high quality at competitive prices

Question 7

what are 2 financial performance indicators?

Answer 7

number of sales

percentage of market share

Question 8

what are 2 non-financial performance indicators

Answer 8

results of a customer satisfaction survey

level of staff turnover

Question 9

what is a possible conflict between management and customers?

Answer 9

• management may attempt to maintain profit and high dividend to satisfy shareholders by raising the prices of products
• This will upset customers who expect reasonably priced products

Question 10

what is a possible conflict between management and suppliers?

Answer 10

• management wishes to keep costs down to improve profit

- suppliers providing ethical materials require higher prices to cover their costs

Question 11

who is included in the operating environment? (4)

Answer 11

• Customers - expect high quality at reasonable prices
• Suppliers - want business to do well so they make more money
• Competitors – organisations that offer rival products/services
• Trade unions

Question 12

how can a business be socially responsible to customers?

Answer 12

ensuring their product is high quality and reasonably priced which will make customers happy

Question 13

how can a business be socially responsible to suppliers?

Answer 13

develop good relationships with suppliers to ensure timely delivery

Question 14

how can a business be socially responsible to members of the community? (2)

Answer 14

• show concern for the environment

- give back to the community (local sport events)

Question 15

what is the responsibility of research and development department?

Answer 15

designing and developing new products or improving existing ones

Question 16

Who is included in the internal environment? (4)

Answer 16

• Employees
• Managers
• Shareholders
• Corporate culture

Question 17

Who is included in the macro environment? (PELTS)

Answer 17

• Political influences
• Economic influences
• Legal influences
• Technological developments
• Social attitudes

Question 18

What are 2 things that make LSO’s unique?

Answer 18

• have a hige range and large numbers of stakeholders

- they operate in many countries

Question 19

what is ‘contribute to economic growth’? (pos impact of LSO’s on economy) 2

Answer 19

• LSO’s produce huge amount and range of goods and services, which is measured by the GDP
• This grows the level of economic activity in Australia and builds wealth through their sales as exports overseas

Question 20

what is ‘contribute to employment’? (pos impact of LSO’s on economy) 3

Answer 20

• LSO’s make a significant contribution to employment
• leads to those employees spending their income
• has a multiplier effect, generating benifits across the economy through their spending

Question 21

what is ‘damage to the environment’? (neg impact of LSO’s on economy) 2

Answer 21

• mass production of goods and services, leads to waste and pollution in the environment
• this needs to be cleaned up by the government or other organisations, having a negative impact on the economy

Question 22

what is ‘outsourcing’? (neg impact of LSO’s on economy) (3)

Answer 22

• Usually results in labour being used overseas, which leads to less wages overall being paid in Australia, reducing amount of money available for people to spend.
• This has a negative multiplier effect as theres less money to spend on the consumption of goods and services
• leads to less production and even fewer jobs.