Introduction to Business

What Introduction to Business covers

Introduction to Business is examined in all three written papers — the specification is assessed in full on every one of them, and they differ by the context questions are set in rather than by content. It covers entrepreneurs, enterprise and the value they create, land, labour, capital and enterprise, sectors of industry, forms of ownership and the reach of a market, sole traders, partnerships, companies and limited liability, choosing a legal structure and what it means for stakeholders, franchising and co-operatives, the functions of a business and how they depend on each other, measuring the size of a business, and what limits its growth and joint ventures and strategic alliances.

The 9 subtopics

Each one has its own page.

• Entrepreneurs, enterprise and the value they createRecall questions on the entrepreneur and enterprise, the risk an entrepreneur bears, the qualities and start-up decisions of an entrepreneur, opportunity cost and innovation, and how new enterprise affects the economy, established industries, regions, suppliers, employees and other stakeholders.Open →
• Land, labour, capital and enterpriseRecall questions on land, labour, capital and enterprise as the factors of production, why a bank loan is not capital, the reward each factor earns, and how scarce labour, sites, equipment and raw materials affect costs, location, employees and customers.Open →
• Sectors of industry, forms of ownership and the reach of a marketRecall questions on the primary, secondary and tertiary sectors, the chain of production, deindustrialisation, the private, public and third sectors, how success is judged in each, local, national and international markets, and what makes a business multinational.Open →
• Sole traders, partnerships, companies and limited liabilityRecall questions on sole traders, unlimited and limited liability, incorporation, ordinary partnerships, joint and several liability, the deed of partnership, limited liability partnerships, private and public limited companies, the £50,000 share capital rule and filing accounts.Open →
• Choosing a legal structure and what it means for stakeholdersRecall questions on the factors that decide a legal structure, the trade-off between control and finance, why owners accept unlimited liability, privacy of accounts, and how the choice affects lenders, suppliers, employees, the owner's family and creditors.Open →
• Franchising and co-operativesRecall questions on franchising, the franchisor and franchisee, the initial fee and royalty, the benefits and restrictions of a franchise, quality control, co-operatives and their one-member-one-vote rule, consumer and worker co-operatives, and how co-operatives share surplus, raise capital and decide.Open →
• The functions of a business and how they depend on each otherRecall questions on the marketing, sales, operations, finance, human resources, customer service and support functions, how the functions depend on and constrain one another, why they conflict, and how a very small firm combines them.Open →
• Measuring the size of a business, and what limits its growthRecall questions on classifying small, medium and large enterprises, measures of size including turnover, market share and market capitalisation, why owners stay small, what limits growth, how size affects customers, employees and suppliers, and diseconomies of scale.Open →
• Joint ventures and strategic alliancesRecall questions on joint ventures and strategic alliances, how they differ, entering foreign markets and sharing development risk, why ventures fail, alliances compared with mergers, the risk to know-how, and the effects on shareholders, employees, passengers and competition authorities.Open →

What you need to know

Answer each one before you reveal it.

Take Introduction to Business further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Public sector vs Public limited company

  Public sector: the part of the economy owned by the state and funded largely from taxation to provide a service. Public limited company: a business that may offer its shares for sale to anyone and have them traded on a stock exchange.

• Franchisor vs Franchisee

  Franchisor: the business that owns the brand and the trading format, sells the right to use it and collects the fees. Franchisee: the person or business that pays for the right to use an established brand and format, and runs an outlet as their own business.

• Multinational vs Exporter

  Multinational: a business that owns and runs productive facilities such as factories, offices or stores in more than one country. Exporter: a business that produces in one country and sells its goods to customers abroad.

Questions from this topic

Each one with the model answer underneath.

1. 1

   Define the term entrepreneur.

   Model answer

   An entrepreneur is a person who spots a commercial opportunity, organises the resources needed to exploit it, and accepts the personal financial risk of the venture succeeding or failing.

2. 2

   Define the term enterprise as it is used in business.

   Model answer

   Enterprise is the willingness and ability to take a calculated risk in setting up and running a venture, bringing the other resources together to create something customers will pay for.

3. 3

   Why is the entrepreneur said to bear risk in a way that a bank lending to the business does not?

   Model answer

   The bank is contractually owed its interest and capital whatever the business earns, while the entrepreneur is paid only out of whatever profit is left over and loses their stake if there is none.

4. 4

   Name four personal qualities commonly found in successful entrepreneurs.

   Model answer

   Four are a willingness to take calculated risks, determination and resilience after setbacks, creativity in spotting an opportunity, and the initiative to act on it without being told.

5. 5

   Which three decisions fall to the entrepreneur rather than to anyone else when a business is first set up?

   Model answer

   The entrepreneur alone decides what the business will sell and to whom, how the start-up will be financed, and what legal structure it will trade under.

6. 6

   How does the entrepreneur's role usually change once the business grows beyond a handful of staff?

   Model answer

   The entrepreneur shifts from doing most of the work personally to delegating day-to-day decisions to specialist managers, and concentrates instead on strategy, finance and direction.

What is inside Levo

Six ways to work the same material.

Introduction to Business revision questions

What does Introduction to Business cover in OCR A-Level Business (H431)?

9 subtopics: entrepreneurs, enterprise and the value they create, land, labour, capital and enterprise, sectors of industry, forms of ownership and the reach of a market, sole traders, partnerships, companies and limited liability, choosing a legal structure and what it means for stakeholders, franchising and co-operatives, the functions of a business and how they depend on each other, measuring the size of a business, and what limits its growth and joint ventures and strategic alliances. Each one has its own page with questions and model answers.

How is Introduction to Business organised?

By the OCR H431 specification, subtopic by subtopic, so it matches the order you are taught it in.