BUS 108 – Business Administration Basics |
BUS 108 BUSINESS ADMINISTRATION BASICS COMPREHENSIVE
STUDY GUIDE & REVISION FLASHCARDS LATEST 2026/2027
1. Foundations of Business
• Business: An organization that provides goods or services in exchange for money,
with the goal of earning a profit.
◦ Example: A neighborhood bakery selling bread and pastries for a daily profit.
• Profit: The amount of money left over after a business subtracts its total expenses
from its total revenue.
◦ Example: A shop earns $10,000 in sales and spends $7,500 on costs, leaving a profit of
$2,500.
• Not-for-profit organization: An organization whose primary goal is a mission or
cause rather than generating profit for owners.
◦ Example: A local food bank that relies on donations to feed families in need.
• Factors of production: The resources used to create goods and services: land, labor,
capital, and entrepreneurship.
◦ Example: A furniture maker uses wood (land), workers (labor), tools (capital), and a
business idea (entrepreneurship).
• Stakeholder: Any person or group with an interest in a business's decisions or
performance, including owners, employees, customers, suppliers, and the community.
◦ Example: Employees, investors, and local residents are all stakeholders in a manufacturing
plant.
• Value creation: The process by which a business turns resources into a product or
service that is worth more to customers than its cost to produce.
◦ Example: A phone maker combines glass, metal, and software into a device customers pay
far more for than the raw materials cost.
• Private vs. public sector: The private sector consists of businesses owned by
individuals or shareholders; the public sector consists of government-owned or
funded organizations.
◦ Example: A private grocery chain versus a public transit authority run by the city.
• Standard of living: The level of wealth, comfort, and material goods available to a
population, closely tied to business productivity.
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, BUS 108 – Business Administration Basics |
◦ Example: A country with efficient industries and strong wages tends to have a higher
standard of living.
Quick Check
1. What is the difference between a business and a not-for-profit organization?
Answer: A business aims to earn profit for its owners; a not-for-profit exists primarily to
serve a mission or cause.
2. Name the four factors of production.
Answer: Land, labor, capital, and entrepreneurship.
2. Forms of Business Ownership
Every business must choose a legal structure, which affects liability, taxes, control, and the
ability to raise money.
• Sole proprietorship: A business owned and operated by one person, who has
unlimited personal liability for the business's debts.
◦ Example: A freelance graphic designer working under their own name.
• Partnership: A business owned by two or more people who share profits, losses,
and management responsibilities.
◦ Example: Two friends co-founding a law practice and splitting profits equally.
• Corporation: A legal entity separate from its owners, offering limited liability but
subject to more regulation and double taxation.
◦ Example: A publicly traded technology company whose shareholders are not personally
liable for company debts.
• Limited liability company (LLC): A hybrid structure that combines the liability
protection of a corporation with the tax flexibility of a partnership.
◦ Example: A small consulting firm registered as an LLC to protect the owner's personal
assets.
• Franchise: An arrangement where a business owner (franchisee) pays to use
another company's (franchisor's) name, products, and systems.
◦ Example: Opening a branded fast-food restaurant location under a national chain's rules.
• Cooperative: A business owned and operated by a group of individuals for their
mutual benefit, with profits shared among members.
◦ Example: A farmers' cooperative that jointly markets and sells crops from many small
farms.
• Limited partnership: A partnership with at least one general partner who manages
the business and has unlimited liability, and limited partners who invest but have
limited liability.
◦ Example: An investor who contributes capital to a restaurant but takes no role in daily
operations.
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, BUS 108 – Business Administration Basics |
• Merger and acquisition: A merger combines two companies into one; an acquisition
occurs when one company purchases and absorbs another.
◦ Example: Two competing airlines merging to form a single, larger carrier.
Quick Check
1. Why might an owner choose an LLC over a sole proprietorship?
Answer: An LLC provides limited liability protection for personal assets, which a sole
proprietorship does not.
2. What is the key liability difference between general and limited partners?
Answer: General partners have unlimited liability and manage the business; limited
partners have liability limited to their investment.
3. Management Functions and Levels
Management is the process of working with and through people to achieve organizational
goals efficiently and effectively.
• Planning: Setting goals and deciding the best course of action to achieve them.
◦ Example: A retailer forecasting holiday sales and ordering inventory in advance.
• Organizing: Arranging resources and tasks to implement the plan, including
assigning responsibilities.
◦ Example: Dividing a marketing team into content, social media, and analytics groups.
• Leading: Motivating and directing people to work toward organizational goals.
◦ Example: A manager holding weekly check-ins to keep the team engaged and focused.
• Controlling: Monitoring performance and making adjustments to stay on track with
goals.
◦ Example: Reviewing monthly sales reports and correcting an underperforming region's
strategy.
• Top, middle, and first-line managers: Top managers set overall direction; middle
managers translate strategy into department plans; first-line managers supervise
day-to-day operations.
◦ Example: A CEO sets a five-year vision, a regional director builds a yearly plan, and a shift
supervisor manages daily staffing.
• Strategic, tactical, and operational planning: Strategic planning sets long-term
direction; tactical planning outlines mid-term department actions; operational
planning covers daily tasks.
◦ Example: A company's five-year growth strategy, a marketing department's annual
campaign plan, and a store's weekly staff schedule.
• Decision making: The process of identifying a problem, evaluating alternatives, and
choosing a course of action.
◦ Example: A manager comparing three vendors' quotes before selecting a supplier.
Page 3 of 17
BUS 108 BUSINESS ADMINISTRATION BASICS COMPREHENSIVE
STUDY GUIDE & REVISION FLASHCARDS LATEST 2026/2027
1. Foundations of Business
• Business: An organization that provides goods or services in exchange for money,
with the goal of earning a profit.
◦ Example: A neighborhood bakery selling bread and pastries for a daily profit.
• Profit: The amount of money left over after a business subtracts its total expenses
from its total revenue.
◦ Example: A shop earns $10,000 in sales and spends $7,500 on costs, leaving a profit of
$2,500.
• Not-for-profit organization: An organization whose primary goal is a mission or
cause rather than generating profit for owners.
◦ Example: A local food bank that relies on donations to feed families in need.
• Factors of production: The resources used to create goods and services: land, labor,
capital, and entrepreneurship.
◦ Example: A furniture maker uses wood (land), workers (labor), tools (capital), and a
business idea (entrepreneurship).
• Stakeholder: Any person or group with an interest in a business's decisions or
performance, including owners, employees, customers, suppliers, and the community.
◦ Example: Employees, investors, and local residents are all stakeholders in a manufacturing
plant.
• Value creation: The process by which a business turns resources into a product or
service that is worth more to customers than its cost to produce.
◦ Example: A phone maker combines glass, metal, and software into a device customers pay
far more for than the raw materials cost.
• Private vs. public sector: The private sector consists of businesses owned by
individuals or shareholders; the public sector consists of government-owned or
funded organizations.
◦ Example: A private grocery chain versus a public transit authority run by the city.
• Standard of living: The level of wealth, comfort, and material goods available to a
population, closely tied to business productivity.
Page 1 of 17
, BUS 108 – Business Administration Basics |
◦ Example: A country with efficient industries and strong wages tends to have a higher
standard of living.
Quick Check
1. What is the difference between a business and a not-for-profit organization?
Answer: A business aims to earn profit for its owners; a not-for-profit exists primarily to
serve a mission or cause.
2. Name the four factors of production.
Answer: Land, labor, capital, and entrepreneurship.
2. Forms of Business Ownership
Every business must choose a legal structure, which affects liability, taxes, control, and the
ability to raise money.
• Sole proprietorship: A business owned and operated by one person, who has
unlimited personal liability for the business's debts.
◦ Example: A freelance graphic designer working under their own name.
• Partnership: A business owned by two or more people who share profits, losses,
and management responsibilities.
◦ Example: Two friends co-founding a law practice and splitting profits equally.
• Corporation: A legal entity separate from its owners, offering limited liability but
subject to more regulation and double taxation.
◦ Example: A publicly traded technology company whose shareholders are not personally
liable for company debts.
• Limited liability company (LLC): A hybrid structure that combines the liability
protection of a corporation with the tax flexibility of a partnership.
◦ Example: A small consulting firm registered as an LLC to protect the owner's personal
assets.
• Franchise: An arrangement where a business owner (franchisee) pays to use
another company's (franchisor's) name, products, and systems.
◦ Example: Opening a branded fast-food restaurant location under a national chain's rules.
• Cooperative: A business owned and operated by a group of individuals for their
mutual benefit, with profits shared among members.
◦ Example: A farmers' cooperative that jointly markets and sells crops from many small
farms.
• Limited partnership: A partnership with at least one general partner who manages
the business and has unlimited liability, and limited partners who invest but have
limited liability.
◦ Example: An investor who contributes capital to a restaurant but takes no role in daily
operations.
Page 2 of 17
, BUS 108 – Business Administration Basics |
• Merger and acquisition: A merger combines two companies into one; an acquisition
occurs when one company purchases and absorbs another.
◦ Example: Two competing airlines merging to form a single, larger carrier.
Quick Check
1. Why might an owner choose an LLC over a sole proprietorship?
Answer: An LLC provides limited liability protection for personal assets, which a sole
proprietorship does not.
2. What is the key liability difference between general and limited partners?
Answer: General partners have unlimited liability and manage the business; limited
partners have liability limited to their investment.
3. Management Functions and Levels
Management is the process of working with and through people to achieve organizational
goals efficiently and effectively.
• Planning: Setting goals and deciding the best course of action to achieve them.
◦ Example: A retailer forecasting holiday sales and ordering inventory in advance.
• Organizing: Arranging resources and tasks to implement the plan, including
assigning responsibilities.
◦ Example: Dividing a marketing team into content, social media, and analytics groups.
• Leading: Motivating and directing people to work toward organizational goals.
◦ Example: A manager holding weekly check-ins to keep the team engaged and focused.
• Controlling: Monitoring performance and making adjustments to stay on track with
goals.
◦ Example: Reviewing monthly sales reports and correcting an underperforming region's
strategy.
• Top, middle, and first-line managers: Top managers set overall direction; middle
managers translate strategy into department plans; first-line managers supervise
day-to-day operations.
◦ Example: A CEO sets a five-year vision, a regional director builds a yearly plan, and a shift
supervisor manages daily staffing.
• Strategic, tactical, and operational planning: Strategic planning sets long-term
direction; tactical planning outlines mid-term department actions; operational
planning covers daily tasks.
◦ Example: A company's five-year growth strategy, a marketing department's annual
campaign plan, and a store's weekly staff schedule.
• Decision making: The process of identifying a problem, evaluating alternatives, and
choosing a course of action.
◦ Example: A manager comparing three vendors' quotes before selecting a supplier.
Page 3 of 17
