Aims And Objectives and organisation of a business Flashcards
What is an objective?
Steps that will enable a business to reach their aims
What is an aim?
It’s an overall target for a business
What do aims and objectives need to be?
Smart
What is a sole trader?
Small businesses owned by one person
What are the advantages of a sole trader?
Owner has complete control, so aims and objectives can reflect their own person interests
No pressure of working with someone else
Independence
Disadvantages of a sole trader?
Harder to raise finance
May have to work very long hours
Unlimited liability- owner responsible for all business debts
How is the capital raised for a sole trader?
Owner taking out a bank loan or by putting savings into a business
What is a partnership?
These are are businesses owned by 2 or more people.
Advantages of a partnership?
Able to raise more capital
Different partners will have different specialisms
Disadvantages of a partnership?
Arguments between owners
Unlimited liability- owners responsible for all business debts
How is the capital raised for a partnership?
Owners taking out a bank loan or by putting savings into the business
What is a private limited company- (ltd)
Usually owned by a small number of shareholders, often two people
Advantages of a private limited company (Ltd)
Limited liability- if the business goes bust the owners will not be personally responsible for debts
Able to raise more capital
Disadvantages of a private limited company (ltd)
Arguments between owners
Have to produce yearly accounts- done properly (audit)
Lots of paperwork
What is a public limited company?
Plcs sell shares on the stock market to raise their capital. The company will then be owned by shareholders, who are usually members of the public. They all hag e a chance to say how the business is run. They have to register with the company house
Advantages of a public limited company (Plc)
Limited liability, lots of money invested from shareholders
Disadvantages of a public limited company (Plc)
Takes lots of time and money to set up
Complex paperwork
Meetings take time
Arguments between shareholders.
What is the public sector?
Government owned and run businesses. These include hospitals, schools and local councils. Public sector organisations will often have very different aims and objectives from private sector businesses
What happens during the production department in a business?
A sector of the company that is responsible for manufacturing products or services
What does the human resources department do in a business?
They are responsible for recruiting, screening, interviewing and placing workers. They may also handle employee relations, payroll and benefits and training. Human resources managers plan, direct and coordinate the administrative functions of a organisation
What does the marketing department do in a business?
They promote the business and drives sales of its products or devices, it provides the necessary research to identify your target Audi nce, hugely investigate how to keep sales high
What does the finance department do in a business?
It’s the part of an organisation that manages the money, the business functions of a finance department typically include planning, organising, auditing, accounting for and controlling it’s company’s finances. The finance department also usually produces the company’s financial statements
What does the research and development department of a business do?
It’s responsible for innovations in design, products and style. This department is responsible for creasing new products to keep the company a step ahead of the competitions. They also improve existing consumer products and to explore new ways of producing them
What does the administration department in a business do?
Oversees support iterations of a business or organisation. Also know as an office manager, this is the person that keeps the business running smoothly. They may provide managerial support to a particular division or department or to the entire company. They keep track of everything that occurs in a business
What does the ICT department do in a business?
They ensure that the company’s ICT systems Are working at their best. They will develop systems that will allow the company to expand
What is an organisational structure used to show?
It’s used to illustrate the way in which the business is divided into separate functions and different job roles that are carried out
A hierachy shows..
Channels of communication
The chain of command
Span of control
How big the business is
What does it mean if a business has a tall hierarchical structure?
Large business with lots of employees Solid communications- people only deal with the employees directly above and below Decision making is very formal Higher cost if management Clear promotional routes Each person has a distinct role
What does it mean if the hierarchy is flat?
Suits a smaller business- one manager
Communications are good because the manager is in contact with all employees
Business controlled less formally
Lower wage bills due to fewer managers
Management responsibility will lie with one person which could be stressful at times
What does it mean if a business has been centralised? What are the advantages and disadvantages?
It is the concentration of management and decision making power at the top of the hierarchy, the location of all of most of the main departments and managers at one facility.
Advantages-senior managers have more control
The use of standardised procedures can result in cost savings
Deductions can be made to benefit the whole organisation
Strong leadership
Disadvantages- delay in work
No loyalty
Lack of secrecy
What is decentralisation? Advantages and dis?
Distribute manager roles and authority among several local authorities and sections within a business. The desicions are made across the business not just by managers
Ad- distributions of high stress Increased motivation Greater efficency More communication Better coordination
Dis-more costly
No specialisation
Hard to distribute work
No clear manager
What is a manager?
A manager is someone who has decision making power, they can decide how resources are allocated in the business and make priorities for the future direction of the business
What is a supervisor?
A supervisors is someone who oversees the work of a group of people. They may be in charge of a small team or department
What is an operative?
An operative is somebody who undertakes the day to day work of the business to produce the good or service
