AOS1 - Business Foundations Flashcards
What is a business?
An entity that is involved in the provision of goods and/or services to consumers
What is business?
Lawful commercial activities to earn profit.
What is a Sole Trader?
An individual operating as a sole person legally responsible for all aspects of the business
What is the difference between Limited and Unlimited Liability?
Limited Liability is where business owners are not personally responsible for business debts whereas with Unlimited Liability the owner of the business can be held responsible for the debts of the organisation
What are the attributes of a Sole Trader?
Unlimited Liability, Simple, Full Control, Low Cost
What is a Partnership?
Involves a number of people (2-20) who carry the duties of a business together
What are the attributes of a Partnership?
Unlimited Liability, Partnership Act 1958, Simple, Shared Control, Low Cost, Separate TFN
What is a Private Limited Company?
A Company where operations are controlled by directors and owned by investors. Profits are distributed to investors as dividends
What are the attributes of a Private Limited Company?
Limited Liability, Corporations Act 2001, Separate Legal Identity, Private Share Trading, Expensive, Max 50 Shareholders
What is a Public Limited Company?
A Company where operations are controlled by directors and owned by shareholders and allow for public trading of shares on the Stock Exchange
What are the attributes of a Public Limited Company?
Limited Liability, Corporations Act 2001, Separate Legal Identity, Public Share Trading, Expensive, Min 50 Shareholders
What is a Social Enterprise?
Revenue-generating business with a focus on social objectives over profit
What are the attributes of a Social Enterprise?
Led by Economic, Social, Cultural or Environmental Mission, Provides Services to the Community, Surpluses reinvested into business, Incorporated
What is a Government Business Enterprise?
A Commonwealth entity that aims to act under general business principles to make profit
What are the attributes of a Government Business Enterprise?
Owned and Operated by Gov, Service to Community, Incorporated, Profit Minded, Business Structure (revenue, pay tax)
What is a Business Objective?
An aim or goal by which the business strives towards completing in the future.
What does the business objective “Make a profit” refer to?
The surplus remaining after total costs are deducted from total revenue and the basis on which tax is calculated and dividends are paid
What does the business objective “Increase Market Share” refer to?
The percentage of that total industry sales that the business in question receives
What does the business objective “Fulfil Market Need” refer to?
Identifying what the target market requires and meeting those needs with you goods and services
What does the business objective “Fulfil Social Need” refer to?
Benefitting the community through the actions of the business
What does the business objective “Meet Shareholder’s Expectations” refer to?
Expectations including capital gains on shares, dividends and voting rights
What does Capital Gain mean?
Capital gain is an increase in the value of a capital asset that gives it a higher worth than the purchase price.
What are Dividends?
A proportion of the business’ profit reallocated to the shareholder
What is a Stakeholder?
A Stakeholder is an individual or group who has a direct or vested interest in the activities of an organisation.
How can Stakeholders experience conflict?
Stakeholder conflict arises when the needs of one stakeholder group compromise the expectations of another.
What are Corporate Social Responsibility (CSR)?
Corporate Social Responsibility is a business’s ongoing commitment to operate in an economically, socially, and environmentally sustainable manner while considering the interests of diverse stakeholders.
N.B. This does not include what is legally required by regulators
What are some benefits of Corporate Social Responsibility (CSR)?
- More Customers
- Better Reputation
- Competitive Edge
What are some examples of Corporate Social Responsibility (CSR)?
- Reducing a business’s carbon footprint
- Flexible work atmosphere for employees
- Donating to charity
- Ethical marketing
- Using only fair trade ingredients
- Sponsoring local events
What is Operations?
The Area of Operations is concerned with controlling the activities that convert inputs into outputs in the production of goods and services.
What are some activities included within Operations?
Ordering and sourcing stock
Minimising waste
Redesigning the sequence of production
What is Finance?
The Area of Finance is concerned with controlling the activities concerned with receiving and spending money within the business.
What are some activities included within Finance?
Budgeting
Financial planning
Managing day to do payments.
What is Human Resources?
The Area of Human Resources is concerned with managing the employees and all aspects of their working relationship with the business.
What are some activities included within Human Resources?
Recruitment
Training
Motivation
Ultimate termination of employees
What is Sales and Marketing?
The Area of Sales and Marketing is concerned with the goods and services produced with their end consumers.
What are some activities included within Sales and Marketing?
Determining product features Pricing Promotion Customer service After sales support
What is Technology Support?
The Area of Technology Support is concerned with providing employees and customers with user friendly assistance for individuals having technical problems with electronic devices.
What are some activities included within Technology Support?
Troubleshooting computer problems
Office phones
Website crashes
What is Management Styles?
Management styles refers to the behaviour and attitude of the manager when making decisions and communicating with employees
What is the Autocratic Management Style?
Where the leader directs all the activities to achieve business objectives without meaningful participation from the employees.
What is the Persuasive Management Style?
Where the manager attempts to convince the employees that their decision is the right way to go
What is the Consultative Management Style?
Where the manager consults with employees on an issue but ultimately makes the decision alone.
What is the Participative Management Style?
Where the decision making is performed as a collective with the managers and employees working together.
What is the Laissez-Faire Management Style?
Leaves the majority of the decision making and running of the business operations to the employees.
What is a Management Skill?
A Skill refers to the ability to do something well, gained through training and experience
What is Communication Skills?
The transfer of information between people that produces the required response. This can come in the form of verbal and non-verbal.
What is Delegation Skills?
The passing of authority or specific tasks from a manager to an employee while still maintaining responsibility.
What is Planning Skills?
The prior thinking that goes into considering how best to achieve a business goals or objective. They are categorised into 3 types: Strategic, Tactical and Operational
What are the Factors that Determine the Appropriateness of a Management Style?
The Nature of Task
The Time Available
The Experience Level of Employee
The Managers Reference and Skills
What is a Corporate Culture?
Corporate Culture refers to the shared values and beliefs of an organisation which can influence the actions and decision-making style of managers and employees.
What is the difference between Official Corporate Culture and Real Corporate Culture?
Official Corporate Culture refers to the desired values and beliefs a business wishes to establish (indicated by the official documents). This is observed through the Mission Statements, Logos, Slogans.
Real Corporate Culture is the actual or prevailing values and beliefs that exists within a business. This is observed through the dress code, language, behaviour and celebrations.
What are the 4 Indicators of Corporate Culture?
Communication Channels
Dress of Employees
Willingness to Achieve
Socialisation
What are some Strategies for the Development of Corporate Culture?
- Leading by Example
- Recruit Employees with the Right Attitude
- Establishing Policies
- Team Building/Bonding
- Customer Service Training
What is the difference between Mission Statement and Vision Statement?
A Mission Statement is a written document that sets out the reason for the existence of the organisation and states what the company wants to do whereas a Vision Statement is a written document that outlines the aspirations as well as what is most important to the organisation in terms of value and ethic and states what the company wants to do in the future.
What is the Relationship between Corporate Culture and Management Styles?
Corporate Culture and Management Styles are interrelated. This means that Corporate Culture can influence Management Styles, which is shown typically in Large Scale Business, which have a predetermined corporate culture and Management Styles can influence Corporate Culture, which is typically shown in Small Scale Organisations, for example Sole Traders
What are the advantages of Good Corporate Culture?
- Better staff retention rate
- Attracts potential employees
- High employee morale
- Work together better
