Business Exam Questions Flashcards
Similarities between for-profit and not-for-profit organisation
The need to cover expenses
Both have operating expenses (eg. Rent)
Expanding the org in an ethical and socially responsible way
To help the local or broader community
Differences between for profit and not for profit organisation
Primary objective:
For an FP org the primary objective is to increase its sales revenue to enable it to provide a return (profit). NFP orgs aim to achieve its social mission (eg. Help disadvantaged people in community.
FP orgs return surplus funds to owners and shareholders and NFP don’t, money goes back to biz
FP orgs pay workers, NFP orgs have volunteers
Difference between a small and medium biz
Small biz has fewer than 20 employees.. Medium hahahahaha s 20-199
Small biz usually has sole trader or partnership, medium has partnership or private company.
A financial objective for a discount store that provides low cost household goods and describe strategy
Increase the volume of sales
Could achieve by lowering prices, increase number of specials, encourage buying in bulk
A social objective for a discount store that provides low cost household goods and describe strategy
Ecological sustainability
Provide bags and home brand product packaging that is biodegradable
Why is it important for a FP biz to have social objectives
Because if a biz is ethical, it influences purchase
Positive contributions that a small business can make to the economy
Provide workers who can use the money to provide goods and services, helping out the economy
Economic growth, by producing goods and services, small biz’s contribute in gross domestic product in the economy
Difference between the internal environment and external environment of a business
Internal, includes factors such as owners, management, employees and cooperate culture. Some degree of control
External, includes Eco, environmental, customers, competitors and suppliers. No control
Distinguish between entrepreneurship and innovation
Entrepreneurship is the ability and willingness to start, operate and assume the risk of a business venture in hope of making a profit
Innovation refers to creating a new product, service, or process, or significant,y improving an existing one.
List the amount of employees for the three kinds of businesses
Small, less than 20
Medium, 20-199
Large, 200+
Type of ownership for the three kinds of businesses
Small, partnership or sole trader
Medium, partnership, private company
Large, public company
Market share for the three kinds of business
Small, small usually in the local area
Medium, medium dominant in the geographic region
Large, large multinational
Macro environment consists of…
Int real or external
Political pressure, economic pressure, legal issues, technology, ethics and social responsibility EXTERNAL
Operating environment consists of…
Internal or external
Competitors, finance, companies, employees , unions, suppliers, customers EXTERNAL
Internal environment consists of…
Internal or external
Organisational structure, corporate culture, management styles, management skills, policies, management roles and social responsibility
List of performance indicators
Percentage of the market share Net profit figures The rate of productivity growth Number of sales Staff/customer satisfaction surveys Staff turnover Wastage level Customer complains number Sick days number
Financial indicators characteristic
Quantitative data
Non financial indicator characteristic
Qualitative data
Sole trader business Char adv and disadv
One person who owns and runs the business
Easy to establish, freedom
Unlimited liability
Partnership char, adv and disadv
Has a minimum of 1-20 partners
Limited liability
Potential disputes
Advantages of purchasing an established business
Existing Goodwill passed over
Instant income from existing customers
Everything is already set up
Disadvantages of purchasing an established business
May be difficult to change existing image and policies of the original business
Employees may resent change of owner
Previous success may be because of previous owners
Advantages of setting up a new business
Freedom to make decisions
No goodwill that the owner has to pay
Possible to begin on a smaller scale
Disadvantage of setting up a new business
High risk and a measure of uncertainty without a previous reputation
May be difficult to secure finance
Time needed to develop a customer base
Start up period is slow
Advantages of buying a franchise
Already established
Immediate benefit from goodwill
Franchiser often provides training
Franchise can succeed despite having limited experience
Disadvantage of buying a franchise
Franchisor controls the operations, with little scope of franchise individuality
Profits shared by franchisor
Additional service fees
Things to consider with location of a business
Owners personal factors eg.close to home
Competition, demographics, socioecomics
Visibility
Accessibility to target market, transport and customers
Cost of premises
Proximity to customers, suppliers, companies and complimentary business’s
Benefits of developing a business plan
Helps the viability of the business
Identifies strengths and weaknesses
Indicates owners ability and level of commitment
Assists the business to be proactive rather than reactive
What are the 4 p’s of the marketing mix
Product
Price
Promotion
Place
Objectives can be
Strategic
Tactical
Operational
Strategic goals
Long term goal
3-5 years
Buy second store
Tactical goals
Medium term goal
1-2 years
Increase market share by 2%
Operational goals
Short term goals
Up to 12 months
Increase profit
Vision statement dot points
Aspiration
Future
Just out of reach
Shows that the business is heading somewhere
Mission statement dot points
Who we are
What we do
Where are you going
Two legislations that protect workers
Occupational health and safety act 2004: ensures the safety of the employees
Equal opportunity act of 1995: makes discrimination illegal in work places
The three phases of recruitment
Establishment phase: planning, recruitment and selection
Maintenance phase: induction, training and development and performance management
Termination phase
Ways of termination
Voluntary
Resignation – employee resigns
Retirement – employee withdraws from workforce
Involuntary
Retrenched – job no longer exists
Dismissal – fired
Be wary of unfair and unlawful termination
The 10 national employment standards
Hours of work: full time 35-38 Flexible work for parents Annual leave Personal, careers and compassionate leave Community service leave Public holidays Notice of termination and redundancy Information in the work place Long service leave
Selection of an employee is
The process of gathering information and subsequently choosing the most suitable applicant
