Business Management Flashcards
Sole trader
A sole trader is a business structure owned and operated by a single person
Unincorporated
Is an owner and business being viewed as a single legal entity.
Unlimited liability
Is the complete responsibility an owner has for a business’s debts. Debts are the sums of money a business owes to banks, suppliers or even customers.
Proprietor
Is the owner of a business.
Profits
Are the amount remaining after all expenses are deducted from a business’s income.
Personal income tax
Is a portion of an individual’s earnings that is paid to a government for public services such as roads, schools, and hospitals.
Company tax
Is the portion of profits a business pays to the government for public services such as the police, courts and fire services. Incorporated is a business being established as a separate legal entity from the owners.
Company tax
Is the portion of profits a business pays to the government for public services such as the police, courts and fire services. Incorporated is a business being established as a separate legal entity from the owners.
Director
Is the manager of a particular area of a company often selected for their expertise.
Shareholders
Are part-owners of a business as they purchase company shares.
Limited liability
Is the protection of a shareholder’s personal assets against any business debt. Shares are the units of ownership of a business that it sells to raise funds.
Partnerships
Are suitable for two to 20 owners of small to medium businesses
Private limited companies
Are suitable to raise funds and grow the business while maintaining control
Public listed companies
Are suitable to raise large amount of funds publicly
Social enterprises
Are suitable for businesses that focus on improving a community or environmental cause.
GBEs (Government Business Enterprises)
Are a unique type of business that can only be designated by the government
Open market
Is a public arena where people can buy and sell items of commercial value freely.
Australian Securities Exchange
Is the electronic market where Australian public company shares are bought and sold.
Share price
Is the value of a single share of a company that it can be bought or sold for.
Dividends
Are regular sums of money paid out to shareholders from a business’s profit
Business Objectives
Are the goals a business intends to achieve
Revenue
Is the amount of money a business makes from its normal business activities. Expenses are the costs of running a business.
Market share
Is a business’s percentage of total sales within an industry.
Make a profit
Profit is essential for any business to survive and grow. By generating more revenue than expenses, a business earns a profit which can then be distributed to owners and shareholders.
Increase market share
A business typically wants to increase its market share to become more competitive within an industry. Increased sales usually means a business can also increase their profits.
Meet shareholder expectations
Shareholders are people who have invested a sum of their own money into a business by purchasing company shares. As part owners of a business, shareholders expect a return on their investment.
Fulfil a market need
A business fulfils a market need by providing products and services which meet the desires of a group of customers with similar needs.
Fulfil a social need
A business fulfils a social need by improving the community and environment through its business activities.
Vested interest
Is a strong connection to a business that can lead to personal gain or benefit.
Internal stakeholders
Are groups who have a direct financial share or are employed by the business including owners, board of directors, investors, shareholders, and employees
External stakeholders
Are groups that are outside a business but are concerned or affected by its activities including customers, suppliers, and the general community.
Ethically
Is the alignment to current moral standards.
Wages
Are regular payments of money earned by employees for work or services completed, typically paid on a weekly or monthly basis.
Conditions
Are the terms that an employee and employer agree to including job responsibilities, hours of work, dress code and leave entitlements.
Corporate social responsibility (CSR)
Is the ethical conduct of a business beyond legal obligations to improve the social, economic and environmental outcomes of stakeholders.
Operations Area of Management
Produces the goods or services that a business sells
to customers.
Operations Area of Management
Produces the goods or services that a business sells
to customers.
Human Resources Area of Management
Establishes and manages the relationship the
business has with its employees, including their hiring, training and termination.
Sales And Marketing Area of Management
Promotes and sells the business’s goods
or services to customers.
Finance Area of Management
Handles the monetary requirements of a business.
Technology Support Area of Management
Installs automated equipment, machinery
and devices within the business and provides assistance to employees on the use of these
technologies.
Corporate Culture
Is the shared values and behaviours practised by managers and employees within a business.
Official Corporate Culture
Is the shared values and beliefs desired by a business and expressed through elements such as formal rules and symbols.
Real Corporate Culture
Is the shared values and behaviours that are actually practised by
employees and managers and expressed through informal rules and habits.
Policies
Are the formal and written rules of a business.
Mission statement
is a formal
summary of the core focus of a
business apart from profit.
Vision statement
is a formal
summary of a business’s longer
term objective
Rituals
are practices within a business that occur regularly.
Communication flow
is the direction of the transfer of
information between managers
and employees.
Decision making
is deciding a course of action for a business
from a set of alternatives.
Autocratic management style
is a manager making decisions and directing employees without any input from them
Centralized control
is one person
having concentrated authority to
make decisions
Persuasive management style
is a manager making decisions and communicating the reasons for those decisions to employees without their input
Consultative management style
is a manager seeking input from employees on business decisions but making the final decision themselves.
Participative management style
is a manager communicating and discussing
information with employees in order to make decisions together.
Laissez-faire management style
is a manager communicating business objectives to
employees and allowing them to make decisions independently.
Planning
is the manager’s ability to establish objectives and strategies to achieve them.
Decision-making
is the manager’s ability to determine a suitable course of action for the business from a range of alternatives.
franchise
is a business model that licenses the business’s name, product and procedures to people outside the business, also known as franchisees. Franchisees pay a fee to the business in return for an established brand, proven business methods and a loyal customer base.
Communicating
is the manager’s ability to clearly exchange information with employees
and relevant stakeholders.
Communicating
is the manager’s ability to clearly exchange information with employees
and relevant stakeholders.
Delegating
is the manager transferring authority and responsibility to employees for
business tasks
Franchisees
are individuals who become business owners by purchasing the right to trade using another established business’s brand, products and processes.
Interpersonal
skills are the manager’s ability to interact positively with employees to create and maintain professional relationships.
Leading
is the manager’s ability to motivate employees to work towards business
objectives
Vision
is the aspirational purpose of a business for owners, managers and employees. Examples include: Disney - ‘to make people happy’ Instagram - ‘capture and share the world’s moments’
Motivation
is a need or desire that directs, energises, and sustains a person’s behavior.
living wage
is the minimum
income an employee needs to
afford basic shelter, food, and other
necessities.
Physiological needs
are the basic requirements for human survival, such as food, water and shelter.
Safety and security needs
are the desires for protection from dangerous or threatening environments.
OH&S regulations
are the occupational health and safety rules and laws that aim to protect the wellbeing of employees and the public.
Job security
is the likelihood of an
employee keeping their job
Social needs
are the desires for a sense of belonging and friendship among groups
Esteem needs
are the desires to feel important, valuable and respected.
Self-actualisation
is the realization of one’s full potential through creativity and personal growth
Intrinsic motivation
is a drive that comes from within an individual
Drive to acquire
is the desire to achieve rewards and high status
financial reward
is a monetary
payment to recognise performance
which achieves business goals.
non-financial reward
is recognition of performance which achieves business goals but is not in the form of a monetary payment
Drive to bond
is the desire to participate in social interactions and feel a sense
of belonging.
Drive to learn
is the desire to gain knowledge, skills and experience.
Drive to defend
is the desire to protect personal security as well as the values of a
business.
Locke and Latham’s goal setting theory
The goal setting theory is a motivation theory which states that employees strive to achieve
well defined objectives.
The goal setting theory states that managers can use goals that fulfil five key principles to
motivate employees within the workplace.
Production quota
is a goal for how
many products are to be made
within a specific time period.
Performance related pay as a motivation strategy
is a financial reward for reaching or
exceeding a set business goal.
Remuneration
is the money paid
to an employee by an employer in
exchange for completing work tasks.
Pay rise
is a permanent increase
in an employee’s salary or hourly
wage rate.
Bonus
is a one-off payment
made for meeting a set objective.
It is provided in addition to an
employee’s regular salary.
Commission
is a payment provided to an employee for selling a good or service. It is usually paid as a percentage of the price of the good or service being sold
Career advancement as a motivation strategy
is the upwards progression of an
employee’s job position.
Investment in training as a motivation strategy
is allocating resources to improve
employees’ skills and knowledge.
Mentoring
is a senior employee
assisting a junior employee in
developing the skills and knowledge
needed for their work.
Support as a motivation strategy
is providing employees with any assistance that
improves their satisfaction at work
Sanction as a motivation strategy
is penalizing employees for poor performance or
breaching business policies.
On-the-job training
is employees improving their knowledge and skills within the workplace
Job shadowing
is following and observing an experienced employee for a period of time to understand how they perform their role.
Off-the-job training
is employees improving their knowledge and skills in a location
external to the business.
Management by objectives
are both managers and employees collaboratively setting individual employee goals that contribute to the achievement of wider business objectives
Performance appraisals
is a manager assessing the performance of an employee against a range of criteria, providing feedback, and establishing plans for improvement in the future
Self-evaluation
is an employee assessing their individual performance against a set criteria.
Employee observation
is a range of employees from different levels of authority assessing
another employee’s performance against a set criteria
Entitlement issues
are legal
obligations an employer owes
to employees following the
termination of their employment.
Transition issues
are social and
ethical concerns a manager
can consider when terminating
employment
Termination
is ending the
employment contract between an
employee and the business
Retirement
is an individual deciding to leave the workforce as they no longer wish to work
Redundancy
is an employee no longer working for a business because there is insufficient
work or their job no longer exists
Exit interviews
are discussions held between an employer and the leaving employee and are used to identify the reasons for an employee deciding to no longer be a part of the business.
Unfair dismissal
is an employee
being dismissed for an invalid or
unjust reason.
Resignation
is an employee voluntarily terminating their own employment, usually to take
another job position elsewhere.
Dismissal
is the involuntary termination of an employee who fails to meet required standards
or displays unacceptable or unlawful behaviour.
Annual leave i
is paid time off work that is provided to an employee when they are not working. Businesses often have a limit to the amount of leave they provide employees with.
Long service leave
is an extended
period of paid leave that is granted
to an employee after a sustained
period of work at a single business.
Workplace relations
is the interactions between employers and employees, or their representatives, to achieve wages and conditions that satisfy both the business and employees
Human resource managers
are individuals who coordinate the relationship between
employees and management within businesses.
Employer associations
are advisory bodies who assist employers in understanding and
upholding legal business obligations
Unions
are organisations composed of individuals who represent and speak on
behalf of employees in a particular industry to protect and improve their wages and
working conditions.
The Fair Work Commission (FWC)
is Australia’s independent workplace relations
tribunal and has a range of responsibilities outlined by the Fair Work Act.
Employment contracts
are
legal documents which outline
the wages and conditions of
employees within a business
National employment standards
NES
are minimum wages and
conditions set out by the FWC.
awards
is a legal document which outlines the minimum wages and conditions of work
across an entire industry
Collective bargaining
is the process of negotiation between employers and employees, or their chosen representatives, to reach an agreement regarding their wages and conditions of employment.
Negotiation
is the process of two
or more parties coming to a
mutual agreement
agreement
is a legal document which outlines the wages and conditions of employees
and is applicable to a particular business or group of businesses.
dispute
is a conflict between
workplace participants as a result
of a disagreement
grievance procedure
is a formalised set of steps that employees and employers can
follow to resolve workplace disputes.
Mediation
is an impartial third party facilitating the discussion between disputing parties
to help each side of the conflict reach a resolution themselves
legally binding decision
is a judgement that requires and prohibits certain actions of parties to a decision which is enforceable by law. Failure to follow this decision can result in legal consequences
Arbitration
is an independent third party hearing arguments from both disputing parties
and making a legally binding decision to resolve a conflict.
Efficiency
is how productively a business uses its resources when producing a good or service.
Productivity
is the number of goods or services that are produced compared to the number of resources used in the production process.
Effectiveness
is the extent to which a business achieves its stated objectives
Inputs
are the resources used by a business to produce goods and services
Inputs
are the resources used by a business to produce goods and services
Raw materials
are unprocessed
substances used to produce goods
and services
Processes
are the actions performed by a business to transform inputs into outputs.
Outputs
are the final goods or services produced as a result of a business’s operations
system which are delivered or provided to customers.
Manufacturing businesses
use
raw materials and resources to
produce a finished physical good.
Service businesses
provide intangible products, usually with
the use of specialized expertise
Tangible
is the ability to be touched.
Capital intensive
is using a high degree of machinery and
equipment during the production
process
Inventory
are resources and
finished goods held as stock
Standardised goods
are goods that are produced consistently and are
virtually identical to one another.
Intangible
is something that
cannot be touched.
Labour intensive
is having a high
degree of employee involvement
during the production process
Computer-aided design (CAD)
is a digital design tool that enables businesses to generate and
modify technical illustrations of a product.
Computer-aided manufacturing (CAM)
is a software used to control and direct the
production process by controlling machinery and equipment through a computer.
Automated production lines
are machinery and equipment which are arranged in a sequence, and the product is developed as it proceeds through each step
Website development
is the creation and improvement of online web pages controlled by a business that customers can use to discover information about the business and purchase their goods or services at any time.
Forecasting
is a materials planning tool that predicts customer demand for an upcoming period using past data and market trends
Stock
is the materials stored for
production or goods stored for
sale.
A master production schedule (MPS)
is a plan that outlines what a business intends to
produce, in its specific quantities, within a set period of time.
Materials requirement planning (MRP)
is a process that itemises the types and quantities
of materials required to meet production targets set out in the master production schedule.
Just in time (JIT)
is an inventory control approach that delivers the correct type and
quantity of materials as soon as they are needed for production.
Quality
is a good or service’s ability
to satisfy a customer’s needs
Quality control
is inspections at various stages of the production process to ensure
products meet designated standards and unsatisfactory products are discarded
Reactive
is responding to
a situation after something
has occurred
Proactive
is performing actions
to prevent problems before they
occur
Quality assurance
is a business achieving a certified standard of quality in its production after an independent body assesses its operations system.
Quality circles
are small groups of
employees who meet to discuss
and create solutions to problems
related to quality
Total quality management (TQM)
is a holistic approach where all employees are committed to continuously improving a business’s operations system to enhance the quality for customers.
Lean management
is the process of systematically reducing waste in all areas of production
while improving customer value.
Waste
is any material or resource
that is discarded because it
cannot be further used in the
production process.
Waste minimisation
is the process of reducing the amount of unused material, time or
labour within a business
Zero defects
is preventing defects from occurring in the production process
Supply chain management
is the coordination of the flow of goods and services from raw materials to delivering final products to customers.
Wholesalers
are businesses that
store and distribute manufactured
goods to retailers.
Retailers
are businesses that
purchase goods from a wholesaler
and resell them to customers.
Global sourcing of inputs
is acquiring raw materials or resources from overseas suppliers.
Quotas
are the limitations on the number of a particular product that can be imported or exported into a country. Quotas are usually set by a country’s government
Tariffs
are taxes that have to be
paid to a government for particular
imports or exports.
Global outsourcing
is transferring specific business activities to an external business in an
overseas country
Overseas manufacturing
is producing goods or services in a location outside of a business’s headquarters countr
Outsource
is the transfer of
specific business activities to an
external business.
Corporate social responsibility (CSR)
is the ethical conduct of a business beyond legal
obligations to improve the social, economic and environmental outcomes of stakeholders
Environmental sustainability
is ensuring that natural resources
are not permanently depleted
or damages
