Business Management

Question 1

Advantages of a Sole Trader

Answer 1

Low cost of entry
Complete control

Question 2

Disadvantages of a Sole Trader

Answer 2

Unlimited Liability
Difficult to operate if sick

Question 3

Advantages of a Partnership

Answer 3

Shared responsibility
and workload
Pooled funds and talent

Question 4

Disadvantages of a Partnership

Answer 4

Unlimited liability
Divided loyalty and
authority

Question 5

Advantages of a Private Limited Company

Answer 5

Limited liability
A long life/perpetual

Question 6

Disadvantages of a Private Limited Company

Answer 6

Public disclosure — reporting
Cost of formation

Question 7

Advantages of a Public Listed Company

Answer 7

Limited liability
Has perpetuity

Question 8

Disadvantages of a Public Limited Company

Answer 8

Needs more accountability and compliance
paperwork
High establishment costs

Question 9

What do Social Enterprises aim to fulfill

Answer 9

providing essential services to disadvantaged communities

creating accessibility to a better quality of life for disadvantaged members of the community

Question 10

Advantages of a Government Business Enterprise

Answer 10

Can operate with some
independence from
government
Provision of healthy
competition to businesses
operating in the private
sector

Question 11

Disadvantages of a Government Business Enterprise

Answer 11

Political interference in
the day-to-day
operation of the GBE

There can be less
accountability within a GBE,
resulting in less productivity.

Question 12

Advantages of social enterprise

Answer 12

Can open up new
markets — the social
enterprise may meet a
need that commercial
businesses choose
not to
Meeting a social need
can have a positive
effect on profit and
market share.

Question 13

Disadvantages of social enterprise

Answer 13

• Difficulty in obtaining
  capital to start the
  business
• It can be difficult to
  focus on both social
  and financial objectives.

Question 14

Define Sole Trader

Answer 14

sole trader a business owned
and operated by one person

Question 15

Define Partnership

Answer 15

partnership a business owned by
two or more people (generally a
maximum of 20)

Question 16

Define private limited company

Answer 16

private limited company an
incorporated business that has a
minimum of one shareholder and
a maximum of 50 non-employee
shareholders, and whose shares are
offered only to those people whom
the business wishes to have as part
owners

Question 17

Define Public listed company

Answer 17

public listed company an
incorporated business with a
minimum of one shareholder
(and no maximum), and whose
shares are openly traded on the
Australian Securities Exchange

Question 18

Define Social enterprise

Answer 18

social enterprise a business with
the objective of fulfilling a social
need

Question 19

Define Government Business Enterprise

Answer 19

government business
enterprise (GBE) a type of
business that is government
owned and operated

Question 20

What are some business objectives

Answer 20

To make a profit
To fulfil a social need
To improve effectiveness
To improve efficiency

Question 21

what are some potential conflict between Employees and
owners/shareholders

Answer 21

Employees require safe working conditions and reasonable wages, but this may
reduce the business’s profit and dividends to owners/shareholders

Question 22

what are some potential conflict between Management and
customers

Answer 22

Management could attempt to maintain profit and a high dividend to satisfy
shareholders by raising the prices of products, but this will upset customers, who
expect reasonably priced products.

Question 23

what are some potential conflict between Management and the
general community

Answer 23

Management might decide to cut costs by neglecting maintenance, which could
possibly put members of the community in danger

Question 24

what are some potential conflict between Suppliers and the general
community

Answer 24

Suppliers expect to be paid fairly and promptly, but they might reduce costs by
using unethical or socially irresponsible practices, which can upset members of
the community

Question 25

what are some potential conflict between Management and suppliers

Answer 25

Management wishes to keep costs down to improve profit but suppliers providing
ethical materials require higher prices to cover their costs.

Question 26

appropriateness of management styles

Answer 26

the nature of the task.
time
the experience of employees
the preference of the manager

Question 27

corporate culture normally consists of four essential elements, what are they?

Answer 27

1. Values and practices
2. Symbols
3. Rituals, rites and celebrations
4. Heroes