business mix Flashcards
- State two financial methods of motivation.
Bonus schemes – Extra payments given to employees when they meet certain performance targets.
Commission – A percentage of sales paid to employees, motivating them to increase their sales.
Which of the following is the next stage in the selection process after the closing date for job applications?
Shortlisting candidates – After the closing date, employers will shortlist candidates based on the job applications received.
formula for total costs?
Total Costs = Fixed Costs + Variable Costs.
definition of a part-time contract of employment?
A part-time contract is an employment contract where the employee works fewer hours than a full-time worker, usually with flexible hours.
describes the chain of command?
The chain of command refers to the hierarchy within an organization, where authority and responsibility are passed down from senior management to lower levels of employees.
characteristics of an entrepreneur is the ability to develop new ideas/products?
Innovation – The ability to develop new ideas and create new products or services is a key trait of an entrepreneur.
Explain one method a business may use to expand.
Higher quality – Job production allows for customized products, which can be made to a higher quality standard, tailored to customer specifications.
Explain one benefit to shareholders of limited liability.
Protection from debt – Shareholders of companies with limited liability are only responsible for the amount they invested, so they are not personally liable for the business’s debts.
Identify two stages of the process of procurement.
Identifying needs – Determining what materials or services are required for production.
Supplier selection – Choosing suppliers to provide the needed goods or services.
State and explain two employment laws.
Minimum Wage Law – Employers must pay workers at least the national minimum wage.
Health and Safety at Work Act – Employers are required to ensure a safe working environment for employees.
Explain one reason why the objectives of a business may change over time.
Market changes – A business may change its objectives in response to changing customer demands, technological advances, or economic conditions.
Explain one way in which health and safety law might decrease the profits of a business.
Increased costs – A business may incur additional costs for implementing safety measures, providing training, or meeting legal requirements, which can reduce profits.
Recommend whether Jameel should use zero-hour contracts for the new employees. Give reasons for your recommendation.
Recommendation: Caution – Zero-hour contracts provide flexibility but may lead to low employee morale and uncertainty. Jameel should weigh the need for flexibility against the potential negative impact on employee loyalty and job satisfaction.
Explain one benefit to Eve of being a sole trader.
Full control – As a sole trader, Eve has complete control over her business decisions and operations without needing to consult anyone else.
Method of secondary market research.
Surveys and reports – Secondary market research includes using existing data, such as industry reports or surveys, to understand the market.
Calculate the margin of safety from a break-even chart.
Margin of Safety is the difference between the actual sales and the break-even sales level. For example, if a business’s actual sales are 1,000 units and the break-even point is 800 units, the margin of safety is 200 units.
Which of the following types of business ownership has shareholders, but cannot advertise its shares to the general public?
Private Limited Company (Ltd) – This type of business can have shareholders but cannot sell shares to the public.
Advantage of trade credit for a business.
Improved cash flow – Trade credit allows businesses to purchase goods on account and pay later, helping improve cash flow.
Explain one problem a business might face when producing an effective business plan.
Uncertainty – Businesses may struggle to predict future market conditions or demand accurately, making it difficult to create a realistic business plan.
Shareholders have a key objective of profit. Explain one reason why this might cause conflict with a different stakeholder group.
Employee wages – Shareholders may push for higher profits by cutting costs, which could result in lower wages or fewer benefits for employees, causing conflict.
The benefit to a business of being more environmentally friendly.
Improved reputation – Being environmentally friendly can enhance the business’s brand image, attracting more customers and investors who value sustainability.
What is meant by the term ‘entrepreneur’?
Entrepreneur – An entrepreneur is someone who starts and manages a business, taking on financial risks in the hope of making a profit.
Explain one way a business might measure its success, other than profit.
Customer satisfaction – A business can measure success by evaluating customer feedback, loyalty, and satisfaction levels, which indicate the long-term health of the business.
Example of a variable cost?
An example of a variable cost is the cost of raw materials. This cost changes depending on the number of products produced. For example, if a business produces more items, it will need more raw materials.
What is a public limited company (PLC)?
A public limited company (PLC) is a type of business that offers its shares to the public on the stock exchange. It has shareholders, and the company’s shares are traded on the open market.
Describe job production.
Job production is a method where a business produces a single product or service for a specific customer, usually to a high standard and tailored to the customer’s needs. This method is used for bespoke items like custom-made furniture or unique services.
What is the effect of delayering in an organisation?
Delayering is the process of removing one or more levels of management in an organisation. This can lead to reduced costs, a more efficient decision-making process, and improved communication. However, it may also lead to fewer promotion opportunities and increased pressure on remaining staff.
What is the effect of a rise in interest rates?
A rise in interest rates can increase the cost of borrowing money, which may reduce consumer spending and business investment. It may also lead to higher loan repayments for businesses, impacting their profits.
Explain one cost of maintaining quality during the production of a product.
One cost of maintaining quality is the expense of quality control checks and inspections during production. Businesses need to invest in training staff, equipment, and quality assurance processes, which can increase operational costs.
Explain one disadvantage to a business of poor customer service.
One disadvantage of poor customer service is the potential loss of customers. If customers are unhappy with the service, they may choose to go to a competitor, leading to reduced sales and damage to the company’s reputation.
What is meant by ‘induction training’?
Induction training is the process of introducing new employees to the business. It helps them understand the company’s values, policies, and procedures, ensuring they feel welcomed and are equipped to start their role effectively.
State and explain two financial methods of rewarding employees.
Bonuses: A one-time payment given to employees for achieving certain targets or goals. It acts as an incentive to increase productivity.
Commission: A payment based on the sales or business that an employee generates. This method motivates employees to work harder to increase their sales and, in turn, their earnings.
