Business Organisations Flashcards

Question

Explain the role of managing director/CEO in a company

Answer 1

Runs the company on a day-to-day basis Leader of the business and sets out the vision and direction of the company Hires senior managers Is in overall charge of the business and is answerable to the Board of Directors Ex: Michael O Leary of Ryanair PLc

Answer 2

A direcotr Elected by Board of Directors In charge of running the company’s meetings Acts as a figurehead leader for company

Answer 3

Responsible for the administration of the company e.g keeping shareholder records, sending out notice of company meetings, taking the minutes of a meeting, sending companies annual return to the CRO

Answer 4

An outside independent accountant that checks over company accounts to ensure they are accurate and correct. Ensures company has kept proper accounting records and must write a report stating whether the accounts are complete or accurate

Answer 5

A business set up by a group of people, who come together and establish an enterprise with the aim of helping one another Owned and controlled by members for benefit of members Must be at least 7 owners in the co-op Run by Committee of Management voted in by owners Has limited liability Ex: credit union

Answer 6

Must apply to Registrar of Friendly Societies | Must be issued a certificate of registration

Answer 7

A group of producers (e.g farmers) come together and set up a business e.g Kerry Co-Op

Answer 8

A Co-Op that is owned and controlled by those who work in it ex: greencaps was a co-op set up by people from Ballymun offering a left luggage and luggage porter service Dublin Airport

Answer 9

Similar to a bank | Made up of a group of people who save together and lend to each other at a reasonable rate

Answer 10

Limited Liability- if co-op goes bankrupt they will only lose capital invested Easy to raise large amounts of capital - each owner contributes some One member, one vote – a democratic type of business - each member equal say

Answer 11

Can be complicated to set up - Must apply for permission from register of friendly societies. each year must send annual report to the registrar Accounts must be published - not confidential Difficult to raise capital - each member has equal say so less incentive to contribute more capital

Answer 12

These are businesses owned by the Irish government on behalf of the people of Ireland. Run by professional managers 'Sate-sponsored’ bodies or ‘semi-state’ bodies Ex: Iarnród Éireann (Transport), RTÉ (broadcasting)

Answer 13

Create employment - thousands of jobs. reduced unemployment. better standard of living for people with more wages Provide essential services - to all in all parts of ireland. private entrepreneurs would not service smaller parts Development of the Irish economy - IDA Ireland attracts foreign companies like Dell/Intel creating jobs and business pay corporation tax Dividend to government- if make a profit. desperately need dividends to run country

Answer 14

Do not make profit - many make loss. government has to give subsidies to keep them going Inefficient with money - not judged on profit. no incentive to keep costs to minimum. wastes taxpayers money Political Alliances- directors appointed because of support for particular party rather than business expertise. Also government can interfere with business High levels of debt - have large loans as government wont or cant give them money they need

Answer 15

This is when the government sells a state-owned enterprise to private individuals or companies. Shares in the company can be offered to the general public Shares can be sold to one business Examples: Eircom – now known as Eir ; Aer Lingus – sold to IAG

Answer 16

Quick cash - received cash from sale. used to pay national debt and improve economy Reduces political control and interference - not made by politicians. Made by business managers with goal of profit Raises finance - raises finance for expansion. no replying on government unable to invest. can sell shares Opportunity for investment- Irish people an opportunity to invest money and make decent return

Answer 17

Higher prices for consumers- poorer service, redundancies and owners want to make it profitable Potential job losses Decisions made for benefit of the company - not strategic interests of Ireland Loss of annual dividend - instead of using to benefit Irish people profit will fall into hand of select investors Only profitable state owned companies can be privatised government let subsidising all the loss making companies

Answer 18

A business arrangement where one person sells the right to use their name, business idea or business to another person and allows them to set up an exact replica of that business as if it were their own for a one off fee and an annual share of the profits. Franchisor trains franchisees in all aspects of running the business and lays down strict rules to follow Ex: Super macs expanded over Ireland through franchising

Answer 19

Reduced Risk- already successful. guaranteed sales with well known name Economies of Scale - head office buys stock gets good discount. products sold cheaply,competitive advantage Training and Ongoing Support - guidelines in all aspects. ongoing support in running of business an marketing Advertising- benefits from national advertising ex: dominos sponsored X factor

Answer 20

Cost - must pay initial fee and a share of profits each year after Restrictions and Conditions- conditions on running of business. little room for individual flair and freedom in the business Damage to image - actions of franchisees mistakes make entire brand have bad image. business may suffer through no fault of the entrepreneur

Answer 21

An Alliance is when two separate and independent businesses make a deal to co-operate with each other on a particular business project Pool their resources to make success of project No change in ownership Ex: Swatch and Mercedes-Benz who worked together to make the SMART car

Answer 22

Cost effective expansion - Split the costs, business share equipment and other assets with each other More successful expansion- brainstorming. shared knowledge and expertise ex: engineers and designers from both companies to share ideas to produce best car possible New markets- can open new markets for both. Attracts new customers increasing profits ex: tesco and bord gáis

Answer 23

Disagreements- one feels not getting as much out of it as other. Smaller businesses may feel identity is hidden by higher profile Lose customers- Unhappy. May feel they have a restricted choice or unhappy with choice offered. Unwilling to buy from them

Answer 24

A business with a head office in one country but branches in a number of other countries Branches carry out different jobs Ex: Zara, Dell

Answer 25

Employment New technologies, new products and new management skills Competition Corporation tax Buy raw materials and supplies from Irish businesses

Answer 26

No loyalty Profits are returned to home countries Pressure the government Decisions are taken by head office

Answer 27

MNCs employ over 200000 people in Irish branches Reduces unemployment Wages mean employees get higher standard of living and increased spending in economy Ex: Dell and Intel created thousands of well-paid quality jobs for people in their factories

Answer 28

They train their irish workers in all these new skills Increasing skill set of labour force and helps to make our economy more modern and technologically advanced Ex: dell intel, facebook brought latest computer technology helping ireland develop into advanced knowledge based economy

Answer 29

Better quality and lower prices to compete with indigenous firms. Consumers have more choice lower prices and better quality ex: lidl and aldi increased competition in the Irish grocery markets

Answer 30

Corporation tax on profit and VAT on products sold here they also pay PAYE, PRSI with employees wages Amount of tax revenue for government to use improving the irish economy

Answer 31

Helps Businesses to increase their sale and profits Positive spin off effect on indigenous businesses Tesco, lidl, aldi buy sector of the irish economy to flourish

Answer 32

Have taken low grants and taxes and then left ireland for lower wage economies. Very little notice, unemployment Ex: Fruit of the loom a US transnational closed down its factory in Donegal to move to Morocco where wages are cheaper

Answer 33

Repatriate profits. Sent home Doesn't necessarily benefit the Irish economy. Money made in the country goes out.

Answer 34

MNCs are very influential and can put pressure on government. If laws are introduced they dont like they could threaten to pull out of Ireland Influence over Irish government policy

Answer 35

May not take irish interests into account | In the past US congress found Microsoft used its irish subsidaries to reduce its US tax bill

Answer 36

These firms are businesses set up, owned and managed by Irish people Main place of business is Ireland, make products and sell here but may also export ‘Home Grown Businesses’ Ex: Supermacs, Lily O’Briens, Pat The Baker

Answer 37

Employment- labour intensive, use more workers than machines. Many jobs, lower unemployment, richer government Loyalty- set up here. tend not to leave if economy goes through bad patch or to reduce costs Enterprising Culture- encourage, inspiring other irish. More businesses in the economy and economic growth Profits stay in Ireland- reinvest profit to expand business or goes into banks loaned out to help other irish businesses

Answer 38

``` Co-operatives becoming PLCs Privatisation of state-owned enterprises Increasing popularity of franchises High tech transnational companies Nationalisation ```

Answer 39

To Raise Capital To Lower Risk Faced by the Owners To Increase Sales or Profits To Acquire Skills

Answer 40

Changed organisational structure ex: Avonmore co-op and waterford co-op who merged to form glanbia plc

Answer 41

Irish government has sold more and more of its owned companies in recent years. ex: 2014 privatized Bord Gáis Energy

Answer 42

Large increase Irish people wishing to set up a business have taken to franchising as there is a lower risk of this type of business failing

Answer 43

succeeded in attracting many high-tech computer transnationals to set up operations here ex: facebook HQ in Dublin. Attracted by low corporation tax, highly educated graduates, english language Creates thousands of well paid jobs

Answer 44

Opposite to privatisation Government taking ownership of a private business Ex: banking crisis and economic downturn government was forced to give banks billions of euro to help them survive and they were given shares in return

Answer 45

more people that can invest and better credit ratings enjoyed by some businesses make hem attractive choice when money is needed to fund business Ex: Kerry co-op became a PLC so it could sell shares on stock exchange to finance expansion

Answer 46

certain businesses give advanatge of limited liability If business goes bankrupt private assets are safe only capital invested into business would be lost ex: sole trader- private limited company Less danger

Answer 47

If business forms an alliance can give it ability to sell more products ex: swatch and mercedes benz Business changing structure to a plc will enjoy increased publicity

Answer 48

Sole trader may enter partnership with others who have the skills she needs to expand and improve her business