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Business Studies > Business Revision Unit 1 > Flashcards

Business Revision Unit 1 Flashcards

1
Q

What are premises in a business context?

A

Buildings and land used by a shop or business.

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2
Q

Reasons for public ownerships

A
  • Maintain control of strategic industries
  • Serve unprofitable regions
  • Avoid wasteful duplications; more efficient to have one business providing service
  • Save jobs; prevent mass unemployment
  • Fill gaps of private sector; to meet the market’s needs
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3
Q

Reasons against public ownerships

A
  • Cost to government; losses have to be paid by taxpayer, subsidy cannot be used for better alternatives
  • Inefficiency; caused by lack of competition, business cannot fail so workers not motivated
  • Political intererence; subject to policy changes
  • Difficult to control; especially large businesses with lots of employees
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4
Q

Why may business objectives change as business evolves?

A

In respone to market conditions, technology, performance, legislation, internal reasons

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5
Q

What are goods?

A

Physical products such as mobile phones or shoes.

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6
Q

What are services?

A

Non-physical products such as banking or car washing.

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7
Q

What are consumer goods?

A

Goods and services sold to ordinary people rather than businesses.

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8
Q

What are producer goods?

A

Goods and services produced by one business for another.

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9
Q

What are needs in a business context?

A

Basic requirements for human survival.

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10
Q

What are wants?

A

People’s desires for goods and services.

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11
Q

What is a private limited company?

A

Buisness owned by one or more shareholders whose responsibility for debts is limited to the level of their initial investment.

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12
Q

What is a social enterprise?

A

Non-profit organizations, e.g., charities.

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13
Q

What is a public enterprise?

A

Business organisation owned by the government.

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14
Q

What is a stakeholder?

A

An individual or a group of individuals interested in the operation of a business.

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15
Q

What are business objectives?

A

Goals set by a business to achieve their aims.

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16
Q

What does it mean to diversify in business?

A

Increase the range of goods or services produced.

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17
Q

What is revenue?

A

Money from the sale of goods and services.

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18
Q

Why are clear objectives important?

A

Employees need targets to strive for, objectives motivate people, provides direction for the business, facilitates performance assessment.

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19
Q

Who are customers in a business context?

A

Buy goods and services.

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20
Q

Who are employees?

A

Work for businesses.

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21
Q

What is the role of managers?

A

Help run the business.

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22
Q

Who are owners in a business?

A

Owners of the business.

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23
Q

Who are suppliers?

A

Businesses providing raw materials.

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24
Q

Who are financiers?

A

Entities lending money to businesses.

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25
Q

What are financial objectives?

A

Survival of the business, making a profit, increasing sales, increasing market share, financial security.

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26
Q

What are non-financial objectives?

A

Increasing recycling rates, improving education quality, personal satisfaction, independence and control, challenges.

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27
Q

What are the advantages of sole traders?

A

Keeps all profit, independent and flexible, simple to set up, owner has complete control.

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28
Q

What are the disadvantages of sole traders?

A

Unlimited liability, difficulty in raising finance, long hours of work, no continuity after the owner’s departure.

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29
Q

What are the advantages of partnerships?

A

No legal formalities, shared responsibilities, more capital from multiple owners, partners specialise in own are of expertise.

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30
Q

What are the disadvantages of partnerships?

A

Unlimited liability, shared profits, potential for partner conflicts.

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31
Q

What are the advantages of franchises for franchisees?

A

Reduced risk with a tested idea, back-up support, predictable setup costs, national marketing efforts.

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32
Q

What are the disadvantages of franchises for franchisees?

A

Shared profits with franchisor, strict contracts, less independence, expensive operation.

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33
Q

What are the advantages of franchises for franchisors?

A

Quick expansion method, cost-efficient growth, transfer some risks to franchisees.

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34
Q

What are the disadvantages of franchises for franchisors?

A

Sharing profits with franchisees, risk of poor franchisee management affecting the brand, high costs for franchisee support.

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35
Q

What are cooperatives?

A

Organisations owned & controlled by its members to meet their shared needs

36
Q

What are consumer cooperatives?

A

Owned by customers.

37
Q

What are worker cooperatives?

A

Owned by employees.

38
Q

What are limited companies?

A

Organizations with legal distinction from owners.

39
Q

What are the advantages of private limited companies (Ltd)?

A

Limited liability for owners, more capital possible since seen as less risky by lenders, continues if a shareholder dies.

40
Q

What are the disadvantages of private limited companies (Ltd)?

A

Public access to financial information, initially costly and time-consuming to set up, shared profits, transfer of shares can be complicated.

41
Q

What are the advantages of public limited companies (PLC)?

A

Large capital potential raised, limited liability, economies of scale can be exploited, shares can be bought & sold easily.

42
Q

What are the disadvantages of public limited companies (PLC)?

A

High setup costs, extensive financial information disclosure required, potential for managerial control over owners’ decisions.

43
Q

What are public corporations?

A

Business organisations owned & controlled by the state/government

44
Q

What are key features of public corporations?

A

Created by law via parliamentary acts, have a separate legal identity, funded by taxes for public services, state owned.

45
Q

What does interdependent mean in business classification?

A

Businesses relying on each other.

46
Q

What factors influence business location?

A
  • Proximity to market, labour, materials & competitors
  • Nature of business activity
  • Impact of internet on location decisions; e-commerce/fixed premises
  • Legal controls & trade blocs
47
Q

Primary sector

A

Industry involved in the extraction of raw materials/natural resources from the earth.

48
Q

Secondary sector

A

Industry involved in the processing & manufacturing of raw materials to convert them into goods/products

49
Q

Tertiary sector

A

Industry involved in the provision of a wide variety of services for consumers & other businesses

50
Q

What is legislation in a business context?

A

Laws governing business operations.

51
Q

What are international location influences?

A

Multinationals operating globally, trade barriers impacting international business, economic advantages for businesses operating in developing countries, political stability, language barriers affecting operations.

52
Q

What is globalization?

A

Growing integration of the world’s economies/ the increases in worldwide trade & movement of people & capital between countries

53
Q

Privatisation

A

Transfer of public sector resources to the private sector

54
Q

What is a multinational company (MNC)?

A

Large business with significant production or service operations in at least two different countries

55
Q

Factors affecting different forms of ownerships

A
  • Size
  • Growth
  • Need for finance
  • Control
  • Limited liability
56
Q

What are the advantages of MNCs?

A

Job creation across regions, boosts local economies, employee training and education, can exploit EOS.

57
Q

What are the disadvantages of MNCs?

A

Local labor may receive low wages, pressure on smaller businesses due to pricing power, influence over government policy.

58
Q

What are exchange rates?

A

Conversion rates between currencies.

59
Q

What is the impact of an increase in pound value?

A

Cheaper imports; expensive exports.

60
Q

What is the impact of a decrease in pound value?

A

Expensive imports; cheaper exports.

61
Q

What is fiscal policy?

A

Management of the economy via taxation and expenditure.

62
Q

What is monetary policy?

A

Control of money supply and interest rates by central banks.

63
Q

What is the purpose of taxes?

A

Used to fund public services; including direct and indirect taxes.

64
Q

What are social factors in business?

A

Influences including fashion, job availability, economy improvement.

65
Q

What are technological factors?

A

Advancements driving economic growth.

66
Q

What are environmental factors?

A

Emphasis on sustainable development.

67
Q

What are political factors?

A

Government regulations affecting business operations.

68
Q

What are key metrics for measuring business success?

A

Revenue, market share, customer satisfaction, profit.

69
Q

What are common causes of cash flow problems?

A

Overtrading, excessive fixed asset investments, excessive credit, seasonal factors, external factors, and poor financial management.

70
Q

What are general reasons for business failure?

A

Market entry barriers, ineffective marketing, inadequate business skills, poor leadership.

71
Q

Private sector

A

Business organisations owned by individuals or groups of individuals

72
Q

Public sector

A

Business organisations owned by local or central government

73
Q

Private enterprise

A

Owned by individuals or groups of individuals

74
Q

Sole trader

A

Business with a single owner who makes all decisions & keeps all profit; unlimited liability

75
Q

Profit maximisation

A

Making as much profit as possible in a given period of time

76
Q

Shareholders

A

Owners of limited companies

77
Q

Dividends

A

Share of the profit paid to shareholders in a company

78
Q

Unincorporated

A

No legal difference between owner & business

79
Q

Incorporated

A

Separate legal identity from owners

80
Q

Unlimited liability

A

Owner of a business is personally liable/responsible for all business debts

81
Q

Deed of partnership

A

Binding legal document that states formal rights of partners

82
Q

Limited liability

A

Owner only liable for the original amount of money invested in the business

83
Q

What is a public limited company?

A

Business that sells shares publicly on the stock exchange and is managed by directors & owned by shareholders; limited liability

84
Q

What is a partnership?

A

A formal arrangement by two or more parties to manage & operate a business & share its profits

85
Q

What is a franchise?

A

Business format in which the owner of a business (franchisor) grants a licence to another individual (franchisee) to operate their business model

86
Q
A

Business Studies (8 decks)

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