Business sac revision unit 1

Question 1

TYPES OF BUSINESSES

Answer 1

TYPES OF BUSINESSES

Question 2

what is a sole trader?

Answer 2

• Sole Trader:
  
  • A sole trader has one person that owns and operates the business
  • Sole traders have unlimited liability
  • Owners are legally responsible for all debts of the business
  • The individual and the business have the same legal entity

Question 3

what is a advantage and disadvantage of a sole trader

Answer 3

• Advantages
  
  • Simple and inexpensive to set up
  • No partner disputes
  • The owner has complete control over the business
• Disadvantages
  
  • Unlimited liability(personally responsible for all business debts)
  • Difficult in raising finance for expansion
  • Often required to perform many different tasks

Question 4

what is partnership?

Answer 4

• A partnership is a business that is owned by two or more people
• Partnerships can generally have up to 20 partners
• Two types of partnerships
  
  • General Partnership: Partners are deemed equally responsible (each has unlimited liability)

Question 5

what is a advantage and disadvantage of a partnership

Answer 5

• Advantages
  
  • Simple and inexpensive to set up
  • Risk/debt is shared among partners
  • Shared workload and responsibility
  • Less costly to operate than a company
• Disadvantages
  
  • Unlimited liability
  • Possibility of disputes over key decisions
  • Difficulty in finding a suitable partner
  • Need to share the profits amongst partners

Question 6

Private limited company?

Answer 6

• A private company is a business that is owned by private shareholders which are not available to the public
• Owned by up to 50 private shareholders
• Private Companies have limited liability
• Private companies tend to be small to medium-sized, family-owned businesses.
• A private company must have the words Pty Ltd after its name

Question 7

what is a advantage and disadvantage of private limited company

Answer 7

• Advantages and Disadvantages
  
  • Advantages
    
    • Limited liability
    • Separate legal entity
    • Life of the company is longer
  • Disadvantages
    
    • Higher establishment costs
    • Shares can’t be traded freely
    • Higher degree of government control

Question 8

Public Company?

Answer 8

• A public listed company is one where the shares of the business can be purchased or sold on an open market such as the Australian Securities Exchange
• Public companies have limited liability
• Shares can be purchased by the general public

Question 9

advantages and disadvantages of a public company

Answer 9

• Advantages
  
  • Limited liability
  • Easier to raise capital (money) by selling extra shares
  • Separate legal entity
  • Life of the company can live longer
• Disadvantages
  
  • Highly complex and time-consuming to establish
  • Higher establishment costs
  • Additional compliance costs, more accountability
  • Possible loss of control

Question 10

Social Enterprise?

Answer 10

• A business that exists to fulfil a social need.
• They are usually commercially viable businesses that make a profit.
• Typical social needs include
  
  • Providing opportunities for local unemployed people
  • Create accessibility to a better quality of life for disadvantaged members of the community.
  • Focusing on waste minimisation and recycling.

Question 11

advantages and disadvantages of social enterprise?

Answer 11

• Advantages and Disadvantages
  
  • Advantages
    
    • Meeting a social need can encourage community support, increasing profit and market share
    • Improved morale within the business as employees value the work they are doing
  • Disadvantages
    
    • Difficult to obtain finance to begin the business
    • It can be difficult to focus on both social and financial objectives

Question 12

BUSINESS OBJECTIVES

Answer 12

BUSINESS OBJECTIVES

Question 13

what are the business objectives

Answer 13

• To make a profit
• To increase market share
• To fulfil a market need
• To fulfil a social need
• To meet shareholders’ expectations

Question 14

what are the business objectives with examples of each one

Answer 14

To make a profit – A business makes more money than it spends.

To increase market share – A business sells more than its competitors and becomes more popular.

To fulfil a market need – A business provides something that people want but don’t have enough of.

To fulfil a social need – A business helps the community or the environment while also running as a business.

To meet shareholders’ expectations – A business makes enough money and grows in a way that keeps its investors happy.

Question 15

MANGAGEMENT STYLES

Answer 15

MANGAGEMENT STYLES

Question 16

what is autocratic style and a example

Answer 16

• Autocratic Management Style
  
  • The manager tells the staff what decision has been made
  • Characteristics:
    
    • Management makes decisions without employee input (centralised)
    • One-way communication (top-down)
    • Clear communication
  • Strengths:
    
    • Fast decisions
    • Clear direction given to employees
    • Employees are clear about their role in the business
  • Weaknesses:
    
    • Low morale
    • Employee development is lacking
    • Poor relationships between management and staff
    • Smaller pool of ideas
  • The autocratic management style would be the best when time is lacking and decisions need to be made quick.

Question 17

Persuasive Management Style

Answer 17

• The manager makes the decision on their own and sells the decision to staff
• Characteristics:
  
  • Management makes decisions without employee input
  • (centralised) One-way communication (top-down), although more information is given
• Strengths:
  
  • Fast decisions
  • Can gain support by providing more information
  • Instructions are clear
• Weaknesses:
  
  • No employee input
  • Low morale
  • Employees are frustrated as their ideas are not heard
• When time is of importance and decisions need to be made quickly, change would occur quicker if staff understood why

Question 18

Consultative Management Style

Answer 18

• A manager consults employees before making decisions
• Characteristics:
  
  • Two-way communication (up and down)
  • Management makes decisions (centralised)
  • Discussions are encouraged
• Strengths:
  
  • Greater variety of ideas can improve the quality of the decision
  • Employees often take more interest
  • Higher morale Improves confidence in employees
• Weaknesses:
  
  • Time-consuming
  • Some ideas will be overlooked, which can cause conflict or resentment
  • Employees may not have the experience or knowledge to contribute
• When is it most important? During times of change, when employees have experience and knowledge, more complex tasks need to be solved

Question 19

Participative Management Style

Answer 19

• The manager joins in with staff to make decisions
• Characteristics:
  
  • Two-way communication (up and down)
  • Employees are able to make decisions (decentralised)
  • Information is shared among employees
• Strengths:
  
  • A larger pool of ideas
  • Strong relationships between employees and management
  • High motivation
  • Employees are more receptive to change
  • Employees develop more skills and experience
• Weaknesses:
  
  • Time-consuming
  • Conflicts can arise due to disagreements on the best decision
  • More time on forming decisions less time spent completing work
  • Managers role maybe undermined
  • Possible misuse of resources

Question 20

MANAGEMNT SKILLS

Answer 20

MANAGEMNT SKILLS

Question 21

Communication

Answer 21

• Communication is the transfer of information from a sender to a receiver.
  
  • It can be non-verbal (body language, visual) or verbal (written or oral form).
  • It is an important skill in most situations so that stakeholders are clear on expectations
  • Two-way communication is often important

Question 22

Delegation

Answer 22

• Delegation is the process where authority and responsibility is passed down from a manager to an employee.
  
  • Delegating tasks can free up time for the manager to do more important things
  • Helps improve the skills and experience of employees
  • Empowers staff

Question 23

Interpersonal skills

Answer 23

• Interpersonal skills is the ability to communicate with a range of people and develop positive relationships.
  
  • Having good interpersonal skills allows the manager to communicate accurately and honestly yet maintain strong relationships.
  • Helps build a strong culture where relationships are valued.

Question 24

Corporate Culture

Answer 24

• Corporate culture is the shared values and beliefs of people within the business.

Two types of corporate culture exist:

Question 25

TYPES OF STAKEHOLDERS

Answer 25

TYPE OF STAKEHOLDERS

Question 26

what are the types of stakeholders

Answer 26

Customers: Want a quality product or service that meets their needs Employees: Depend on their job security and benefits from the organization Investors: Provide capital to the business in exchange for financial returns Suppliers: Sell goods or services to the business, so project success means more business for them Communities: Want the project to not negatively impact their health, safety, or economic development Government: Collect taxes from the business and its employees