Business Sem 1 Unit 3 Rev Flashcards
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Sole Trader characteristics
- single owner
- unlimited liability
- no perpetuity
- easy to set up
- owner keeps all profit
Partnership characteristics
- 2-20 owners
- unlimited liability
- no perpetuity
- easy to set up
- owners split the profit
Private limited company characteristics
- 1-50 shareholders
- complicated to set up
- limited liability
- has perpetuity
- owners split the profit
- can have a board of directors
Public Company characteristics
- unlimited shareholders
- has a board of directors
- perpetuity
- very complicated to set up
- profit split between everyone
- limited liability
- has ASX stock exchange
Social Enterprise characteristics
- Aims to help the community, environment, or social cause
- Reinvests it’s profit back into the cause
- Makes little to no profit
- Has volunteers
Government Business Enterprise Characteristics
- Run by the gov or gov body
- Aims to make a profit
- The company has a separate legal existence from the government.
Difference between unlimited liability and limited liability
Unlimited Liability - the owner is liable for all occurring debt by the business, they have to pay the debts by all means e.g selling personal assets
Limited Liability - The owner is only responsible for their part of the debt incurred in the business while the rest of the debts that occurred afterwards is the business to pay off
Types of business objectives
- Making profit
- Increase market share
- Improved efficiency
- Improved effectiveness
- Fulfill a market need
- Fulfill a social need
- Meet stakeholder expectation
Stakeholders of a business and what their interests could be
Owners - make a profit, grow the business
Managers - make a profit, increase profit, grow business
Employees - make a profit, stable/sustainable job, pay rise, improved working conditions
Customers - Low prices, usefulness, quality products and services
Suppliers - Trust and security, profit, prompt and consistent payments/orders
General community - Bring in jobs, Improve the economic of the community
Separate legal entity
Business is a separate entity - can only have its own debt
Types of stakeholders
Internal stakeholder - groups who have a direct financial share or are employed by the business
External stakeholder - groups that are outside of a business but are concerned or affected by its activities
Autocratic
- No feedback allowed from employees
- One-way top down communication (centralised -
decision making) - Quick decision making
- roles are well established and understood
- Task orintated
- Motivations are done through threats
Persuasive
- No feedback allowed from employees
- One-way top down communication ( centralised
decision making) but provides reason - Motivations are done through threats
- Task orientated
Consultative
- Two way communication (decentralised decision
making) - Feedback is asked by the manager but manager makes
the final decision - Employee contribution
- People orientated/focused
Participative
- Two way communication (decentralised decision
making) - People focused
- People motivated - peoples needs first
- Employee contribution
Laissez - Faire
- Two way communication (decentralised decision)
- People focused
- People motivated - peoples needs first
Employee contribution
Communication
- Written or verbal
- Effective transfer of information
- Not just talking but articulating themselves and their ideas.
Delegation
- Distributing workload to other employees
- Enforcing work needed to be done
Planning
- decision-making process that is future-oriented
- understanding the purpose or mission of a business
- creating various levels of objectives for the business
Steps in planning
- Set goals
- Gather info using SWOT
- Establish oppotunities and threats the business could face in the future
- Develop action plan
- Evaluate and review
S.W.O.T analysis
S - Strenghts
W - Weaknesses
O - Opportunities
T - Threats
Leadership
- influencing others towards attaining the objectives of the business
- good communicator
- able to build teams
- resolve conflicts
Types of planning
- Strategic - Long term (2-5 yrs)
- Tactical - Medium term (1-2 yrs
- Operational - Short term (daily/monthly)
Decision - making
Being able to identify and workout a solution to a problem in a given time
The steps taken in decision making
- Identify the problem and define the objectives
- Gather information to establish the cause of the problem
- Develop alternative solutions
- Analyse the alternatives - Rank and sort the different alternatives using SWOT
- Choose an alternative and implement it
- Evaluate the implementation
Interpersonal
Being able to lead, motivate, communicate, manage conflict and build team rapport.
Corporate Culture
The values, beliefs, and behaviors that are common or understood at a company
Offical Corporate Culture
Values, beliefs and behaviors that are set by the company, usually in the mission or goal statements or policies and procedures
Real Corporate Culture
What actually happens in the business, different from offical corporate culture
