business structure Flashcards
what is the private sector
the private sector included businesses that are set up by individuals or groups of individuals.
e.g. partnerships, sole traders, charities
what is the public sector
the public sector is essentially businesses activity that is owned / run by the government for the benefit of everyone.
e.g. hospitals, army, schools
what is unlimited liability
the owners of a business are responsible for all the debts of a business. personal belongings may need to be given up to pay the debts of the business
what is limited liability
owners of a business are not responsible for the debts of a business. personal belongings will not need to be given up to pay for the debts of a business. the owners however will lose the money they invested in the business if it fails
what is qualitive research
involves collection of data about attitudes, beliefs and intentions. Focus groups, participant observation and interviews are common methods used to collect qualitative data
what is quantitative research
Involves the collection of data that can be measured. This means the collection of statistical data such as sales figures and
market share. Surveys and the use of government publications/existing statistics are common methods of collecting quantitative research data
advantages of secondary research
It is inexpensive to collect and quick to obtain.
Enables cost-effective analysis of several data sources.
disadvantages of secondary research
Often out of date.
Might not be available.
Little control over quality.
Problems of interpretation.
advantages of primary research
The research carried out is only available
to that business – this will enable it to gain
market advantages over rival firms.
It is up to date information, thereby enabling better decision making.
It can be targeted for specific needs that the
business may have identified
disadvantages of primary research
Can be very expensive to collect – could
the money have been better utilised using
secondary research.
Can be very time consuming to collect so
that by the time it has been collected and
analysed the market may have changed.
Can have problems of bias
what is primary research
(field research) – collecting primary
data and information that does not already
exist. It is collected for a specific purpose. Most primary information is gathered through questionnaires, interviews, surveys, focus groups and consumer panels.
what is secondary research
(desk research) – identifies, collects
and collates information that is already in existence. This can be collected internally or externally. It may be existing business documents, official publications, yellow pages, industry magazines and online desk research
what are the aims if the private sector
survival
- profit maximisation
- maximizing growth
- gaining market share
- maximising sales revenue
- maximising shareholder value
- diversifying into new
products/new markets - social aims
- ethical aims
- improving reputation
- improved quality
- environmental
- increased efficiency
- competitiveness
what are the public sector aims
provide a universal service to all UK
households wherever they are located
provide a service that the private sector may
not be willing to provide as it may not be
profitable to do so
to make a trading surplus if possible
provision of merit goods to raise society’s
standard of living
to ensure effective provision of public goods
who are the stake holders of a business
owner / shareholder
managers
employees
customers
suppliers
competition
local community
trade unitons
what is a stakeholder
A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business
what is a private limited complan
often a small business. shares do not go on the stock exchange
what is a public limited company
Is usually a large, well-known business. Shares trade on the stock exchange
what is a sole trader
owned and run by one individual but they may employe people
what is a partnership
owned and run by 2-20 people
what are the advantages of sole traders
independence / own boss
wants to develop the sills acquired
privacy of affairs
to increase rewards
what are the disadvantages of sole traders
unlimited liability
more responsibility
relies heavily on their own ability to make
decisions
may work long hours and have limited
holidays as there is no one to cover them
limited sources of resources.
what are the advantages of a partnership
can share resources and ideas
can cover for each other (during holidays for example)
have more sources of finance
have shared responsibility and decisionmaking
what are the disadvantages of a partnership
unlimited liability
loss of control
slow decision-making
disagreements between partners
profits must be shared between partners
what is a deed of partnership
The partners may choose to draw up a ‘Deed of Partnership’, which is a legal agreement setting out the rights and responsibilities of the partners. It covers issues such as:
- how much capital each partner will contribute
- how profits (and losses) will be shared
amongst the partners - the procedure for ending the partnership
- how much control each partner has
- rules for taking on new partners
what is a social enterprise
Social enterprises include for-profit
and not-for-profit businesses (e.g. cooperatives)
with primarily social objectives, trading for social and environmental purposes, whose surpluses are principally reinvested for that purpose in
the business or in the community, rather than
being driven by the need to maximise profit for shareholders and owners
