Business Studies

Question 1

Nature of a business

Answer 1

-producing goods and services
-profit, employment, income, choice, innovation, entrepreneurship and risk, wealth, quality of life

Question 2

Classification

Answer 2

-size
-local, national, global
-industry - primary, secondary, tertiary, quaternary, quinary
legal structure

Question 3

Factors influencing choice of legal structure

Answer 3

• size, ownership, finance

Question 4

External influences

Answer 4

• economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets

Question 5

Internal influences

Answer 5

• products, location, resources, management, business culture

Question 6

Stages of the business life cycle

Answer 6

• establishment, growth, maturity, post-maturity - steady state, renewal, decline

Question 7

Responding to challenges at each stage of life cycle

Answer 7

Goals, programs, quality control, broaden market etc

Question 8

Voluntary and involuntary cessation - liquidation

Answer 8

voluntary - choose to close
involuntary - bankrupt if not incorporated
- liquidation if incorporated

Question 9

Features of effective management

Answer 9

Planning, organising, leading, controlling

Question 10

Skills of management

Answer 10

• Interpersonal, communication, strategic thinking, vision, problem-solving, decision-making, flexibility, adaptability to change, reconciling the conflicting interests of stakeholders

Question 11

Achieving business goals

Answer 11

• Profit, market share, growth, share price, social, environmental
• Mix of goals
• Staff involvement (innovation, motivation, mentoring, training)

Question 12

Management approaches

Answer 12

Classical - planning, organising, controlling, strict hierarchical structure, extensive chain of command, autocratic style

Behavioural - leading, motivating, communicating, teams, flat organisational structure, less management levels, democratic

Contingency - flexibility, adapting to changing circumstances, pyramid or flatter

Question 13

Operations

Answer 13

• goods and/or services
• the production process
• quality management (control - standards, inspections, assessing)(assurance - prevention)(TQM - responsibility among all)

Question 14

Marketing

Answer 14

• identification of target market (segmenting, mass, segmented (demographic, sociocultural, geographics, psychographics), niche
• marketing mix (4PS)(product - physical, positioning, branding)(price - cost, discount, market etc)(promotion - publicity, advertising, direct selling, sales promotion, product placement)(place - intensive/selective/exclusive, distribution channels)

Question 14

Cash flow statement

Answer 14

• cash balance position, how well generates cash to pay debts, enough funds to pay while maintain profit, cash generating ability of a firm
• opening + cash in - cash out= closing

Question 15

Income statement

Answer 15

• profitability for shareholders and owners etc, assess increase in expenses/sales, financial performance
• revenue, COGS = opening + purchases - closing, gross = revenue - COGS, net = gross - expenses

Question 16

Balance sheet

Answer 16

• displays what owes and owns, useful for investors, determine ability to pay debts
• assets = liabilities + owner’s equity
• assets - owned
• liabilities - owed
• OE - internal sources of funds

Question 17

HR

Answer 17

• recruitment - right people for right job
• acquisition - staffing needs, recruitment, selection
• training - induction, performance appraisal, training, development
• employment contracts - common law, awards/enterprise agreements
• casual/part time/full time
• separation - voluntary/involuntary

Question 18

Responding to internal/external influences

Answer 18

• eg accelerating tech, new business culture etc
• outsourcing, flat structure, strategic alliances/networks

Question 19

Managing change effectively

Answer 19

• identifying the need - BIS, reasons, cost money
• setting achievable goals - SMART - using targets/short term to motivate
• resistance to change - perception that will threaten, minimise, fear of unknown, financial costs, inertia of management staff, staffing, cultural incompatibility - to manage: consultants, slow/communicate, change models
• management consultants

Question 20

SME definition

Answer 20

1-199 - depends on who classifies
most unincorporated or incorp. private

Question 21

SME Role

Answer 21

98% SME
contribution to GDP
employment - jobs to 5 mil - 70% of workforce
choice and competition, innovation
domestic production 95% of Aus agriculture

Question 21

SME Economic contribution

Answer 21

1/3 Aus gdp - 500 billion of economic activity
42% of private sector workforce - 70% of workforce total
cash flow - taxes, wages, sales, trade etc

Question 22

Success/failure

Answer 22

• measure success: financial or non financial
• reasons for failure: lack of business skills, economic conditions, competition, insufficient capital
• outcomes of failure (20% 1st year, 60% 3 years) - personal costs, find new jobs, costs to gov if invol cessation

Question 23

Influences in establishing SMEs

Answer 23

- personal qualities – qualifications, skills, motivation, entrepreneurship, cultural background, gender, age

Question 24

Sources of information

Answer 24

- financial, professional, educational, institutional

Question 25

Business idea - competition

Answer 25

concept which could turn into profitable business - fill market, discussion, assessment, research, risks, solutions etc assessment of competitors - advantage

Question 26

Establishment options (name a few adv, dis)

Answer 26

New, existing, franchise

Question 27

Finance - source/cost

Answer 27

debt - owed, external - short term eg overdraft, commercial bill, factoring long term eg mortgage, debenture, leasing equity - owned personal savings, retained profits, shareholders

Question 28

Legal - business name, zoning, health and other regs.

Answer 28

bus name - legally required zoning - state based, position/location, industry work health + other - WHS act 2011, ppe, rights and responsibilities, environmental, how handle stock

Question 29

HR SME

Answer 29

- skills - cost - wage: salary, commission. non wage: employee benefits eg super, tax, payroll, leave loading, training

Question 30

Taxation

Answer 30

State - Payroll, stamp duty, land Local - council rates Federal - company, group/income, fringe benefits, GST, capital gains

Question 31

Sources of planning ideas

Answer 31

- gov, internet, market researches, customers and suppliers, trade shows, industry ass, staff/management - situational analysis - environment, market, competition, current position etc. therefore, SWOT

Question 32

Vision, goals and or objectives

Answer 32

Vision statement - wants to be, desired image, want to head Mission statement - how to get there Business goals - overall accomplishment that plan to achieve Long term growth - 5-10 years eg potential. mergers, takeovers, market expansion, product innovation

Question 33

Organising resources

Answer 33

- 4KBF - determine activities, delegate, efficiency

Question 34

Forecasting

Answer 34

Predict future for forward planning, financial projections - Total revenue - affects fund gathering, expected profit = price per unit x units - Total costs - whether project viable or not - fixed + variable. profit = rev - costs - Break even - how much need to sell at what price to gain profit = fixed/selling price - variable cost per u - Cash flow projections - cash available, identify periods of shortfall/surplus, additional funding if needed

Question 35

Monitoring/evaluations

Answer 35

- sales, profit, budgets nb: monitoring - measure against predicted evaluate - decide whether achieved/changes

Question 36

Taking corrective action

Answer 36

change, are standards unrealistic, have external influences changed, change business plan