Business studies end of yrs flash cards

Question 1

Purpose of business activity

Answer 1

Meet needs of customers at a profit
Combine Factors of production
Add value

Question 2

Needs of consumers

Answer 2

Water
Food
Clothing
Shelter

Question 3

Factors of production

Answer 3

land
labour
capital
enterprise

Question 4

Business activities classified by sector

Answer 4

primary sector
secondary sector
Tertiary sector −

Question 5

Businesses in a mixed economy

Answer 5

Private sector
Public sector
Unincorporated
Incorporated

Question 6

Private sector organisations

Answer 6

Sole trader
Partnership
Private limited company
Public limited company
Franchise
Joint venture
Social enterprise

Question 7

Characteristics of entrepreneurs

Answer 7

Innovative
Self motivated
Self confident
Multiskilled
Strong leadership qualities
Initiative
Results driven
Risk-taker
Good at networking

Question 8

Contents of a business plan

Answer 8

Outline of business proposal
Details of business opportunity
Potential market
Objectives of the business
Financial forecasts – sales, revenue, profit and
cash-flow forecasts

Question 9

Measuring business size

Answer 9

Capital employed
Number of employees
Value of output
Market share

Question 10

Ways businesses grow

Answer 10

Internal growth

External growth
Horizontal integration
Horizontal integration
Conglomerate integration
Backward vertical integration
Forward vertical integration

Question 11

Business organisations in the private sector

Answer 11

Sole trader
Partnership
Limited company
Franchise
Joint venture
Social enterprise
Private limited company
Public limited company

Question 12

Business objectives

Answer 12

Survival
Profit
Growth
Market share
Corporate social responsibility

Question 13

SMART objectives

Answer 13

Specific
Measurable
Achievable and agreed
Realistic and relevant
Time-specific

Question 14

Business stakeholders

Answer 14

Internal
Owners/ shareholders
Managers
Employees

External
Customers
Suppliers
Lenders
Local community
Government

Question 15

Benefits of a well-motivated workforce

Answer 15

Lower absenteeism
Lower labour turnover
More competitive
Better quality goods and services
Improved productivity

Question 16

Key motivational theories

Answer 16

Taylor
Economic man
Money is the main
motivator

Maslow
Hierarchy of needs
Physiological needs
Safety needs
Social needs
Esteem needs
Self-actualisation

Herzberg
Two-factor theory
Hygiene factors:
Wage/salary
Working with others
Supervision
Working condition
Company policies
Motivators:
Responsibility
Advancement
Achievement
Recognition of achievement
The work itself

Question 17

Methods of motivation – financial rewards

Answer 17

Hourly wage rate-Earnings based on hours worked, not on output
Salary-Fixed amount earned per year, not based on hours worked or output
Piece-rate/commission-Earnings based on the number produced or the number sold
Bonus scheme-Additional amount paid for reaching the production target
Fringe benefits- Include company cars,
staff discounts and pension schemes
Profit sharing-Employees receive a share
of the yearly profit

Question 18

Methods of motivation – non-financial rewards

Answer 18

Job rotation-Employees switch to different tasks to increase variety

Job enlargement-Increasing or widening tasks to
increase variety

Job enrichment-Organising tasks so employees
are able to use their full abilities

Quality circles-Groups of employees meet on a
regular basis to discuss work related problems

Team working-Organising production so groups of employees complete the whole unit of work

Delegation-Passing authority to lower-level employees to complete tasks

Training-Improves job prospects and provides opportunities for employees to gain new skills

Opportunities for promotion-Employees are given chances to progress within the organisation and move to a higher level

Question 19

Features of an organisational structure

Answer 19

Levels of hierarchy-The number of levels in
an organisational structure

Chain of command-The route through
which authority is passed down in an
organisation

Span of control-The number of
subordinates reporting
to each
manager/supervisor

Question 20

Main functions of management

Answer 20

Planning
Organising
Commanding
Coordinating
Controlling

Question 21

Leadership styles

Answer 21

Autocratic Leader takes all
the decisions

Democratic Employees take part
in decision-making

Laissez-faire Employees take most
of the decisions

Question 22

Benefits of being a trade union member

Answer 22

Negotiate with employers to improve pay and working conditions
Help to resolve conflict in the workplace
Provide legal advice and support to members
Provide other benefits such as insurance schemes and pension schemes

Question 23

Methods of recruitment

Answer 23

Internal
Benefits
* Quicker
* Cheaper
* Can motivate employees
* New recruit already knows
and is known to the business
Limitations
* Better candidate might have
been available from outside
* Might create conflict among
employees who also wanted the job
* Does not bring in new ideas
* There will still be a vacancy to fill

External
Benefits
* Wider choice of applicants
* Brings in new ideas
* Avoids upsetting employees by not
promoting someone internally
Limitations
* Takes longer to fill the vacancy
* More expensive
* New employee will need induction
training

Question 24

Methods of training

Answer 24

Induction
Helps new employees
become familiar with
their workplace

On-the-job
Watching or following an experienced employee in the workplace

Off-the-job
Training takes place away from the workplace, for example at a specialist training centre or college

Question 25

Reasons for terminating employment

Answer 25

Resignation by the employee
Employee decides to leave their job voluntarily

Retirement of the employee
Employee reaches retirement age

Redundancy
Employee’s job is no longer
needed

Dismissal
Employer dismisses employee for reasons of incompetence or for poor conduct (e.g. often late/ignores safety procedures)

Question 26

Legal controls over employment issues

Answer 26

Contract of employment-A legally binding written agreement between employer and employee

Discrimination laws-It is illegal to discriminate against someone on grounds of age, gender, disability, race, colour or religion

Health and safety-Protects employees from injury or physical discomfort

Minimum wage-Employers cannot exploit employees by paying very low wages

Unfair dismissal-An employer cannot dismiss an employee without good reason

Question 27

Benefits of effective communication

Answer 27

Reduces risk of mistakes
Faster decision making
Quicker response to market changes
Improves employee motivation and morale
Improves coordination between departments
Improves customer relationships

Question 28

Methods of communication

Answer 28

Oral
* Face-to-face conversation
* Interview
* Meeting
* Telephone

Written
* Letter
* Memorandum
* Noticeboard
* Meeting agenda and minutes
* Job description
* Purchase order and invoice
* Report
* Company magazine

Electronic
* Email
* Fax
* Text messaging
* Video-conferencing
* Social media

Visual
* Bar chart
* Graph
* Photograph
* Video
* Presentation

Question 29

Communication barriers

Answer 29

Problems with the communication
channel
* Wrong medium used
* Language is too complex
* Message is too long
* Channel of communication is too long

Problems between sender and
receiver
* Lack of trust and respect
* Demotivated employees don’t listen properly
* Employees do not pass on the message

Problems with the physical
environment
* Too much noise when message is
being sent and
received
* Sender and receiver are a long
distance from each other

Question 30

Problems of ineffective communication

Answer 30

Tasks not completed or not completed correctly
Damage to business’s reputation
Fall in morale and motivation
Greater risk of accidents
Poor sales
Poor recruitment and selection of employees