Business studies end of yrs flash cards
Purpose of business activity
Meet needs of customers at a profit
Combine Factors of production
Add value
Needs of consumers
Water
Food
Clothing
Shelter
Factors of production
land
labour
capital
enterprise
Business activities classified by sector
primary sector
secondary sector
Tertiary sector −
Businesses in a mixed economy
Private sector
Public sector
Unincorporated
Incorporated
Private sector organisations
Sole trader
Partnership
Private limited company
Public limited company
Franchise
Joint venture
Social enterprise
Characteristics of entrepreneurs
Innovative
Self motivated
Self confident
Multiskilled
Strong leadership qualities
Initiative
Results driven
Risk-taker
Good at networking
Contents of a business plan
Outline of business proposal
Details of business opportunity
Potential market
Objectives of the business
Financial forecasts – sales, revenue, profit and
cash-flow forecasts
Measuring business size
Capital employed
Number of employees
Value of output
Market share
Ways businesses grow
Internal growth
External growth
Horizontal integration
Horizontal integration
Conglomerate integration
Backward vertical integration
Forward vertical integration
Business organisations in the private sector
Sole trader
Partnership
Limited company
Franchise
Joint venture
Social enterprise
Private limited company
Public limited company
Business objectives
Survival
Profit
Growth
Market share
Corporate social responsibility
SMART objectives
Specific
Measurable
Achievable and agreed
Realistic and relevant
Time-specific
Business stakeholders
Internal
Owners/ shareholders
Managers
Employees
External
Customers
Suppliers
Lenders
Local community
Government
Benefits of a well-motivated workforce
Lower absenteeism
Lower labour turnover
More competitive
Better quality goods and services
Improved productivity
Key motivational theories
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
Methods of motivation – financial rewards
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
Methods of motivation – non-financial rewards
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
Features of an organisational structure
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
Main functions of management
Planning
Organising
Commanding
Coordinating
Controlling
Leadership styles
Autocratic Leader takes all
the decisions
Democratic Employees take part
in decision-making
Laissez-faire Employees take most
of the decisions
Benefits of being a trade union member
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
Methods of recruitment
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
Methods of training
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
Reasons for terminating employment
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)
Legal controls over employment issues
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
Benefits of effective communication
Reduces risk of mistakes
Faster decision making
Quicker response to market changes
Improves employee motivation and morale
Improves coordination between departments
Improves customer relationships
Methods of communication
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
Communication barriers
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
Problems of ineffective communication
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
