Business Year 10 Flashcards
3 sectors of business with explanation
Primary - produce materials
Secondary - using raw materials
Tertiary - providing a service
Examples of business in each sector
Primary- farming, fishing, mining, quarrying
Secondary- car/phone manufacturers
Tertiary- retail, entertainment, transport, education, emergency services
Reasons for change in primary sector
New machinery, raw materials used up, foreign competition
Reasons for change in secondary sector
New machinery, foreign competition
Reasons for change in tertiary sector
Change in population, increase/decrease in wealth, increased leisure time, more emphasis on customer service from businesses
Business objectives
P-rofit I-ncrease market share G-rowth S-urvival S-ervice
Public sector definition and example
Organisations owned and ran by government, that generate revenue through taxes or payments for the service.
Post office and BBC.
Stakeholders definition
An individual or group of people who have an interest in a business and it’s activities
Entrepreneurship definition
An individual who has the skills and knowledge to set up and run their own business, and is willing to take risks to do so.
Objectives of an entrepreneur for first three years
Year 1 - survival
Year 2 - increase profit
Year 3 - grow business
3 factors affecting location of a business
Physical geography of area
Transport
Tradition
Reasons for business failure
No demand Poor service/product Wrong location Bad management High costs Competition
Insolvency definition
Describes a firm that can’t meet financial commitments (can’t cover costs with revenue)
Merger definition
2 companies join to form a new larger business
Takeover/acquisition definition
Control of a company is achieved by buying a majority of its share (51%)
Internal growth definition and examples
A business growing within itself
- buy/open new stores
- buy new factories
- open new markets overseas to sell products
Horizontal integration
When organisations in the same stage of production merge or takeover
Backwards vertical integration
When an organisation merges with a company in the stage of production behind them
Forwards vertical intergration
When an organisation merges with the stage of production in front of them (which provides an outlet)
Diversification/conglomerate
Takeover or merge with a completely unrelated business activity
Sole trader definition
Business owned and controlled by one person, but can still employ others
Partnership definition
A business that has a minimum of 2 owners
Sleeping partner definition
Also known as limited partner, invests money in to a business but does not take part in day to day activities or decisions
What a deed of partnership provides
- Info on how business operates
- states how profits and losses are shared
- shows how much capital each partner invested
- signatures
- info on each partner
Private limited company (Ltd) with advantages and disadvantages
Can only sell shares to family and friends Advantage : unaffected if someone dies Limited liability Disadvantage : public view info Difficult to find investors
Public limited company (Plc) with advantages and disadvantages
Sell shares to anyone by trading on stock market Advantage: easy to sell shares Limited liability Disadvantage: pressure from shareholders Accounts can be seen Costly to set up
Incorporated businesses with advantage
Limited companies
Limited liability
Unincorporated business and advantage
Sole trader and partnerships
Easy and cheap to start
Multinationals definition with advantages and disadvantages
Company based in one country but sells and manufactures in a majority of others
Advantage: economies of scale
Disadvantage: cost of transport
Communication problems
Franchise definition
Existing company offers for sale its right to use its product, services and logo, usually in a defined location
Job description
Document describing duties of a worker
Person specification
Profile of type of person needed for a job, their skills and qualities
Internal recruitment
Advantages and disadvantages
When a vacancy is filled with someone already working for the organisation Advantage: -familiar with site -cheaper for company -Good morale due to promotion Disadvantages: - no new ideas -staff may be jealous of promotion
External recruitment
Advantages and disadvantages
When a vacancy is filled with someone outside of the company Advantages: -new ideas - no conflict in company Disadvantages: -costly - unfamiliar of workplace
6 methods of advertising
Local newspaper National newspaper Specialist magazine Job centers Internet Word of mouth
CV’s advantages and disadvantages
Advantages: -shows ability of organizing information -easy to see essential info at a glance Disadvantages: -may exaggerate - can be too long, therefore not read
What application forms provide
Information on applicant
Easy to compare
Up to date info so no old CV is submitted
Scenario testing
Watch an applicant in a mock scenario
Interviews
Employer is able to see candidates and judge how they present themselves. Group interviews are also used for teamwork
Presentations
Shows personal qualities of applicants
4 Monetary methods of motivation
Bonus
Fringe benefit
Overtime
Profit share
7 Non monetary methods of motivation
Promotion Fear Team work Award schemes Job enlargement Job enrichment Job rotation
Democratic leadership key points
Power is with whole group
Employees have greater input
Emphasis on delegation and empowerment
Induction definition
Training aimed to introduce new employees to a business and its procedures
On the job training definition
At the workplace, shown what to do by experienced employee be shadowing or demonstration
Off the job training
Training away from the workplace, but sometimes on the same site
Employment tribunal definition
A special court of law that only deals with disputes between workers and employees
7 employment laws
- Equal pay act
- Employment rights (making reasonable changes for disabled applicant or employees)
- Race relation act
- Minimum wage legislation
- Health and safety at work act
- Sex discrimination act
- Disability discrimination act
Redundancy definition
Employment is eroded as the firm no longer needs the work that was performed
What is ACAS
Advisory conciliation and arbitration service.
It helps to settle disputes between workers and employers.
One way communication
Sends a message without receiving one back
Two way communication
Sends a message and receives one back
Internal communication
Communication between 2 people within the same organisation
External communication
Communication with someone outside of the organisation you are working for
Vertical communication
Communication between 2 people on different layers of hierarchy
Horizontal communication
Communication between 2 people on the same layer of hierarchy
Formal communication
Official means of communication in an organisation such as meetings
Informal communication
Conversational communication
6 communication barriers
- Timing (worker may not listen to instructions whilst in a rush)
- clarity (may assume worker knows more than they do)
- attitude (workers may not respect each other therefore not communicate)
- wrong method (email does not work for urgent message)
- feedback not received (sender doesn’t knows if it has been received)
- problems (email not working)
Tall structure
Has many levels
Flat structure
Has few levels
Delayering
Process of removing layers from organisation charts
Span of control definition
Number of employees the manager is responsible for
Wide span of control
Responsible for 4 or more subordinates
Narrow span of control
Responsible for less than 4 subordinates
Chain of command
How responsibility for employees is organized within a business
Trade unions
Organisations that represent workers and give individuals a way of communicating with their employees, even in large organisations
3 types of industrial action
Strike- withdrawal of labour
Overtime ban- workers only work hours stated in contract
Work to rule- workers only do what is included in contract
Autocratic leadership key points
Full control
Uses power to get others to carry out work
Employees have little input
Motivation through reward
Tests
These allow you to find out about very specific info so is easy to compare
Appraisal and what it includes
Formal assessment of employees performance. It includes: -review of current performance -targets for next year -training/support identified
References
Describe personal qualities of the applicant
Reference can be refused, but not bad
Laissez-faire leadership key points
Gives little direction
Responsibility lies with group
Individual work in most aspects of job
Physchometric test
Produces profile or description of applicant, useful to compare against others
Maslow’s hierarchy (bottom to top)
Physiological needs (basic human needs) Safety needs (to feel safe from risk of danger) Social needs (to be with others) Self-esteem (to feel others value you) Self actualisation (to feel you've been able to use your talents)
Royalty payments definition
Payment made to franchisor based on sales revenue or profit
Social enterprises definition
Business primarily with social objectives whose surpluses are mainly reinvested into the business or community (non-profitable)
