Ch 1-2 Flashcards
1
Q
Define Need
A
A good or service essential for living
2
Q
Define Want
A
A good or service that people would like to have, but is not required for living
3
Q
Define Scarcity
A
Unlimited wants and limited resources to satisfy those wants
4
Q
Define Opportunity cost
A
Next best alternative forgone by choosing another item
5
Q
Define Factor of Production
A
Resources required to produce goods or services
6
Q
Give Factors of Production
A
- Land2. Labour3. Capital4. Enterprise
7
Q
Define Land
A
Natural resources
8
Q
Define Labour
A
Physical/mental efforts by workers in production process
9
Q
Define Capital
A
Finance/equipment needed to produce good/service
10
Q
Define Enterprise
A
Risk taking ability of a person
11
Q
Define Specialization
A
when a person/organisation concentrates on a task at which they are best at
12
Q
Pro/Con of Specialization
A
Pros:
1. Increase efficiency
2. Faster production
3. Quicker to train labours
4. Skill development
Cons:
1. Monotonous
2. Higher labour turnover
3. Over-dependency
13
Q
Purpose of Business Activity
A
Business is an organization that use factors of production to create goods/services to supply human want/need
14
Q
Define Added Value
A
Difference between cost of material bought in and selling price of product
15
Q
How to increase added value?
A
- Reducing cost of production
- Raising prices
- Branding
- Adding special features
- Provide premium services
16
Q
Give types of Sectors
A
- Primary
- Secondary
- Tertiary
- Public
- Private
17
Q
Define Primary Sector
A
Use/extraction of natural resources
18
Q
Define Secondary Sector
A
Manufacture of goods with natural resources
19
Q
Define Tertiary Sector
A
Provides service
20
Q
Define industrialization
A
When economy shift from agriculture to manufacturing
21
Q
Define de-industrialization
A
Reduction of manufacturing of an economy
22
Q
Define Private Sector
A
Private individuals own/run business ventures for profit
23
Q
Define Public Sector
A
Government own/run business venture for increase wellfare
24
Q
Define Mixed Economy
A
Both public/private sector exists
25
Define Entrepreneur
A person who organizes, operates and takes risks for a new business venture
26
Qaulities of Entrepreneur
1. Risk taker
2. Creative
3. Optimistic
4. Self-confident
5. Innovative
6. Independent
7. Effective communicator
8. Hard working
27
Define Business Plan
A document containing business objectives and important details about operations, finance and owners of new business
28
Contents of Business Plan
1. Owner
2. Business
3. Market
4. Advertising
5. Costs
6. Expansion
7. Business organisation
29
Pros of Business Plan
1. More focus of mission
2. Help motivate workers
3. Help get loan/overdraft
30
Define Start-up
Company in first stages of operations
31
Why governments help start-ups?
1. Provide employment
2. Contribute to economy growth
3. Contribute to country exports
4. introduction of fresh idea/technologies
32
How governments support businesses?
1. Organise advice
2. Provide low cost land
3. Provide loan at low interest rate
4. Give grants for capital
5. Give grants for training
6. Give tax breaks/ holidays
33
How to measure business size?
1. Number of employees
2. Value of output
3. Value of capital employed
34
Define Internal Growth
Expands its existing operations
35
Define External Growth
When business takes over or merges with another business (Intergration)
36
Define Merger
When owner of two businesses agree to join together to make one business
37
Define Takeover
When one business buys another business
38
Types of External Growth
1. Horizontal
2. Vertical (back/front)
3. Conglomerate
39
Define Horizontal merger/integration
When one firm merges with/takes-over another one in **same industry at same stage of production**
40
Pros of Horizontal merger/integration
1. Reduce competition
2. Opportunities of economies of scale
3. Increase market share
41
Define Vertical merger/integration
When one firm merges with/takes-over another one in **same industry but at different stage of production**
42
Define Backward vertical merger/integration
When one firm merges with/takes-over another one in **same industry but at a stage of production behind 'predator' firm**
43
Define Forward vertical merger/integration
When one firm merges with/takes-over another one in **same industry but at a stage of production ahead 'predator' firm**
44
Define Conglomerate merger/integration
When one firm merges with/takes-over a firm in different industry (diversification)
45
Cons of Growth
1. Difficult to control staff
2. Lack of funds
3. Lack of expertise
4. Diseconomies of scale
46
Why businesses stay small?
1. Type of industry
2. Market size
3. Owners objectives
47
Why businesses fail?
1. Poor management
2. Lack of experience/planning
3. Over-expansion
4. Failure to plan for change
5. Poor financial management
48
Why new businesses have greater risk of failure?
1. Less experience
2. New to market
3. Don’t have lot of sales
4. Don’t have lot of money to support business
49
Define Sole Trader/Sole Proprietorship
A business owned and controlled by one person
50
Pros/Cons of Sole Trader/Sole Proprietorship
Pros:
1. Easy to set up
2. Full control
3. Sole trader receives all profit
4. Personal
Cons:
1. Unlimited liability
2. Full responsibility
3. Lack of capital
4. No continuity
51
Define Partnership
A partnership is a legal agreement between 2+ people to own, finance and run a business jointly to share all profits
52
Pros/Cons of Partnership
Pros:
1. Easy to set up
2. Partners provide skill/idea
3. More capital investments
Cons:
1. Conflicts
2. Unlimited liability
3. Lack of capital
4. No continuity
53
Define Joint-stock companies
Companies which can sell shares
54
Types of Joint-stock companies
1. Private Limited Companies
2. Public Limited Companies
55
Define Private Limited Companies
1+ owners who can sell shares to only people known by existing shareholders (family and friends)
56
Define Public Limited Companies
2+ owners who can sell shares to any individual/organization in general public through stock exchanges
57
Pros/Cons of Joint-stock companies
Pros:
1. Limited Liability
2. Raise huge amounts of capital
3. Public Ltd. Co. advertise shares
Cons:
1. Required to disclose financial information
2. Private Ltd. Co. can't sell shares to public
3. Public Ltd. Co. require lots of legal documents
4. Annual General Meeting (AGM)5. Public Ltd. Co. have managerial problems
58
Define Franchise
Owner of business (the franchisor) grants licence to another person/business (the franchisee) to use their business idea
59
Pros/Cons of Franchisor
Pros:
1. Fast/low cost for expansion
2. Income of franchisee to franchisor
3. Franchisee runs business
Cons:
1. Profits shared with franchisee
2. Loss of control
3. Risk of reputation loss
4. Franchisee may not be skilled
5. Need to supply training/product
60
Pros/Cons of Franchisee
Pros:
1. Low chance failure
2. Established brand
3. Supplied technical/managerial support
4. Supplied products
Cons:
1. Cost of set-up
2. Not fully in control
3. Profits shared with franchisor
4. Need to promote
61
Define Joint venture
An agreement between 2+ businesses to work together on a project
62
Pros/Cons of Joint Venture
Pros:
1. Reduce risk
2. Less cost
3. Other businesses bring skills
4. Market potential increased
Cons:
1. Risk of reputation loss
2. Slow decisions made
63
Define Public Sector Corporations
Businesses owned by the government
64
Pros/Cons of Public Sector Corporations
Pros:
1. Natural monopolies
2. Reduce waste
3. Provide essential services
Cons:
1. Low motivation
2. No competion (no improvement)
3. Run for government popularity
65
Define Business objectives
Aims/targets that a business works towards for success
66
Pros of Business objectives
Pros:
1. Increased motivation
2. Improved decision making
3. Unite the business
4. Compare business preformance
67
Examples of Business objective
1. Survival
2. Profit
3. Growth
4. Market share
5. Service to society
68
Define Stakeholder
Any person/group that is interested in/directly affected by the performance/activities of a business
69
Types of Stakeholders
1. Internal Stakeholder
2. External Stakeholder
70
Types of Internal Stakeholders
1. Shareholder/ Owners
2. Workers
3. Managers
71
Define Shareholder/ Owners
They invest capital into the business for profit/growth
72
Define Workers
People that are employed by the business for salary/job satisfaction/job security
73
Define Manager
Employees that manage work of others for business growth/job security/high salaries
74
Types of External Stakeholders
1. Customers
2. Government
3. Banks
4. Community
75
Define Customer
They purchase goods/services for valuable/reliable/well designed product
76
Define Government
Protect workers/customers from business activities for increase government revenue/imployment
77
Define Banks
Provide financial help for business liquidity/profit
78
Define Community
Consists of all Stakeholder groups for job offer/socially responsible products/no harm to environment
79
Give Public Sector business objectives
1. Financial
2. Service
3. Social
80
Give Private Sector business objectives
1. Survival
2. Profit
3. Growth
4. Market share
81
Define Conflicts of stakeholder objectives
When a business tries to satisfy objectives of one stakeholder, it might mean that another stakeholder’ objectives could go unfulfilled
82
Why do people work?
1. Have a better standard of living
2. Be secure
3. Gain experience and status
4. Have job satisfaction
83
Define Motivation
The reason why employees want to work hard/effectively for the business
84
Types of Motivators
1. **Money**
2. Socail needs
3. Esteem needs
4. Job satisfaction
5. Security
85
Why motivate workers?
1. Increased productivity
2. Increased efficiency
3. Decrease absenteeism
4. Decrease labour turnover
5. Increase profits
86
Types of Motivation Theories
1. Taylor's Scientific Management Theory
2. Maslow's Hierarchy of Needs Theory
3. Herzberg's Two Factor Theory
87
Concept of Taylor's Motivation Theory
* Workers are motivated by money
* Piece-rate system (paid for no. of output produced)
* Scientific management in production
* Division of Labour
88
Cons of Taylor's Motivation Theory
Cons:
1. There are more important motivators than money
2. Piece rate system isn't measurable & doesn't guarentee quality
89
Concept of Maslow’s Motivation Theory
1. Employees are motivated by each level of the hierarchyhttps://igcseaid.files.wordpress.com/2020/05/maslows-heirarchy-e1589767895741.png
90
Cons of Maslow’s Motivation Theory
Cons:
1. It doesn't apply to all workers
91
Concept of Herzberg’s Motivation Theory
People have 2 sets of needs:
1) Basic animal needs called ‘hygiene factors’:
-status
-security
-work conditions
-company policies and administration
-relationship with superiors/subordinates
-salary
2) Needs that allow worker to grow psychologically, called ‘motivators’:
-achievement
-recognition
-personal growth/development
-promotion
-work itself
Hygiene factors need fulfilment, if not it de-motivates. Motivators truly motivate workers.
92
Types of Financial Motivators
1. Wages
2. Salary
3. Commission
4. Bonus
5. Performance-related pay
6. Profit-sharing
7. Share ownership
93
Define Time-Rate Wage
Pay based on no. of hours worked
94
Define Peice-Rate Wage
Pay based on no. of output produced
95
Types of Non-Financial Motivators
1. Fringe benefits
2. Job Satisfaction
3. Job Rotation
4. Job Enlargement
5. Job Enrichment
6. Team-working
7. Training
8. Promotion
96
Define Organizational structure
Levels of management and division of responsibilities in a business
97
Pros of Organizational structure
Pros:
1. Employees know their position
2. Sense of belonging
98
Define Span of Control
No. of workers working directly under manager in organizational structure
99
Define Chain of Command
Structure of organization to allow instructions to pass on from senior manager to lower levels of management
100
Pros of short chain of command
Pros:
1. Communication is quicker/accurate
2. Managers are in touch with employees
3. Span of control is wider
101
Define Line Manager
Person who has authority over people directly below them in organizational structure
102
Define Staff Manager
Specialists who provide support to line managers
103
Role of Manager
1. Planning
2. Organizing
3. Coordinating
4. Commanding
5. Controlling
6. Delegation
104
Define Delegation
Giving subordinate authority to do a task
105
Pros of Manager Delegation
Pros:
1. Managers cannot do all work by themselves
2. Managers can measure efficiency/effectiveness of subordinates work
106
Pros of Subcordinate Delegation
Pros:
1. Work becomes interesting/rewarding (job satisfaction)
2. Employees feel important/feel trusted
3. Method of training
4. Opportunity for promotion
107
Define Leaderships style
Approach used in dealing with people when in a position of authority
108
Define Autocratic style
Where managers expect to be in charge
109
Define Democratic style
Where managers involve employees
110
Define Laissez-faire style
Where managers leaves worker to do their own decision-making
111
Define Trade Union
Group of workers who join together to protect their interest
112
Pros/Cons in joining a Trade Union
Pros:
1. Strength in number
2. Improved conditions of employment
3. Financial support
Cons:
1. Costs money
2. Actions may go against own will
113
Role of HR Department
1. Recruitment and selection
2. Seting Wages and Salaries
3. Industrial relations
4. Training programmes
5. Health and Safety
6. Redundancy and dismissal
114
Define Recruitment
Process of hiring someone
115
Define Job Analysis
Identifies/records tasks/responsibilities relating to a job
116
Define Job Description
Outlines responsibilities and duties of the job
117
Contents in Job Description
1. Job Title
2. Job location
3. Job summary
4. Working Conditons
5. Job Duties
6. Hazards
118
Define Job Specification
A document that outlines the requirements required by an employee
119
Contents in Job Specification
1. Qualifications
2. Experience
3. Training
4. Skills
5. Responsibilities
6. Emotional Characteristics
7. Sensory Demands
120
Define Internal recruitment
Vacancy is filled by an existing employee of the business
121
Pros/Cons of Internal recruitment
Pros:
1. Saves time and money
Cons:
1. No new skill/experience coming in business
2. Jealousy among workers
122
Define External recruitment
Vacancy is filled by someone who is not an existing employee/will be new to the business
123
Types of Job Advertisement
1. Local/national newspapers
2. Job centres
3. Recruitment agencies
124
Process of Selection of a Job
1. Shortlisted applicants CV's2. Interview3. Contract of employment
125
What does Interview asses?
1. Applicant’s ability to do job
2. Applicant’s personal/character qualities
126
Define Contract of Employment
Legal agreement between employer and employee
127
Content in Contract of Employment
1. Name of employer/employee
2. Job title
3. Hours to work
4. Salary
5. Holiday entitlement
128
Types of Contract of employment
1. Part-Time employment 2. Full-Time employment
129
Pros/Cons to Employer of Part-Time Employment
Pros:
1. More flexible hours of work
2. Easier to make employees work at busy times
3. Works less hours and so takes lower pay
4. Less expensive than full-time workers
Cons:
1. Less chance to be trained because worker sees job as temporary
2. Takes longer to recruit
3. Less committed to the business
4. less likely to be promoted
5. More difficult to communicate
130
Pros of Training
Pros:
1. Improve skill/knowledge
2. Increased efficiency
131
Types of Job Training
1. Induction training2. On-the-job training3. Off-the-job training
132
Define Induction Training
An introduction given to new employee about the business
133
Pros/Cons of Induction Training
Pros:
1. Helps new employees to settle in job quickly
2. Less chance to make mistakes
Cons:
1. Time-consuming
2. Wages paid whilst training
134
Define On-the-job Training
Watching a more experienced worker doing the job
135
Pros/Cons of On-the-job Training
Pros:
1. Less costs than off-the-job training
2. Worker produces whilst training
Cons:
1. Production time lost
2. Bad habits might transfer
136
Define Off-the-job training
Trained away from the workplace by specialist trainer
137
Pros/Cons of Off-the-job training
Pros:
1. Increase range of skills (Multi-skilled)
Cons:
1. Expensive
2. No production
3. Worker can leave easily
138
Define Workforce Planning
Number and skills of employees required
139
Why downsize workforce?(reduce no. of employees)
1. Introduction of automation2. Less demand of product3. Business closure4. Relocating factory abroad5. Business has merged
140
Ways to downsize workforce
1. Dismissal2. Redundancy3. Retirement
141
Define Dismissal
When worker is fired because of them
142
Define Redundancy
When worker is fired not because of them
143
Types of Legal Controls over Employment Issues
1. Protection from unfair discrimination2. Protection from unfair dismissal3. Health/safety at work4. Wage protection
144
Define Industrial Tribunal
Legal meeting that considers workers complaints of unfair dismissal/discrimination at work
145
Define Communication
Transfer of a message from sender to receiver
146
Define Internal communication
Communication between two members of same organisation
147
Define External communication
Communication between a organisation and another organisation/individual
148
Contents of Effective communication
1. Sender2. Medium of communication3. Receiver4. Feedback
149
Define One-way communication
Message which doesn't require feedback
150
Define Two-way communication
When a receiver gives response to a message received
151
Pros of Two-way communication
Pros:1. Ensure receiver understand/does it2. Motivate employees
152
Define Downward Communication
Message from managers to subordinate
153
Define Upward communication
Message/feedback from subordinate to manager
154
Define Horizontal communication
Communication between people on same level of organisation structure
155
Types of Communication methods
1. Verbal2. Written3. Visual
156
Examples of Verbal communication
1. Telephone2. Face-to-Face3. Meeting
157
Pros/Cons of Verbal communication
Pros:1. Quick/efficient2. Opportunity for feedback3. Speaker can reinforce the messageCons:1. Can take long if there is feedback/discussion2. Can't guarantee other's listening/understood the message3. No written record
158
Examples of Written communication
1. E-mail2. Letter3. Socail Media4. Signboard5. Text message
159
Pros/Cons of Written communication
Pros:1. Written record2. Include details3. Can be copied/sent to many people4. Quick/CheapCons:1. Feedback may not be possible2. Can't ensure message has been received3. Language could be difficult to understand4. Long message could disinterest the receiver5. Can't reinforce message
160
Examples of Visual communication
1. Poster2. Presentation3. Video4. Diagram5. Charts
161
Pros/Cons of Visual communication
Pros:1. Information can be in appealing way2. Used with written comunicationCons:1. No feedback 2. May not be understood
162
Factors affecting Communication choice
1. Speed2. Cost3. Message details4. Leadership style5. No. of receiver6. Written record7. Feedback
163
Dedine Formal communication
Message sent through established channels using professional language
164
Define Inforamal communication
When information sent/received with use of everyday language
165
Define Communication Barrier
Factors that stop effective communication
166
Types of Communication Barrier
1. Problem with sender2. Problem with medium3. Problem with receiver4. Problem with feedback
167
Types of Problem/Solution with Sender
Problem: Language used is difficult to understand Solution: Use understandable languageProblem: Use of verbal communication but speak quickly/not clearSolution: Make message clear, ask feedback to ensure understaningProblem: Sends wrong message/receiverSolution: Make sure it's the right message/receiverProblem: Message too long/detail prevent main point to be understoodSolution: Message should be breif to the point
168
Types of Problem/Solution with Medium
Problem: Message may be lostSolution: Insist on feedback, no feedback = message lostProblem: Wrong channel usedSolution: Select appropriate channelProblem: Message sent down long cahin of command may be distortedSolution: Use shortest possible channelProblem: Breakdown of mediumSolution: Use other forms of communication
169
Types of Problem/Solution with Receiver
Problem: Might not listen/pay attentionSolution: Ask for feedback, emphasise the messageProblem: May not like/trust sender, unwilling to do itSolution: Build trust, use another sender
170
Types of Problem/Solution with Feedback
Problem: No feedback receivedSolution: Use different channelProblem: Feedback is distortedSolution: Direct communication of subordinate and manager
