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business management > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Unincorporated

A

is an owner and business being viewed as a single legal entity.

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2
Q

Unlimited liability

A

is the complete responsibility an owner has for a business’s debts

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3
Q

A sole trader

A

is a business structure owned and operated by a single person

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4
Q

A partnership

A

is a type of business owned by two to 20 owners

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5
Q

A private limited company

A

is an incorporated business with at least one director and up to 50 selected shareholders.

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6
Q

A public listed company

A

is an incorporated business that can sell shares in an open market to an unlimited number of shareholders

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7
Q

A social enterprise

A

is a business that aims to make a profit and improve the community or environment.

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8
Q

Government business enterprise

A

is a profit driven business that is owned by but managed separately from the government.

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9
Q

make a profit

A

By generating more revenue than expenses, a business earns a profit which can then be distributed to owners and
shareholders.

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10
Q

increase market share

A

A business typically wants to increase its market share to become more competitive
within an industry

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11
Q

meet shareholder expectations

A

shareholders either expect an income from the business in the form of dividends or they hope to sell their shares at a higher price in the future after the business has grown

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12
Q

meet shareholder expectations

A

shareholders either expect an income from the business in the form of dividends or they hope to sell their shares at a higher price in the future after the business has grown

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13
Q

fulfil market need

A

A business fulfils a market need by providing products and services which meet the desires of a group of customers with similar needs

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14
Q

fulfil social need

A

A business fulfils a social need by improving the community and environment through it business activities.

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15
Q

Internal stakeholders

A

are groups who have a direct financial share or are employed by the business including owners, board of directors, investors, shareholders and employees.

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16
Q

External stakeholders

A

are groups that are outside a business but are concerned or affected by its activities including customers, suppliers and the
general community

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17
Q

Stakeholders

A

are individuals or groups that have a vested interest in the performance and
activities of a business.

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18
Q

Owner/shareholder

A

Invest funds into a business.

  • A return on their investment through profits, dividends or increase in share price.
  • Create and maintain a positive impact on other stakeholders.
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19
Q

Manager

A

Coordinate employees and tasks to achieve business objectives.

  • Pay that matches the responsibility of managing the business.
  • Status and recognition for work achievements.
  • Opportunities for career advancement.
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20
Q

Employees

A

Complete a business’s work tasks.

  • Fair pay and work expectations.
  • Opportunities for professional development and promotion.
  • Long term job security.
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21
Q

Customer

A

Purchase and use a business’s
products or services.

  • A product or service that is of quality and value for money.
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22
Q

Supplier

A

Provide raw materials and resources

  • To earn a profit by providing supplies.
  • To maintain or increase its revenue.
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23
Q

General Community

A

Observe the impact of a business’s operations.

  • Business activities that improves the community and environment.
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24
Q

Corporate social responsibility (CSR)

A

is the ethical conduct of a business beyond legal obligations to improve the social, economic and environmental outcomes of stakeholders

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25
Q

Advantages and disadvantages of implementing CSR practices.

A

ADVANTAGES
- CSR practices improve a business’s reputation and may lead to increased sales.
- CSR practices can increase employee satisfaction as they are working for an ethical business, therefore improving employee retention.
- Sustainable supplies last longer compared to unsustainable supplies, reducing the time needed to source supplies repeatedly

DISADVANTAGES
- Can be time-consuming to practice CSR
for multiple stakeholders at a time.
- CSR practices can be more expensive in
the short term.

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26
Q

Manager/Employees CSR considerations

A
  • Provide work from home options.
  • Provide flexible working shifts.
  • Provide childcare facilities at the workplace.
27
Q

Customer CSR considerations

A
  • Ethical or green marketing that encourages sustainable purchases.
  • Provide customer options that contribute to the general community of the environment.
28
Q

Supplier CSR consideration

A
  • Provide reasonable delivery schedules and fair payment for supplies.
29
Q

General community CSR consideration

A
  • Boost local economy by employing local workers.
  • Reduce or recycle waste.
  • Use renewable energy sources.
  • Donate money, time or expertise to arts, sports and charitable organisations.
30
Q

Operations as an area of management

A

produces the goods or services that a business sells to customers.

31
Q

CSR considerations for the business activities within operations

A
  • Use renewable energy sources or energy-efficient machinery and equipment in
    production.
  • Source raw materials and resources from suppliers that provide fair pay and
    working conditions to their employees.
  • Source sustainable raw materials and resources.
  • Reduce or recycle waste generated during operations.
32
Q

Human resources as an area of management

A

establishes and manages the relationship the business has with its employees, including their hiring, training and termination.

33
Q

CSR considerations for the business activities within human resources.

A
  • Hire local workers to decrease local unemployment rates.
  • Provide internship placements for members of the community.
  • Train employees to practice waste reducing methods.
  • Improve the employability of employees by increasing their skills and experiences.
  • Provide work from home options or flexible working hours.
  • Provide additional workplace facilities such as a gym or childcare.
  • Provide employees the time to volunteer for social and environmental causes.
  • Provide support for employees to find further employment such as resume building or interview skills.
  • Reassign employees to other parts of the business if their previous roles are no longer required.
34
Q

Sales and marketing as an area of management

A

promotes and sells the business’s goods
or services to customers.

35
Q

CSR considerations for the business activities within sales and marketing

A
  • Encourage customers to only purchase goods or services
    they require.
  • Encourage customers to purchase goods or services that use sustainable materials.
  • Provide customers with sustainable packaging or reusable bags.
  • Highlight important information for customers to make informed decisions e.g. health or energy ratings
    of products.
  • Provide options that allow customers to positively contribute to the general community or the environment such as:
  • Reusable plastic bags at supermarkets.
  • BYO cup at cafes.
  • Reduce the amount of packaging in the distribution process.
36
Q

Finance as an area of management

A

handles the monetary requirements of a business.

37
Q

CSR considerations for the business activities within finance.

A
  • Obtain loans from banks that operate ethically.
  • Provide funds for CSR initiatives such as:
  • Purchasing energy-efficient machinery or equipment.
  • Research and development for sustainable products
    and processes.
  • Establishing a gym or childcare centre at the workplace.
  • Donate a portion of profits to local arts, sports or charitable organisations.
  • Produce honest and transparent financial statements
38
Q

Technology support as an area of management

A

installs automated equipment, machinery
and devices within the business and provides assistance to employees on the use of these technologies.

39
Q

CSR considerations for the business activities within technology support.

A
  • Install energy-efficient equipment or machinery.
  • Reduce the use of paper in the workplace by encouraging digital communication.
  • Avoid exploitation of customer data for marketing purposes.
40
Q

Corporate culture

A

is the shared values and behaviours practised by managers and
employees within a business.

41
Q

Official corporate culture

A

is the shared values and beliefs desired by a business and expressed through elements such as formal rules and symbols

42
Q

Real corporate culture

A

is the shared values and behaviours that are actually practised by
employees and managers and expressed through informal rules and habits

43
Q

An autocratic management style

A

is a manager making decisions and directing employees
without any input from them.

44
Q

Advantages and disadvantages of the autocratic management style.

A

ADVANTAGES
* Employees have less responsibility and risk as they only have to follow the manager’s instructions.
* Decision making may be quick as there
is no discussion or consultation with
employees.
* Work tasks can be completed quickly as directions are clear and employee
compliance is immediate.

DISADVATAGES
* All solutions and ideas generally come from the manager, as there is no contribution from employees.
* Business can not benefit from the ideas of
employees
* The cost of replacing employees who may
have left due to low motivation can be high.

45
Q

A persuasive management style

A

is a manager making decisions and communicating the reasons for those decisions to employees without their input.

46
Q

Advantages and disadvantages of the persuasive management style

A

ADVANTAGES
* Management has full control and may gain
employee’s trust and support by explaining
the reasons for decisions.
* Production can occur quickly due to quick
decision making which results in higher
outputs and potentially increased sales.
* Employees may feel like they are being
considered when the benefits of management decisions are explained to them.

DISADVANTAGES
* All solutions generally come from the
manager, as there is no contribution from
employees.
* Business can not benefit from the ideas of
employee
* The manager has to take some time to
explain business decisions to employees.

47
Q

A consultative management style

A

is a manager seeking input from employees on business decisions but making the final decision themselves.

48
Q

 Advantages and disadvantages of the consultative management style.

A

ADVANTAGES
* Management can gain a variety of ideas
from the suggestions of employees which
can lead to better decision making outcomes.
* May have increased motivation because
they can contribute to decision making
and therefore feel valued by the business
* Potential for increased sales and profit
as the quality of decisions and outcomes
may be improved from employee input

DISADVANTAGES
* Employees may offer suggestions that are not suitable because they do not fully understand the complexity of a business situation
* Potential for employee conflict, resentment
or feelings of being undervalued when ideas
are ignored or overlooked during decision
making
* Decision making may be slower as the
manager consults employees for their input

49
Q

A participative management style

A

is a manager communicating and discussing
information with employees in order to make decisions together

50
Q

Advantages and disadvantages of the participative management style.

A

ADVANTAGES
* Employee motivation and productivity may
increase due to participation in decision making.
* Employees feel highly valued and can develop a sense of ownership over decisions and meeting business objectives.
* Potential for highly positive and supportive
work environments.

DISADVANTAGES
* Accommodating multiple views may
result in a compromise that decreases
the quality of decisions.
* Manager may lose some control as
employees now have decision making
power as well
* Decisions can take a long time as a
consensus between everyone has to be
reached.

51
Q

A laissez-faire management style

A

is a manager communicating business objectives to employees and allowing them to make decisions independently.

52
Q

Advantages and disadvantages of the laissez-faire management style.

A

ADVANTAGES
* May have increased motivation and
productivity due to a highly independent
work environment, high levels of trust
and empowerment.
* Can increase opportunities for employee
growth that are either coached or selfdirected.
* Potential for increased sales and profit
as the quality of decisions and outcomes
are improved through highly innovative
solutions

DISADVANTAGES
* Accommodating multiple views may result in a compromise that decreases the quality of decisions.
* Manager may lose some control as employees now have decision making power as well.
* Potential for employees to spend large
amounts of time on discussions regarding
decision making.

53
Q

Choosing management styles

A
  • Time available for a task
  • Experience of employees
  • Nature of tasks
  • Manager preference
54
Q

Planning

A

is the manager’s ability to establish objectives and strategies to achieve them.

55
Q

Decision-making

A

is the manager’s ability to determine a suitable course of action for the
business from a range of alternatives

56
Q

Communicating

A

is the manager’s ability to clearly exchange information with employees
and relevant stakeholders.

57
Q

Delegating

A

is the manager transferring authority and responsibility to employees for
business tasks.

58
Q

Interpersonal skills

A

is the manager’s ability to interact positively with employees to create
and maintain professional relationships.

59
Q

Leading

A

is the manager’s ability to motivate employees to work towards business
objectives.

60
Q

Relevant skills for the autocratic management style

A
  • Only the manager can set objectives, choose strategies and
    organise required resources.
  • The manager must consider all alternatives and choose
    the appropriate course of action since they make all business decisions.
  • Used to clearly deliver information, instructions and provide feedback to employees.
  • One way communication means the skill is not used to receive any information from employees.
  • Used to assign tasks to different employees.
  • Choosing the most appropriate employee is not as important
    under this management style as tasks are usually simple or for
    inexperienced employees.
  • Employees are expected to implement decisions made by the manager which reduces the need for interpersonal
    relationships.
  • Leading is less important as employees are expected to implement the decisions made by the manager.
61
Q

Relevant skills for the persuasive management style

A
  • Only the manager can set objectives, choose strategies and organise required resources.
  • The manager must consider all alternatives and choose the appropriate course of action since they make all
    business decisions.
  • Used to clearly deliver information, instructions and provide feedback to employees.
  • Used to explain the benefits and reasons for business decisions so that employees support them.
  • One way communication means the skill is not used to receive any information from employees.
  • Used to assign tasks to different employees based on their skills.
  • Can be helpful in maintaining an employee’s desire to continue working for the manager.
  • Can be helpful for employees to understand the purpose of the work.
  • Leading is less important as employees are expected to implement the decisions made by the manager.
62
Q

Relevant skills for the consultative management style

A
  • Only the manager can set objectives, choose strategies and organise required resources.
  • The manager must consider all alternatives and choose the
    appropriate course of action since they make all business decisions.
  • Used to deliver information, instructions and provide feedback to employees.
  • Also used to receive and respond to ideas or feedback from employees.
  • Used to assign tasks to different employees based on their skills and preferences.
  • Developing a positive relationship with employees can improve the quality of an employee’s contributions to business decisions.
  • Motivating employees towards the business’s vision can improve the quality of employee’s contributions to business decisions.
63
Q

Relevant skills for the participative management style

A
  • Plans are made by groups which allows planning responsibilities to be shared between the manager and employees.
  • Decisions are made by all members of the group, reducing the importance of this skill on the manager.
  • Used to share and discuss information with employees to make
    business decisions together.
  • Also used to receive and respond to ideas or feedback from employees.
  • Decisions on the allocation of tasks may be made collectively by managers and employees.
  • Productive and positive relationships can directly affect the quality of group discussions and decisions.
  • Decisions made by the group are more likely to achieve objectives if employees are genuinely motivated by the business’s purpose and there is respect for the manager.
64
Q

Relevant skills for the laissez-faire management style

A
  • Strategies most likely determined by employees.
  • Most business decisions are made by employees.
  • Decision-making required on selecting appropriate employee for business tasks.
  • Used to clearly outline the business’s vision to employees.
  • Used to be kept up to date on the progress of objectives.
  • Used to listen to requests from employees for additional support required to achieve business objectives.
  • Used to select appropriate employees to take ownership of different areas of the business.
  • Manager may have limited contact with employees.
  • A clear business purpose and respect for the manager directly affects the quality of business decisions made by employees to
    achieve business objectives.

business management (9 decks)

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