Chapter 2, 4, 18 Flashcards

1
Q

What is a sole trader?

A

When individuals establish and operate a business on their own. E.g. hairdresser, window cleaners

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2
Q

Advantages and disadvantages of sole traders

A

It’s easy to start and manage but it can involve a lot of work and no support

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3
Q

Pros of being a company

A

It can offer support through coworkers in tough situations and results in less work for the average employee

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4
Q

What does limited liability mean?

A

A company is responsible for the money it owes and the personal possessions of its owners are safe

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5
Q

Private limited companies “Ltd”

A

Smaller than public limited companies.
Ltd’s benefit from limited liabilities
Able to make more long term investments

The owners of the company agree to pay if it fails

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6
Q

Public limited companies “plc”

A

They get more investors
Access to capital (they can sell shares using stock exchanges)
They can take over other businesses

Unlimited liability

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7
Q

Market capitalisation

A

Total amount of shares sold x value of shares

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8
Q

Role of shareholders:

A

The more shares they have the more influence and percentage of the company they have

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9
Q

Influences on share prices

A

The company’s performance

Business environment

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10
Q

Four principle functions of management

A

Planning
Organising
Directing
Controlling

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11
Q

Pros and cons autocratic:

A

Can easily make decisions
Clear path of direction
Focused leader

Lacks relationship with employees
Lack of trust
System of dependence

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12
Q

Pros and cons democratic

A

Relationship with employees
Feel included in decision making
Effective communication

Less authority
Takes much longer to come to a decision
Can lead to procrastination

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13
Q

Laissez-faire

A

Workforce self motivated
Workforce agree with each other

Lack a sense of direction
Low authority over employees

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