EOT REVIEW Flashcards
what is bartering?
bartering is the exchange of goods and services for other goods and services without the use of money.
what are 3 challenges of bartering?
rates of exchange
store of wealth/value
double coincidence of wants
indivisibility
what are 3 advantages of bartering?
- No Need for Money
Bartering eliminates the need for cash, making it accessible for people who lack financial resources. - Flexibility
Almost anything can be exchanged, allowing people to trade items or services based on their immediate needs and wants. - Builds Community
Bartering fosters personal connections and trust among participants, which can strengthen local communities.
what is store of wealth or value?
goods lose or gain value as time passes.
what is double coincidence of wants?
each person must have what the other wants and be willing to exchange.
therefore LACK of double coincidence of wants (which is the disadvantage) is
the opposite. each person would not have what the other wants and not willing to exchange.
what is rates of exchange?
problems deciding how much of an item should be traded for another.
what is indivisibility?
some items could not be realistically traded in parts.
what is the role of money?
money is a medium of exchange that is widely accepted by everyone across the globe.
describe the 7 features/characteristics of money.
PHRSADD
portable - can be taken anywhere
homogenous - each bill is the same size, length, feel, look
relatively scarce - it’s a limited supply
acceptable - acceptable by all
divisible - can be broken down into smaller parts
durable - long-lasting
name the four functions of money.
medium of exchange - all must accept money in exchange for goods and services
store of value - allows for saving and investing for future use
measure of value - determines the worth of a good or service so that prices can be determined or compared
standards of deferred payment - pays for any item or service bought on credit
name the instruments of exchange
bills of exchange - a document stating that the receiver of my goods must pay a particular sum by a stated date.
credit cards - a card authorizing the holder to purchase items ‘on credit’ up to a particular limit.
debit cards/bank cards - a plastic payment card that is a cash alternative when making purchases.
electronic transfers - funding transfers from one financial institution to another through computer and communications technology
tele-banking - conducting business transactions using a phone device
e-commerce - doing trade via the internet
define an organisation.
it is a system that groups people together establishing a common goal.
name 3 reasons to start your own business
- you’ll be your own boss.
- can choose your co-workers.
- can work from home and cut down on travelling time and traffic stress.
- if you are juggling an existing job, your business can be considered a second career
- can set your own deadlines
- can choose work hours or have flexible work hours
name the two types of business organisations.
Private sector
Public sector
PRIVATE SECTOR:
1. funded by
2. owned and controlled by
3. objective
4. who it includes (3)
5. what is profit used for
- private individuals
- private firms
- to make a profit
- self-employed, multi-national firms, joint ventures, construction and manufacturing industry, co-operatives.
- shared among investors and shareholders
PUBLIC SECTOR:
1. financed by
2. controlled and operated by
3. objective
4. who it includes
5. what is profit used for
- the Government through taxation
- the Government or its agents
- to provide cost-effective goods and services to the public
- government-controlled companies, companies incorporated by the government through legislation, companies essential for the development of the economy
- to benefit the entire nation
what are 3 features of private firms?
- little or no government control, so owners are free to do as they please.
- make profit that is shared among shareholders and investors.
- funded by private individuals (owners)
what are 3 features of public firms?
- profit is used to improve the firm or benefit citizens
- owned and primarily controlled by the government
- funded by the government through taxation.
name the 6 forms of business organizations.
- sole traders
- partnerships
- public limited liability companies
- private limited liability companies
- franchises
- co-operatives
what is a sole trader?
is a single business owner that makes all decisions and acquires all the capital.
list 3 advantages of a sole trader.
- consultations are not necessary for decision-making
- owner enjoys all the profit
- ease of formation as all is need is to submit the registration documents to the Registrar of Companies
list 3 disadvantages of sole trader.
- lack of specialized staff so the owner may have trouble in particular technical areas of the business as they aren’t specialized in them.
- lack of leisure time to rest and spend time with friends and family
- unlimited liability if the business goes bankrupt all personal assets will be lost.
name the two types of limited liability companies.
public limited liability company
private limited liability company
name 3 characteristics of private limited liability companies (PLLC)
- membership is between 2-50 persons
-* capital is obtained from private individuals*, financial institutions, government agencies or retained profits
- limited liability shareholders have limited liability
name 3 advantages of a PLLC
- larger capital base than sole traders and partnerships as membership is larger.
- the company has continuity so they can easily obtain loans from financial institutions
- shareholders have limited liability
name 3 disadvantages of PLLC
- capital is limited because membership is limited to 50 persons. (the larger the membership, the larger the capital base)
- the company must file their financial reports with the registrar of companies
- selling of shares is restricted to the private grouping
what are the 4 companies involved in registering a business?
- registrar of business names
- registrar of companies: memorandum of association, articles of association
- other statements and declarations
- certificate of incorporation
registrar of business names
the name of the business is registered in the Business Registrar.
Registrar of Companies: Articles of Association
The document that lists the regulations that govern the running of the company
What does the Articles of Association document?
It documents how:
directors are elected
profit is divided
meetings are conducted
Registrar of Companies: Memorandum of Association
provides general information about the company and outlines the external relationship of the company
What information does the Memorandum of Association include?
TIBBD (pronounced tibbed)
- The objectives of the company
- Initial capital investment
- Business name
- Business adress/location
- Declaration that the shareholders have limited liability
what is a nominal capital statement?
it outlines the maximum number of shares that the company is authorized to raise.
what is a prospectus?
it is prepared by a public company to provide details on new issues of shares and the intention of the company.
what is a notice of directors? (self-explanatory)
outlines the directors of the company.
___ of ___ to act in a ___ ___
statement, willingness, director, capacity
what is a certificate of incorporation?
it is given from the registrar of companies to a business to show that a firm has satisfied all legal requirements.
THE FIRM CAN NOW BEGIN OPERATIONS
name 5 franchises around the world and 4 that originate in T&T/the Caribbean.
AROUND THE WORLD:
McDonald’s
KFC
Taco Bell
Nike
Hilton
IN TRINIDAD AND TOBAGO:
Rituals Coffee
Royal Castle
Joe’s Pizza
Mario’s Pizza
what’s a capital good?
a good used to make another good.
what’s a consumption good?
takes a process: product of another good to consume.
what’s a military good?
like guns, bombs etc. It’s used in the military.
what’s labour intensive method?
many people doing the job.
what’s capital intensive method?
few people, more machinery producing the product.
name the four types of economic systems.
- traditional/subsistence
- planned economy
- free market economy
- mixed economy
TRADITIONAL:
1. alternative name
2. two characteristics
- subsistence
- simple technology, reliance on custom and tradition.
COMMAND:
1. (2) alternative names
2. one characteristic
3. two advantages
4. two disadvantages
- planned, communist.
- dependent on the government to control prices and distribution of goods.
- prices are affordable, benefits an entire society rather than a fortunate minority.
- decisions are made by bureaucrats who are out of touch with the market, there’s a disconnect between what goods are produced and what is needed.
MARKET:
1. (2) alternative names
2. two characteristics
3. two advantages
4. two disadvantages
- free-market, capitalist
- (a) allows goods to flow freely through the market, according to supply and demand. (b) supply and demand determines: what is produced, how it is produced and who gets what is produced.
- (a) freedom of choice, (b) competition acts as incentive to motivate companies to achieve a higher standards and lower service prices.
- (a) poverty exists, (b) merit goods like education & health are under-produced.
MIXED:
1. two characteristics
2. two advantages
3. two disadvantages
- (a) there is both a private and public sector. (b) the government can create laws to control the actions of the private sector.
- (a) Participation in production is permitted to stimulate healthy competition to motivate companies. (b) goods that benefit society are produced.
- (a) excessive taxation so that goods that benefit society can be produced. (b) corruption can be caused from conflict in public offices
name 3 functional activities of the PRODUCTION DEPARTMENT.
making the product, warehousing finished goods, controlling the production process
name 3 functional activities of the MARKETING DEPARTMENT.
conduct market research, designing the company’s product, develop sales and promotional strategies for the business.
name 3 functional activities of the FINANCE DEPARTMENT.
produce all financial reports for the business, establish hire purchase and credit control, budgeting for the company and the giving out of financial resources to other departments.
name 3 functional activities of the HUMAN RESOURCES/PERSONNEL DEPARTMENT.
terminations: firing people, recruitment and selection, occupational safety and health.
name 2 functional activities of the RESEARCH AND DEVELOPMENT DEPARTMENT.
conducting various types of research on behalf of the company: product, consumer and technology research,
feasibility studies for new products or business ideas.
name 2 functional activities of the INFORMATION TECHNOLOGY DEPARTMENT.
developing and maintaining IT systems tailored to the type and needs of the business, ensuring the security of corporate information and assets.
what is a stakeholder?
an individual or group/anyone with a vested interest in the operations and performance of a business
name the 2 classifications of stakeholders.
INTERNAL AND EXTERNAL
name 4 INTERNAL stakeholders.
[MOBE]
Managers
Owners/Shareholders
Board of Directors
Employees
name 2 roles of an owner/shareholder.
required to attend general meetings to receive annual reports and elect directors,
to provide capital for a business to survive and possibly expand.
name 2 roles of the board of directors (BOD).
to develop strategies for the business to reach agreed targets for sales, profits and company value
to ensure all business activities are in accordance with government regulations.
name 2 roles of managers.
to ensure the set goals made by owners and BOD are achieved in growing the business.
to ensure all employees are productive and treated fairly.
name 2 roles of employees.
to meet the conditions and requirements of the employment contract, to co-operate with management in all reasonable requests
name 6 EXTERNAL shareholders.
(SLCCCG) - Slick-G
Suppliers
Lending institutions
Community
Competitors
Consumers
Government
name one role of suppliers.
To supply goods and services to the business within the contracted time frame.
name 2 roles of consumers.
to provide feedback on the business’ product, to report unethical practices to the relevant authorities, consumers are required to be honest and not make false claims about poor service or faulty goods.
name 2 roles of lending institutions.
to ensure businesses can repay loans, to provide financial assistance in the form of financial advice or loans.
name 2 roles of the community.
to co-operate with the business on expansion and other plans, to ensure the business within the community operates within the confines of the law and contributes to the development of the community.
name the role of competitors.
to stimulate competition for sales and market shares.
name two roles of the government.
to ensure the business pays all taxes, to ensure the business operates with in the confines of the law.
what are the functions of management?
[DDCCPOM]
Directing
Delegating
Controlling
Coordinating
Planning
Organizing
Motivating
describe directing.
the process where managers instruct, guide and oversee the performance of workers to achieve pre-determined goals. (Giving instructions to perform a task at hand)
describe delegating.
an assignment of responsibility (normally from managers to subordinate) to carry out specific activities.
describe controlling.
monitoring employees’ activities to determine whether or not they are achieving their assigned goals.
describe coordinating.
ensuring the work of all departments is brought together to achieve the overall goals of the business.
describe planning.
setting objectives and targets and formulating a plan to accomplish them.
describe organizing.
structuring the process of accomplishing a goal and getting the right resources, to the right place at the right time (with the right quantities)
describe motivating.
encourages workers to do their best or to achieve goals
name two responsibilities of management and to whom.
to ensure government laws are followed - to the government
to give clear direction and motivation - to employees
name 5 essential characteristics of a good leader. OUTLINE each.
(HAFFT)
Honesty
Ability to make intelligent decisions (for the business to achieve goals)
Flexibility (to change plans)
Focus (must have intense focus to reach an goal/objective)
Trustworthiness (seek to build and maintain trust)
name the four MAIN leadership styles.
Autocratic
Democratic
Laissez-faire
Charismatic
what is autocratic leadership? Name one ADVANTAGE and DISADVANTAGE.
the leader makes all decisions with little or no help.
A: Faster decision-making
DA: Discourages group input
what is democratic leadership? Name one ADVANTAGE and DISADVANTAGE.
the leader makes decisions with input from members.
A: Provides creative resolutions
DA: Slower decision-making
what is laissez-faire leadership?
Name one ADVANTAGE and DISADVANTAGE.
the leader takes a hands-off approach and the members make all the decisions.
A: Encourages personal growth
DA: The leader may not be available for clarifications on roles or assistance. They tend to be present at the start and end of the projects.
what is charismatic leadership? Name one ADVANTAGE and DISADVANTAGE.
the leader has a strong personality or charisma, inspiring others to follow them.
A: Employees develop loyalty to the leader.
DA: The leader’s strong personality may influence employees to commit illegal activities (or breach operating guidelines)
define teamwork.
a group of individuals working together to achieve a common goal.
outline 2 ADVANTAGES of teamwork.
ideas will be developed faster, less experienced workers can learn more from the more experienced workers.
outline 2 DISADVANTAGES of teamwork.
clash of personality and difference of opinion can lead to conflict/disagreements between members.
some members will leave others to do the work because they prefer individual work, or don’t want to contribute
disagreements and lengthy discussions can be time-consuming.
how does teamwork help the SUCCESS of an organisation?
helps build morale in the workplace and make problem solving easier.
