General Revision

Question 1

Sole Trader (5)

Answer 1

Owned by 1 person, low set up costs, owner gets all profits + liable for all losses, limited financial capacity, owner may lack skills

Question 2

Private limited companies advantages

Answer 2

Won’t lose more money than you put into the company, shares are sold to family and friends

Question 3

Private limited companies disadvantages

Answer 3

Have to share profits by paying dividends to shareholders, can’t see shares on stock market, quite expensive to set up

Question 4

Public limited companies advantages

Answer 4

Limited liability, large amounts of capital may be raised, flexibility for shareholders, greater status as a business

Question 5

Public limited companies disadvantages

Answer 5

Legal requirements (add costs, time consuming), greater rules and regulations, risk of uncontrolled growth, expensive to be listed on a stock exchange, risk of takeover

Question 6

Market capitalisation equation

Answer 6

Market capitalisation = market price of share X no. of common shares outstanding

Question 7

Public sector

Answer 7

Owned by central/local government, mainly funded through taxes, profit not a huge objective

Question 8

PEST (political factors)

Answer 8

Government stability, rule of majority, taxation policy, regulation + deregulation trends, levels of corruption

Question 9

PEST (economic factors)

Answer 9

Stage of business style, impact of globalisation, labour costs, changes in the economic environment

Question 10

PEST (social factors)

Answer 10

Population growth, gender + ethnic diversity, health and education, social welfare

Question 11

PEST (technological factors)

Answer 11

R&D growth (research and development), impact of emerging technologies, impact of technology transfer

Question 12

Country club manager

Answer 12

High people, low task

Question 13

Team manager

Answer 13

High people, high task

Question 14

Impoverished manager

Answer 14

Low people, low task

Question 15

Authority obedience manager

Answer 15

Low people, high task

Question 16

Middle of road manager

Answer 16

Medium people & task (focus on work output as well as people morale)

Question 17

Autocratic style

Answer 17

Tells employees what to do with no talking about it

Question 18

Laissez faire

Answer 18

Let’s employees do the job how they want but they have to do the task

Question 19

Democratic

Answer 19

Asks employees on their ideas and what they think, is a better relationship between employer-employee

Question 20

What are decision trees?

Answer 20

Use of scientific management

Question 21

What is intuition?

Answer 21

Experienced based decisions, affect-initiated decisions, cognitive-based decisions, subconscious mental processing, values or ethic based directions

Question 22

Experienced based decisions?

Answer 22

Managers make the decisions based on experience

Question 23

Affect - initiated decisions?

Answer 23

Managers make decisions based on feelings and emotions

Question 24

Cognitive-based decisions?

Answer 24

Manager makes decisions based on skills, knowledge or training

Question 25

Subconscious mental processing?

Answer 25

Managers make decisions based on subconscious data

Question 26

Values or ethic based decisions?

Answer 26

Managers make decisions based on ethical values or culture

Question 27

Internal stakeholders to a company are...

Answer 27

... employees, managers, owners

Question 28

External stakeholders to a company are...

Answer 28

... suppliers, society, government, creditors, shareholders, customers

Question 29

Stake holder mapping

Answer 29

used to assess how the interests of those stakeholders should be addressed in a project plan, policy, program, or other action

Question 30

Key player (stakeholder mapping)

Answer 30

Focus efforts on this group, involve in decision making bodies, engage & consult regularly

Question 31

Meet their needs (stakeholder mapping)

Answer 31

Engage + consult on their interest area, try to increase level of interest, aim to make them a key player

Question 32

Show consideration (stakeholder mapping)

Answer 32

Make use of interest through involvement in low risk areas, keep informed, potential supporter

Question 33

Least important (stakeholder mapping)

Answer 33

Inform via general communications e.g. newsletters, websites

Question 34

Average cost per unit equation

Answer 34

Average cost per unit = total production costs in period (£) / total output in period (units)

Question 35

Labour productivity equation

Answer 35

Labour productivity = output per period (units) / number of employees at work

Question 36

Capacity utilisation equation

Answer 36

Capacity utilisation = current/actual output / maximum possible output = X 100

Question 37

Ways of reducing capacity

Answer 37

Selling off all or part of its production area, changing to a shorter working week or shorter day, laying off workers, transferring resources to and from another area (e.g. staff)

Question 38

Ways of increasing capacity

Answer 38

Building or extending factories, asking staff to work longer hours/overtime, a flexible workforce, hiring new staff

Question 39

What could training include?

Answer 39

Coaching, teaching, knowledge, development, learning, experience, skills

Question 40

What is quality assurance?

Answer 40

Medium to long term process, achieved by improving production processes, targeted at the whole organisation, emphasises the customer, quality is built into the product

Question 41

What is quality control?

Answer 41

Can be implemented at short notice, focus on outputs, achieved by sampling, targeted at production activities, emphasises required standards, defect products are inspected out

Question 42

Quality assurance

Answer 42

Requires each employee to be responsible for the workers own quality

Question 43

Supply chain components

Answer 43

Supplier > manufacturer > distributor > retailer > shopper/consumer

Question 44

Supply chain management main areas

Answer 44

Performance measurement, product development, customer service, manufacturing

Question 45

Benefits of outsourcing

Answer 45

Saves time, reduces cost, brings innovation, improves quality, brings skilled expertise, increases productivity

Question 46

Advantages of using different stock control methods - cost

Answer 46

Least amount of stock cuts cost + saves money

Question 47

Advantages of using different stock control methods - price

Answer 47

Businesses able to negotiate discounts if ordered in bulk, having frequent stock is better/buying larger amounts than buying small amounts frequently