industry study (structural considerations)

Question 1

sole trader

Answer 1

Single owner who has full control over decisions for their business, including legal and financial decisions
Sole traders take all the risks and make all the decision

e.g plumbers, gardeners, local clothes store e.g selling desi clothes

Question 2

positives of sole trader

Answer 2

-freedom in work hours
-owners keep their profits
-inexpensive and easy to set up
-full control on assets and decisions

Question 3

negatives of sole trader

Answer 3

-Slow expansion due to difficulty in building resources
-if business goes bankrupt, then the owner may have to sell their own property (house, car) in order to repay the bank
bankrupt = at the end of one’s resources

Question 4

partnership

Answer 4

A number of people (group of people) maintain a business together, distributing incomes and losses
size= 2 to 20 people

e.g firms include husband and wife or father and son partnership

Question 5

positives of a partnership business

Answer 5

-limited liability: personal assets not at risk if something happens to the business
-shared responsibilities diffuse pressure between owners sharing of expertise

Question 6

negatives of a partnership business

Answer 6

-owners have limited personal control
-more cost due to legal and accounting services
-must register for GST if turnover is $75,000 or more
-possible disputes between partners over business decisions
-may have disagreements between owners

Question 7

private company

Answer 7

-owned by the company’s founders, management, or a group of private investors

Question 8

positives of private company

Answer 8

-management doesn’t have to answer to stockholders (someone who has shares in a company, owns the piece of the company
-wider range of expertise (expert skill or knowledge in a particular field)
-more people involved = more money going into the business

Question 9

negatives of private company

Answer 9

-harder to get people involved because cannot sell shares on public stock exchange
-higher set up and running costs

Question 10

public company

Answer 10

-a company that has sold all or a portion of itself to the public via an initial public offering

Question 11

positives of public company

[see negatives in notes]

Answer 11

-can tap the financial markets by selling stock (equity) or bonds (debt) to raise capital (i.e., cash) for expansion and other projects company members have limited liability (protected just in case something effects the business)

Question 12

organisation structures
-hierarchical

Answer 12

-traditional form of organising an industry
-The structure of the industry is likened to a pyramid, where most power is at the top of the pyramid and the least power at the bottom

Question 13

positives of a hierarchical structure

Answer 13

Makes sense for linear work, where employee innovation is not required

-clearly defined roles between employees
-Authority and responsibilities clearly defined
-Encourages use of specialist managers to control specialised production

Question 14

negatives of a hierarchical structure

Answer 14

-Does not allow room for innovation, engagement is limited, limited collaboration
-final decisions are clearly based and dependent on top levels
-Poor communication
-Too many levels of approval for changes

Question 15

organisation structures
-flat structure

Answer 15

-Organisational structure has few or no levels of management
-supports the formation of more informal work groups and/or teams
-employees becoming multi skilled and allows employees to have a greater say in the operation of the business (flatter structure)

Question 16

positives of flat structure

Answer 16

-Allows for greater communication between managers and employees, and between employees within the company

-Fewer layers of management may result in reduced costs

-Supervises employees less

-Increased room for innovation

Question 17

negatives of flat structure

Answer 17

-More workload on individuals within the company

-Employees have more responsibilities and are more involved in decisions and the operation of the business

-Few promotion opportunities as there is not a large, distinct hierarchy

Question 18

management role:
CEO

Answer 18

level = senior (think of senior as the year 11 and 12s being the top of the school)

their role is to make major corporate designs
manages the overall operations and resources of a company

Question 19

management role:
Production Manager

Answer 19

level = middle

-they oversee the production process (ensuring that the manufacturing process runs reliably and efficiently)

-coordinates production activities and operations

-negotiates and helps to determine budgets (financial plan)

coordinates production activities and operations

Question 20

management role:
Artist manager

Answer 20

level = middle

-holding interviews for possible good clients
-collect revenues, fees and other payments
-communicate with artists

Question 21

management role:
Lead Animator

Answer 21

level = lower

-leads and creates storyboards, animations, visual effects and artwork to meet design goals

-develops, communicates and maintains animation style of the production