Introduction To Business Flashcards
What is a private limited company Ltd ?
A privately owned company ran for profit, doesn’t sell shares on the stock market
What is a public limited company
A company owned by shareholders, the public can buy ownership of the business
Factors that affect the choice of legal structure of a business
Economic situation, size of the business, number of staff, competition,
Importance of legal structure for stakeholders of a Business
Public businesses has to answer to more of the shareholders demands compared to private, sole traders and partnerships have unlimited liability compared to public and private, each type has a profound impact on the way the business is run
The impact of franchising to a business
Easier to expand, candidates are chosen for suitability, however can make the business look bad and costs can be high to manage
The impact of the coop structure to its stakeholders
Profits benefit those directly involved, costs are managed easier, however decision making is longer and members have less operation control
Why is size important to the stakeholders of the business
Big businesses have the resources and capital to grow and achieve economies of scale where as smaller businesses have to compete more competitively to achieve this
What factors affect the size of the business
Inflation or recession, legal legislation on supply and trading, size of competitors in the market, size of the market, total customer base
Advantages and disadvantages of a mission statement
Helps employees see the meaning and purpose behind their work(motivation), however can be lofty and unrealistic making it look cheap and not real if the company doesn’t appear to be acting upon it
The impact of a mission statement to the businesses stakeholders
Provides an ideal vision of the company’s future and inspires growth
