KEY FACTS

Question 1

what is retained profit?

Answer 1

an internal source of finance where profit it built up in business over the years for later investment
-no interest has to be paid on this money

Question 2

what is rationalisation?

Answer 2

when a manger reorganises the business to take it more efficient e.g through selling some of its assets to generate capital and then leasing them back

Question 3

what are the short term external sources of finance?

Answer 3

• overdrafts

- debt factoring

Question 4

what are overdrafts?

Answer 4

where a bank lets a business have a negative about of money in the bank

Question 5

what is debt factoring?

Answer 5

when banks take unpaid invoices off the hands of the business and give them an instant cash payment

Question 6

what are examples of long term external sources of finance?

Answer 6

Bank loans

• venture capitalists
• crowd funding

Question 7

what are bank loans and what does a business need to get one?

Answer 7

when business can borrow a fixed amount of money and pay it back over a period
-businesses need security for a loan which is usually in the form of property

Question 8

advantages of bank loans?

Answer 8

• guranteed money
• only have to pay back loan and interest,the business won’t own any of the business
• interest rates are lower than for an overdraft

Question 9

disadvantages of bank loans?

Answer 9

• hard to arrange
• may be hard to keep up with the payments
• theres an early pay back charge

Question 10

what is a venture capitalist?

Answer 10

this is funding in the from of share or land capital thats invested in a business thats thought to be at high risk

Question 11

what info is gathered from market mapping?

Answer 11

• spot a gap in the market
• shows closet competitors
• if sales are declining a market map may be used to see how they are viewed and how they can reposition themselves
• shows how much a customer is willing to pay

Question 12

what is extrapolation?

Answer 12

when trends from previous years are continued to the future to forecast future sales

Question 13

whats an issue of using correlation?

Answer 13

doesn’t show course and effect

Question 14

what does it mean if a product is price elastic?

Answer 14

-the price changes increases with demand

Question 15

what does it mean if a products price inelastic?

Answer 15

the demand doesn’t change with price

Question 16

what is concentrated and differentiated marketing?

Answer 16

concentrated marketing involves targeting one or two segments,good for smaller businesses
differentiated marketing - involves targeting several segments

Question 17

what does the boston matrix do and what are the components?

Answer 17

-compares market growth with market share

stars,question marks,cash cows and dogs

Question 18

whats an imitative product and an innovative product?

Answer 18

initiative-new to business but already established in the market
innovative-spotting a gap in the market

Question 19

what is price skimming?

Answer 19

when new and innovative products are sold at high prices when they first reach the market
-companys such as apple use this long term as a way of keeping the product exclusive

Question 20

what is penetration pricing

Answer 20

launching a product at a low price in order to attract customers and gain market share

Question 21

hard hr approach characteristics?

Answer 21

• employees are seen a resource
• hired on a short term basis
• apprasials are judgemental
• training is only one to meet production needs

Question 22

soft hr approach characteristics?

Answer 22

• emplyees are most important resource
• managed on a long term basis
• training is provided

Question 23

whats staff turnover and staff retention?

Answer 23

turnover-the promotion of staff leaving a business

retention- the ability a company has to keep employees

Question 24

whats a span of control?

Answer 24

number of people who directly report to the manager

Question 25

what is delegation?

Answer 25

giving decision making responsibity to people below you

Question 26

what is a centralised structure ?

Answer 26

where all decisions are made by the senior managers

Question 27

what is a decentralised approach?

Answer 27

shares out authority to more junior employees

Question 28

what did Taylors scientific management strategy say?

Answer 28

• workers were only motivated by money and would do the minimum if left to their own devices
• he believed in paying workers for the quantity they produced

Question 29

what were the 5 steps of Maslows hierarcy of needs?

Answer 29

basic needs,safety,social needs,self esteems,self actualisation

Question 30

what did maslow say?

Answer 30

people start meeting the needs at the bottom sonf them move on to the next level

Question 31

what were involved in Herzbergs hygiene factors?

Answer 31

company policy,supervision,working conditions+ relations

if these aren’t met workers get dissatisfied

Question 32

what were involved in Herzbergs motivating factors?

Answer 32

interesting work,personal achievement,recognition

Question 33

what did herzbergs theory say?

Answer 33

motivations comes from individual needs and has influcens motivational techniques