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business > prelim 2 finance and people > Flashcards

prelim 2 finance and people Flashcards

1
Q

effects of the eqality act in 2010 6 marks

A
  • any update in the equity act legislation means a company would have to update recruitment policies. this is time consuming to update. additional training may have to be provided which may reduce productivity whilst training takes place
  • when advertising a position all companies must be carful of the wording used in any job advert to ensure there is no discrimination
  • to provide equal opportunities all organisations must adapt to the workplace to allow employees to access the building and carry out their job. this willi lead to additional costs fro installing ramps, lifts and doors.
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2
Q

methods that motivate staff (9)

A
  • fair pay
  • payment methods
  • incentives
  • permanent contracts
  • good working conditions
  • staff appraisal
  • recognition
  • empowerment
  • skill development
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3
Q

how does fair pay motivate staff

A
  • to satisfy employees needs and wants
  • when employees feel like they do not get paid enough or a fair amount they may feel demotivated
  • productivity and quality of work willi decrease
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4
Q

how do payment methods motivate staff (4)

A

commission - gives sales people a percentage of the sales they make. motivates them to sell more
PRP - performance related pay is an extra payment on top of the basic wage for meeting agreed targets
price rate - employees are paid per item produced encouraging a higher work rate. quality of work may drop
overtime - when employees work longer then their contract for a higher pay rate encouraging extra production to meet demand

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5
Q

how to incentives motivate staff

A

financial incentives such as holidays cars or private health care may appeal to employees and motivate them to work for the company

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6
Q

how do permanent contracts motivate staff

A

employees must feel job security so organisations should avoid the use of temporary contracts

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7
Q

how do good working conditions motivate staff

A

employees must feel working conditions are safe. bad working conditions may demotivate staff. Improvement in working conditions such as new equipment may motivate staff for a short while

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8
Q

how does staff appraisal motivate staff

A

meetings with managers where employees are told what they are doing correct and are given targets to aim for willi increase motivation levels

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9
Q

how does recognition motivate staff

A

employees who want to progress in their career want to feel recognised

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10
Q

how do development opportunities motivate staff

A

employees want to develop skills so they can be up for promotion opportunities to improve their status

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11
Q

how does empowerment motivate staff

A

giving staff power to make decisions will increase job satisfaction

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12
Q

advantages of a democratic leadership style (2)

A
  • employees have a say in decisions meaning they are more motivated
  • managers have a final say but employees can contribute allowing for creativity and complex problem solving
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13
Q

disadvantages in a democratic leadership style

A
  • mistakes can be made if workers are not skilled or experienced to make decisions
  • some employees may be less productive compared to if they were under an autocratic manager
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14
Q

advantages of an autocratic leadership style (4)

A
  • clear expectations are set
  • decisions are made quickly
  • when a manger is skilled and knowledgable it can work well
  • productivity is high
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15
Q

disadvantages of having an autocratic leadership style (2)

A
  • no opportunity for delegation of empowerment which may demotivate staff
  • lack of creativity in decision making
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16
Q

advantages of a laissez faire leadership style (2)

A
  • employees are highly empowered to make decisions motivating staff greatly
  • very relaxed and clam working environment
17
Q

disadvantages of a laissez faire leadership style (2)

A
  • objections may not be met
  • can only work in a high skilled and professional environment where workers are self motivated.
18
Q

benefits of preparing a cash budget (4)

A
  • a business can see when a deficit is expected. this allows the business to make financial arrangements in advance.
  • a business can see when a surplus is expected as it will allow the business to invest in assets for the future. this will improve the quality of work and production.
  • allow corrective action and anticipated overspend on certain payments/expenses
  • present to a bank when applying for a loan
19
Q

gross profit percentage formula

A

(gross profit/sales revenue) x 100

20
Q

profit for the year percentage formula

A

(profit for the year/ sales revenue) x 100

21
Q

Return on equity employed formula

A

(profit for the year/ equity) x 100

22
Q

what does gross profit percentage measure

A
  • measures profit made from buying and selling. the higher the percentage the better
  • to improve percentage sales revenue can be raised
23
Q

what does profit for the year percentage measure

A
  • measures profits after expensive are deducted from the gross profit. the higher the better.
  • to improve percentage you can reduce expenses such as lower wage costs by making staff redundant. increase sales revenue and improve gross profit
24
Q

what does Return on equity employed measure

A
  • measures percentage of investment that is returned to investors such as shareholders. the higher the better
  • ways to improved percentage include attempting to increase profit for the year by reducing expensive
25
Q

leasing advantages (3)

A
  • cash flow is improved as payments are spread over a longer period
  • maintenance costs are not the responsibly of the user
  • businesses can acquire an asset they do not own already
26
Q

leasing disadvantages (2)

A
  • can be expensive if done over a long period of time
  • business willi never own the asset
27
Q

selling shares advantages

A
  • large sums of money can be raised
  • money does not need to be repaid
  • growing potential
28
Q

Selling shares disadvantages (4)

A
  • dividends must be paid to shareholders
  • expenses to advertise and organise sales of shares can be expensive
  • ownership is diluted
  • less control
29
Q

grants advantages

A
  • offered to help the business get started and expand
  • money does not need to be repaid back
30
Q

grants disadvantages (3)

A
  • complicated to apply for
  • businesses must meet certain requirements
  • usually a one off payment
31
Q

bank overdraft - advantages (5)

A
  • allows account holder to choose when to use the extra money and how much to borrow
  • used to fund short term projects
  • easily budgeted for
  • power and choice
  • helps with planning
32
Q

bank overdraft disadvantages (3)

A
  • interest may be charged on amount over drawn
  • penalty charges apply if the account holder exceeds agreed limit
  • not good for very expensive and long term projects
33
Q

discuss external recruitment methods (4)

A
  • a large amount of possible candidates to choose form as the job is advertised out with the company. this means the company is more likely to find a candidate withe the right skills and experience
  • Brining someone new into the company would mean that new skills and knowledge will be gained (1) which could give the company a competitive advantage (1)
  • However, using external methods means that the recruitment process is longer as the company must advertise out with the company (1).
  • It may also lead to feelings of resentment that an existing employee was not successful (1)
34
Q

what does a financial statement show (2)

A
  • overall value of a business
  • assets and liabilities
35
Q

who may use a businesses financial statement (2)

A
  • investors may use it to see the financial position of a business in order to see if they will get a good return on their investment
  • suppliers can use it to determine the risk level involved in lending or supplying the business
36
Q

what can a financial statement be used for (2)

A
  • analysing ratios which can be compared with previous years or competitors. this willi help to make future decisions
  • it can be used to show the current value of assets and liabilities

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