U3 AOS1 Flashcards
Unlimited Liabiliy
The business owner(s) are personally liable for the debts of their company.
-Personal assets of the owner are at risk.
Limited Liability
Having its own legal identity, the owners will not be personally liable for the debts of the company.
Sole Trader
An individual who owns the business and is the sole person legally responsible for all aspects of the business.
-Simple to set up and control.
-Has unlimited liability.
-Owner has full control over the business and all decisions.
Partnership
A business structure that involves 2 to 20 individuals who own a business together.
-Relatively easy to set up.
-Requires a separate TFN.
-Unlimited Liability, however split among owners.
-Shared control of the business.
Private Limited Company
An incorporated business, the ownership of these companies is divided into equal parts called shares.
-Shares not traded on stock exchange.
-Limited to 50 shareholders.
More complex to start and run.
-Money earned belongs to the company.
-Separate legal entities with limited liabilities.
Public Listed Company
A public listed company has members who own the company, and directors who run it.
-Listed on the stock exchange.
-Separate legal entities with limited liability.
-Money earned belongs to the company.
-Operations controlled by directors and owned by shareholders.
Social Enterprise
A profit-making business with social objectives whose profits are reinvested for that social objective.
-Not a charity.
-Led by an economic, social, cultural or environmental mission.
-Trades to fulfill a mission.
Autocratic Management Style
Where the manager ‘tells’ staff what decisions have been made and why. Top-down communication with centralized authority.
Advantages-
-Very clear what is expected
-Expectations are set out plainly.
Disadvantages-
-No employee input allowed.
-Conflicts may arise.
-Creates an us and them mentality.
-Could impact staff turnover and absenteeism.
Persuasive Management Style
The manager attempts to sell or convince employees that the managements way is the best way. Centralized authority with top-down communication.
Advantages-
-Managers may gain trust and support through persuasion.
-Instructions remain clear.
-Workers believe their feelings are being considered.
Disadvantages-
-Attitudes could remain negative as employees fail to trust management.
-Communication is poor and limited.
-Employees remain frustrated.
Consultative Management Style
Where the manager asks employees for their opinions before making the final decision. Two-way communication but authority remains with the manager.
Advantage-
-Allows greater variety of ideas.
-Ideas are discussed before implementation.
-Employees begin to have more of a say in the running of the business.
Disadvantages-
-Consultation can take time.
-Some ideas might not be suitable.
Participative Management Style
The manager sharing the decision-making responsibility with their employees and empowers them to make decisions. Two-way communication and decisions are made by the group.
Advantages-
-Lots of opportunity for employees to voice ideas and opinions.
-Positive relationships between employees and employers.
-Higher levels of trust.
-Employees feel they have an active role in the businesses operations.
Disadvantages-
-Reaching decisions can take time.
-Employees could be given too much power.
-More involvement could bring disagreement.
Laissez-Faire Management Style
The employees being totally responsible for decision making and operations of the business.
Manager has no central power. Two-way communication.
Advantages-
-Employees feel a sense of ownership.
-Encouragement of creativity and independence.
-Team members leadership skills are expanded.
Disadvantages-
-Loss of control by management.
-Can breed personal conflicts for people who don’t cooperate.
-The focus on business objective can be eroded.
Corporate Culture
The shared values, beliefs and practices of a business.
Real Corporate Culture
he actual values and beliefs present in the company, observable from attire, behavior, and the way in which employees and managers relate to each other.
Official Corporate Culture
The values and beliefs that a company is trying to convey to the public. Observable in mission statements, logos, slogans and symbols.
List Various Stakeholders
Internal Environment Stakeholders-
-Managers
-Employees
-Shareholders.
External Environment Stakeholders-
-Suppliers
-Customers
-Society.
List Business Objectives
-Making a profit.
-Increasing market share.
-Fulfilling a market need.
-Fulfilling a social need.
-Improving efficiency.
-Improving effectiveness.
-Meeting shareholder expectations.
Communication Skill
The transfer of information from one person to another that could come in many forms such as verbal and non-verbal. This is essential for all management styles.
Delegation Skill
Where formal authority is passed down through an organizations hierarchy. Saves times and provides further development of skills. Essential for management styles such as Laissez-Faire, Participative and Consultative styles.
Leadership Skill
Being able to guide the business and employees towards achieving business objectives. Essential to Persuasive, Autocratic and Consultative styles.
Strategic Planning
2 to 5 years+, Senior management level, New products, Investments, and structure.
Tactical Planning
1 to 2 years, departmental level, allocation of resources, responding to changes.
Operational Planning
Short term, day/week/month, implements the strategies.
Interpersonal Skills
The ability to deal with people and build positive relationships with staff. Essential for consultative, participative, persuasive and laissez-faire styles.
