U3 AOS1 Outcome 1 Flashcards
Sole Trader
The simplest form of business ownership, One individual owner of a business, entitled to keep all profits and liable for all losses.
Adv:
Simple + Inexpensive
Minimal Govt regulation
No disputes (1 owner)
Dissadv:
Unlimited Liability
Hard to obtain finance
Partnership
Legal form of business ownership involving 2-20 partners working together
Adv:
Shared workload + risk
Simple + Inexpensive
Minimal Govt regulation
Dissadv:
Unlimited Liabality
Disputes between partners
No perpetuity
Private Limited Company
Seperate legal incorporated body owned by up to 50 shareholders.
Adv:
Limited Liability
Extra Capital (via shares)
Perpetuity
Dissadv:
Complex to establish
Costs
Govt Control
Public Company
A separate legal entity that is established when a prospectus is issued, aiming to maximise shareholders.
Adv:
Limited liability
Extra capital (via shares)
Experienced Management
Dissadv:
Complex structure
Establishment costs
Government control
Social Enterprise
Private sector business that distributes profit to benefit the community rather than the shareholder.
Adv:
Provides support to the community
Addresses social issues
Dissadv:
No profit for shareholders
Government Business Enterprise
Government-run and operated businesses in the public sector that provide goods and services to make a profit.
e.g
Communications: Auspost
Telecom: NBN
Transport: PTV
The 4 Business Objectives
- To make a profit - Allow for growth
- Increase market share - Increase total portion of sales in an industry
- To fulfill a market need - To meet customer needs via conducting market research
- To fulfill a social need - A focus on benefiting the community
Areas of Management Responsibility
Operations, Finance, Human Resources, Sales & Marketing, Technology Support
Operations
Responsible for managing the process of creating goods and services and planning and organising the resources needed to produce/provide such goods and service
Finance
Responsible for planning and preparing internal financial information such as budgets and balance sheets. This information guides future financial decision making.
Human Resources
Responsible for establishing the relationship the business has with its employees. involves recruitment & selection, workplace relations, etc.
Sales & Marketing
Responsible for developing strategies via the use of market research to further create relationships with customers to increase sales. Assuring customers needs+wants are met.
This furthermore increases market share
Technology Support
Responsible for assisting a business to create value via the implementation of systems and processes that increase productivity and profitability.
Business Stakeholders
Stakeholder/Interest/Area
Owner - Profitability, Ethical operations - Internal
Management - Goal setting, achievement, fair remuneration - Internal
Employees - Fair wages, ethical workplace, job security - Internal
Customers - Quality goods/services, customer service - Operating
Suppliers - Customers business is profitable, long term relationship - Operating
Outline the interests of two relevant stakeholders and describe a management skill that will ensure there is no conflict between them
Two relevant stakeholders are management and suppliers
Management wants a long term relationship with suppliers, assuring fair prices and consistent quality
Suppliers want to be ensured a relationship with minimal disputes on pricing and both parties are in agreement.
To ensure NO conflict between the 2 parties the skill of communication can be used. Communication is the process of exchanging info between people.
Potential Conflicts between Stakeholders
Owners/Directors + Shareholders: Profit distribution, owners wish to pocket, shareholders wish to retain to build the business.
Management + Suppliers: Long term relationship with fair prices, consistent quality, high standard/low cost
Owners + Community: Environmental issues, pollution, waste
Management + Customers: Quality, price
Corporate Culture
System of shared values and beliefs of people within a business.
Management seeks to influence corporate culture in hope of optimising busines performance
Official Corporate Culture
Set of values and beliefs that the business wants to present to the public as its own, shown in goals, missions statement, and documents.
Real (unofficial) Corporate Culture
What actually prevails throughout the business, visible through observation
How to develop corporate culture
Training is able to put staff in a position where they are able to understand the values and beliefs of the entity.
Training can further build employees relationships with others and customers in order to define the business postiviely
Management
Process of providing direction and guiding staff achieve business objectives
Management Style
The manner and approach of providing direction, implementing plans, and motivating people
The 5 Managment Styles
Autocratic Persuasive Consultative Participative Laissez-faire
Autocratic
Centralised decision making, little delegation of responsibility, managers make the final decision via the use of one way communication
Adv:
Decisions made quickly
Direction communication
Dissadv:
Discourages teamwork
Low staff morale
