U3 AOS1 Outcome 1

Question 1

Sole Trader

Answer 1

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

Question 2

Partnership

Answer 2

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

Question 3

Private Limited Company

Answer 3

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

Question 4

Public Company

Answer 4

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

Question 5

Social Enterprise

Answer 5

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

Question 6

Government Business Enterprise

Answer 6

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

Question 7

The 4 Business Objectives

Answer 7

1. To make a profit - Allow for growth
2. Increase market share - Increase total portion of sales in an industry
3. To fulfill a market need - To meet customer needs via conducting market research
4. To fulfill a social need - A focus on benefiting the community

Question 8

Areas of Management Responsibility

Answer 8

Operations, Finance, Human Resources, Sales & Marketing, Technology Support

Question 9

Operations

Answer 9

Responsible for managing the process of creating goods and services and planning and organising the resources needed to produce/provide such goods and service

Question 10

Finance

Answer 10

Responsible for planning and preparing internal financial information such as budgets and balance sheets. This information guides future financial decision making.

Question 11

Human Resources

Answer 11

Responsible for establishing the relationship the business has with its employees. involves recruitment & selection, workplace relations, etc.

Question 12

Sales & Marketing

Answer 12

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

Question 13

Technology Support

Answer 13

Responsible for assisting a business to create value via the implementation of systems and processes that increase productivity and profitability.

Question 14

Business Stakeholders

Answer 14

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

Question 15

Outline the interests of two relevant stakeholders and describe a management skill that will ensure there is no conflict between them

Answer 15

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.

Question 16

Potential Conflicts between Stakeholders

Answer 16

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

Question 17

Corporate Culture

Answer 17

System of shared values and beliefs of people within a business.
Management seeks to influence corporate culture in hope of optimising busines performance

Question 18

Official Corporate Culture

Answer 18

Set of values and beliefs that the business wants to present to the public as its own, shown in goals, missions statement, and documents.

Question 19

Real (unofficial) Corporate Culture

Answer 19

What actually prevails throughout the business, visible through observation

Question 20

How to develop corporate culture

Answer 20

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

Question 21

Management

Answer 21

Process of providing direction and guiding staff achieve business objectives

Question 22

Management Style

Answer 22

The manner and approach of providing direction, implementing plans, and motivating people

Question 23

The 5 Managment Styles

Answer 23

Autocratic
Persuasive
Consultative
Participative
Laissez-faire

Question 24

Autocratic

Answer 24

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

Question 25

Persuasive

Answer 25

Centralised approach, managers make a decision then persuade staff of the benefits via one way communication

Adv:
Suits high-risk situation
Employees are clear on why the decision has been made

Dissadv:
No input from employees
Opportunities are overlooked

Question 26

Consultative

Answer 26

Centralised approach, managers consult employees when discussing an issue or change via two-way communication. The final decision is made by the manager based on input received

Adv:
Variety of ideas and suggestions
Employee involvement

Dissadv:
Employees may not understand
Time-consuming
Ideas can be overlooked

Question 27

Participative

Answer 27

Decentralised approach, decisions are made as a team with staff and management working together with two-way communication. The manager still retains responsibility and accountability.

Question 28

Laissez-faire

Answer 28

Decentralised approach, leaves majority of decision making to staff to run and operate, the manager sets parameters that employees stick to

Question 29

The 6 Management Skills

Answer 29

Communication
Delegation
Planning
Leading
Decision-making
Interpersonal

Question 30

Communication

Answer 30

Process of creating and exchanging information between people. Personal, internal and external.

Question 31

Delegation

Answer 31

Passing of authority from management to employee to perform tasks or make decisions. Authority, responsibility and accountability

Question 32

Planning

Answer 32

Formalised decision-making that is future-orientated. Involves goal setting via SWOT analysis.

Question 33

Leading

Answer 33

Influencing others and guiding them to achieve the goals of the business. Involves delegation and communication

Question 34

Decision Making

Answer 34

Multi-step approach whereby a selection is made between a range of alternatives. Difficulty in decision varies on the situation.

Question 35

Interpersonal

Answer 35

Everyday skills used by a manager when dealing with people on a personal basis, both individually and in groups.

Question 36

Objective

Answer 36

Statement of desired achievement that provides direction for the business