Understanding Bus Man Act

Question 1

How do businesses satisfy needs and wants

Answer 1

Businesses will firstly identify customers needs and wants
Then combine the factors of production CELL to make the good or service
Sell it to the customer to satisfy their needs and wants

Question 2

Describe how businesses create wealth in the economy?

Answer 2

Lots of jobs
High income
Lots of income for local firms
Economic growth- firm are creating more goods and services then increasing income

Question 3

Advantages of creating wealth

Answer 3

More jobs for people which increases there income
Taxes are raised so that they can increase the standard of living
Businesses income increases as people are spending more money making the business have more profit and they can continue to produce outputs

Question 4

Disadvantages of creating wealth?

Answer 4

Demand increases for housing meaning people with less money can find if difficult to buy a house
Businesses have a large environmental impact like noise pollution, air pollution
The volume of non-renewable resources can decreases

Question 5

Describe the sectors of the industry

Answer 5

Primary - businesses that are involved in extracting raw materials from earth and sea
Secondary - businesses that are involved in manufacturing the raw materials
Tertiary - providing services eg- cinema
Quaternary - industries providing information services such as computing, consultancy

Question 6

Describe the sector is economy?

Answer 6

Private - business set up and owned by private individuals, who invest there own money in the businesses known as capital, they set up the businesses to provide goods and services to people who can afford them eg- apple

Public - organisations set up and owned by different levels of the government, they get there money from taxes that the public pay, they set up goods and services to improve the quality of life for the public eg- NHS

third - non governmental organisations been set up to rise money for good causes and provide goods and services to help specific groups that need it eg- Oxfam

Question 7

Describe a sole trader organisation?

Answer 7

Owned by one person and set up by one person
Invests there own money
Have the right to make all decisions for the business

Question 8

Describe a private limited company?

Answer 8

The capital is divided into shares, each member or shareholder owns a number of shares. They are run by the board of directors who are appointed by the shareholders.
They are not allowed to offer shares to the public thought stock exchange
They have limited liability
They are private nothing has to be shown publicly

Question 9

What is a public limited company

Answer 9

A Large company minimum of £50,000 shares
The shares can be bought and sold of the stock exchange market
Register with the register do companies

Question 10

What are the advantages of a Public limited company?

Answer 10

Shareholders have Limited liability
Huge sums do capital can be raised by individuals and investors as
They have financial sustainability meaning it can develop and expand without the worry of money

Question 11

What are the disadvantages of a PLC?

Answer 11

Members of public can see financial information
They can grow so large that it can become inflexible and difficult to manage
It can cost a lot of legal procedures to set this type of business up

Eg-boots and marks and Spencer’s

Question 12

What is a franchise?

Answer 12

A businesses run by one firm under the name of another, the franchiser gives permission to the franchisee to sell goods or services under the Franchisers brand name, usually in return for a share of the franchisees profits

Question 13

What are the advantages for the franchiser

Answer 13

Quick way to enter new geographical markets and gain more market share

Ideas can be brought from the franchisee helping the franchiser

The profits that are made by the franchisee a percentage goes to the franchiser

Question 14

What are the disadvantages of a franchiser?

Answer 14

The businesses reputation depends on the success of the franchisee

Franchiser has to devote time and training to the franchisee

A percentage of profit goes to the franchisee - May have been more profitable to set it up themselves.

Question 15

Advantages for the franchisee

Answer 15

Training and support from franchiser will occur

The franchiser is likely to advertise nationally, this saves the frag he’s money

The reputation of the businesses is already on what the franchiser has made it reducing the ricks of failure of the franchisee

Question 16

What is a multinational business?

Answer 16

Very large businesses which have production facilities in a number of different countries, and they are said to be global

Question 17

Advantages of becoming a multinational business?

Answer 17

In different countries the government may offer lower tax meaning a higher profit for the business
Legalisation in other countries are way more relaxed meaning production is much cheaper
Higher skilled workers may be on offer for lower costs

Question 18

Disadvantages for a franchisee

Answer 18

Capital investment to set up
Profits have to be shared with franchiser
The franchiser may impose strict rules on the franchisee and restrict there ability to operate on their own initiativ

Question 19

Disadvantages of a multinational business?

Answer 19

Currency may be weak to allow profits to be converted back to a good rate

Language barriers may make if difficult to operate abroad

The country may be politically unstable

Question 20

Sectors of the economy?

Answer 20

Private - owned by private Individuals and financed by personal investments there aims are to stay on the market and to have profit survival

Public - owned and set up by parts of the government and funded by local taxes paid by the public, there aims are to provide services to the public and use taxes wisely

Third - are non profitable organisations that is funded by donations and fundraising there aims are to help a good cause

Question 21

Describe corporate culture?

Answer 21

When a business has branches that have the same logo and brands and hold training events

the values and beliefs that a business has that shapes how they behave.

Question 22

Methods businesses use to start corporate culture?

Answer 22

Have the staff wear uniforms so they are ergo missed by customers

Advertisement like press events

Phrase or motto used so that customers recognise the business

Question 23

What are the advantages of corporate culture?

Answer 23

The staff have a sense of belonging and that may increase there motivation

Employees know there positions and roles in the organisations this means that employees are more productive and less likely to make mistakes

The relationship between employees are strong meaning the business has a highly motivated work force meaning it’s a good working environment and increases motivation

Staff can move to different branches meaning the business is more flexible and is able to react to changes

Question 24

What is a mission statement?

Answer 24

Is a summary of the aims and objective the business has, to give direction to the organisation. They contain long term strategic decisions

Stakeholders?

Question 25

What are the private sectors objectives

Answer 25

Managerial objectives - managers peruse their own individual aims
Corporate social responsibly - improve its public image by becoming more ecological and Eco friendly
Growth- become a bigger company

Question 26

What is organic growth?

Answer 26

Means when a business grows by expanding its sales or their operations and is financed through its own profits

Eg- lowering the prices of goods and services, increasing advertisement, sell in a different location

Question 27

Mergers and acquisitions?

Answer 27

Businesses joking or buy other businesses, not necessary of the same type. When two or more companies agree to join together to become one larger company

Eg - latter market share, higher prices and gain more profit

Question 28

What are the benefits of growth?

Answer 28

Capital is easier to raise if it’s a larger business
Other businesses can bring in new skills ams knowledge
Reduces competition if a rival is taken over

Question 29

What are the costs of growth?

Answer 29

Conflicts may arrive between the organisations meaning decisions can be harder to make

May need to make some workers redundant, more managers this may have an effect on motivation.

Question 30

Horizontal integration?

Answer 30

Combining two firms operating in the same stage of production, for example - two super markets. One form might merge with another in Order to - eliminate competition, become stronger business’s

Question 31

Vertical integration?

Answer 31

The joining of firms operating at different stages of production.

Backwards vertical - when a firm takes over another at an earlier stage of the production - for example, a jam manufacturer taking over a fruit farm, the main reason for this is for the firm to be sure of the availability and quality of the outputs

Forward vertical - is when a firm takes over another at a later stage eg- pie manufacturer takes over delicatessens, the main reason for this is to control the distribution outlets for the product

Question 32

What is conglomerate integration?

Answer 32

This is when the businesses takes over firms that are completely different markets eg- airline takes over record shops

Reasons are make the firm larger, firms overcome seasonal fluctuations in its markets

Question 33

Compare the objectives within the public sector and the private sector

Answer 33

Public sector objectives are made by different departments of the government whereas the private sectors decisions are made my the private individuals

Public sector organisations want to increase the quality of living whereas the private sector wants to increase market share

Public sector wants to use taxes wisely whereas private sector wants to increase here profit

Question 34

Compare the objectives of the private sector to the third

Answer 34

The private sector want to increase there profit whereas the third sector want to maximise funds to help a good cause

The private sector wants to increase there market share whereas the third sector wants to prevent poverty

Question 35

External factors and there influences and interests

Answer 35

PESTEC

Question 36

Internal factors and here Influences and interests

Answer 36

Finance, managers, employees, technology,

Question 37

Internal stakeholders? Interest and influence

Answer 37

Owners, managers, employees

Question 38

External stakeholders? Influences and interests

Answer 38

Government, banks, customers, suppliers, local community

Question 39

Go to page 36 and 37 do all

Answer 39

Go

Question 40

What is a social enterprise?

Answer 40

Business’s that tackle social problems improve communities, peoples live changes and the environment

They make money but selling goods and services in the open market, but then reinvest there profit back into the business or the local community

Funded by grants, loans

Aims - make a income to tackle social issues

Question 41

Strategic decisions

Answer 41

Long term decisions made by senior managers, decisions that would impact the future for the business eg- to have 100% customer satisfaction

Question 42

Tactical decisions?

Answer 42

Are made by middle managers and are short term decisions that will impact the business not a lot, eg- to reduce costs

Question 43

Operational decisions?

Answer 43

Day to day decisions made by employees eg- dealing with customer complaints

Question 44

What is a SWOT analysis?

Answer 44

Strengths
Weaknesses
Opportunities
Threats

Question 45

Strengths are?

Answer 45

What the business is doing well - internal

Question 46

Weaknesses are?

Answer 46

What the businesses weak points are

Question 47

Opportunities are?

Answer 47

Looking a strengths and see if they open any opportunities and the same with weaknesses but if we can close hem to make the business a better organisation

Question 48

Threats are?

Answer 48

The obstacles that the business faces

Question 49

Functional grouping?

Answer 49

Organisations are grouped into departments based on similar skills eg- marketing, finance

Benefits - efficient use of resources eg- marketing resources are In one place, staff specialisation they all have knowledge in there departments

Disadvantages - rivalry between departments, poor communications between departments might occur, slow decision making

Question 50

Product or service?

Answer 50

Product or service grouping of activities based around a particular product or service

Benefits - respond quicker to external changes in there field, easier to Identify areas of the business that are not performing well, product specific expertise is achieved

Disad- duplication occurs, new groups need to be issued when a new product or service is put out

Question 51

Customer grouping?

Answer 51

Organisations structured around customers or groups of clients are more likely to be found in the service sector.

Benefits - allows the company to have depth knowledge of their customers, allows customer loyalty to build up, gives the customer a feeling of personal service,

Costs - expensive in terms of personnel, duplication of services,

Question 52

Place and territory grouping?

Answer 52

A structure designed for geographical and territorial base. The grouping is grouped around the world and had a HQ eg- hq will be in UK but has branches in North America and Middle eats and Australia

Benefits - healthy competition between regions, can serve the needs of local people more easily, the local branch is more responsive to chambers in customers needs

Costs - expensive in terms of personnel, can be expensive, duplication is services

Question 53

Technology grouping?

Answer 53

Organisations may set up there activities along technological lines this is because they often produce products that require different technological processes.

Benefits - easier to train staff, easier to introduce new technology at a particular stage of the production line

Costs - work can become very low skilled and repetitive so the staff may become demotivated, expensive to set up

Question 54

Line and staff grouping?

Answer 54

Line grouping is when the business is divided up into line department, each department has a line manager responsible for the work of the department.

Benefits- staff become specialised, improved communications between staff

Costs - line mangers may focus on departments rather than business aims, coordination of activities can be hard between departments

Question 55

Hierarchical structure?

Answer 55

Pyramid structure main people at the top less main people at the bottom

Benefits - clear limes of responsibility, opportunities of promotion

Costs - structure is unable to respond to change quickly as they have to go through the layers, commutation can be slow

Question 56

Flat structure?

Answer 56

Fewer levels of a a hierarchy.

Benefits - Improved communication, can respond to ch ages faster as there is less layers to get the information through

Costs - fewer promotions for the staff results into demotivating the staff

Question 57

Matrix structure?

Answer 57

Getting people together who have a specialised skills placing them in a a project reams to compete specific tasks.

Benefits - allows all individuals to uses their talents, job satisfaction which means an increase in motivation.

Costs - costly in terms of support staff as each project team needs their own admin staff, difficult to co-ordinate a team of individuals for different functional areas

Question 58

What is a business?

Answer 58

A business is a organisation set up to provide goods or services to consumers to satisfy there needs and wants

Question 59

How do businesses use ICT?

Answer 59

Spreadsheets- graphs can be created to make comparisons, statistics can be easy to analyse

Internet- can get information quickly from the web, decisions can be made by social media

Email- communications can take place almost at any time or place and between departments

Question 60

Explain 3 economic factors that can affect the profitability of a business

Answer 60

The employment rate - if the employments rate is low the firm will have less skilled workers and this can lead to a a decrease in production and a decrease in profit.

The economic state - if there is a recession that is occurring it can lead to a decrease in profit as many people are not spending money of luxury goods and services because they simple cannot afford it.

Interest rate - if the interest rate is high and business’s relies on loans from the banks and the I rest rate is high, it could lead to suppliers not being paid and then suppliers do not supply the business no more and a decrease in production occurs leading to a decrease in profit.