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Business > Understanding business > Flashcards

Understanding business Flashcards

1
Q

What is the secondary sectors and some examples

A

The manufacturing process

Eg construction, building and car production

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2
Q

What is the primary sectors and what are some examples of these?

A

The extraction of raw materials
Eg
Farming
Oil extraction and fishing

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3
Q

What is the tertiary sector and some examples of this

A

Providing a service

Eg hospitality, retail

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4
Q

What are the 4 sectors of industry

A

Primary sector
Secondary sector
Tertiary sector
Quaternary sector

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5
Q

What is the quaternary sector and what are some examples

A

It and knowledge based services
Eg research and development
Ict

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6
Q

What is the definition of a plc

A

A company owned by shareholders who buys shares on the stock market

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7
Q

What’s the definition of a ltd

A
  • a company owned by shareholders who are invited to buy shares
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8
Q

What are advantages of plc (3)

A
  • limited liability- can’t loose everything
  • economic of scales- can buy in bulk which is cheaper
  • easily borrow money to expand
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9
Q

What are advantages of ltds (3)

A
  • shares not sold to the general public- no loss of control
  • smaller number of directors- easier decisions
  • business and owner separate- if in debt shareholders don’t have to pay
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10
Q

What are disadvantages of ltds

A
  • shares not sold to general public- less finance
  • financial info available to public- can see your financial situation
  • share of profits to shareholders- more shareholders means less profits you get
  • info to register of companies, time consuming and expensive
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11
Q

What are disadvantages of a plc (3)

A
  • general public can view accounts- competition have access to the amount of profits
  • complicated and expensive to set up- £50,000 capital
  • Easily get taken over by buying stock exchange, loose control
  • shareholders have little say unless own a lot of shares
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12
Q

What are some similarities of a ltd and plc (4)

A
  • both have limited liability
  • both follow legal procedure forms
  • both owned by shareholders and controlled by a board of directors
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13
Q

What are differences between a plc and ltd

A

Plc requires a £50,000 start up capital whereas ltd have no start up capital

  • ltd can have one shareholder whereas plc must have at least two
  • ltd invites shareholders whereas plc sells stock on the market
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14
Q

Relating to a brewery whah is horizontal integration

A

Taking over another competitor-

Buy another brewery

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15
Q

Relating to a brewery

What is back wards integration

A

Taking over a business in a earlier sector of industry

Buying a potato farm

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16
Q

Relating to a brewery

What is forward integration

A

Taking over a business in a later sector of industry

Buying a pub

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17
Q

Relating to a brewery

What is lateral integration

A

Taking over a business in a similar industry

Buying a cider making company

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18
Q

Relating to a brewery

What ops conglomerate integration

A

Open in a new unrelated market

Buying a show shop

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19
Q

What are some disadvantages of outsourcing (4)

A
  • organisation can loose control over quality/ flexibility
  • communication have to be clear or mistakes can occur
  • may cause redundancies which looses morale and costs
  • may be expensive, outsourced company have to make a profit too
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20
Q

What are some advantages of outsourcing (4)

A
  • cheaper- economics of scale which is buying in bulk
  • allows organisation to concentrate on its activity
  • if not a tied contract, can use service as and when they want, saving money
  • reduces costs- no excess staff need to be employed
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21
Q

What is the definition of outsourcing

A

This involves hiring another firm to supply or do parts of a job instead of a firm doing it themselves

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22
Q

What are some advantages of horizontal integration (3)

A
  • can dominate the market- strong
  • economic of scale- buying in bulk
  • control prices and increase profits
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23
Q

What are some disadvantages of horizontal integration

A
  • quality may suffer with lack of competition

- high prices for companies

24
Q

What is objectives of the private sector (6)

A
  • Sales maximisation- create as many sales as possible staff enjoy as more bonuses
  • customer satisfaction, high standards, loyal customers
  • profit maximisation, achieve as many sales as possible
  • growth, small firms become larger and becoming more competitive
  • manejerial objectives- increase there salary
  • corporate social responsibility, Creates a good image
25
Q

What are advantages of lateral integration (2)

A
  • target new markets and increase sales

- products and service may compliment eachother

26
Q

What are disadvantages of lateral integration (2)

A

Lack of knowledge and experience in sector

New forces can affect new ideas

27
Q

What are advantages of conglomerate integration

3

A
  • larger, more financially stable
  • gain new customers and sales of new customers
  • spreads risks out as can overcome seasonal fluctuations
28
Q

What are disadvantages of conglomerate integration (3)

A
  • lack of experience and knowledge on in the sector
  • very large to manage and managing tel very different markets
  • lots of focus on new industry as differing products
29
Q

What are advantages of backwards vertical integration (3)

A
  • business can control the supply of raw materials
  • quality of stock can be controlled
  • can increase profits by cutting off suppliers
30
Q

What are the disadvantage of backwards vertical integration(3)

A
  • inexperience in managing new industry
  • new focus can affect main activities
  • legal restrictions may not allow the integration
31
Q

What are the advantages of forward vertical integration (3)

A
  • increase profits by cutting out the ‘middle man’
  • can decide to not supply to competitors
  • business can control the supply of raw material/ stock
32
Q

What are disadvantages of forward vertical integration (3)

A
  • inexperience in managing new industry
  • new focus can affect core activities
  • legal restriction may not allow for integration
33
Q

What are advantages of organic growth (3)

A
  • less risky as you know your own company
  • business doesn’t loose control and can do what they want
  • can build what is already good at
  • don’t need outsider finance
34
Q

What are disadvantages of organic growth (3)

A
  • slow growth method
  • growth depends on overall market
  • hard to build on market share if already market leader
35
Q

What is a flat structure

A

Pyramid structure with a few levels of hierarchy- suits smaller sized organisations

36
Q

What are advantages of a tall structure (3)

A
  • everyone knows there individual roles- small amounts of miscommunication
  • motivation- good chance of promotion
  • easy to mange- narrow span of control
37
Q

What are the disadvantages of tall structures (3)

A
  • hard to pass on info- many layers
  • slow to react to external factors
  • fewer staff- hard to share ideas with
38
Q

What is a tall structure

A

Tall pyramid structure can have a high structure of hierarchy
Suits a large organisation

39
Q

What is delaying

A

Removing layers of hierarchy

40
Q

What are advantages and disadvantages of delayering (2 each)

A

+- save money, quicker decisions for response to change
- quicker response to external factors

    • fewer promotional opportunities creating lack of morale
  • loose key member of staff
41
Q

What are advantages of flat structures (3)

A

+ quick response to change

  • positive morale- feels part of decision making
  • wide span of control- lots of delegation and empowerment
42
Q

What are disadvantages of flat structures (3)

A
  • less employees, not as much managers and much chance of promotion
  • managers have lots to do- more pressure
  • lots of supervision requires
43
Q

What is a chain of command

A

The rate that decisions and information flow

44
Q

What is span of control

A

The number of people you are in charge off

45
Q

What are external factors and examples (6)

A
  • political factor- gov increase tax
  • economic factor- inflation and change of interest
  • social factor- changes in society, fashion trends
  • technology factors - increase use of social media
  • economic factors- weather
  • competitive factor- what competitors do
46
Q

What’s the positive and negative impact of increased interest rates ( 2 each)

A

+- greater returns of saving- more people saving than spending
-reduces inflamitary pressure ( costs of items don’t increase

— more expensive to borrow, hard to get capital
-people may not be able to afford new/ current loans

47
Q

What’s the impact of increased taxation (2)

A
  • less spending for consumers to spend as money goes to gov

- less purchasing, business needs to work hard to increase sales

48
Q

What the factors affecting structures (4)

A
  • skill of manager- unskilled staff are in no place to make decisions- decentralised isn’t suited for them
  • skill of employees- unskilled staff should rely on managers to affect decision making, tall structure better for the,
  • size of company- small decisions should Stick to flat and entrepreneurial structures as not many management
  • finance available- if limited staff then a structure like entrepreneurial as not having to pay for many managerial wages
49
Q

What are the role of a manger (7)

A

-planning- look ahead to set aims and strategies
-commanding- tell subordinates what their resources are
-organisations- make arrangements for all the resources of the organisation to be in the right place at the right time
-commanding- tell subordinate what their resources are
-controlling, evaluates companies results against plans and makes sure works done
-co-ordinating- make sure everyone is working towards the same aims and that activities fit in with the correct work
-delegation, make sure employees are responsible for tasks
Motivating- encourages others to complete their tasks efficiently and empower them with non-financial methods

50
Q

Factors affecting decision making (3)

A

HR-Senior managers may not agree with the decisions.
finance- may not have enough finance to make affective decisions
-technology-Lack of the correct equipment or technology may restrict the decision-making process

51
Q

How will managers assess decisions (4)

A
  • Measuring sales- whether sales have increased or decreased
  • analysing profit levels- would it improve
  • interviewing staff- are employees happy
  • mounting staff- is morale High enough
52
Q

Advantages of using decision making models (3)

A

Builds on strength
Address weaknesses
Takes a look at the business current position to help make decision making

53
Q

What are disadvantages of decision making models (3)

A
  • time consuming
  • needs to be organised and structured
  • snapshot and can be out of date quickly
54
Q

Difference between a ltd/plc and public limited companies (3)

A
  • plc controlled by a board of directors- public company is controlled by mps/ maps
  • plc funded by shares sold on stock public is taxes
  • plc owned by shareholders and lads- public is owned by gov
55
Q

Difference between tall and flat structures (5)

A
  • tall narrow span of control easy management, flat wide span, harder management
  • tall slow to pass on info, slow response to PESTEC factors, fast to pass on info, fast reaction to pestec
  • tall = higher manegerial wages, flat not as much manejerial wages
  • tall, good morale as lots of chances of promotion, flat not as much chance of promotion
  • tall everyone knows their individual roles, less pressure, flat, managers have a lot more to do

Business (7 decks)

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