Understanding Business

Question 1

Can you list the 3 SECTORS of the ECONOMY?

Answer 1

Private Sector

Public Sector

Third Sector

Question 2

Can you list the 6 types of BUSINESS ORGANISATIONS?

Answer 2

Sole trader
Partnership
Private Limited Company (Ltd)
Local Government organisation
Non-profit making organisations
Social Enterprises

Question 3

Can you describe the key features of a SOLE TRADER:

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 3

Ownership: Sole trader

Controlled by: Sole trader

Financed by: Owner’s savings

Question 4

Can you describe the key features of a PARTNERSHIP:

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 4

Ownership: Partners

Controlled by: Partner in charge of specific area

Financed by: Partners’ capital (savings)

Question 5

Can you describe the key features of a PRIVATE LIMITED COMPANY (LTD):

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 5

Ownership: Shareholders

Controlled by: Director of manager in charge of specific area

Financed by: Share capital, friends and family

Question 6

Can you describe the key features of a PUBLIC LIMITED COMPANY (PLC):

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 6

Ownership: Shareholders

Controlled by: Board of Directors

Financed by: Share capital; stock market

Question 7

Can you describe the key features of a CHARITY:

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 7

Ownership: Board of Trustees

Controlled by: Manager of shop

Financed by: Donations

Question 8

Can you describe the key features of a PUBLICLY FUNDED:

Owned by: ?
Controlled by: ?
Finance by: ?

Answer 8

Ownership: Government Offices

Controlled by: Government Minister (Uk or Scottish Government; Councillors (Local Government)

Financed by: Tax Revenue

Question 9

Can you describe some pros and cons of a SOLE TRADER?

Answer 9

Question 10

Can you describe some pros and cons of a PARTNERSHIP?

Answer 10

Question 11

Can you describe some pros and cons of a PRIVATE LIMITED COMPANY (PLC)?

Answer 11

Question 12

Can you describe some pros and cons of a PUBLIC LIMITED COMPANY (PLC)?

Answer 12

Question 13

Can you describe some pros of a CHARITY?

Answer 13

Question 14

Can you describe some pros of a PUBLICLY FUNDED ORGANISATION (e.g. government, BBC)?

Answer 14

Question 15

What is an Objective?

Answer 15

An objective is a target set by a business.

It helps the business prioritise what has to be done to achieve the success it wants.

Question 16

Can you list TYPES of Objectives?

Answer 16

1. Profit maximisation
2. Sales maximisation
3. Increased market share
4. Growth
5. Survival
6. Provision of a service
7. Social Responsibility
8. Improving Customer Satisfaction

Question 17

Can you list the EXTERNAL factors that influence businesses?

Answer 17

POLITICAL - actions taken by the government
ECONOMIC - current state of the economy
SOCIO-CULTURAL - Cultural & Population trends
TECHNOLOGICAL - latest tech developments
ENVIRONMENTAL - actions & laws to protect environment
COMPETITIVE - actions of competitors

PESTEC

Question 18

What is a STAKEHOLDER?

Answer 18

Any person or organisation that has an INTEREST IN THE SUCCESS of the business

Question 19

Who are the typical STAKEHOLDERS?

Answer 19

Question 20

What is a stakeholder’s INTEREST?

Answer 20

Interest is what the stakeholder WANTS from the business

Question 21

What is a stakeholder’s INFLUENCE?

Answer 21

Influence is the ACTION or DECISION the stakeholder can take that will affect the business

Question 22

Can you provide examples of how stakeholders can influence the business?

Answer 22