Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Understanding Business > Flashcards

Understanding Business Flashcards

1
Q

Sectors of Industry

A

Primary - raw materials extraction.
Secondary - manufacturing.
Tertiary - services and retail
Quaternary - consultancy and research

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Sectors of Economy

A

Private - PLC, Ltd, Sole Trader etc.
Public - NHS, Local Govt etc.
Third - Charities, Social Enterprise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Advantages and Disadvantages of a Sole Trader

A

Keep all the profits and make all decisions, however unlimited liability and large workload.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Advantage and Disadvantage of a Partnership

A

More capital, shared skills and knowledge, however unlimited liability and shared profits.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a Public Limited Company?

A

A company owned by shareholders, shares sold on the stock exchange, run by an appointed board of directors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Advantages and Disadvantages of a Public Limited Company

A

Limited liability and can take advantages of economies of scale, however no control over share purchases and financial statements must be prepared.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a Private Limited Company?

A

A company owned by at least two shareholders, shares not sold on the stock exchange, but to family and friends.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Advantages and Disadvantages of a Private Limited Company

A

Limited liability and owners control who buy shares, however high startup costs and must be with a registrar of companies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is Franchising?

A

An individual pays for the right to operate under a well established firm, such as McDonalds. In return, the franchisor receives a share of profits and royalties.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Advantages and Disadvantages of Franchising

A

The business well established, advertising and marketing carried out by franchisor, however expensive to set up and little or no control over decisions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a multinational?

A

A company with headquarters in a different country but with manufacturing plants, stores etc in others. Such as Primark, Starbucks or BT.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Advantages and Disadvantages of a Multinational

A

Cheaper labour costs abroad and can take advantages of economies of scale, however laws abroad can impact the product/service and currency rates may fluctuate causing instability.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is Public Sector business?

A

Organisations owned by the government which provide a service to the taxpayer. They operate in a specific budget and are funded by taxes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is Privatisation?

A

Selling off public businesses to the private sector, because the government can no longer subsidise these failing businesses and can make money from it.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Third Sector business?

A

This is non profit organisations such as charities and social enterprises, they are owned and controlled by a board of trustees or committee members, raise finance through grants, donations or trading.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Features of a Social Enterprise

A

Sell goods and services, and reinvest profits into a social or environmental aim. Don’t rely on grants or loans, and can build a positive reputation, less regulation than charities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Business Objectives

A

Survival, Profit, Customer Satisfaction, Market Leader, Corporate Social Responsibility, Satisficing, Managerial, Growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Methods of Growth

A

Organic (Internal) Growth, Merger, Takeover or Integration (Horizonal, Backwards Vertical or Forwards Vertical).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Organic Growth

A

When a firm grows by reinvesting profits into expansion, no loans required and less risk, however it’s a slower method.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Merger

A

An amicable agreement to bring two firms under one board of directors, with possible redundancies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Takeover

A

When a firm buys over 51% of share capital to control the business, can be hostile.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Horizonal Integration

A

Taking over a firm at the same stage of production, such as Ford and Toyota.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Backwards Vertical Integaration

A

Taking over suppliers, the stage of production behind.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Forwards Vertical Integration

A

Taking over customers or retailers, the stage of production ahead.

25
Q

Diversification

A

Moving into a new market or area of business.

26
Q

Benefits of Horizontal Integration

A

You gain profits of competitor, you become bigger and benefit from economies of scale, reducing competition creates monopoly.

27
Q

Business Reduction

A

Demerger (splitting a firm into two parts)

Divestment (reducing costs by selling parts or closing)

28
Q

External Factors: PESTEC

A

Outwith control of business; political, Economic, Social, Technological, Environmental, Competitive.

29
Q

External Factors: Political

A

Government can increase taxes, introduce minimum pricing, grant planning permission, increase the minimum wage etc.

30
Q

External Factors: Economic

A

High unemployment meaning less disposable income but easier recruitment. Low interest rates encourages spending and borrowing. High interest means high loan repayments and saving money.

31
Q

External Factors: Social

A

Changes in fashion and trends, changes in demographics; the grey pound, different cultures, people more into healthy lifestyles etc, fast changing tastes makes market research even more important.

32
Q

External Factors: Technology

A

Developments of computing makes communication and selling easier, e-commerce etc, automation makes production cheaper and faster, must stay ahead of competition, can be expensive to keep up.

33
Q

External Factors: Environmental

A

Pressure on businesses to recycle, change in weather patterns could disrupt delivery or production, using renewable energy, being socially responsible gives good reputation etc.

34
Q

External Factors: Competition

A

Competitor opening next door impacts profitability, can enter a price war driving it down, must increase marketing campaigns, may need to patent to prevent imitation products, impacts market share etc. Competitor opening next door impacts profitability, can enter a price war driving it down, must increase marketing campaigns, may need to patent to prevent imitation products, impacts market share etc.

35
Q

Internal Factors:

A

Within business control; employees, management, finance and technology.

36
Q

Internal Factors: Employees

A

Without correct skills, may provide poor customer service. Low motivation can reduce productivity and high staff turnover, increased training costs etc.

37
Q

Internal Factors: Management

A

Inexperienced managers may make poor decisions, may fail to motivate staff, and cause lower productivity and missed opportunity.

38
Q

Internal Factors: Finance

A

Without finance, can’t buy new machinery, can’t pay staff, can’t conduct marketing and advertising, may lose out to competitors.

39
Q

Internal Factors: Technology

A

Automated factories are more productive, can reduce labour costs so more profits, can allow business to sell worldwide, can allow for customer feedback and market research.

40
Q

Corporate Culture

A

Positive corporate culture can be achieved by having clear aims, a mission statement, taking on board staff views, having visible branding and signage.

41
Q

Advantages of Positive Corporate Culture

A

Creates good working relationships, employees feel motivated and part of the business, gives the business a good image, ensures consistency.

42
Q

Advantages and Disadvantages of Tall Organisation

A

Lots of promotion opportunities, clear who manager is, small span of control, however, slow flow of information and high managerial staff costs.

43
Q

Advantages and Disadvantages of Flat Organisation

A

Fast flow of information and lower staff costs, however large span of control and fewer promotion opportunities.

44
Q

Centralised Organisational Structure

A

All decisions are made in the HQ, easier to promote corporate culture and decisions can be made for whole organisation quickly.

45
Q

Decentralised Organisational Structure

A

Decisions made branch by branch, allowing you to empower staff, keep them motivated and communicate decisions faster.

46
Q

Matrix Organisational Structure

A

A project team is created, bringing people from different functional areas to launch new products. Increases experience and motivation, however many teams can be expensive.

47
Q

Entrepreneurial Structure

A

Decisions are made by the owner with little or no staff input. Decisions made quickly and accountable, however can damage motivation and heavy workload.

48
Q

Changing Structures: Delayering

A

Removing a layer of management, going from tall to flat. Saves money, improves communication and decision making, and staff feel empowered.

49
Q

Changing Structures: Outsourcing

A

Contracting work to a third party; business can focus on core activities, specialists can do a better job, however can be more expensive and lose control of work.

50
Q

Changing Structures: Downsizing

A

Closing a department, store or branch. Staff laid off and labour costs reduced, however gives a greater workload.

51
Q

Functional Groupings

A

Creating departments for staff with similar skills and duties, such as finance, marketing, and human resources. Makes staff training easier however unresponsive to change.

52
Q

Product Groupings

A

Creating departments based on what the business sells, such as for iPhones, Macbooks, iPads etc. Responsive to change and accountable, however duplication of effort and potential competing.

53
Q

Geographical Groupings

A

Creating departments for staff based on geographical location, such as The Scottish Sun, Wales, Ireland etc. Means you can cater to local tastes and more responsive to change, but duplication of effort.

54
Q

Customer Groupings

A

Grouping by market segment, such as family holidays, ski holidays, pensioner holidays. Can cater for customer needs but high staffing costs.

55
Q

Stakeholder

A

A stakeholder is a person who has an interest and an influence on a business. Stakeholders depend on each other, but can also have conflict between them.

56
Q

Strategic Decision Making

A

Long term decisions, concerned with the overall direction of the business. Made by senior management, such as merging or expanding.

57
Q

Tactical Decision Making

A

Tactical Decision Making

58
Q

Operational Decision Making

A

Short term day to day decisions, made by team leaders or supervisors. Includes decisions on overtime required etc.

59
Q

Fayol’s Role of the Manager (POCCC)

A

Planning, Organising, Commanding, Co-Ordinating and Controlling.

Business (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions