Understanding Business Flashcards
What are the sectors of Industry?
Primary: extractive, eg mining, farming
Secondary: manufacturing, eg oil refining
Tertiary: service
Quaternary: information
What are the three sectors of economy?
Private
Public
Third
Describe some characteristics of a PLC
Owned by shareholders
Controlled by a Board of Directors
Financed by selling shares and reinvesting profit
Describe some advantages and Disadvantages of a PLC
Adv:
Economies of scale
Opportunity for large market control
Opportunity for high profit due to investment from SH’s
Limited liability
Multiple skills on the board • good decisions
Disadv:
Bad rep can damage business = lower share prices
Diseconomies of scale (too big too quick)
Lengthy process to set up
No control over who buys shares (hostile takeover)
High start up costs
Characteristics of a Multinational
A company that operates in more than one country
Normally has a headquarters based in one country (home country)
Often very large organisations
Use up to date tech in order to communicate with the world
Advantages and Disadvantages of a multinational
Adv: Brings jobs and employment to people living in the country Selling to more people Boost economy of the home country Economies of scale
Disadv:
