Unit 1 BM Flashcards
sole trader
is a business structure that is owned and operated by one individual
adv: full control over decisions, easy to register and set up
Dis: unlimited liability, less free time
partnership
a business that is owned by 2 or 20 owners
adv: 1)greater range of expertise
2) owners can share the workload
dis: 1) unlimited liability
2)Conflicts could arise due to shared decision-making
private limited company
is an incorporated business structure that has at least one director and a maximum of 50 shareholders.
adv: There is limited liability for shareholders.
dis: It is expensive to set up and operate
public listed company
is an incorporated business that has an
unlimited number of shareholders and lists and
sells its shares on the ASX
adv: Shareholders have limited liability
dis:Conflicts could arise
dividends
are regular sums of money paid out
to shareholders from a company’s profit
Shareholders
are the individuals or organisations who have purchased shares of a company and therefore are part-owners of the company
Limited liability
is when shareholders are only liable to the extent of
their original investment, meaning they are not personally responsible for the business debts.
social enterprise
a social enterprise is a business that aims to fulfil a community or environmental need by selling goods and services.
Adv: 1) the community benefits
2)business can develop positive reputation
Dis: 1) difficult to balance finances and social objectives
2)may be difficult to obtain a bank loan
government enterprise
a business that is owned by the government. it is operated in the public sector and fulfils all large scale needs such as housing, transport
Adv: 1) helps the community
2) can operate with some independence
Dis: 1) government and politicians can interfere
2) GBE’s have to follow significant “red tape”
business objectives
are the goals a business intends to achieve.
types of business objectives:
1) to make a profit
2) to increase market share
3) to meet shareholder expectations
4) to fulfil a market need
5) to fulfil a social need
6) to improve efficiency
7) to improve effectiveness
when a business makes a profit
profit occurs when businesses create more revenues than expenses
to increase market share
when a business increases it’s number of sales it can consequently increase its percentage of market share.by producing products with new technology, increasing customer loyalty
to meet shareholder expectations
shareholders invest their own money into a business by purchasing companies shares. their investment can facilitate the growth and development
capital gain
is an increase of the value of a share, meaning an investor can sell their shares at a higher price than what they originally purchased them for
fulfil a market need
to fill the gaps in the market to address customer needs. This is done by identifying target market
fulfill a social need
improving society and the environment through business activities
improve efficiency
how productively a business uses its resources when producing a good or service. to improve efficiency, the business has to improve their productivity
improve effectiveness
is the extent to which a business achieves its stated objectives. business objectives can be improved by their performance to meet set targets.
stakeholders
are the individuals, groups, pr organisation who have a vested interest in the performance and activities. stakeholders are:
1)owners and shareholders
2) managers and employees
3) suppliers and customers
4) general community
owners
are individuals who establish, invest, and have a share in a business, often with the goal of earning a profit from its operations. In public listed and private limited companies, owners are known as shareholders.
internal stakeholders
are individuals, groups, or organisations who are
employed by or have a financial share in
the business.
external stakeholders
are individuals, groups, or organisations who
are outside the business and are impacted by or interested in a business’s activities
managers
are individuals who oversee and coordinate a businesses employees and lead its operations to achieve business objectives
Employees
Employees are individuals who are hired by a business to complete work tasks and support the achievement of its objectives.
Customers
are individuals or groups who interact with a business by purchasing and utilising its goods and services.
Suppliers
are individuals or groups that source new raw materials and sell them to a business for use in the
production of its goods and services.
stakeholder interest
When a business fulfils stakeholder interests, it strengthens the relationship it has with these stakeholders, positively impacting business reputation and performance.
stakeholder conflicts
often the priorities and expectations of one group will conflict and disagree with those of another.E.g.
Owners – want to increase profits by decreasing the salary
of managers.
vs
Managers – want to receive greater rewards and salaries from the business as recognition for the achievement of objectives.
manager styles
is the approach and manner in which employees are directed and motivated within a business manager styles can be characterised through
1) decision making
2) communication flow
3) control
Autocratic management style
involves a manager making decisions and directing employees without any input from them
features:
- centralised control
- one way communication
- purely expected to follow managers directions
persuasive management style
involves a manager making decisions and communicating the reasons for those decisions to employees without their input
features:
- manager communicates the reason
- one way communication
- employees feel considered
consultative management style
invovles a manager seeking input from employees on business decisions but making the final decision themselves
features:
- two way communication
- manager affectively considers employee feeback
- employees feel valued
- centralised control
Participative management control
involves a manager sharing information with employees so that employees can participate in decision- making
features:
- two way communication
- decentralised control
Laissez-fair management style
Involves a manager communicating business objectives to employees and giving them freedom to make decisions independently
features:
- two- way communication
- employees are given freedom to achieve business objectives
- decentralised control
- allows employees to take ownership
Appropriateness of management styles
1) times
2) experience of employee
3) nature of the task
4) manager preference
management styles
planning
is the process of determining a business objectives and establishing strategies to achieve these aims:
- strategic planning
- tactical planning
- operational planning
SWOT analysis
can be used to evaluate different aspects of the business environment in planning process
- strengths
- weaknesses
- opportunities
- threats
decision making
is the skill of selecting a suitable course of action from a range of plausible options
communication
is the skill of effectively transferring information from one party to another
1) verbal
2) non verbal
delegation
is the skill of assigning work tasks and authority to other employees who are further down in a business hierarchal structure
interpersonal
is the skill of creating positive interactions with other employees to foster beneficial professinal relationship
leadership
is the skill of motivating others in order to achieve a business objective
corporate culture
is the shared values and beliefs of a business and it’s employees
positive corporate culture
negative corporate culture
official culture
involves the shared views and values that a business aims to achieve, often outlined in a written format. such as:
- mission statements
- vision statements
examples of corporate documentation:
- share objectives
- policies
- training
- symbols
- uniform
Real corporate culture
involves the shared values and beliefs, that develop organically within a business and are practised on daily basis by employees
1) types of employees
2) workplace environment
