Unit 1 outcome 1.1 - sectors of Industry Flashcards
What are the 4 sectors of industry?
- Primary
- Secondary
- Tertiary
- Quaternary
What is a primary sector?
Taking natural resources from the land/sea; agricultural and extractive industries such as coal mining.
What is a secondary sector?
Businesses which use resources to make or build their products; manufacturing and construction firms
What is a tertiary sector?
Is made up of all firms which provide services and goods are exchanged (e.g Shops)
Don’t produce goods!!
Give some examples of activities in the tertiary sector:
- Banking
- Hairdressing
What is a quaternary sector?
A way to describe the knowledge based part of the economy
Examples of quaternary sectors;
services such as information generation and sharing, information technology, consultation, education, research and development, financial planning and other knowledge-based services.
What is a private sector?
organisations owned and controlled by private individuals and investors
What is a public sector?
organisations owned and controlled by the government
What is a third sector?
organisations set up to raise money for good causes or to provide facilities for their members.
Includes social enterprises and clubs
What is the ownership of the private sector?
Private individuals known as Shareholders
What is the control of the private sector?
Board of Directors - appointed by shareholders at an AGM
What is the finance of the private sector?
Share capital
What is the ownership of public sector?
Government
What is the control of the public sector?
Board of directors/trustees - appointed by the government
What is the finance of the public sector?
Taxations
What is the ownership of the third sector?
Set up by a trust
What is the control of the third sector?
Board of trustees, paid managers and volunteers
What is the finance of the third sector?
Donations/Fundraising and membership subscriptions
What are the 4 different types pf private-sector organisations?
- private limited companies
- public limited companies
- franchise
- multi-national
What is a private-limited company?
- LTD
- cannot sell shares on the stock exchange
- owned by private shareholders, who must be invited to invest in the company
- Limited liability
- Run by a board of directors
What is a Dividend?
when shareholders receive a share of the profits
What is limited liability?
shareholders do not risk personal bankruptcy in the event of business failure.
Name 3 advantages of a Private limited company:
- shareholders have limited liability
- Shareholders are private therefore the business doesn’t risk losing control of the organisation to outsiders
- The number of shareholders is small so the business usually retains a tight-knit, friendly culture
Name 3 disadvantaged of a private limited company:
- profits have to be shared amongst shareholders
- the legal process to set up the company is lengthy and complicated
- as shares cannot be sold on the stock exchange, the amount of finance which can be raised is limited, also meaning the business doesn’t have a large potential for growth.
What is a public limited company?
- PLC
- owned by shareholders
- shares can be bought by the general public on the stock exchange
- limited liability
- run by board of directors
What must Public limited companies publish and why?
They must publish their annual accounts and annual reports because this provides shareholders with useful information about how well the business is performing using the money they have invested
What are 3 advantages of a public limited company?
- Shareholders have limited liability
- large amounts of finance can be raised since shares can be sold on the stock exchange
- Due to the large number of shareholders, PLCs can grow very quickly and dominate the market
What are 3 disadvantages of a Public limited company?
- Profits have to be shared amongst a large number of shareholders
- There is no control over who purchases shares
- The legal process to set up the company is lengthy, complicated and expensive
What is a multi-national corporation?
A business able to expand globally and operate on an international scale.
What makes it easier to operate as a multinational corporate?
- Improvements in infrastructure
- common currencies
- growth of e-commerce
What are 3 advantages of a multinational corporate?
- wages and raw materials costs can be lower overseas
- businesses can avoid legislation in their home country e.g National minimum wage
- Grants can be issued by another country to encourage large businesses to locate there
Name 3 disadvantages of a multinational corporate?
- Cultural differences can affect production
- exchange rates can increase costs
- Time differences can hinder communication
What is a Franchise?
a business run by one firm under the name of another
What are 2 advantages of a Franchiser?
- it is a quick way to enter new geographical markets and increase market share
- The franchiser will earn a percentage of the franchisee’s profits each year (knows as royalties)
What are 2 disadvantages of a Franchiser?
- they are reliant on franchisees to maintain the image and “good name” of the business
- only a share of profits is received, rather than all the profits if the business owned each branch themselves
What are 2 advantages of a Franchisee?
- The new business can begin trading on the established reputation of the franchiser immediately
- The franchisee benefits from national advertisements carried out by the franchiser
What are 2 disadvantages of a Franchisee?
- A percentage of the profits (royalties) has to be paid to the franchiser
- The franchiser may impose strict rules on the franchisees and restrict their ability to operate
What is the main aim of a organisation in the public sector?
To provide services for the general public
Who are public-sector organisations run by?
The government
What are the 3 separate areas in a public sector organisation?`
- Central government
- Local government
- Public government
