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Higher Business management > Unit 1 outcome 1.1 - sectors of Industry > Flashcards

Unit 1 outcome 1.1 - sectors of Industry Flashcards

1
Q

What are the 4 sectors of industry?

A
  • Primary
  • Secondary
  • Tertiary
  • Quaternary
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2
Q

What is a primary sector?

A

Taking natural resources from the land/sea; agricultural and extractive industries such as coal mining.

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3
Q

What is a secondary sector?

A

Businesses which use resources to make or build their products; manufacturing and construction firms

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4
Q

What is a tertiary sector?

A

Is made up of all firms which provide services and goods are exchanged (e.g Shops)
Don’t produce goods!!

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5
Q

Give some examples of activities in the tertiary sector:

A
  • Banking

- Hairdressing

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6
Q

What is a quaternary sector?

A

A way to describe the knowledge based part of the economy

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7
Q

Examples of quaternary sectors;

A

services such as information generation and sharing, information technology, consultation, education, research and development, financial planning and other knowledge-based services.

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8
Q

What is a private sector?

A

organisations owned and controlled by private individuals and investors

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9
Q

What is a public sector?

A

organisations owned and controlled by the government

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10
Q

What is a third sector?

A

organisations set up to raise money for good causes or to provide facilities for their members.
Includes social enterprises and clubs

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11
Q

What is the ownership of the private sector?

A

Private individuals known as Shareholders

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12
Q

What is the control of the private sector?

A

Board of Directors - appointed by shareholders at an AGM

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13
Q

What is the finance of the private sector?

A

Share capital

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14
Q

What is the ownership of public sector?

A

Government

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15
Q

What is the control of the public sector?

A

Board of directors/trustees - appointed by the government

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16
Q

What is the finance of the public sector?

A

Taxations

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17
Q

What is the ownership of the third sector?

A

Set up by a trust

18
Q

What is the control of the third sector?

A

Board of trustees, paid managers and volunteers

19
Q

What is the finance of the third sector?

A

Donations/Fundraising and membership subscriptions

20
Q

What are the 4 different types pf private-sector organisations?

A
  • private limited companies
  • public limited companies
  • franchise
  • multi-national
21
Q

What is a private-limited company?

A
  • 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
22
Q

What is a Dividend?

A

when shareholders receive a share of the profits

23
Q

What is limited liability?

A

shareholders do not risk personal bankruptcy in the event of business failure.

24
Q

Name 3 advantages of a Private limited company:

A
  • 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
25
Q

Name 3 disadvantaged of a private limited company:

A
  • 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.
26
Q

What is a public limited company?

A
  • PLC
  • owned by shareholders
  • shares can be bought by the general public on the stock exchange
  • limited liability
  • run by board of directors
27
Q

What must Public limited companies publish and why?

A

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

28
Q

What are 3 advantages of a public limited company?

A
  • 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
29
Q

What are 3 disadvantages of a Public limited company?

A
  • 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
30
Q

What is a multi-national corporation?

A

A business able to expand globally and operate on an international scale.

31
Q

What makes it easier to operate as a multinational corporate?

A
  • Improvements in infrastructure
  • common currencies
  • growth of e-commerce
32
Q

What are 3 advantages of a multinational corporate?

A
  • 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
33
Q

Name 3 disadvantages of a multinational corporate?

A
  • Cultural differences can affect production
  • exchange rates can increase costs
  • Time differences can hinder communication
34
Q

What is a Franchise?

A

a business run by one firm under the name of another

35
Q

What are 2 advantages of a Franchiser?

A
  • 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)
36
Q

What are 2 disadvantages of a Franchiser?

A
  • 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
37
Q

What are 2 advantages of a Franchisee?

A
  • 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
38
Q

What are 2 disadvantages of a Franchisee?

A
  • 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
39
Q

What is the main aim of a organisation in the public sector?

A

To provide services for the general public

40
Q

Who are public-sector organisations run by?

A

The government

41
Q

What are the 3 separate areas in a public sector organisation?`

A
  • Central government
  • Local government
  • Public government

Higher Business management (4 decks)

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