unit 1 people in business Flashcards
what is an entrepreneur
the entrepreneur is the one that spots a gap in the market for a good or service, takes on the risk-both personal and financial risk- of starting a business to make a profit
financial risk - risk of losing the money they have invested, through their savings or a loan
personal risk - risk of failure amongst their friends/ families, which could lower their confidence
what is an investor
they give the entrepreneur money, called capital, so that they can invest in the business to help to help it succeed. they expect to receive a return on their investment
dept capital - an investor like a bank may offer money to a business as a loan which is repaid in instalments with interest, and they take no ownership/control of the business
equity capital - an investor may offfer capital in exchange for shares in the business. they would then own some of the business, and expect to receive a reasonable dividend from the business’s profits
what is an employer
an employer hires people to work for them and usually pays a wage or salary
what is an employee
an employee works for their employer, in return for a wage. they are protected by employment law and would usually sign a contract of employment starting out
what is a manager
an entrepreneur may decide to hire someone to run a business for them. a a manger arranges the business’s resources, making business decisions to achieve the business’s goals set out by the entrepreneur set by the entrepreneur and help it succeed
what is a producer
a producer usually manufactures products to sell to consumers. they can use raw materials bought from supplier to create a finished product for sale
what is a supplier
a supplier sells finished stock or partly finished goods to a business. they may supply raw materials to be used to create products or supply stock for resale by the business
what is a service provider
service providers offer business important services that they may need to run their business. they will probably need things like electricty, broadband, light and heat and may also want a chip and pin terminal for paymnts so will need a business like Sum Up or Shopify to process paymets and a bank to keep them secure
what is a consumer
a consumer is a person that buys goods and services sold by a business for their own personal use. they can help an entrepreneur by taking part in market research giving out information on what they want from a product
what is an interest group
interest groups are organisations that represent the common viewpoint, objectives and goals of a particular group of stakeholders. interest groups are known as pressure groups or lobby groups. interest groups seek to influence decisions makers by lobbying, media campaigns, public protests , boycotts and possible legal action
IBEC - Irish business and employers confederation : lobbied the government to not increase the national minimum wage and represents employers in industrial disputes
ICTU - Irish congress of trade unions: interest group for employees- lobby government to increase the minimum wage for workers, and improve their working conditions
IFA - Irish farmers association : Irelands largest farming representative organisation, lobbying and campaigning in Ireland and Europe for improved conditions and incomes for farm families in Ireland
what is a co-operative relationship
parties/stakeholders working together towards a common goal. they act in a mutually beneficial manner - it is a win-win relationship
what is a competitive relationship
each party/stakeholder tries to win at the other parties expense. it is a win-lose relationship where parties pursue a mutually exclusive goal
describe the relationship between an investor an entrepreneur
in a co-operative relationship situation could arise if the entrepreneur requests more time to repay a loan during an economic downturn, and an investor agrees to allow them more time to reduce the chances of them going out of business and not being able to pay back the debt at all (win-win). this would be a co- operative relationship as both parties gain from the relationship
a competitive relationship (win-lose) may exist where an investor may want immediate returns eg a dividend and is not prepared to wait for higher future profits by retaining funds in the business in the business for further expansion where an entrepreneur might prefer
describe the relationship between supplier and purchasing manager
a co - operative situation(win-win) would arise when the supplier provides good raw materials, components and finished goods to the purchasing manager who pays on time and offers a fair price. they act in each others interests to both benefits
there may be a conflict (win-lose) between the two sides if the purchasing manager isn’t paying up within the credit period provider by the supplier for the purchase of the goods
what are the benefits of a competitive relationships between producers
lower prices- producers may lower their prices to attract more consumers to them. this is of financial benefit to the consumer who can swap and save between brands
higher service/quality- producers like Lacoste may try to increase the quality of their product in order to increase sales against their competitors ( tommy hilfiger) . customers may respond by becoming more loyal to the firm. consumers would benefit by getting a higher quality product from the manufacturer
greater choice/ range - producers like Nike or |Adidas may try to increase the range of products(increase choice) available for sale to increase loyalty amongst consumers. consumers would benefit, as there are more options available to them
improved aftersales service - producers like Sony or LG may try to offer better customer service to their consumers eg live chat on their webpage, more information on their products, customer care line… to outdo their competition. customers would benefit as they can find out better information on the product before purchasing an item like a TV
elements of a legally valid contract - agreement( offer and Acceptance) 1
for an agreement to exist their must be a clear, complete and unconditional offer and acceptance of that offer. the party accepts the offer by agreeing to the terms as set out in the offer orally, in writing or by conduct
eg tesco are selling a roll for €6. david offers €6 for the sandwich by presenting it at the till. tesco accepts the €5 without any changes
elements of a legally valid contract- consideration 2
each party in a contract must exchange something of real value to the other party. consideration is usually in the form of money, but it could also be something of value exchanged as part of the contract
eg tesco offer the sandwich and david offers €6. both have some value
elements of a legally valid contract- capacity to contract 3
it is the legal ability/ power of a person/business to enter freely in to a valid contract. the following people generally people generally don’t have the capacity to contract; infants(under 18), persons under the influence of drink or drugs, mentally incapacitated or bankrupt persons
eg a seven year old can’t legally purchase a house as they are a child
elements of a legally valid contract- consent to contract 4
parties choose to enter contract on their own free will. there must be voluntary permission given by both parties. they cant be intimidated or threatened into entering a contract
eg a person made to sell their house due to death threats, could have the contract rescinded by a court
elements of a legally valid contract- intent to contract 5
both parties have to realise they are entering a contract that is legally binding and enforceable in a court of law. social contracts eg arranging for friends to show up to play a game of football, aren’t legal contracts, so if someone doesn’t show up they cannot be sued for not showing up
eg buying a new hockey stick is a legal contract, and if the stick isn’t of merchantable quality, you have legal rights for it to be replaced
elements of a legally valid contract- legality of purpose 6
an agreement to partake in illegal activities would not form a valid contract between parties. it must be for a legal activity
eg a drug dealer couldn’t sue a supplier for not delivering drugs on time to them as it is illegal to deal drugs
elements of a legally valid contract- legality of form
some contracts must be drawn up in a particular manner eg be in writing if they are to be legally valid
eg insurance policies/ the sale of a house needs to be signed written documents/ employment contract
terminations of a legal contract - frustration
an unforeseen event prevents the contract from being completed or makes it impossible to complete
eg the death of a singer makes it impossible for them to complete their contract of singing at a concert
terminations of a legal contract - breach
if one party is in breach of a condition of the contract(does not honour the promises made in contract ), then the second party has the right of action in the courts against the first party who caused the breach/ entitled to compensation
eg if the main members of a band didn’t show for their concert
terminations of a legal contract - agreement
the parties to the contract may agree to end the contract early by mutual consent, whether or not the purpose of the contract has been achieved
eg a band and event organiser may agree to cancel a planned concert if they feel neither party will benefit from it taking place
terminations of a legal contract - performance
both parties to the contract carry out their duties as require by the contract
eg a band is booked to preform at a wedding. they preform as agreed
remedies for breach of a legal contract- specific performance
the party in breach of a contract would be ordered by court to carry out its agreed contractual obligations. they would be made reschedule to fulfil their obligations
specific performance may be used as a remedy in a contract where one party wanted to end a contract early but the other party wants them to continue so asks a judge to order the party in breach to fulfil the agreed conditions of their contract
remedies for breach of a legal contract- rescind the contract
a court can order for both parties to be returned to where they were at the start of the contract . this remedy would return both parties to the original position that they were in when starting the party, effectively cancelling the contract
remedies for breach of a legal contract- damages awarded to the innocent party
a judge can order financial compensation to be paid by the guilty party to the innocent party to compensate them for breach of contract. it could include extra costs eg lack of earnings or the innocent party’s legal cots, on top of the value of the contract where the breach took place