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Higher Business > Unit 1 - Role Of Business In Society and types of organisations > Flashcards

Unit 1 - Role Of Business In Society and types of organisations Flashcards

1
Q

What are the factors of production?

A

Land, labour, capital, enterprise.

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2
Q

What is land (factor of production)?

What does land include (factor of production)?

A

The natural resources which the business uses.

The site which it happens - factories, farms, etc.

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3
Q

What is labour (factor of production)?

What does labour include (factor of production)?

A

Labour is the workforce of the business.

Who works for the organisation - machinists, packers, drivers.

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4
Q

What is capital (factor of production)?

What does capital include (factor of production)?

A

Capital is the man made resources - assets of the business.

What makes the product - cutting machinery, sewing machines, factory.

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5
Q

What is enterprise (factor of production)?

What does enterprise include (factor of production)?

A

Enterprise is where the entrepreneur will use land, labour and capital to achieve a business idea, producing goods or services.

What the end product is - Calvin Klein, ect.

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6
Q

Explain the process of production.

A
  1. Farmer rear the sheep.
  2. Shearers clip the sheep to provide wool.
  3. Wool goes to a spinning factory.
  4. The wool is dyed and washed and spun.
  5. Spun wool is sent to a textile company to make the jumper.
  6. You create and manufacture the jumper.
  7. It is then packaged and labelled.
  8. Now it gets transported to the retailer.
  9. The retainer sells the item of clothing.
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7
Q

What are the sectors of industry?

A

Primary, secondary, tertiary, quaternary.

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8
Q

What is primary (sector of industry)?

What does primary include (sectors of industry)?

A

Primary is when a company provides or uses natural materials for future products.

Farming, mining.

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9
Q

What is secondary (sector of industry)?

What does secondary include (sectors of industry)?

A

Secondary converts and manufactures raw materials into products.

Clothes factory, construction.

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10
Q

What is tertiary (sector of industry)?

What does tertiary include (sectors of industry)?

A

Tertiary provides and supplies services but not goods to a consumer.

Health care, cinema, football, banking.

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11
Q

What is quaternary (sector of industry)?

What does quaternary include (sectors of industry)?

A

Quaternary provides services such as consultancy and research to customers or businesses.

University.

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12
Q

What are the sectors of economy?

A

Private sector, public sector, third sector.

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13
Q

What is the private sector (sectors of economy)?

What is their aim (sectors of economy)?

What does the private sector include (sectors of economy)?

A

Private sector organisations are organisations owned and controlled by by private individuals.

They aim to survive and make a profit.

Sole trader, partnership, private limited company (LTD), public sector company (PLC), multinational, franchise.

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14
Q

What is the public sector (sectors of economy)?

What is their aim (sectors of economy)?

What does the public sector include (sectors of economy)?

A

Public sector organisations are organisations owned and controlled by the government.

Their aim is to provide a service to the public and are funded by taxes.

National government, local government.

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15
Q

What is the third sector (sectors of economy)?

What is their aim (sectors of economy)?

What does the third sector include (sectors of economy)?

A

Third sector organisations are organisations set up to help a cause or provide a service to members.

They aim to raise money and increase awareness for good causes.

Charities, social enterprises.

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16
Q

What are the advantages of being a sole trader?

What are the disadvantages of being a sole trader?

Where do they get their finance?

A

Easy to set up, can retain all their profits, make all the decisions.

Can be difficult to raise capital, unlimited liability, heavy workload.

Savings, bank loans, loans from family and friends.

17
Q

What are the advantages of being a partnership?

What are the disadvantages of being a partnership?

Where do they get their finance?

A

More equity to finance the business, different partners bring different skill, workload is shared.

Unlimited liability, profit is shared between partners, may not always agree on decisions.

Savings from each partner, bank loans, loans from family and friends.

18
Q

What are the advantages of being a private limited company (LTD)?

What are the disadvantages of being a private limited company (LTD)?

Where do they get their finance?

A

Owner can retain control, better able to raise capital, limited liability.

Must be registered with the registrar of companies, high set up costs (legal and admin), harder to motivate and control workers.

Bank loans, retained profits, grants, debentures, venture capital, share issue.

19
Q

What are the advantages of being a public limited company (PLC)?

What are the disadvantages of being a public limited company (PLC)?

Where do they get their finance?

A

Raise capital by selling shares on stock exchange, easier growth and diversify.

Disagreements over how to run the country, threat of take over, difficult to pursue objectives unrelated to profit.

Bank loans, retained profits, grants, debentures, venture capital, share issue.

20
Q

What are the advantages of being a multinational?

What are the disadvantages of being a multinational?

Where do they get their finance?

A

Creates jobs, benefits from economies of scale, achieving purchasing economies.

Removing profits from host country, exploitation of natural resources and workforce, exerting political muscle.

Tax avoidance, bank loans, retained profits, debentures, venture capital, share issue.

21
Q

What are the advantages of being a franchises?

What are the disadvantages of being a franchises?

Where do they get their finance?

A

Lower risk in buying a franchises company, commercial assets are covered, franchiser support.

Little say in company decisions, pay franchiser royalties, start up costs are high considering profits.

Loans, investors, debentures.

22
Q

What does the central government spend on?

Where do they get their finance?

A

They divide up money to each local and devolved government and reserved powers such as the military.

Income tax, national insurance, VAT, air passenger duty, fuel duty.

23
Q

What does the local government spend on?

Where do they get their finance?

A

They divide up money to each allocated areas such as schools and housing.

Central government.

24
Q

What do charities spend on?

Where do they get their finance?

A

They spend money on their respective movements and research.

Grants, donations, gift aid.

25
Q

What do charities spend on?

Where do they get their finance?

A

They spend money on helping their area in the community.

Grants, donations, gift aid.

Higher Business (5 decks)

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