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IB business management HL > unit 2 > Flashcards

unit 2 Flashcards

1
Q

human resource management definition

A

Strategic approach to the management of people within a business to meet its objectives

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2
Q

what does HR do and why is it Important?

A
  • HR planning
  • recruitment
  • training
  • appraisal (judging how good they are)
  • remuneration (paying people)
  • dismissal
  • motivation

Its important because: People are a business’ most important resource.
HR tries to get the best employees and getting them to work productively.

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3
Q

HR planning definition

A

predicting how many employees are needed and what skills they need

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4
Q

HR planning internal factors

A
  • labour turnover (% of workers leaving)
  • change in company objectives (E.g. expansion, new product)
  • productivity of employees (Increased productivity may mean less need to hire more workers)
  • automation (Possibly fewer workers needed, but need to hire a machine specialist)
  • flexitime (Homeworking, teleworking. This can lead to job sharing, access to a larger pool of talent, more equitable)
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5
Q

HR planning external factors

A
  • demographic change (Increase in retirement age, more woman entering the workforce)
  • changes in labour mobility (Willingness to move location for a job. Willingness to take jobs with a different skill set)
  • immigration (People moving from one country to another. Immigration increases the pool of labour)
  • economy (E.g. a recession might decrease demand for the product reducing the new for so many employees)
  • change in laws (E.g. maximum 40-hour week. Increase in Retirement age)
  • gig economy (temporary workers)
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6
Q

Why do people resist change?

A
  • fear of change
  • self-interest
  • poor communication by business
  • lack of trust in management
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7
Q

what is capital Expenditure

A

The purchase of fixed assets that usually will last more than one year and the main purpose is to drive growth in the business.
including:
- factories
- machinery
- vehicles
- furniture

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8
Q

what is revenue expenditure

A

The day to day spending of a business to keep it running; paid weekly/monthly.
not being able to pay could lead to bankruptcy.
- utility bills
- employee salaries
- office supplies
- rent
-insurance

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9
Q

external sources of finance (8)

A
  • share capital
  • loan capital
  • over drafts
  • trade credit
  • crowdfunding
  • leasing
  • microfinance providers
  • business angels
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10
Q

internal sources of finance

A
  • personal funds
  • retained profit
  • sale of assets
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11
Q

personal funds

  • definition
  • pros
  • cons
A

owner(s) put their own savings into the company, usually startups or sole traders

PRO
no interest payments or loss of control

CON
may not have personal funds

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12
Q

sale of assets
- definition
- pros
- cons

A

selling items that belong to the business (eg. factory, land, machines etc.)

PRO
gain a one off payment

CON
might be future costs involved (rent)

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13
Q

retained profit
- definition
- pros
- cons

A

a company may make profit - this is put back into the business, or paid to shareholders

PRO
using money the business has earned

CON
shareholders may sell shares if you don’t pay large enough dividends

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14
Q

equity finance - external source of finance
- definition
- examples (2)

A

giving up a percentage of company in return for investment
- share capital
- business angels

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15
Q

share capital
- definition
- pro
- con

A

selling part of the business to an investor in return for finance (limited liability companies - because must have shares)

PRO
- doesn’t need to be repaid

CON
- give up some ownership and control

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16
Q

business angels
- definition
- pro
- con

A

wealthy individuals who invest in small business

PRO
- gain knowledge, experience and connections

CON
- give up some ownership and control
- may have short to medium term profit expectations

17
Q

debt financing - external source of finance
- definition
- examples (4)

A

borrowing money
- loan capital
- overdraft
- trade credit
- microfinance provider

18
Q

loan capital
- definition
- pros
- cons

A

borrowing money (usually from a bank)

PRO
- do not give up control of the business

CON
- have to pay back with interest

19
Q

overdraft
- definition
- pro
- con

A

bank allowed the business’s account to go negative

PRO
- very flexible and short term

CON
- can be high rates of interest

20
Q

trade credit
- definition
- pro
- con

A

when businesses buy inputs from another business - buy now pay later

PRO
- good for cash-flow

CON
- businesses may give a discount for paying early so you can lose money

21
Q

microfinance provider
- definition
- pro
- con

A

providing small loans to business/entrepreneurs who might not be able to borrow elsewhere (often in LDC)

PRO
- can get access to finance
CON
- small amounts
- some see that this is unethical

22
Q

leasing
- definition
- pro
- con

A

paying for the use of an asset for a period of time (machinery/car etc)

PRO
- no upfront payment

CON
- likely to be more expensive in the long run

23
Q

crowdfunding
- definition
- pro
- con

A

when many people invest small amounts of money into a business (donations, equity, peer-to-peer lending)

PRO
- use of large numbers

CON
- investors will also expect some sort of reward

24
Q

factors to consider when choosing a source of finance (6)

A
  • time period
    short: overdraft, trade credit
    long: loan, shares
  • amount needed
    a lot: share capital
  • cost involved
  • legal structure
  • size of existing borrowing
  • attitude to ownership and control
25
Q

loan capital pros

A
  • no loss of control
  • no sharing profits
  • temporary as loan is payed back
  • good in long term (business does not lose control of the business)
26
Q

share capital pros

A
  • no borrowing - never have to pay anything back
  • no interest payments
  • more flexible
  • good in short term (can risk other people’s money to grow the business)
27
Q

Marketing definition

A

Identifying, predicting and satisfying consumer needs and wants profitably

28
Q

what does marketing involve?

A
  • advertising
  • market research
  • product design
  • setting pricing
  • designing promotion campaigns
  • how to get the product to consumers
  • after sales service
    etc.
29
Q

market definition

A

any place where buyers and sellers come together to buy and sell goods and services and exchange information

30
Q

market orientation definition

A

when a business focuses on the needs and wants of customers which are identified through market research, goods and services are produced to satisfy the wants and needs of customers

31
Q

product orientation definition

A

when a business focuses on research and development and producing high quality products, ignores the market

32
Q

benefits of market orientation

A
  • new products are likely to be more successful
  • can build customer loyalty through customer satisfaction
  • can react quicker to changes in consumer preferences
33
Q

benefits of product orientation

A
  • more likely to be different from competitors
  • market research is not always reliable
  • customers don’t always know what they want
34
Q

Market share
- definition
- how to calculate

A

measures how much of a market is controlled by one business

sales revenue of the business
—————————————— x 100
sales revenue of the market

35
Q

market growth
- definition
- how to calculate

A

how much the market is growing

(market revenue this year - market revenue last year)
————————————————————————- x 100
market revenue last year

36
Q

what to write in key of decision tree

A
  • decision node
  • chance node
  • decision not taken
37
Q

Market Leadership (HL)

Benefits of high market share

A
  • high revenue (and maybe profits)
  • control over pricing
  • economies of scale (lower cost -> higher production)
  • better shop placements

IB business management HL (12 decks)

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