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Unit 2 Flashcards

1
Q

What is a horizontal merger?

A

When two similar businesses at the same stage of production in the same industry merge

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2
Q

What is a lateral merger?

A

When two businesses that are related merge (e.g. A brush shop and a comb shop)

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3
Q

What is a vertical merger?

A

When two businesses at different stages of production merge

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4
Q

Advantages of a sole trader 3

A

Easy to set up
Relatively cheap
Owner can make decisions quickly

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5
Q

Disadvantages of a sole trader 3

A

No one to share responsibility with
Long hours
Unlimited liability

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6
Q

What is a Deed of Partnership?

A

A legal document stating the responsibilities of the partners, e.g. How profits and losses are to be shared

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7
Q

Advantages of a partnership

A

More partners = more capital invested

Someone go consult about business decisions

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8
Q

Disadvantages of a partnership

A

Disputes

Unlimited liability

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9
Q

What is:
A franchise?
A franchisee?
A franchisor?

A

A franchise is when someone buys into an existing business and get the right to use their ideas
A franchisee is the person who buys the right to copy a business format
A franchisor sells the right to use a business idea

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10
Q

Advantages of a franchise 2

A

The franchisee is adopting a proven business model and selling a well known product
Continued support

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11
Q

Disadvantages of a franchise 2

A

Less control

Have to pay profits to franchisor as a royalty payment

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12
Q

What is a cooperative?

A

A business owned and controlled equally by owners and customers

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13
Q

Advantages of a cooperative 2

A

Everyone has an equal day; it is democratic

Limited liability

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14
Q

Disadvantages of cooperatives 2

A

Inefficient management as the owners don’t have any special skills
Lack of secrecy

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15
Q

What is a public sector business?

A

A business owned and run by the government

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16
Q

What is a multinational company?

A

Companies that operate in several countries

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17
Q

Advantages of multinationals

A

Cheap raw materials

Cheap labour

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18
Q

Advantages of Limited companies

A

They are incorporated (they have their own legal identity)

Limited liability

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19
Q

Disadvantages of limited companies

A

Financial information must be publicised

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20
Q

What is an LTD?

A

A private limited company: a small business that can only sell shares to family and friends

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21
Q

What is a PLC?

A

A public limited company: usually a larger, well known business. Can sell shares over the stock market to anyone

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22
Q

What is privatisation?

A

The transfer of a business, industry of service from the public to private sector

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23
Q

What is an objective?

A

A short term objective the company much achieve in order to meet their aims

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24
Q

Possible objectives of a business:

A

Survival (when a business just starts up)
Profit maximising (maximum profit)
Profit satisfying (enough profit to keep owners comfortable)
Sales growth (sell as much as possible)
Provide a service
Ethical objectives

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25
Why might a business change its objectives?
May have achieved an objective The competition might change Technology advances
26
Primary sector and its decline
Produces raw materials, involves some sort of extraction We are running out of natural resources Cheaper foreign labour More leisure time for tertiary jobs
27
Secondary sector and its decline
Manufacturing sector We can't compete against foreign goods Advance of robots Deindustrialisation
28
Tertiary sector and its rise
Retail and service businesses We have a higher standard of living More money Less time
29
A service
Something you can't touch
30
What is a business aim?
The long term, overall thing a business is set up to achieve
31
Factors to consider when choosing a location
``` Customers (convenient for them?) Staff (do locals have right skills?) Support services (any nearby?) Cost Infrastructure (can people get there easily, are there corrects services?) ```
32
Problems with moving overseas
Culture and language barriers Legal issues with variations in law Exchange rates
33
What is a stakeholder?
Anyone with an interest in a business (e.g. Employees, suppliers)
34
``` What are the interests of the following?: Government Owners Workers Customers ```
Government: taxes and employment Owners: profits Workers: incomes, benefits Customers: good value and quality products
35
What are economies of scale
Reduction in unit/ average cost due to an increase in production
36
Why would a business choose to grow?
Increased market share Economies of scale Rule out competitors
37
What does the term 'recruitment' mean?
Attracting people to apply for a job
38
What does internal recruitment mean?
Recruiting known staff
39
Job description
Explain the work to be done and basic information
40
Person specification
List desirable qualities of candidate
41
Methods of advertising
Local newspapers National newspapers Job centres Internet
42
Selection
Selecting the most appropriate candidate for the job
43
Why is training important? 3
Improves efficiency Avoids accidents Retrain workers so they understand new technology
44
What is induction training?
The initial, first training an employee gets. Includes things such as: Health and safety Meeting co workers Lunch and breaks
45
On the job training
Takes place in the work place, whilst employee is carrying our job. It is cheap and specific to the ways of the company
46
Off the job training
Takes place away from work place. It is good because it is provided by experts and there are no distractions. However, it can be very expensive
47
Why should employees be motivated?
Increased output Improved quality Higher staff retention
48
Monetary methods of motivation
Profit share | Pay rise
49
Non montage methods of motivation
Improves working conditions Appraisals Job rotation
50
Autocratic leadership
Senior managers make all important decisions
51
Democratic leadership
Workers allowed to make own decisions
52
What is communication?
Passing messages between people or organisations
53
Channel of communication
Path takes by a message
54
Horizontal communications
Messages sent between staff on same level of hierarchy
55
Vertical communications
Messages sent between staff on different levels of hierarchy
56
Verbal communications
Sending messages face to face or over phone
57
Written communication
Messages sent using words
58
Why is communication important?
Customers enjoy a good relationship with the business (complaints are dealt with ) Staff understand responsibilities Staff are more motivated when listened to
59
Barriers to communication
Timing, clarity and the wrong method may be used
60
How can ICT help a business?
``` Decision making (knowledge is power) Helps staff (quickly access data) Maintains records Communications (email etc) ```
61
What is an organisation chart and why is it needed?
It is a diagram that shows the structure of a business. It is easy to identify roles and responsibilities of staff and how different roles are related
62
What is the hierarchy?
The management levels in an organisation
63
What is a person's span of control?
The number of subordinates directly reporting to that person
64
What is the chain of command?
The path of authority along which instructions travel
65
What are lines of communication?
Routes messages travel along
66
Tall organisations
Many levels of hierarchy with narrow span of control
67
What is a flat organisation?
Few levels of hierarchy, wide span of control and short lines of communication
68
What is a trade union?
A group of workers who join together to protect their own interests
69
Aims of a trade union
To improve pay and working conditions To support training and development of members To ensure members are looked after by employers
70
Types of industrial action
Non cooperation Work to rule (working to a minimum) Strikes
71
What is the chain of production?
The stages involved in making a product
72
What is Specialisation?
When a business or employee is good and focussed on one specific thing
73
How does a business add value?
When the selling price of an item is higher than the production costs (e.g. Convenient)
74
What is a social enterprise?
A business that reinvests in the community. Makes money in a socially responsible way
75
Characteristics of a social enterprise
Directly involved in producing goods Social aims and ethical values Self sustaining (don't rely on donations)
76
Why might a business fail?
``` Lack of planning Not focussed Poor cash flow No monitoring of performance Not making a profit Small number of customers ```
77
How might a business succeed?
Unique selling point Clear vision Attracting wide customer base Making profit
78
Name the 6 legislations
``` Minimum wage act Race relations act Sex discrimination act Health and safety in the workplace Equal pay Disability discrimination ```
79
Why might a business fail?
Wrong staff Not focussed Underestimating money and time
80
Why might a business succeed?
``` Clear vision Efficient staff Location Timing Leadership ```
81
Advantages to internal recruitment
Motivation | Cheaper
82
Disadvantages to internal recruitment
Limited choice | Favouritism
83
Disadvantages of external recruitment
Employees may be annoyed Retrain Cost and time
84
Advantages of external recruitment
Wider choice | Fresh outlook
85
Advantages of a tall chain of command/disadvantages of a short chain of command
More opportunity for promotion Easier to supervise staff Clearly defined roles Smaller, manageable workload for employees
86
Disadvantages of a tall chain of command/advantages of a short chain of command
High wages cost Indecisive Employees have little responsibility - demoralised
87
Advantages to a wide span of control 3
Wages saved Quick decision making Faster communication
88
Disadvantages to a wide span of control 3
The managers have a larger workload Fewer promotion opportunities The employees must multitask which results in more training being required
89
Advantages to a narrow span of control 3
Better communication between employees Better quality of decision making Those in command can closely monitor the work of their subordinates
90
Disadvantages to a narrow span of control 3
Increase in wages Numerous smaller departments can result in ineffective communication Remoteness and demoralisation
91
What is commission?
Sum of money paid after selling a certain amount
92
What is democratic leadership
Employees have a say
93
What is autocratic leadership?
Managers make all decisions without consulting others
94
What is laissez faire leadership?
Leaders make no decisions
95
Disadvantages to ICT
``` Unreliable Security breaches Job elimination Training Cost Time ```
96
What does ACAS do?
It is invlved in disputes between employees and their employers
97
What are the three ways of reaching an agreement in a dispute in the workplace?
Negotiation Consultation Arbitration
98
What is negotiation?
When employees and employers discuss their problems and issues together and try to reach a solution or compromise that is mutually acceptable
99
What is consultation?
Employers consult employees about their views on the issue but they would also involve other stakeholders in this process.
100
What is arbitration?
When a dispute cannot be resolved. When this happens, a third party is called in who will make a judgement or ruling on the matter e.g. ACAS
101
What is a merger?
When two companies decide to join together
102
What is a takeover?
When a company buys out a rival
103
What is a dividend?
A regular payment made from the business to its shareholders from its profit
104
What is a needs analysis?
A process focusing on how the product meets the needs of the consumer
105
What is continuity?
Continuing the business after the owner has died
106
What is bankruptcy?
A person or an organisation | which cannot repay the debts owed to creditors, therefore, it ceases to trade
107
What does insolvent mean?
When the business goes bankrupt and can't repay their debts

Business Studies (6 decks)

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