Unit 3 1A - Business Foundations

Question 1

List six types of businesses

Answer 1

Sole Traders
Partnerships
Private Limited companies
Public listed companies
Social Enterprise
Government Business enterprise

Question 2

Define the term Business

Answer 2

Businesses are organisations that sell goods and/or services to a market in an aim to make a profit. There are different types of businesses, such as a sole proprietorship and a private limited company, each with their own structure and objectives.

Question 3

Explain a sole trader business type

Answer 3

A sole trader (or sole proprietor), is a business owned and operated by one person. The proprietor may employ workers to assist with business activities, however the owner provides all the finances, decisions and takes sole responsibility for how the business operates.

Question 4

List three examples of sole traderships

Answer 4

Florist
hair salon
milkbar

Question 5

Define the term partnership

Answer 5

A partnership is a business structure where 2-20 people come together to to run a business with the purpose of making a profit. Each owner has equal responsibility over the business, and equally provide business funds.

Question 6

Give an example of a partnership

Answer 6

Law firm

Question 7

Define Private Limited Company

Answer 7

Private Limited company is a business that is incorporated, meaning they have their own legal identity. The ownership of the company is divided into equal parts called shares. These shares however are not listed n the Australian Stock Exchange.

Question 8

Give examples for Private Limited Companies

Answer 8

Visy

Linfox

Question 9

Define Public Listed Company

Answer 9

A Public Listed company is a business that has shareholders who own the business and directors who run it. The company is listed on the Australian stock exchange for members of the public who can trade shares in it.

Question 10

Give Examples for PLC

Answer 10

Qantas

BHP Billington

Question 11

Define Social Enterprise

Answer 11

A social enterprise is revenue-generating business with the aim to fulfil a social cause or mission.

Question 12

Define government business enterprise

Answer 12

A government business enterprise is a company owned by the Commonwealth. Unlike government departments, this business type aims to make a profit and act under general business principles.

Question 13

Give examples of a Government business enterprise

Answer 13

Australian post

NBN

Question 14

List 2 advantages and 2 disadvantages of a sole trader

Answer 14

Owner makes all decisions
easy set- up costs

Unlimited Liability
Business doesn’t run without owner

Question 15

List 2 advantages and 2 disadvantages of a partnership

Answer 15

funds are shared
diversity in opinions

disputes
unlimited liability

Question 16

List 2 advantages and 2 disadvantages of a private limited company

Answer 16

Limited liability
typically generates more profit

expensive

Question 17

define the term profit with a supporting example

Answer 17

Profit refers to the surplus remaining after total costs are deducted from the total revenue. If a business makes $100,000 sales revenue but has costs of $40,000 then they make a profit of $60,000.

Question 18

List 2 advantages and 2 disadvantages of a social enterprise

Answer 18

satisfaction helping a cause
make a difference

donations
volunteers

Question 19

List 2 advantages and 2 disadvantages of a government business enterprise

Answer 19

wide market
needs

privatised
sceptical of giving money to the government

Question 20

define the term profit with a supporting example

Answer 20

Profit refers to the surplus remaining after total costs are deducted from the total revenue. If a business makes $100,000 sales revenue but has costs of $40,000 then they make a profit of $60,000.

Question 21

Define the term market share

Answer 21

Market share represents the proportion of total sales in an industry for one company in relation to its competitors. This is usually expressed as a percentage.

Question 22

What is fulfilling a market need

Answer 22

A business’ target market are the customers most likely to purchase their goods and/or services. Identifying what the target market requires allows a business to meet their needs and build a market.

Question 23

What is fulfilling a social need

Answer 23

Involves benefiting the community through the actions of a business.

Question 24

Meeting shareholder expectation

Answer 24

Providing what shareholders are expecting of a business such as capital gain on shares and dividends etc

Question 25

Define stakeholder with a supporting example

Answer 25

A stakeholder is any individual

Question 26

Define stakeholder with a supporting example

Answer 26

A stakeholder is any individual or group that had a vested interest in the business. Stakeholders are also in some way affected by business activities and decisions made. An example of a stake holder is a Employee, a they have a vested interest in the business being job security, income and a safe working environment. In addition they are also affected by the decision a business makes such as cutting wages or implementing a new safety regime within the departments.

Question 27

Give examples of stakeholders

Answer 27

Customers
Employees and managers
Owners/shareholders
Competitors 
Government

Question 28

Explain stakeholder conflict

Answer 28

Stakeholder conflict occurs when the interests of two or more stakeholders clash. Businesses need to consider the conflicts when making decisions, and weigh up the consequences of neglecting interests.

Question 29

Describe the conflict between Customers and owners

Answer 29

Customers want good quality at low prices.

shareholder want to earn as much money as possible to receive dividends, which means they would have raise prices.

Question 30

What is corporate social repsonsibility

Answer 30

CSR is the continued commitment by a business to contribute to economic development while taking into account an approach that is both ethical and socially responsible. It expresses a concern for how a business treats the environment, society and workers beyond what is required by law.

Question 31

What are three ways a business can show corporate social responsibility.?

Answer 31

reducing carbon footprint
using only fair trade ingredients
using only Australian made products/stock

Question 32

what are the areas of management responsibility

Answer 32

Operations
finance
Human resources
sales and marketing
technology support

Question 33

Describe the role of the operations manager

Answer 33

Concerned with controlling the activities concerned with converting inputs to outputs in the production of goods and services. They source stock, minimise waste, ensure quality meets customer expectations, sequence of production etc.

Question 34

How does the operations manager help to achieve objectives: PROFIT

Answer 34

through converting inputs to outputs more efficiently the company will be reducing waste resulting in less money lost by the business and more outputs to sell. If these operations are successful it will result in a surplus.

Question 35

Describe the role of the Finance manager

Answer 35

Concerned with controlling the activities concerned with receiving and spending money within the business. Activities include financial planning, budgeting, auditing, checking receipts etc.

Question 36

How does the finance manager help to achieve objectives: PROFIT

Answer 36

If the management of money and budgeting is done better within a business, including ensuring the business isn’t losing money, managing cost of outputs, financial planning of where to invest money most, sales revenue is expected to increase and therefore a profit will be made.

Question 37

Describe the role of the Human resources manager

Answer 37

Concerned with controlling the activities concerned with managing the employees and all aspects of their working relationship with the business. Activities include recruitment, termination, selection, training and motivation.

Question 38

how does the HR manager help to achieve objectives: Market share

Answer 38

If HR managers work well and look after the features of human resources, have staff motivated who are well trained, then better quality goods and services are produced. This makes customers happy, which improves the business’ reputation and subsequently the business will attain more customers and therefore a higher market share percentage.

Question 39

Describe the role of the Technology support manager

Answer 39

Concerned with providing employees and customers with user-friendly assistance for individuals having technical problems with electronic devices. Activities involve dealing with computer issues, phone issues, website crashes etc

Question 40

how does the Sales and marketing manager help achieve objectives: Fulfilling a market need

Answer 40

through having an effective sales and marketing team are going to be listening and responding to customer needs and adjust their operations accordingly. This results in a better product and therefore the market needs being met

Question 41

how doe the tech support manager help achieve objectives: MEETING SHAREHOLDER EXPECTATION

Answer 41

It this area is managed well then it is expected there will be less trouble shooting and quicker problems solved and more time spent on core business without interruptions. This efficiency results in more goods and services being produced, meaning more products sold and more profits - meeting the shareholder expectation of receiving dividends and capital gain.