Unit 3: A0S1 - Business Foundations ( Chapter 1)

Question 1

Unincorporated

Answer 1

Is an owner and business being viewed as a single legal entity.

Question 2

Unlimited liability

Answer 2

Is the complete responsibility an owner has for a business’s debts. Debts are the sums of money a business owes to banks, suppliers or even customers.

Question 3

Proprietor

Answer 3

Is the owner of a business.

Question 4

Profits

Answer 4

Are the amount remaining after all expenses are deducted from a business’s income.

Question 5

Personal income tax

Answer 5

Is a portion of an individual’s earnings that is paid to a government for public services such as roads, schools, and hospitals.

Question 6

Company tax

Answer 6

Is the portion of profits a business pays to the government for public services such as the police, courts and fire services. Incorporated is a business being established as a separate legal entity from the owners.

Question 7

Director

Answer 7

Is the manager of a particular area of a company often selected for their expertise.

Question 8

Shareholders

Answer 8

Are part-owners of a business as they purchase company shares.

Question 9

Limited liability

Answer 9

Is the protection of a shareholder’s personal assets against any business debt. Shares are the units of ownership of a business that it sells to raise funds.

Question 10

Sole Trader

Answer 10

Is suitable for a small business with one owner

Question 11

Partnerships

Answer 11

Are suitable for two to 20 owners of small to medium businesses

Question 12

Private limited companies

Answer 12

Are suitable to raise funds and grow the business while maintaining control

Question 13

Public listed companies

Answer 13

Are suitable to raise large amount of funds publicly

Question 14

Social enterprises

Answer 14

Are suitable for businesses that focus on improving a community or environmental cause.

Question 15

GBEs (Government Business Enterprises)

Answer 15

Are a unique type of business that can only be designated by the government

Question 16

Open market

Answer 16

Is a public arena where people can buy and sell items of commercial value freely.

Question 17

Australian Securities Exchange

Answer 17

Is the electronic market where Australian public company shares are bought and sold.

Question 18

Share price

Answer 18

Is the value of a single share of a company that it can be bought or sold for.

Question 19

Dividends

Answer 19

Are regular sums of money paid out to shareholders from a business’s profit

Question 20

Business Objectives

Answer 20

Are the goals a business intends to achieve

Question 21

Revenue

Answer 21

Is the amount of money a business makes from its normal business activities. Expenses are the costs of running a business.

Question 22

Market share

Answer 22

Is a business’s percentage of total sales within an industry.

Question 23

Make a profit

Answer 23

Profit is essential for any business to survive and grow. By generating more revenue than expenses, a business earns a profit which can then be distributed to owners and shareholders.

Question 24

Increase market share

Answer 24

A business typically wants to increase its market share to become more competitive within an industry. Increased sales usually means a business can also increase their profits.

Question 25

Meet shareholder expectations

Answer 25

Shareholders are people who have invested a sum of their own money into a business by purchasing company shares. As part owners of a business, shareholders expect a return on their investment.

Question 26

Fulfil a market need

Answer 26

A business fulfils a market need by providing products and services which meet the desires of a group of customers with similar needs.

Question 27

Fulfil a social need

Answer 27

A business fulfils a social need by improving the community and environment through its business activities.

Question 28

Vested interest

Answer 28

Is a strong connection to a business that can lead to personal gain or benefit.

Question 29

Internal stakeholders

Answer 29

Are groups who have a direct financial share or are employed by the business including owners, board of directors, investors, shareholders, and employees

Question 30

External stakeholders

Answer 30

Are groups that are outside a business but are concerned or affected by its activities including customers, suppliers, and the general community.

Question 31

Ethically

Answer 31

Is the alignment to current moral standards.

Question 32

Wages

Answer 32

Are regular payments of money earned by employees for work or services completed, typically paid on a weekly or monthly basis.

Question 33

Conditions

Answer 33

Are the terms that an employee and employer agree to including job responsibilities, hours of work, dress code and leave entitlements.

Question 34

Corporate social responsibility (CSR)

Answer 34

Is the ethical conduct of a business beyond legal obligations to improve the social, economic and environmental outcomes of stakeholders.

Question 35

Operations Area of Management

Answer 35

Produces the goods or services that a business sells | to customers.

Question 36

Human Resources Area of Management

Answer 36

Establishes and manages the relationship the | business has with its employees, including their hiring, training and termination.

Question 37

Sales And Marketing Area of Management 

Answer 37

Promotes and sells the business’s goods | or services to customers.

Question 38

Finance Area of Management 

Answer 38

Handles the monetary requirements of a business.

Question 39

Technology Support Area of Management

Answer 39

Installs automated equipment, machinery and devices within the business and provides assistance to employees on the use of these technologies.

Question 40

Corporate Culture

Answer 40

Is the shared values and behaviours practised by managers and employees within a business.

Question 41

Official Corporate Culture

Answer 41

Is the shared values and beliefs desired by a business and expressed through elements such as formal rules and symbols.

Question 42

Real Corporate Culture

Answer 42

Is the shared values and behaviours that are actually practised by employees and managers and expressed through informal rules and habits.

Question 43

Policies

Answer 43

Are the formal and written rules of a business.

Question 44

Mission statement

Answer 44

Is a formal summary of the core focus of a business apart from profit.

Question 45

Vision statement

Answer 45

Is a formal summary of a business’s longer term objective.

Question 46

Communication Flow

Answer 46

Is the direction of the transfer of information between managers and employees.

Question 47

Decision Making

Answer 47

Is deciding a course of action for a business from a set of alternatives.

Question 48

Centralised Control

Answer 48

Is one person having concentrated authority to make decisions.

Question 49

Decentralised Control

Answer 49

Is multiple people having the authority to make business decisions

Question 50

Autocratic management style

Answer 50

Is a manager making decisions and directing employees without any input from them.

Question 51

Persuasive management style

Answer 51

Is a manager making decisions and communicating the reasons for those decisions to employees without their input.

Question 52

Consultative management style

Answer 52

Is a manager seeking input from employees on business decisions but making the final decision themselves.

Question 53

Participative management style

Answer 53

Is a manager communicating and discussing information with employees in order to make decisions together.

Question 54

Laissez-faire management style

Answer 54

A laissez-faire management style is a manager communicating business objectives to employees and allowing them to make decisions independently.

Question 55

Laissez-faire management style

Answer 55

Is a manager communicating business objectives to employees and allowing them to make decisions independently.

Question 56

Time

Answer 56

The amount of time a manager has to make a business decision or carry out a task can vary from a few seconds to several months

Question 57

Experience of employees

Answer 57

The experience of employees in a business can range from untrained and inexperienced to highly skilled experts

Question 58

Nature of tasks

Answer 58

The nature of tasks in a business can range from simple and straightforward duties to incredibly complex work assignments.

Question 59

Manager preference

Answer 59

Each manager has a personal preference for their own management styles. Some managers have a higher desire of control over a business situation while other managers are comfortable with assuming lower levels of control.

Question 60

Planning

Answer 60

Planning is the manager’s ability to establish objectives and strategies to achieve them.

Question 61

Decision-making

Answer 61

Is the manager’s ability to determine a suitable course of action for the business from a range of alternatives

Question 62

Communicating

Answer 62

Is the manager’s ability to clearly exchange information with employees and relevant stakeholders.

Question 63

Delegating

Answer 63

Is the manager transferring authority and responsibility to employees for business tasks.

Question 64

Interpersonal skills

Answer 64

Is the manager’s ability to interact positively with employees to create and maintain professional relationships.

Question 65

Leading

Answer 65

Is the manager’s ability to motivate employees to work towards business objectives.

Question 65

Leading

Answer 65

Is the manager’s ability to motivate employees to work towards business objectives.

Question 66

Franchise

Answer 66

Is a business model that licenses the business’s name, product and procedures to people outside the business, also known as franchisees. Franchisees pay a fee to the business in return for an established brand, proven business methods and a loyal customer base.

Question 67

Franchisees

Answer 67

Are individuals who become business owners by purchasing the right to trade using another established business’s brand, products and processes

Question 68

Vision

Answer 68

Is the aspirational purpose of a business for owners, managers and employees. Examples include: Disney - ‘to make people happy’ Instagram - ‘capture and share the world’s moments’.