unit 3 aos 1 Flashcards
Types of businesses:
Sole traders
Partnerships
Private limited companies
Public companies
Social enterprises
Government business enterprises (GBE)
Business objectives examples:
Profits
Market share
To improve efficiency
To improve effectiveness
Fulfilling market/social needs
Meeting shareholder expectations
Profits:
Total revenue earned minus total expenses incurred.
Market share:
Proportion of that industry’s sale that you control.
Efficiency:
How well a business uses resources to achieve objectives
Fulfilling market needs:
when a business fills a gap in the market, (addressing customer needs that are currently unmet other businesses in the same industry).
Fulfilling a social need:
improving society and the environment through business activities
Meeting shareholder expectations:
Shareholders have an interest in the performance of the company, looking for return on their investment
Communicating Objectives:
Vision + mission statements
Vision statement:
expresses what a business hopes to become.
Mission statement:
expresses reasons for a business’s existence, purpose and method of operation.
Objectives:
desired goal an organisation intends to achieve, gives direction.
Strategies:
actions taken to achieve a specific objective.
SOLE TRADERS:
Individual who owns the business, and is the sole person legally responsible for all aspects of the business.
PARTNERSHIP:
Involves 2 to 20 individuals who own a business together.
PRIVATE LIMITED COMPANY:
Incorporated business structure that has at least one director and a maximum of 50 shareholders.
PUBLIC LISTED COMPANY:
Incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX
SOCIAL ENTERPRISE:
Business that aims to fulfil a community/environmental need by selling goods/services
GOVERNMENT BUSINESS ENTERPRISE:
Business owned and operated by the government.
Stakeholder examples:
Owners, managers, employees, customers, suppliers, general community
Owners:
establish and invest, often with the goal of earning a profit from its operations
Managers:
oversee and coordinate employees and lead its operations to ultimately achieve business’s objectives.
Employees:
hired by a business to complete work tasks and support the achievement of its objectives.
Customers:
interact with a business by purchasing its goods and services.
Suppliers:
source raw and processed materials and sell them to a business for use in the production of its goods and services.
General community as stakeholders:
who are impacted by a business’s operations and decisions
MANAGEMENT STYLES examples:
Autocratic management
Persuasive management
Consultative management
Participative management
Laissez-faire management
Autocratic management:
Leader dictating the objectives to be achieved + how to achieve them
Persuasive management:
Leader dictating the objectives to be achieved and persuading the employees on how to achieve them
Consultative management:
Leader asking their employees for their opinions before making decisions
Participative management:
Leader sharing decision-making responsibility with employees to create consensus decision
Laissez-faire management:
Employees being responsible for decision making + operations
THE APPROPRIATENESS OF MANAGEMENT STYLES:
Nature of the task
Time
Experience of employees
Preference of manager
Nature of the task:
depend - if you need a lot of employee input vs manager decision
Time:
when time is critical = autocratic style of management
when there is an extended timeframe = participative style
Experience of employees:
if inexperienced, may not ask for opinion vs if you are experienced, you may be asked for opinions
Preference of a manager:
managers revert back to management style to match personality: if assertive = more likely to be autocratic
Management skills:
Communication skills
Delegation skills
Planning skills
Leadership skills
Decision-making skills
Interpersonal skills
Communication skills:
Process of creating and exchanging information between people that produces the required response.
Delegation skills:
Passing of authority down the hierarchy to perform tasks/make decisions
Planning skills:
Formalized decision-making process that is future oriented.
Leadership skills:
guiding the business and employees towards achieving its objectives
Decision-making skills:
process of purposely choosing an course of action from a set of alternatives to achieve business objectives
Interpersonal skills:
to interact with others properly, employees ability to build positive relationships with others while getting the job done
CORPORATE CULTURE:
Shared values, beliefs and practices of a business
Official culture:
Values + beliefs a company conveys to the public (logos, mission statements)
Real culture:
ACTUAL values + beliefs present in a company, observable from dress, behaviour, interactions, etc.
Types of planning:
strategic-planning (long-term), tactical-planning (medium-term), operational-planning (short-term)
To improve effectiveness
extent to which a business achieves its stated objectives
Stakeholders
individuals, groups, or organizations who have a vested interest in the performance of a business
Real corporate culture examples:
Celebrations, dress code, promotions, hiring
Official corporate culture examples:
Mission statements, logos, policies, training
