Unit 3 AOS 1 Flashcards
What are the characteristics of stakeholders?
Stakeholders are individuals or groups that interact with the business and have interests in its operations
Key stakeholders include owners, shareholders, managers, employees, customers, suppliers, and the general community.
What is the relationship between management styles and skills?
Management styles influence the skills needed for effective management
For example, an autocratic style may require strong decision-making skills, while a participative style may demand good communication skills.
What is a Sole Trader business structure?
A Sole Trader is owned and run by one person who handles all decisions and keeps all profits
This structure has unlimited liability, meaning personal and business liabilities are not separated.
What are the advantages of a Sole Trader business?
- Easy to establish
- Complete control
- Takes all profit
- Simplest form of business
- Overall lowest cost of entry
What are the disadvantages of a Sole Trader business?
- Unlimited liability
- Carries all losses
- Burden of management
- Overall lower profits compared to other business types
Define a Partnership in a business context.
A Partnership is owned by two or more people, typically with a maximum of 20 owners, and has unlimited liability
Each partner is responsible for the debts incurred by the business.
What is a Limited Partnership?
A Limited Partnership allows for partners who contribute financially but do not participate in management
This is often akin to investors providing capital without involvement in day-to-day operations.
What does incorporation mean?
Incorporation is the process of forming a new legal entity that separates the business from its owners
This allows for limited liability for shareholders.
What are Private Limited Companies?
Private Limited Companies must have at least one shareholder and one director, and shares are not publicly traded
They require shareholder agreement to close the business.
What are the advantages of Private Limited Companies?
- Limited liability
- Easier to attract finance
- Growth potential
- Less risk
- Experienced management
What are the disadvantages of Private Limited Companies?
- Overall higher set up costs
- Public disclosure requirements
- Potential management challenges
Describe Social Enterprises.
Social Enterprises produce goods and services to fulfill a social need while aiming to make a profit
They focus on improving community well-being.
What is the main objective of Government Business Enterprises (GBE)?
The main objective of a GBE is to make a profit while delivering community services and executing government policies.
What are the types of business objectives?
- Make profit
- Increase market share
- Improve efficiency
- Improve effectiveness
- Fulfill market need
- Fulfill social need
- Meet shareholder expectations
What is Corporate Social Responsibility (CSR)?
CSR is the practice of going beyond legal obligations to fulfill moral and ethical responsibilities
It can improve business performance through enhanced reputation and customer loyalty.
What is the Autocratic Management Style?
The Autocratic Management Style involves the manager making all decisions and closely supervising employees
This style is efficient for quick decision-making but can lead to employee dissatisfaction.
List the advantages of the Autocratic Management Style.
- Clear directions and procedures
- Defined roles minimize confusion
- Efficient use of time
List the disadvantages of the Autocratic Management Style.
- No employee input
- Decreased job satisfaction
- Potential for conflict
What is the Consultative Management Style?
The Consultative Management Style involves managers seeking employee input before making decisions, although the manager has the final say.
What are the advantages of the Participative Management Style?
- Higher employee acceptance of decisions
- Increased job satisfaction
- Greater skill acquisition opportunities
What are the disadvantages of the Participative Management Style?
- Time-consuming process
- Possible undermining of management authority
- Confusion over roles
What factors affect management style appropriateness?
- Nature of the task
- Time
- Experience of employees
- Preference of the manager
What are the key management skills?
- Communication
- Delegation
- Planning
- Leadership
- Decision-making
- Interpersonal skills
What is the purpose of delegation?
Delegation allows managers to assign authority and responsibility to employees, enabling them to take on tasks and develop skills.
Delegation can allow manager to pursue more urgent matters -> time efficient and less workload on manager
What is strategic planning?
Strategic planning is long-term planning typically spanning 2-5 years to set future goals. Rather than detailing every step, it provides a broad direction, as many external factors remain uncertain and uncontrollable
What is the decision-making process?
- Develop objectives and criteria
- Outline the facts
- Identify available options
- Choose a course of action
What motivates employees?
Sense of direction and improved efficiency
Motivation can be affected by the focus on leadership and reward systems.
What can happen if employees do not agree with the manager?
Conflicts can occur
This is especially true if the manager is focused on reward systems.
What is decision making?
Identifying available options and choosing a course of action from the options.
Name a factor that affects decision making.
Timeframe
What is involved in the decision-making process?
Developing objectives and criteria
Example: Increase profit by 10%.
What should be outlined in the decision-making process?
All info in relation to the situation including circumstances and possible obstacles.
What analysis can be helpful when outlining facts in decision making?
SWOT analysis
What is the next step after outlining the facts?
Identify potential solutions.
What should be done after identifying potential solutions?
Analyse the solutions.
What is considered when analysing solutions?
Possible consequences and resources required.
What is the final step in the decision-making process?
Choose one solution and implement it.
What is an advantage of decision making by a manager alone?
It can be quick.
What is a disadvantage of group decision making?
It can be time-consuming to get input from everyone.
What are interpersonal skills?
The management’s ability to cooperate with people and build positive relationships.
What characterizes good interpersonal skills?
Clear communication and sensitivity to needs.
What are characteristics of bad interpersonal skills?
Arrogance, lack of empathy, intimidation.
What is an advantage of good interpersonal skills?
Can inspire staff to overcome conflict.
What is a disadvantage of interpersonal skills?
May take time to learn and utilize.
How do management styles influence skills?
Type of management style determines the skills managers utilize.
Give an example of a management style that requires strong communication skills.
Participative style.
What is corporate culture?
Shared values, beliefs, and expectations among a business’ internal stakeholders.
What are the two types of corporate culture?
- Official
- Real
What does official corporate culture refer to?
Values, beliefs, and expectations as per formal documentation.
What does real corporate culture refer to?
Values, beliefs, and expectations actually practiced.
List elements of corporate culture.
- Values, beliefs, and expectations
- Symbols
- Rituals and celebrations
- Heroes/Champions
What do symbols in corporate culture represent?
Objects or events representing important beliefs of the business.
What are examples of rituals and celebrations in a business?
- Friday night drinks
- Annual Christmas party
- Ceremony to celebrate exemplary employees
What are heroes or champions in corporate culture?
Successful staff reflecting the business’ values.
What is an advantage of a positive corporate culture?
Fosters a sense of belonging and job satisfaction.
What is the relationship between official and real corporate culture?
Minimal differences lead to a more positive culture.
