Unit 3 AOS 1 Flashcards
What are the types of businesses and define them gng
Sole Traders: A sole trader is an individual who owns the business, and is the person legally
responsible for all aspects of the business.
Partnerships: A partnership is a business structure that involves 2 to 20 individuals who own a business together.
Private Limited Companies: A private limited company is an incorporated business. The ownership of a private limited company is held by shareholders. Importantly, shares are not traded on the stock exchange.
Public Listed Companies: A public listed company (PLC) has members (shareholders) who own the company, and directors who run it. The company is listed on the stock exchange for members of the public, who can trade shares in it.
Social Enterprises: A social enterprise is a profit-making business with social objectives whose surpluses are reinvested for that social objective, rather than being driven by the need to deliver profit to shareholders and owners.
Government Business Enterprises: A government business enterprise is owned by the Commonwealth, but unlike government departments, aims to act under general
business principles and to make a profit.
Business Objectives slime
Making a Profit: Profit is the surplus remaining after subtracting expenses and tax
Increasing market Share: Market share is the proportion of that industrys slaes that you control.
Improve Efficiency: Efficiency is how well a business uses recources to achieve its objectives
Improve effectiveness: Effectiveness is the degree to which a business achieves its stated objectives
Fulfilling Market Needs: Meeting the demands of the customers
Fulfilling a Social Need: Producing goods or offering services for the purpose of making society and/or the world a better place
Meeting shareholder expectations: Providing returns on the shareholders invetments through dividends.
Stakeholders twin
Stakeholder is anyone or group who has a vested interest in the business
Owners: Interested in the success of the business from a financial and personal reputation position.
Managers: Interested in the succes of the business from a job security, financial, career development and personal reputation position.
Employees: Interested in the success of the business from a job security, financial, career development and personal reputation position.
Customer: Interested in the success of the business froma consumption position, want high quality well priced products/ services.
Suppliers: Interested in the success of the business from a financial and associated reputation position.
General Community: Interested in the success of the business from an indeirect effect position. Less invested in the business unless a bad consequence occurs.
Potential conflicts between stakeholders
Owners vs Employees: Owners will want to maximise their return on investment. Labour costs are commonly a high expense, so reducing the wages will potentially improve profits, but upset employees.
Managers vs Customers: Managers are interested in the success of the business from a financial position meaning they may want to raise prices to maximise their profits. Customers are interested from a consumption position so they want high quality as well as fairly priced goods and/or services so conflict may arise from this.
Employees vs Shareholders: Employees want higher wages and better terms and conditions, but this may come at the expense of profits which will potentially damage dividends and share prices harming the shareholders vested interest.
Managers vs Suppliers: Management wants to keep costs down to improve profits, but suppliers want higher prices to cover their costs and make their own profits.
Management Styles
Autocratic Management: This involves the leader dictating the objectives to be achieved and how to achieve them. Involves one way communication and decision making is done by the manager.
Persuasive Management: Involves the leader dictating the objectives to be achieced and persuading the employees as to how to achieve them. Communication is one way and decision making is retained by the manager.
Consultative Management: This style involves the leader asking their employees for their opinons before ultimately making the decisions themselves. Communication is two-way and decision making is retained by manager.
Particaipative Management: Involves the leader sharing the decision making responsibility with their employees to create a concesus decision. Two way communication and decions are made by group.
Lassiez-faire Management: Involves employees being totally responsible for the decison making and operations of the business. Manager has no central role or power but still are held accountable.
Management Skills
Communicating: Involves the ability to transfer information from a sender to a reciever, and listen to feedback.
Interpersonal: Refers to the ability to deal or cooperate with people and build positive relationships wiht staff.
Decision-making: Is the ability to identify the options available and then choose a specific course of action from alternatives.
Leading: Is the ability to influence or motivate people to work towards the achievment of business objectives.
Planning: Is the ability to define business objectivesand decide on the methods to achieve them.
Delegating: The ability to transfer authority and responsibility from a manager to an employee to complete tasks or acitvities.
Corporate Culture
Corporate culture(CC) refers to the values, ideas expectation and beliefs shared by staff and managers of the business.
Official CC: involves the shared views and value that a business aims to achieve often outliend in a written format. Through: Mission statement, Logo, Slogans. (External view of the organisation)
Real CC: Can be seen in the unwritten or infomral rules that guide how people in the business behave, such as the way staff dress, language they use, and the way they treat eachother and customers. (Internal view of the organisation)
