Unit 3 Chapter 1

Question 1

sole trader

Answer 1

a business structure that is
owned and operated by
one individual.

Question 2

unincorporated

Answer 2

a legal status of a business
whereby the business
owner and the business
are viewed as the same
legal entity

Question 3

unlimited liability

Answer 3

the personal legal
responsibility a business
owner has for an
unincorporated
business’s debts

Question 4

partnership

Answer 4

a business structure that
is owned by two to 20
owners

Question 5

private limited company

Answer 5

• Pty Ltd
  an incorporated
  business structure that
  has at least one director
  and a maximum of 50
  shareholders

Question 6

public listed company

Answer 6

• Ltd
  an incorporated
  business that has an
  unlimited number of
  shareholders and lists and
  sells its shares on the ASX.

Question 7

incorporated

Answer 7

a legal status of a company
whereby the company
is established as a
separate legal entity to the
shareholder/s.

Question 8

limited liability

Answer 8

when shareholders are only
liable to the extent of
their original investment,
meaning they are not
personally responsible for
the business debts.

Question 9

social enterprise

Answer 9

a type of business that aims
to fulfil a community or
environmental need by
selling goods or services

Question 10

government business enterprise

Answer 10

• GBE
  a business that is owned
  and operated by the
  government.

Question 11

business objectives

Answer 11

the goals a business
intends to achieve

Question 12

market share

Answer 12

a business’s percentage
of total sales within an
industry

Question 13

capital gains

Answer 13

an increase in the value of a
share, meaning an investor
can sell their shares at a
higher price than what
they originally purchased
them for.

Question 14

dividends

Answer 14

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

Question 15

to fulfil a market need

Answer 15

when a business fills a
gap in the market, which
involves addressing
customer needs that
are currently unmet or
underrepresented by
other businesses in the
same industry

Question 16

to fulfil a social need

Answer 16

improving society and
the environment through
business activities

Question 17

efficiency

Answer 17

how productively a business
uses its resources when
producing a good or
service

Question 18

effectiveness

Answer 18

the extent to which a
business achieves
its stated objectives

Question 19

stakeholders

Answer 19

individuals, groups, or
organisations who have
a vested interest in the
performance and activities
of a business

Question 20

owners

Answer 20

individuals
who establish, invest, and
have a share in a business,
often with the goal of
earning a profit from
its operations
- In public listed and private
limited companies, owners
are known as shareholders

Question 21

managers

Answer 21

individuals who oversee
and coordinate a
business’s employees
and lead its operations
to ultimately achieve the
business’s objectives

Question 22

employees

Answer 22

individuals who are hired by
a business to complete work
tasks and support the
achievement of its
objectives

Question 23

customers

Answer 23

individuals
or groups who interact
with a business by
purchasing and utilising its
goods and services

Question 24

suppliers

Answer 24

individuals or groups that
source raw materials,
component parts, and
processed materials and
sell them to a business
for use in the production
of its goods and services

Question 25

general community

Answer 25

the individuals and groups
who are impacted by a
business’s operations and
decisions, often because
they are located in close
proximity to the business

Question 26

autocratic management style

Answer 26

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

Question 27

communication flow

Answer 27

the direction of
information transfer
between managers and
employees, which can
occur in a one-way or
two-way manner

Question 28

centralised control

Answer 28

one individual having
concentrated authority
to make decisions

Question 29

persuasive management style

Answer 29

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

Question 30

consultative management style

Answer 30

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

Question 31

participative management style

Answer 31

involves a manager
sharing information
with employees so that
employees can participate
in decision-making

Question 32

decentralised control

Answer 32

occurs in a business when
multiple people have
the authority to make
business decisions

Question 33

laissez-faire management style

Answer 33

involves a manager
communicating business
objectives to employees
and giving them freedom
to make decisions
independently

Question 34

planning

Answer 34

the process of determining
a business’s objectives and
establishing strategies to
achieve these aims

Question 35

decision-making

Answer 35

the skill of selecting a suitable
course of action from a
range of plausible options

Question 36

communication

Answer 36

the skill of effectively
transferring information
from one party to another

Question 37

delegation

Answer 37

the skill
of assigning work tasks
and authority to other
employees who are further
down in a business’s
hierarchical structure

Question 38

subordinate employee

Answer 38

a person that has a
lower rank or position
within a business

Question 39

interpersonal

Answer 39

the skill of creating positive
interactions with other
employees, to foster
beneficial professional
relationships

Question 40

leadership

Answer 40

the skill of motivating
others in order to
achieve a business’s
objectives

Question 41

corporate culture

Answer 41

the shared values and
beliefs of a business
and its employees

Question 42

official corporate culture

Answer 42

involves the shared views
and values that a business
aims to achieve, often
outlined in a written format

Question 43

real corporate culture

Answer 43

the shared values
and beliefs that develop
organically within a
business, and are practiced
on a daily basis by its
employees