Unit 3 Chapter 1 Flashcards
Business Foundations
sole trader
a business structure that is
owned and operated by
one individual.
unincorporated
a legal status of a business
whereby the business
owner and the business
are viewed as the same
legal entity
unlimited liability
the personal legal
responsibility a business
owner has for an
unincorporated
business’s debts
partnership
a business structure that
is owned by two to 20
owners
private limited company
- Pty Ltd
an incorporated
business structure that
has at least one director
and a maximum of 50
shareholders
public listed company
- Ltd
an incorporated
business that has an
unlimited number of
shareholders and lists and
sells its shares on the ASX.
incorporated
a legal status of a company
whereby the company
is established as a
separate legal entity to the
shareholder/s.
limited liability
when shareholders are only
liable to the extent of
their original investment,
meaning they are not
personally responsible for
the business debts.
social enterprise
a type of business that aims
to fulfil a community or
environmental need by
selling goods or services
government business enterprise
- GBE
a business that is owned
and operated by the
government.
business objectives
the goals a business
intends to achieve
market share
a business’s percentage
of total sales within an
industry
capital gains
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.
dividends
regular sums of money paid out
to shareholders from
a business’s profit.
to fulfil a market need
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
to fulfil a social need
improving society and
the environment through
business activities
efficiency
how productively a business
uses its resources when
producing a good or
service
effectiveness
the extent to which a
business achieves
its stated objectives
stakeholders
individuals, groups, or
organisations who have
a vested interest in the
performance and activities
of a business
owners
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
managers
individuals who oversee
and coordinate a
business’s employees
and lead its operations
to ultimately achieve the
business’s objectives
employees
individuals who are hired by
a business to complete work
tasks and support the
achievement of its
objectives
customers
individuals
or groups who interact
with a business by
purchasing and utilising its
goods and services
suppliers
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
general community
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
autocratic management style
involves a manager making
decisions and directing
employees without any
input from them
communication flow
the direction of
information transfer
between managers and
employees, which can
occur in a one-way or
two-way manner
centralised control
one individual having
concentrated authority
to make decisions
persuasive management style
involves a manager
making decisions
and communicating
the reasons for those
decisions to employees
without their input
consultative management style
involves a manager
seeking input from
employees on business
decisions but making the
final decision themselves
participative management style
involves a manager
sharing information
with employees so that
employees can participate
in decision-making
decentralised control
occurs in a business when
multiple people have
the authority to make
business decisions
laissez-faire management style
involves a manager
communicating business
objectives to employees
and giving them freedom
to make decisions
independently
planning
the process of determining
a business’s objectives and
establishing strategies to
achieve these aims
decision-making
the skill of selecting a suitable
course of action from a
range of plausible options
communication
the skill of effectively
transferring information
from one party to another
delegation
the skill
of assigning work tasks
and authority to other
employees who are further
down in a business’s
hierarchical structure
subordinate employee
a person that has a
lower rank or position
within a business
interpersonal
the skill of creating positive
interactions with other
employees, to foster
beneficial professional
relationships
leadership
the skill of motivating
others in order to
achieve a business’s
objectives
corporate culture
the shared values and
beliefs of a business
and its employees
official corporate culture
involves the shared views
and values that a business
aims to achieve, often
outlined in a written format
real corporate culture
the shared values
and beliefs that develop
organically within a
business, and are practiced
on a daily basis by its
employees
