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GCSE Business Studies > Y10- A292 Business and People > Flashcards

Y10- A292 Business and People Flashcards

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1
Q

Define Interdependence:

A

Each business is reliant on other businesses in other sectors for supplies or custom.

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2
Q

Define Specialisation:

A

When a business concentrates on one particular area/activity. This makes them become better at that activitiy and more efficient.

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3
Q

Define Added Value:

A

When a business increases the value of a product/material.

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4
Q

What is THE FIRST STAGE OF PRODUCTION?

A

Involves producing or extracting raw materials for other businesses to use.

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5
Q

What is THE SECOND STAGE OF PRODUCTION?

A

Involves using raw materials to make/manufacture products.

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6
Q

What is THE TERTIATY SECTOR OF PRODUCTION?

A

The third stage of business activity. Involves providing a service/goods for customers.

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7
Q

There has been a decline of importance in the PRIMARY SECTOR.Give 3 changes:

A

1) Raw materials are used up = closing coal mines.2) Machinery to replace jobs = workers are expenses for the business.3) Foreign competition = Things are cheaper in other countries.FEWER PEOPLE BEING EMPLOYED.

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8
Q

There has been a decline of importance in the SECONDARY SECTOR.Give 2 changes:

A

1) Foreign Competition = cheaper to manufacture things overseas.2) Machinery to replace jobs = less expenses, robots/compute controlled things for car assembling etc.

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9
Q

There has been a rise of importance in the TERTIARY SECTOR:Give 3 changes:

A

1) As the population rises, more teachers/nurses etc needed.2) Increase in wealth so more retail workers needed.3) Most businesses want customer service lines.

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10
Q

Define Stakeholders:

A

An individual or group of people who have an interest or concern in a business.

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11
Q

Give 2 examples of INTERNAL stakeholders:

A
  • workers.- managers.
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12
Q

Give 2 examples of EXTERNAL stakeholders:

A
  • competitors.- customers.
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13
Q

Why do conflicts often occur between stakeholders?

A

Because they all have different objectives.

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14
Q

What is an AIM?

A

A purpouse or intention - a long term goal.

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15
Q

Give 2 examples of a business’ aim:

A
  • to make a profit.- be very competitive.
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16
Q

What are OBJECTIVES?

A

Short term targets that the business is trying to achieve in order to meet it’s overall aims.

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17
Q

Give 2 examples of business’ objectives:

A
  • to produce a new product.- to improve the quality of the service.
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18
Q

Objectives/Aims vary depending on….

A

The type, size and situation of the business.

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19
Q

Give the main 4 things business’ aim to achieve:

A
  • PROFIT.
  • GROWTH.
  • SURVIVAL.
  • PROVIDING A SERVICE.
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20
Q

Objectives are often set as SMART targets.What is a SMART target?

A 
Specific
Measurable
Achievable
Realistic
Time Specific
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21
Q

What are social enterprises?

A

They usually have aims and objectives targetted at helping people in society.e.g. a local football team.

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22
Q

Objectives can be in CONFLICT too.How would GROWTH vs PROFIT be a conflict?

A

Profits are reduced in short term to fund expansion.

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23
Q

Objectives can be in CONFLICT too.How would Growth vs SERVICE be a conflict?

A

Small businesses may know their customers well and respond to their needs. Growth could jepordise this.

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24
Q

Objectives can be in CONFLICT too?How would SURVIVAL vs PROFIT be a conflict?

A

When survival is the main objective a business is unlikely to have profit as an objective.

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25
Q

What is a SOLE TRADER/PROPERIETOR?

A

An UNINCORPORATED business owned and controlled by one person - the most simplest and common form of business.

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26
Q

Give 3 advantages of being a SOLE TRADER:

A

1) Easy to set up.2) Little start up capital needed.3) Owner gets to keep all the profits.

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27
Q

Give 3 disadvantages of being a SOLE TRADER:

A

1) Unlimited Liability.2) Long hours of work (paper work)3) Lack of continuity.

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28
Q

What is a Partnership?

A

A business that is owned by 2 or more people.

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29
Q

Give 3 advantages of being a PARTNERSHIP:

A

1) More people investing = more capital introduced.2) Easy and cheap to set up.3) More skills.

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30
Q

Give 3 disadvantages of being a PARTNERSHIP:

A

1) Unlimited Liabilty.2) Profit has to be shared.3) Partners may not always agree.

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31
Q

Define DEED OF PARTNERSHIP:

A

A legally binding agreement which states information on the way the business operates and how profits/losses will be shared. Details on how much capital each person has contributed.

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32
Q

How are Board of Directors elected?

A

At the companies’ annual general meetings.

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33
Q

What is the CHAIRMAN responsible for?

A

The way the directors operate.

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34
Q

What is the MANAGING DIRECTOR responsible for?

A

The overall running of the company.

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35
Q

Give 2 points about shares:

A

1) Anyone over 18 can buy shares.2) Shareholders are given a share of any company profits in the form of DIVIDENDS.

36
Q

What is a PRIVATE LIMITED COMPANY (LTD)?

A

An incorporated business where shares have been sold privately to friends/family.

37
Q

How is capital raised in a LTD and PLC?

A

Through shares that can be issued to investors in exchange for money.

38
Q

Define Incorporation:

A

The process a business goes through to become a company - the business gains its own legal identity. CERTIFICATE OF INCORPORATION.

39
Q

Give 3 advantages of being a PRIVATE LIMITED COMPANY (LTD)?

A

1) Limited Liability - can only lose what you invested.2) Continuity.3) Separate legal identity.

40
Q

Give 3 disadvantages of being a PRIVATE LIMITED COMAPNY (LTD)?

A

1) Cannot sell shares freely on stock exchange to public.2) Shareholders will expect DIVIDENDS.3) Costly and time consuming to set up.

41
Q

What is a PUBLIC LIMITED COMPANY (PLC)?

A

An incorporated business (company) that can sell and trade shares freely on the stock exchange.

42
Q

How is a PLC set up?

A

It must have issued a share capital more than £50,000 & gone through the process of Incorporation.

43
Q

Why does the share price in a PLC change?

A

Changes in supply and demand (more people want to buy shares)becauseProspects for the company look good/bad so there is a possibility of a take over bid.

44
Q

Give 2 advantages of being a PUBLIC LIMITED COMPANY (PLC)?

A

1) Limited Liability.2) The ability to raise large sums of finance by offering shares for sale.

45
Q

Give 2 disadvantages of being a PUBLIC LIMITED COMPANY (PLC)?

A

1) A complicated and expensive process to set up.2) The general public is allowed to request a copy of the company’s accounts

46
Q

What is a Franchise?

A

When an already established business (the franchisor) offers for sale to other businesses or individuals (the franchisee) the right to use it’s products, services and logo.

47
Q

Give 3 advantages of being a FRANCHISE:

A

1) Reduced risk of business failure.2) You get training and advice on how to run the business.3) Logos and products are already established.

48
Q

Give 3 disadvantages of being a FRANCHISE:

A

1) A large amount of initial capital may be required.2) Losses have to be paid for by the franchise.3) Annual Royal payment based on profit or sales revenue may be required.

49
Q

What is a Franchisee?

A

The person who buys the Franchise, once they have purchased the franchise they have to pay a proportion of their profits to one franchisor on a regular basis.

50
Q

What is a FRANCHISOR?

A

This is the person selling the franchise. The name given to the person or business who offers to franchise to other businesses.

51
Q

Define ROYALTY:

A

A payment made to the franchisor based on sales revenue of the franchise.

52
Q

What is a MULTINATIONAL COMPANY?

A

A multinational is a business/company that has operations in many countries around the world.

53
Q

Give 3 advantages of being a MULTINATIONAL COMPANY:

A

1) Can gain access to raw materials or cheap labour.2) Can avoid paying tax by employing expert accountants and shuffling money between countries.3) Can keep transport accounts to a minimum depending on the country.

54
Q

Give 3 disadvantages of being a MULTINATIONAL COMPANY:

A

1) Communication problems caused by being located in different countries.2) Hard coping with the legal requirements of different countries.3) Annoying to fluctuating exchange rates for different currencies.

55
Q

What are PUBLIC CORPORATIONS?

A

Businesses that provide a range of goods and services but are owned and controlled by the national or local government.

56
Q

Give 2 examples of PUBLIC CORPORATIONS:

A

BBCBANKS

57
Q

What are CO-OPERATIVES?

A

A business/trading organisations that are owned and operated by the people who are members in the business.

58
Q

Give 2 advantages of workers running the business:

A

1) They will be more motivated to work hard.2) They already know all about the business so they can make good decisions.

59
Q

Give 2 disadvantages of workers running the business:

A

1) Everyone has a say so decision making could take longer.2) They may not have experiences in running a business.

60
Q

What are SOCIAL ENTERPRISES?

A

Businesses that has objectives to benefit people (not to make profit).

61
Q

Give 2 examples of SOCIAL ENTERPRISES:

A

1) Voluntary groups. 2) Local football team.

62
Q

Give 2 main aims of SOCIAL ENTERPRISES:

A

1) Helping people in society.2) Providing a service.

63
Q

Why is choosing the location for a business so important?

A

It can make the difference between success and failure.

64
Q

ExplainCost of the Location

A

It will have to be paid through the prices of the goods/services.

65
Q

ExplainNearness to Market (customers)

A

Businesses need to be near customers because customers don’t want to travel.

66
Q

Explain Access to and availability of raw materials

A

Businesses that depend on raw materials want to reduce transport costs.

67
Q

ExplainAvailability of Labour (workers)

A

Level of unemployment can vary. Seasonal un-employment, holidays = shortage.

68
Q

ExplainTransport and Infrastructure

A

The ease with access to transport will have an influence on where to locate the business.

69
Q

ExplainClimate and Geography

A

Some areas may be more suited to a particular type of activity.

70
Q

ExplainGovernment Help

A

The government can provide:1) Grants for small businesses2)Factories and Offices to be built.3) Paying for training.

71
Q

What 7 factors affect business locations:

A

1) COST OF THE LOCATION.2) NEARNESS TO CUSTOMERS.3) ACCESS TO AND AVALIABILITY OF RAW MATERIALS.4) AVALIABILITY OF LABOUR.5) TRANSPORT AND INFRASTRUCTURE.6) CLIMATE AND GEOGRAPHY.7) GOVERNMENT HELP.

72
Q

What does it mean if a business is “FOOTLOOSE”?

A

It does not matter where they locate because customers don’t physically visit the business.

73
Q

Give 2 examples of footloose businesses:

A

1) CALL CENTRES.2) COMPUTER GAMES DESIGN BUSINESSES.

74
Q

Give 3 main considerations of FOOTLOOSE businesses:

A

1) Access to skilled staff.2) Access to supplies.3) Access to transport links.

75
Q

Name the 4 different types of integration that can occur between businesses:

A

1) Horizontal.2) Backwards vertical.3) Forwards vertical.4) Diversification.

76
Q

What is Horizontal Integration?

A

It occurs between businesses in the same industry at the same stage of production.

77
Q

Give an advantage of horizontal integration:

A

It allows economies of large-scale production to be achieved.

78
Q

Give 2 disadvantages of Horizontal Integration:

A

1) Reduced choice.2) May lead to a monopoly. (the only firm avaliable for customers)

79
Q

What is Backwards Vertical Integration?

A

When a business takes over or merges with the supplier.

80
Q

Give an advantage of backward vertical integration:

A

There is the control of a supply of components or raw materials.

81
Q

Give a disadvantage of backward vertical integration:

A

It may lead to a reduction in the variety of goods available for consumers or other businesses.

82
Q

What is forwards vertical integration?

A

When a business takes over or merges with another business which provides an outlet for the goods and services produced.

83
Q

Give two advantages of forwards vertical integration:

A

1) Control over sales.2) Possibly improve job security for workers.

84
Q

Give a disadvantage of forwards vertical integration:

A

May lead to higher prices and/or reduced choices.

85
Q

What is Diversification Integration?

A

The merge or takeover of another business involved in an unrelated business activity.

86
Q

Give an advantage of Diversification Integration:

A

It reduces dependency on the product or service area.

87
Q

Give a disadvantage of Diversification Integration:

A

No understanding of the new business activity.

GCSE Business Studies (5 decks)

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