Yr 11 MOCS PAPER 2 Flashcards
What are the different leadership styles?
Autocratic leadership: Leader makes decisions without much input from the team. Thus employees will always know what to do and know what is expected of them. However, feel not able to contribute or make any comments if they feel something could be improved.
Democratic leadership: Involves team members in decision-making, thus improving motivation among the staff. However, decisions will take longer leading to delays in the expansion to the new factory.
Lassiez faire: A hands-off leadership style where leaders allow employees significant freedom. Some workers may find this motivating due to control over decision-making. Some workers may find it stressful if as no clear lines of authority.
What are Mass vs. Niche markets? What are the disadvantages and advantages?
Niche Market: a specific, well-defined segment of the market with unique needs e.g. gluten-free food, luxurious watches etc.
Advantage: can sell specialist products that meet these specific customer needs
Thus likely to be few competitors in this market as less attractive for larger businesses thus easier to have higher market share and higher profits.
Disadvantage Less benefit from economies of scale. Will need to use methods such as job or batch production instead of flow production thus increasing unit costs and possibly less profit.
Mass Market: Refers to a large and broad customer base e.g. forks, underwear etc.
Advantage:
Contributes to Economies of Scale.
Profit Potential: With a vast customer base, companies have the potential to generate significant profits, especially if they can streamline production processes and reduce costs.
Disadvantage:
Lack of Personalization offering standardized products or services, which may not cater to individual preferences.
Intense Competition: Because mass markets are attractive to many businesses, competition can be fierce. This can lead to price wars and reduced profit margins, making it challenging for companies to stand out.
What is the Kaizan technique (continous improvement)?
Involves all workers trying make small frequent improvements by suggesting small things that could be done better.
Pros:
- Lots of small improvements add up to saved costs.
- Easy to do compared to big management change etc.
Cons
- Relies on commitment of employees.
- Relies on willingness of managers to listen.
What is Just in Time technique?
To Minimize stock holding at each stage of the production process e.g. from delivery of raw material to meeting customer demand.
Pros:
- Stock holdings kept at zero/minimum: Money is saved as stock wont become old, damaged or no longer of value.
- Good relations with Supplier needed: Must know correct quantity, quality and deliver on time. Needs to respond fast to demand changes.
Flaw:
-If materials don’t arrive on time
-If costs more to buy small but frequent amounts from supplier.
-If customer wants product now
-If there is a unexpected rise in demand
What is lean production?
Technique that can be used to increase efficiency of a firm but reduce costs e.g. Kaizen or Just in time.
- Reduces waste of resources in production process
Identify four ways break-even analysis can be useful to a business.
Way 1: Predicts how many sales the business needs to make to break-even
Way 2: Predicts how much sales could fall by and still make a profit
Way 3:Shows potential profit/loss for the business at different levels of output
Way 3: Shows possible effect of change in price on the break-even level of output/profit
Identify and explain two opportunities and two threats for a businesses from globalisation.
Opportunity 1 Access to global markets
Explanation so potential for higher sales
Opportunity 2 Access to reduced labour costs
Explanation and if businesses move production to another country they can may be able to reduce production costs
Threat 1 Increased competition
Explanation Multinational companies may enter country Y and force lower prices meaning lower profits and lower market share
Threat 2 susceptible to global shocks
Explanation a recession in another country may spread to Country Y and effect consumer spending reducing business profits
Positives and negatives of expansion of a Business on stakeholders?
Shareholders/Owners:
Positive Impact: If successful, Shareholders can see an increase in value of their shares.
Negative Impact: If unsuccessful, potential financial losses for shareholders.
Employees:
Positive Impact: Create new job opportunities, promotions, and increase in salary.
Negative Impact: Could create job insecurity or changes in working conditions during the expansion process.
Customers:
Positive Impact: Improved products/services, increased accessibility, and potentially lower prices due to economies of scale.
Negative Impact: Expansion could lead to temporary disruptions in service, and changes in product quality or customer service.
Suppliers:
Positive Impact: Increased business means more orders and business for suppliers.
Negative Impact: If the business demands cost reductions, profit margins of suppliers could be affected.
Local Communities:
Positive Impact: Can contribute to local economic development, job creation, and increased local business activity.
Negative Impact: May lead to increased traffic, noise, or environmental concerns, depending on the nature of the expansion.
Government:
Positive Impact: Can lead to increased tax revenues and economic growth.
Negative Impact: The government may need to address potential issues such as zoning regulations, environmental impact, or labor practices.
Competitors:
Positive Impact: May benefit from increased overall market growth.
Negative Impact: Could intensify competition and potentially lead to market share loss for competitors.
Creditors:
Positive Impact: If successful, may increase the creditworthiness of the business.
Negative Impact: If unsuccessful, could affect ability of business to meet financial obligations.
What is Flow Production?
Items flow along the production line in a continuous process.
- Suitable for mass production: Large scale, Identical items.
- Uses specialist machinery.
- Employees responsible for each small step along process: Specialisation, Division of labour.
What is Batch Production?
Identical items produced in groups, passing through the production process at the same time e.g. bread, jeans, garden furniture.
- Cheaper & quicker production of items
- More uniform products
- Variation can be achieved in different batches
What is Job Production?
Production of one of a kind items to meet needs of a individual customer e.g. tailor made clothes, specialist cakes, web designs.
- Cheap & easy to set up but expensive to produce
- Often a specialist service
- Time consuming to produce
- Meet specific needs of customers
What are the two ways Quality can be achieved?
Quality Control: Checking the product at the end of the production process
Quality Assurance: Checking the product at each stage of the production process. This requires employees checking their own work to ensure the product is ‘right the first time’.
How does a business decide where to locate?
Factors:
- Availability of raw materials
- Transport
- Labour
- Costs
- Competition/other businesses
- Technology
- Proximity to the market
- Proximity to supplier
What are tariffs? Advantages and Disadvantages?
Taxes imposed by governments on imported goods. Used as barrier for international trade. Importing goods from outside of country is more expensive than in country.
Advantages of Tariffs:
- Protect local industries from foreign competition, allowing them to grow.
- Governments can generate revenue by imposing tariffs on imported goods, contributing to national finances.
- Help preserve jobs within a country by reducing reliance on foreign goods.
- Help improve a country’s trade balance by reducing imports and promoting local production.
Disadvantages of Tariffs:
- Increase the cost of imported goods, leading to higher prices for consumers.
Lead to trade tensions and reduced international trade, impacting global economic relationships and Globalisation. - Imposing tariffs may lead to retaliation from other countries, triggering a trade war and harming global economic stability.
- Can disrupt global supply chains, affecting industries that rely on the seamless flow of goods across borders.
What is a Sole trader and what are the pros/cons?
An individual who runs a business - the simplest form of business.
Pros:
- Cheap/easy to set up
- All profits go to you
- Competitors can’t see your accounts
- Highly motivated
- You are your own boss!
Cons:
- Unlimited liability: All on you! Business goes bankrupt and so do you
- Limited finance: Harder to loan from the bank
- Difficult to find cover when ill
- Small range of expertise: the owner has to do everything or buy expertise.
