Unit 2: Business Organisation (2)
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- Created on: 28-04-15 19:44
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- Unit 2: The Business Organisation
- Effects of Expansion on Stakeholders
- ShareholdersBenefit from profit but asked to invest more money.
- Employees Greater job security but less involved.
- Customers lower prices but less competition so could charge higher prices
- Government: Collect more taxes
- Local Community: Local jobs but noise pollution or traffic
- Suppliers: Increased sales as more supplies needed but less negotiation on prices.
- Private Limited Company
- Advantages
- More status than sole trader/ partnership
- Limited Liability- Cannot loose more than you put in
- Disadvantages
- Accounts are available to general public
- Cannot offer shares to the general public
- Advantages
- Public Limited Comapny
- Advantages
- Limited Liability
- Status of company increased.
- Raise more capital by selling shares through stock exchange
- Disadvantages
- Disclose main accounts to public
- Shareholders want to make as much profit as possible making it difficult to pursue other aims
- Shareholders own company but directors run company. 'Divorce of ownership and control
- Allows any member of public to buy shares in the company.
- Advantages
- Social Influences
- Many businesses are trying to operate in a sustainable way.
- Taking issues seriously give firms a competitive advantage.
- Effects of Expansion on Stakeholders
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