Business year 10 units

sole trader-any business owned and controlled by one person usually provide a specialist service

Advantages=easy to set up,small amount of capital required,owner delegates profit 

Disadvantages=all responsibility down to the owner,long hours and unlimited liability

Partnership-between 2-20 partners

advantages=shared expertise

disadvantages=shared responsibility allows more possibility for disputes over decisions

Franchises-an entrpreneur whos opted to set up a new business and try and win customers

Franchisee-someone who buys the right from a franchisor to copy a business format

Franchisor-who sells the right to use a business idea in a particular location 

Disadvantages=royalty payment for every franchise to the franchisor 

advantages=less risky than setting up an independant retailer

co operatives-a cooperative is a business owned and controlled equally by the people who use its service or by people who work there 

Advantages=everyone has an equal say no matter what shares they own

Disadvantages=profit split between the workers not shareholders

Multinationals-companies that operate in several different countries e.g mc donalds 

Advantages=cheap raw materials ,cheap labour,friendly government policies and acces to markets were goods are sold.

A trade union is a group who join together in order to protect their own interests and be more powerful when negotiating with employers.

they must pay an anual fee to be a trade union 

there aims

-to improve working conditions

-suppourt training and develoipment of members 

-ensure members interests are considered by the employers 

Industrial action-if negotiation collapses number of different methods they can propose to its members 

non cooperative

overtime ban

strikes 

work to rule or go slow 

Set up by government 1975 as an independant body to settle industrial disputes and claims of unfair dismissal by employers.

A single union agreement-an agreement between workers and employers that all workers belong to the same union and this makes negotiations easier.

wages are weekly 

salaries are monthly 

gross pay - pay before deductions

net pay- amount left for employee to spend

employers can legally expect their employees to:

-meet terms in contract

-co operate in meeting the objects of the business

-comply with health and safety regulations 

employes can legally expect to be:

-paid according to their contracts

-provided with a safe working environment

-appropriately trained

-permited to join trade unions 

-allowed acces to any confidentialrecords kept on them as employees 

A business cannot discriminate against a person on the grounds of :

-sex (sex discrimination act)

-age(age discrimination act)

-origin(race relations act)

-Disability(disability act)

when a person gets a job they will sign a contract of employment wchich lists conditions of work such as -pay-hours-holidays-pension

training is crucial in a business because its part of human resources department and in some large firms there is very often seperate training departments.

training should ideally involve the worker before they actually start the job.

The purpose of training----->

-train new workers for particular jobs 

-help improve efficency of existing workers

-avoid accidents at work

-retain workers so they can cope with new technological advances 

-help workers gain promotion to better jobs within the firm

On the job training----->This takes place in the work place,carryng out the job itself.may involve being coached by an existing  member of staff or may involve buddying up with a similar worker so they can teach you!!!!

Off the job training----->This takes place away from the workplace or within the workplace but away from the job itself.often provided by outside experts training for new technology purposes or software improvements.

companies can motivate employees to do better job than they otherwise would!!!

incentives include----->

-increased pay

-improved working conditions

Non monetary may include ---->

-extra holidays

-promotions 

Terms you need--->

-Hierachy-managment levels within an organisation

-Line managers-responsible for overseeing the work of other staff

-Subordinates-report to higher staff if subordinates are accountable to their line manager actions 

-Authority-power the managers have to direct subordinates regarding decisions.

-Delegation-when managers entrust tasks or decisions to subordinates

-Enpowerment-sees managers passing authority to make decisions down to subordinates 

-Span of control-measures number of subordinates reported directly  to a manager

-Chain of command-pathway of authority along instructions are passed from CEOdownwards 

-Lines of communication-routes messages travel along

Tall organisations-many levels of hierachy span of control narrow opourtunities for promotions,lines of communication long and unresponsive to change 

Flat organisations-few levels of hierachy lines of communication short and firms responsive to change with a wide span of control meaning tsaks must be delegated making managers feel overstretched 

centralised organisations-majority of decisions taken by senior managers then passes down the organisational hierachy 

decentralised organisations-delegate authority down the chain of command reducing speed of decision making 

ICT allows the quality of work to improve and information can be shared easily and theres more effective communication,productivity improves and its quicker to type documents balancing workload 

organisational charts show the internal structure and make it easier to identify the specific roles and responsibilities of staff.also showing how different roles relate to one another.

Verbal communication---->eg face to face/video conferencing/telephone

person can check the message has been understood

however no permanent evidence to refer back to

Written communications---->eg letters/reports/faxes/emails

a written record 

can avoid confrontation but can remain unclear 

How can ICT be used in a business ???????

-word processing

-spreadsheets

-databases

communication makes a big impact on a busineses efficency and effective communication means:

customers enjoy a good relationship with the business can complete details quickly

staff understand their roles and responsibilities eg tasks and deadlines 

staff motivation improves when managers listen and respond for suggestions

Barriers include 

-timing-messages may be sent at wrong time

-clarity-messages maybe unclear and language maybe to

-wrong method may be used-eg email urgetnt respons maybe required

one way---->reciever cannot respond

two way---->reciever can respond

Types of communication!!!!

-internal-within the business

-external-outside the business between other businesses

-vertical-sent between different levels of organisation hierachy

-horizontal-sent betwee staff on the same level of the organisational hierachy

-formal-official messages sent by an organisation

-informal-unoficial messages formally aproved by a business

-channel of communication-path taken by a message

Anyone whos interested in a businesses activitys!!!!!

internal stakeholder >owners and workers 

external stakeholders >the community

Stakeholder conflict 

conflict between managers and workers can lead to industrial action

-Poor communication between stakeholders can lead to reduced morale and a loss of productivity 

Different stakeholders hold different interests------>

owners-profit

managers-salary

workers-competitive wages and keep thier jobs

customers-value for money alongside quality 

suppliers-continuing to buy their products

Lenders-who want to be repaid on time in full

Some firms may stay small becuase 

-like to give a personal service

-unable to gain money required for expansion

-sole traders prefer to keep controll

-find it difficult to control over larger enterprises

How do firms grow?????

Horizontal integration-between businesses in the same industry

Backwards vertical-takes over or mergers with supplier

Forwards vertical-takes over or mergers with another business which provides an outlet for the goods and services produced

Diversification-merge or takeover of another business involved in an unrelated business activity

lateral-merge or takesover a business that is related to your product but its not the same

Makes or breaks a business 

They need to consider certain factors such as:customers-enough demand???

staff-sufficent local potential staff with the correct skills 

suppourt services-are there services offering specialist training and advice ????

cost-how much will the premesis cost?is it in prime locations with good infastructure???

An efficent transport network enables staff and customers to acces your business easily

Government and location----->

they can offer grants to help with setting up a business

loans are repayable overtimeand low rates of interest

tax breaksfirms may be exempt from paying business rates

Overseas location

-cultural and language barriers

-Legal issues lwas are different

-exchange rates unexpected changes in the value of the sterlingcan impact a busineses cost and profits 

Not all businesses seek profit or growth!!!!!!some have alternative objectives:

ethical and socially responsible objectives such as the body shop-beliefs on how they should treat the environment 

public sector coportaions-are run not only generate a profit but provide a public service 

charities and voluntary organisations-objectives are led by the beliefs they stand for NOT FOR PROFIT!!!!!!

Changing objectives-

may change overtime as a result of the following:

may achieve it therfore need a new one

competitive environment may change 

technology might change product designs 

primary sectors - extracting raw materials

Secondary sectors-manufacturing

Tertiary sector-retail and service provided

Decline of primary jobs-

running out of natural resources

cannot compete against remainder of the world 

have more leisure time 

Decline of secondary jobs 

cannot compete

facing a process of deindustrialisation

automating manufacturing 

recruitment-when a firm seeks to hire new employees!!!!

the process includes the following:

-job description-explains the work to be dones 

-person specification-individuals qualities and skills

internal-appointing existing staff

external-hiring staff from outside the organisation

Internal recruitment:

-cheaper

-limits the number of potential applicants

-people already familiar with the workplace

-motivating to staff

-business already knows weaknesses and strengths 

External recruitment:

-longer process

-new ideas and innovative opourtunities 

-more expensive

-mabe demotivating to existing staff 

Application form-easy to compare as all aplicants will answer the same questions

However

-may have skills they cant showcase on the form

CV-shows candidates ict skills 

However

-Difficult to compare

Autocratic -senior managers take all important decisions with no involvment from workers

-quick decision making

However

-no two way communication so it can be demotivating

Democratic-Workers allowed to make decisions 

-Authority is deleagted to workers which motivating 

However

-mistakes and errors may occur if workers are not skilled or expierienced

Monetary-

Time rate-paid for number of hours worked 

overtime-paid extra for extra working times

piece rate-paid per number of items produced 

commision - paid for number of items they sell

Fringe benefits-payments in kind eg company car

Non monetary-

job rotation-workers switched between different tasks 

job enlargment-given tasks of similr difficultys 

job enrichment-given more interesting challenging tasks 

Limited companys are in the private sector

A limited company has a special status in the eyes of the law 

they have their own legal identity/ can sue or won assets in own right

ownership of a private limited company is divided up into equal parts called shares 

shareholders recieve dividens which are part of the profit 

Limited liability-if the business went bankrupt then the shareholder would only lose the money not any personal possesions

However a major disadvantage is anyone can access their financial information and can be time consuming they also pay coporation tax

private limited company-LTD-often a small business

shares do not trade on stock exchange

shareholders are usually family and friends

no risks of a takeover

However

-less shares means if sold less finance generated 

Public limited company-Plc-often a large business

shares trade on stock exchange so lots of capital can be raised

can be indanger of a takeover 1 share=1vote 

Chain of production-stages a product goes through from a raw material to a finished good

interdependance-when a business relys on another business in different sectors 

Deindustrialisation-reduction of importnace in secondary sector 

Added value- when a business increases the value of a product

satisficing-will make as much profits to fufil its needs but not as much as possible

Dividend-payment made to shareholders from the profits

Incoporated-a limited company owned by shareholders with limited liability

unincoported-a type of business with unlimited liability

Unlimited liability-owners responsibgle for debts

Limted liability-owners dont risk loosing personal possesions if business liquidates 

Insolvency-when a limited companies liabilities are greater than assets 

Conglomerate-merger or takeover of another business in a totally different business activity

Board of directors-elected by shareholders who run the company

Multinational company-operate in several countries 

Registrar of companies-maintains records of all limited companys