Why does a business exist?
Consumers want goods and services businesses supply them and generate revenue by doing so
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What is a gap in the market?
Where there is a product demand but no product to fill it.
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What is a market?
A market is anywhere that a buyer and a seller come together to agree on a sale.
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How do most businesses succeed?
By creating or finding a gap in the market offering a service that is wanted but which other businesses don’t provide.
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What can attract competition?
If a business successfully sells a product in a market
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What are stakeholders?
Stakeholders are individuals, groups or organisations that are affected by/ have an interest in the activity of the business. E.g. costumers, competitors
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What is an internal stake holder?
Owners and employees direct interest in a business. Work for the business inside the business daily.
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What is an external stake holder?
Don’t work for the business. Outside of the business
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Why do stake holder’s conflict?
They all want different things e.g owners want more profits, costumers want lower prices
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What is a financial stake holder?
Such as banks have lent or given the business money. They might make decisions that are in their own interests, rather than those of the business.
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What is the difference between an aim and objective?
Aim-long term goals a business can work towards. Objectives shorter-term targets that can be measured
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What is a mission statement?
A statement of the values and ambitions of a business that defines how it operates.
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What are the 3 main objectives of a business?
Survival, profit maximisation, sales objectives (sell 12 units or increasing revenue).
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What are 3 other objectives?
Expansion, providing charitable public services, being more environmentally friendly.
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What acronym can be used to remember the objectives will be use full to a business?
S.M.A.R.T. S- Specific, M- measureable, A-achievable, R-realistic, T- time related
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What can cause conflict in a business?
Different stake holders want different things from a business e.g workers-better pay, owners-bigger profits. Objectives need to change as the business changes and it they are met
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What can objectives be used to do?
They can be used to help manage a business and measure its progress.
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Explain why the objectives of a business will change after the first year
Because they have grown as a business they may have more customers and may want to start making a profit as they are established and may want to take the business further.
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How can two aims conflict?
Maximising profit may mean cost cutting, e.g. redundancies and this may actually lead to poor motivation amongst employees thus not increasing motivation.
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What is a social enterprise?
An organisation with social objectives, aimed at helping stakeholders such as members, costumers, communities. Social enterprises include co-operatives, mutual societies, charities and voluntary groups
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What do co-operatives and mutual societies want to achieve?
They want to make sure that their members (costumers and employees) get a fair deal. Mutual societies were set up to help members with financial help. Insurance societies protecting against fire or theft.
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What do charities want to do?
They want to maximise the amount of good that they can do, which means raising as much money as possible for a particular cause.
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What do voluntary groups want to do?
They usually provide a service to the community. People volunteer to work for them e.g s.t .Johns ambulance.
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What will a social enterprise aim?
To provide the best service for a cause e.g helping the aged using profits that are made.
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What is a worker co-operative?
A business owned and controlled by its workers rather than outside shareholders
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What are the advantages of operating a business as a worker co-operative?
As the employees own the business everyone should be motivated. Workers will know a lot about the business therefore products should be better quality.
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What are the disadvantages of operating a business as a worker co-operative?
Co-operatives may find it difficult to raise finance since banks are not so willing to lend them money because their main aim is not to make a profit.The lack of experience of running a business may hinder the business and thus less likely 2 succeed.
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Suggest how the aims and objectives of charities are different to that if private sectors?
Charities aim it to help a cause whereas a private sector business aims to make a profit. As it is a charity they have no shareholder pressures as they do not have them unlike private sector businesses
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What is primary production?
Extracts raw materials e.g farming, fishing and forestry.
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What is secondary sector?
Make the raw materials into goods e.g use steel to make a car
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What is Tertiary sector?
Businesses that provide a service. This sector is needed throughout the chain of production to support the secondary and primary sectors. This is known as interdependence.
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What is interdependence?
Each type of business depends upon others for survival e.g Cadbury’s is dependent on farmers for cocoa.
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What is the chain of production?
The stages that a product goes through before it reaches the final consumer.
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What is a sole trader?
They are owned and controlled by one person who raises the finance by their self or by boworring. They are unincorporated. They have unlimited liability. They can employ others. E.g hairdressing, window cleaning. Cheap to set up
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What does incorporated mean?
Legally the business and the owner are not the same.
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What is unlimited liability?
The owner has full responsibility for the business this includes; debts of the business. They have to pay the debts using their own money meaning their personal possessions are at risk if the owner/s can’t pay they may be made bankrupt
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What are the advantages of being a sole trader?
Owner can make all decisions. Owners can keep all profits. Business accounts can be kept private, cheeps and easy to set up.
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What are the disadvantages of being a sole trader?
unlimited liablity. money can be hard to obtain. Costs are usually higher therefore the price are usually higher. Expanding the business is hard. Ill health can be fatal to the bsiness. Owner have to work long hours, holidys will be hard to take.
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What is a partnership?
A business owned by 2 or more people max 20, they can have a deed of partnership. They are unincorporated. They have unlimited liability e.g accountants.
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What is a sleeping partner?
Someone that invests money into the business but doesn’t play an active role in the running of the business. They have limited liability
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What is limited liability?
When liability is limited to the amount a shareholder invested. This means that their own possessions are not at risk.
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What is a deed of partnership?
It is a legal document that states the rules of the business e.g who the paartners are, how much they put into the partnership, how profits should be share and procedure that should take place if a partner dies or leaves the partnership.
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What are the advantages of being in a partnership?
Money put into the business can be shared. Share responsibility and expertise, accounts can be kept private. Easy to set up.
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What are the cons of being in a partnership?
Unlimited liability. Legal costs of drawing up a deed of partnership. Possible arguments. Problems if partner leaves.
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Name two types of businesses that are unincorporated?
Sole traders, partnerships.
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Name two types of businesses that are incorporated?
Private and limited companies
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What legal documents must a business complete to become unincorporated and where must they get them from?
The articles of association and memorandum of association they can get them from company’s house.
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What is the articles of association?
It is a document that contains rules for shareholder meeting, a list of directors & their jobs. The voting rights of the shareholders and details of how accounts will be record.
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What is a memorandum of association?
It is a document that must contain the company name, the main business address, what the business does a statement of limited liability. Number of shares to be sold.
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What are the stages of a company becoming incorporated?
Send the 2 docs to the registrar of companies-->tificate of incorporation_ shares issued.
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What is a private limited company?
A company owned by at least 2 shareholders. Shares are sold to family and friends who invest into the business. They receive dividends in return. Limited liability. Shareholders vote 4 a board of director who run the business.
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What are shareholders?
People and institutions that buy shares in a company and are therefore owners (One share = one vote for a director)
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What is a dividend?
A sum of money paid regular by a company to its shareholders out of its profits. Extra- Profit will be shares according to how many shares the person has
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What are the pros of being a LTD?
Private limited company: raise funds by selling shares. Limited lability. Can employ specialists. Death/illness doesn’t affect the company, shares can be sold to people you can trust.
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What are the con of being an LTD?
Shares can’t be sold on the stock market. Accounts are not private they are available to authorities. Expensive to set up. Have to share profits though dividends. Not all decisions are made by managers.
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What is floatation?
Selling shares for the first time on the stock exchange.
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What is insolvency?
If a business runs out of funds and cant trade/pay its debts. This may cause it to fail.
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How can a private limited company raise more funds?
By becoming a PLC.
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What is a public limited company?
A company that sells shares on the LSE. Shareholders have limited liability. Shareholders vote for a board of directors. Accounts must be published and made available to anyone that wants to see them.
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What are the pros of being a PLC?
Gain money by selling shares. Frim is bigger so it is easier to negotiate with suppliers. Shareholders have limited liability. Can employ specialists. Not effected by death/ illness. Shares can be given to workers to motivate them.
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What are the disadvantages of becoming a PLC?
Firm could be taken over. Accounts are not private - are available to anyone. Expensive to set up. Have to share profits by paying dividends. Not all decisions are made by owners; S.H. interested in getting quick cash and not the long term health of
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What sector are public limited companies in?
The private sector as if it was in the public sector that would mean that it was run by the government.
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What are the differences between LTDs and PLCs?
Ltds- shares are issued to friends and family, accounts available to authorities, they are small. Plc- shares issued on the stock exchange. Accounts are available to anyone. Usually large.
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What are the similarities between LTDs and PLCs?
They are both private sector, they must have more than one owner, profits go to shareholders; dividends.
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What is AGM?
Annual general meeting. Directors and shareholders of every incorporated firm are required by law to gather at a meeting which must be held every calendar year. Here owners can judge how well the business is doing and elect directors.
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What is divorce of ownership and control?
Where shareholders give the managers the authority to control the business. They both have different objectives he owners will more than likely wish to pursue a profit maximising objective
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What is integration?
It is one of the ways that businesses can grow. It means one business joining with another by either merger (where 2 business join to form a new one, usually under a new name) or take over (where 1 business buys at least 51% to control it).
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What are the advantages of intergration?
Together they can enjoy economies of scale so they can buy products in bulk thus getting cheaper unit supplies which means that they can sell at more competitive prices
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What are the 4 types of growth?
Horizontal integration-similar businesses at the same stage of production. Lateral integration-related business at the same stage of production. Vertical integration-businesses at diff stages of production. Diversification-a variety of b at diff stag
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What are economies of scales?
As a business grows it can take advantage of economies of scale because the bigger the business the lager volume you produce and there for you can barging more with suppliers- you can become more competitive which will generate more sales.
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What are diseconomies of scale?
They are the problems with growth e.g communication-becomes hard- takes loner for decisions to be made. Separation of managers and workers-this means worker may not work as hard. Firm is less flexible-not possible to change production fast.
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Why might a frim want to grow?
Lower costs-through economies of scale, meaning higher profits 4 firms. Wider range of products-^^ security-they aren’t relying on 1 product. To prevent competitors gaining advantage-gaining more control of a market give firm a +over competitors.
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How can firms grow?
Internal expansion-expanding by opening more outlets, employing more. Merger (where 2 business join to form a new one, usually under a new name) or take over (where 1 business buys at least 51% to control it).
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What is franchising?
Buying into an existing business and acquiring the right to use an existing business idea e.g allowing a small business to use their name. e.g KFC
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What are the features of franchising?
The franchisor allows the use of their business name for an agreed length of time. Franchisor provides materials, training and advice. Franchise must provide money 2 start the business. Franchisee must make regular payment to the franchisor.
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What are the advantages of being a franchise?
Good chance of success, since the product is already well known, easier to borrow money because of past success, get support from the franchisor, advertising is organised and paid for by the franchisor.
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What are the disadvantages of being a franchise?
The franchise may be taken away, owner can’t make all decisions, cannot sell the franchise without permission, have to make payment to the franchisor, and supplies must be bought from the franchisor which may be expensive.
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What is a multinational?
A company which is based in one country but has Manufacturing/service facilities in another. A company which operates in more than one country e.g. McDonald’s.
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What are the advantages of being a multinational?
Production may be located where production costs are low thus giving more profit thus dividends. They benefit from global brands, this helps businesses compete against local businesses.
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What are the advantages of being a multinational?
Allow fluctuating exchange rates which may mean losing money when buying materials from abroad thus lower dividends to shareholders as profits will b lower. Entry into a competitive market may lead 2 losses therefore shareholders are worse off.
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Factors that businesses should consider when choosing a location (6)
Demographics-age, income, disposable income, crime rate, competition, space, costs, visibility, space. If the business need natural resources
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Where would the best location be?
His closer to natural resources reduces the costs of transportation. Also the transportation links. Governmental help. If it is bulk increasing then is needs to be close to the market.
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How can the government help firms in terms of location?
If there are a lot of people unemployed in the area the government might give firms money to locate in certain locations.
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What does bulk-increasing mean?
Means that the good gets bigger once it has been processed and it becomes harder to transport.
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What does bulk decreasing mean?
Means that the good becomes easier to transport once it has be processed.
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What does footloose mean?
Footloose refers to a business whose location is not influenced strongly by access either to materials or markets, and which can therefore operate within a very wide range of location.
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What is privatisation?
Selling publically owned business to the private sector e.g bp, British airways, British gas
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What is nationalisation?
When the government buys all the shares for PLC
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What is a public corporation?
A business that is owned by the public and run by the government, they are paid for through taxes.
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What are the benefits of Public corporations?
It prevents the exploitation of costumers-it provides services which are non-profitable, it avoid duplication of services, they protect jobs and key industries e.g who would provide army
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What are the limitations of public sector corporations?
They can be difficult to manage and control because they are normally quite big so time may have to be spent on meeting for there to be communication. . They will need to be subsidized it they making losses from taxes this money could be better spen
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Why might a business need to employ staff?
They might be trying to grow the business, staff could have left, the business may be looking for new skills.
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Why is recruitment important?
To insure that the right person for the job is selected. Preferably passionate, academically strong, able to learn quickly.
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What are the advantages of recruiting from outside the business?
External recruitment -You can have a variety of skill and people, people wouldn’t get annoyed that they didn’t get promoted.
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What are the disadvantages of eternal recruitment?
You’ll have to train them
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What is recruitment?
The process in which businesses finds new employees.
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What are the advantages of internal recruitment?
You already know the candidate.
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What impact can the right people have on the businesses performance?
It can grow the firm’s assets. Able to reach a greater capacity. Maximise profits
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What can businesses do to ensure they have the right people?
Employ people with the qualification that they need. Ask people their hobbies and interests
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Why might a business need to recruit?
The business is trying to expand, staff might have left, and business may need new skills.
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What is a job description?
Written by the firm it outlines the details of the job e.g hours of work, job title.
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What is a person specification?
A document that sets out what kind of qualifications, skills, experience and personal attributes a successful job applicant should possess.
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What is employee retention?
The ability of a firm to convince its employees to remain with the business
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What is labour turn over?
The proportion of a firm’s work force that leaves during the course of the year. 30% of staff left Townley that’s a turnover of 30% this may intrigue the governors.
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How can a firm advertise a job?
Website, window, job centres, internet, newspaper, job agencies.
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What should the advert for a job say?
Job title, location, brief description, qualification/ experience required, salary, address, and contact dets.
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How can a firm select the right candidate?
Interviews, aptitude tests, numeracy tests.
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What is the contract of employment?
A legal document that states; job title, rate of pay and method, normal hours of work, holiday entitlements, pension arrangements.
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What do recruitment agencies do?
Look at applicants and see which ones suit the job description and make a shrtlist which they then send to the firm how choses the ones they want to interview and then the agency arranges an interview with them.
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What are the advantages of using a recruitment agency?
Saves time. Saves money-don have to waste money advertising for example it would cost 20,000 to to have a page spread in a national newspaper. Reach wider audience-means you are more likely to find the right person for the job.
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What are the disadvantages of using a recruitment agency?
Might not get a successful candidate- waste money. You might not acc like the candidate-wasted money. Some agencies cost a lot of money to book.
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How can a CV be used to shortlist candidates.
A CV will list the qualifications the candidate has so it will be easy to see if they are qualified to do the job.
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What is a shortlist?
The applicant most likely to be good at the job they will be interviewed.
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How can a letter of application be used to shortlist candidates.
This will explain why the candidate wants the job and what skill/qualities/experience which (1) they will bring to the business
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What is a CV?
A curriculum vitae is a document that an applicant creates that gives details about; previous employment, qualifications, interests.
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Explain briefly the recruitment process.
Vacancy identified-job advertised-HR looks at application-long list-shortlist-interviews-appointment-start job.
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What is training?
The process of making sure that workers in a business have the knowledge and skills to do the job properly.
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Why do people need training at work and what are the benefits to the business of training?
To be taught how to do their job efficiently …^^ £ effective. Workers know H&S procedures therefore prevention of injuries firm doesn’t get sued. Used 2 new surroundings therefore they become productive quickly. Training ^^accuracy + .. efficiency.
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Examples of on the job training?
Observation- showing the trainee how to do the job, using manuals, coaching- a more intensive method of training that involves a close working relationship between an experienced employee and the trainee
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Examples of off the job training?
Self-study, computer-based training, staff training days, skill courses, Day release (employee takes time off work to attend a local college or training centre)
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What are the advantages of on the job training?
Generally most cost-effective no travel/accommodation costs. Trainee is giving individual training, train alongside real colleagues.
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What are the disadvantages of on the job training?
Trainer may need to leave their work to help the trainee, not suitable for groups of workers, Quality depends on ability of trainer
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What are the advantages of off the job training?
Experts may provide training, workers can enjoy a change in environment, a wider range of skills or qualifications can be obtained.
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What are the disadvantages off the job training?
More expensive – e.g. transport and accommodation Lost working time and potential output from employee, Employees now have new skills/qualifications and may leave for better jobs.
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What is appraisal?
The process used to see how well a worker is doing allowing the employee to exchange views with her employee
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What is lifelong learning?
Learning that takes place after a young person has finished their formal education.
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Why is lifelong learning essential for an efficient workforce?
Motivates you to increase your skills and work better, many businesses expect employees to keep retraining and improving skills.as you have di9fferent jobs you will need to learn and develop skills you already have
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What is remuneration?
Refers to the way that a worker is paid. Each type of payment system impacts on the business by motivating workers to become more efficient.
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What is piece rate pay?
Giving a payment for each item produced. The more items the worker produces the more pay they receive.
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What are the advantages and disadvantages of piece-rate pricing?
Piece rates motivate people to produce a lot. However workers may rush their work which may lead to waste, higher costs, and poorer quality and harm the reputation of the business.
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What are time rates?
When an employee is paid at an amount per period of time worked. The most common are weekly/monthly wages (non-exempt employee) or annual salaries.
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What are the advantages and disadvantages of time rate payment?
Time rates can lead to workers working more slowly, but perhaps more accurately.
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What is commission?
This is paid to workers who sell goods or services. The amount paid depends on the percentage value of the goods or services the worker sells.
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What are the advantages and disadvantages of commission?
This encourages salespeople to sell, but may led to customer dissatisfaction if too much pressure is used. It can also lead to low (sometimes no) wages for those sales people who do not exceed the base target.
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What is overtime pay?
Extra pay for extra time worked usually paid at a higher rate than normal time.
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What are the advantages and disadvantages of overtime pay?
It cost the firm money but this is covered by extra sales that the firm makes.
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Why do businesses need to employ a variety of part time and full time workers?
So the business has flexibility as they can have part time staff to cover busy periods.
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What is the difference between a wage and a salary?
In a salary the worker receives the same amount of money no matter how many hours they work they aren’t paid overtime. Someone who is paid wages receives a pay rate per hour, multiplied by the number of hours worked.
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What is profit sharing?
When some profit is shared among workers as a reward for their efforts
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What are the disadvantages of profit sharing?
The more successful the business is in terms of profits, the more money the worker receives. However some worker may not deserve the payment if it is given to all workers in the business.
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What are fringe benefits or perks?
The firm may give the employee non-money rewards e.g company car, non-contributory pension scheme, free health insurance.
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What are the advantages and disadvantages of perks?
It costs the employer less 2 give workers fringe benefits than 2 give them extra income. If someone is given something worth £100 that is all it costs the business. If the employee was paying 40% tax it would cost the business £140 to give the worker
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What are bonus pays?
It is an extra lump sum of money that may be paid to an individual or a group of people when they reach a target level of production.
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What are the disadvantages of bonuses?
The target level of production needs to be realistic. If it is too high workers may decide it is not worth the effort to try and achieve it.
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Why is it important to motivate workers?
To persuade them to work harder or more efficiently-increase profits. If the employees are working well the organisation is more likely to achieve its objectives. Workers that are working well are said to have a high productivity.
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What motivates workers?
People you work with. Passion. Support family.
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Why do people work?
To make money. To make new friends. To have job security, for a sense of achievement.
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What is Maslow’s hierarchy of needs?
Physiological needs- heath, food. Safety-removal from danger. Social needs- belonging having friends, self-esteem, achieving individual potential.
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What methods can be used for Physiological needs?
Ensure pay covers cost of living, places within the building they can sleep, providing them with free healthy snacks.
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What methods can be used for Safety?
Ensuring health and safety training. Making sure there is security guards
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What methods can be used for Social needs?
Social events- Christmas celebrations. Celebration it they meet targets. Fund nights out for people in the same department.
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What methods can be used for Self-esteem?
Raises, awards, plaque on door, parking space with name
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What methods can be used for achieving individual potential?
Employees can get training and providing them with access to it
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What is job rotation?
Letting a worker do different jobs on a regular basis – this helps them maintain interest in the work as it stops them from getting bored from doing the same work day after day
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What is job enrichment?
Giving an employee more responsibly. By giving them different tasks to do in different departments. The worker will be able to see the whole job and its importance so they will be more motivated
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What is job enlargement?
Gives workers more tasks of the same skill level may need more training,m they don’t have any more responsibility – higher pay
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What are award schemes?
An employee of the month award is an example of an award scheme. The work of an individual is recognised. These schemes can meet the need of the worker for self-esteem.
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What are the benefits of good working conditions?
The conditions that workers work in can affect how well they perform. Conditions that are, safe warm, light and comfortable are more likely to motivate workers.
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What is promotion and what are the benefits of it?
Giving promotion to a worker is a way of giving recognition to their achievements and continue to motivate them to continue to work hard. The possibility of gaining promotion also encourages workers.
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List some employment rights.
Join a trade union, safety, comfortable working conditions, breaks, minimum wage, redundancy payments, not be unfairly dismissed, a written statement giving rates of pay, pensions, and disciplinary procedures.
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What are examples of discrimination acts?
Gender-Equal pay, recruitment/promotion opportunities. Race discrimination, disability discrimination-employers of 20 more cant discrim.., age discrimination-they can’t exclude people from jobs because of their age.
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What should someone do it they believe that their rights have been breached?
Employment tribunals rule on whether a law has been broken. They may award compensation.
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What is industrial action?
When one side uses tactics to try and force an agreement
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What are industrial relations?
The relationship between employees and their employers.
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What is industrial dispute?
When relations break down.
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What is a trade union?
It is an organisation the represents employees
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What is the role of trade unions?
To act as a pressure group, which is an organisation that seeks to influence government and to make laws that are in the interests of its members. To protect the interests of its members by7 insuring that there employment rights are breached.
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What are benefits to trade unions bring to their members?
1. They have strength in numbers 2. They can give expert advice as they employ solicitors 3. They have money to help top pay for expensive court cases 4. They have trained negotiators who know how to deal with employers.
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Types of industrial action by the union.
Withdraw goodwill, go-slow, work- to- rule, un-official strike- crease work without T.U agreement.
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Types of industrial action by the employer.
Withdraw privileges (stop bonuses), sack, and suspension- laid off with no pay, lockouts- prevent worker from entering the work place.
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What are Strikes?
A strike is when workers refuse to work for a certain amount of time. Their needs to be a ballot vote and the employers need to be notified.
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Issues for the business of industrial action
Lose profit because they have a smaller work force. Firms that depend on them might be upset. Customers may take their business to competitors/ permanently
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Issues for the workers of industrial action
They may lose wages, they may lose bonuses, commission, and over-time pay, if the firm suffers a loss of sales, workers may be made redundant.
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What is overtime ban?
Employees only work the hours stated in their contract of employment.
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What is work to rule?
This is when the workers will only do what is included in their job description
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What are the benefits of Eu Trade?
No tariffs/ closer distance minimising costs. More money can be spent on expanding the business
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What is A.C.A.S?
Advisory, Conciliation- act as a communicator between parties, getting both sides to agree and Arbitration-BOTH parties accept recommendations, making a ruling between 2 sides service
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What does A.C.A.S do?
It is NGO set up to help to settle industrial disputes between unions and employers. They are there to stop them from getting worse through negotiation and agreement.
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What are single union agreements?
They are negotiated so that employers just have to deal with one union. This benefits employers but it also helps workers if everyone is represented by one union.
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What are employer represented by?
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What is collective bargaining?
Try to improve conditions for every one
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What are the advantages and disadvantages of employing on a seasonal basis?
Only use and pay workers during busy periods therefore save money on wage costs. D- Have to train new workers every year which is costly especially as they are only there for a short period.
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What are the benefits of an organisational chart?
They help a business by showing; what a person is accountable for, to whom a worker is responsible and whom they must take orders from, lines of communication within the organisation.
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What is the difference between informal and formal groups?
Formal group’s e.g departments are shown on an organisation chart. Informal groups don’t show on the chart e.g basketball team where people from different department meet.
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What are the advantages of tall structures?
The lines of communication/ roles or the worker are clear. The span of control of managers is mor likely to by narrower- they don’t have to look after many. There will be plenty of promotion opportunities which motivates.
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What are the advantages of flat structures?
The chain of command is shorter/ less mistakes in communications from top to bottom as there are less layers, wider span of control means that they will have to delegate work-motivate.
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What is delegation?
When somebody has the right to pass information down to others give example.
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What is a span of control?
The number of people for whom the manager is responsible give example.
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What is the chain of command?
Is the route by which orders are passed between different levels (top to bottom) in an organisation give an example.
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What is a hierarchy and why is it important that business?
It is an organisational structure. Because this way it clear who is accountable for who this means that it something was to go wrong, they would know where he problem came from and they would be able to deal with it accordingly
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What is authority?
It is the power to make decisions regarding the organisation or an employee (someone lower that you in the hierarchy) give e.g.
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What is subordinate?
A person who someone else has power over give an e.g
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What is delayering and how could it benefit a business?
Removing a whole layer from the structure. They would save money as there would be less people working there so less costs, decrease the chain of command.
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What are the main functional areas of a business?
Finance, marketing, operations, administration, customer service and human resources.
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Why will keeping accurate records insure business survival?
Monitor level of liquidity (is a measure of the ability of a debtor to pay his debts as and when they fall due), knowing who they owe money to, which costumers owe them money, how many costumers they have
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Explain why business may have a finance department.
This allows specialisation improves efficiency as workers know what they are doing e.g. finance department are able to monitor the money coming into, and out of the CF Ltd.
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What two was can a business get bigger through?
Internal growth-this is when the business grows by increasing sales, using new technology. Eternal growth- by joining with other businesses in agreed marriage or in a hostile way- a takeover.
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What are economies of scales?
Cost benefits from growth.
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Why do business have to change as markets change?
Products may become obsolete, or be replaced with newer, better products. Competitors may enter or leave markets. Flexible businesses plans for change and have policies in place to deal with it. This is called managing change.
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What are the advantages and disadvantages of take overs?
Disadvantages of takeovers problems with existing staff may be liable for any debt the other business may have communication maybe a problem low morale increase market share increased sale, bigger the business more chance of economies of scale
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What must be done for a business to become more productive?
Either new workers must be brought in or existing ones need to work harder. The business may need to change the hours or times worked, type of job and even location.
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What effect has computerisation had on businesses?
For business to compete better may require new technology. Computerisation has reduced many traditional jobs but new roles, connected with the new technology have been created. Retailer now sell online as well brick and clicks.
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How does new technology allow for flexible working?
It is possible for many workers to work from home. This means they save money on travel and can organise work as they wish-motivate. They may lack in specialist equipment and may be subject to distractions.
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What is communication?
The process which enables information to be passed from one person/ group to another.
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What is the difference between verbal communication / non-verbal communication?
Communication between two or more people that is spoken.Written word / pictures / gestures / expressions
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Why is it important for business to use ICT?
It can improve customer services and provides extra services such as online ordering and text updates- cabs. Social networking sites can be used to attract more customers. Provide the business with records of what costumers have bought.
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Give examples of external communication.
Text, letters, internet, email, telephone
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Give examples of internal communication.
Email, notices, memo, reports, briefing, face to face.
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What are some barriers to communication?
If one partner is rude then costumers may not be happy and not repeat a purchase. Clarity of a message from the business may not be clear this may lead to lower sales. Language, time zone, typos, fail of technology – internet not working.
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Give an example of formal communication
Annual general meeting
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Give an example of informal communication.
Can take place at any time, using any medium. Sometimes these can be more powerful than formal communication
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What are disadvantages of businesses using emails?
You need e-mail addresses and not everyone has an e-mail address therefore breaking communication. Not everyone checks there e-mail regularly which means communication is slow.
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Other cards in this set
What is a gap in the market?
Where there is a product demand but no product to fill it.
What is a market?
How do most businesses succeed?
What can attract competition?
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