Business flashcards part 2

All keywords for year 10 and 11.

HideShow resource information
Sole trader and Partnership
1 of 342
2 of 342
Primary Research
(Field research) involves gathering new data that has not been collected before. For example, surveys using questionnaires or interviews with groups of people in a focus group.
3 of 342
Advantages of Primary research
Accurate, up to date, specific, individual results, can be quick if online.
4 of 342
Disadvantages of Primary research
May take along time, expensive, may create misleading results.
5 of 342
Secondary Research
(desk research) involves gathering existing data that has already been produced. For example, researching the internet, newspapers and company reports.
6 of 342
Advantages of Secondary reseach
Cheap, quick, large amounts of data.
7 of 342
Disadvantages of Secondary research
Not unique, too general, may be out of date.
8 of 342
Internet reseach
A form of secondary reseach when used to collect data or primary if doing onlibe surveys.
9 of 342
Internet research advantages
Access to large amounts of data, can be updated.
10 of 342
Internet research disadvantages
May be unaccurate, quick, may not be able to find the information needed.
11 of 342
Telephone survey
Questionaire over the phone.
12 of 342
Telephone survey advantages
Large market, people may feel more comfortable answering personal questions because they can't see the interviewer.
13 of 342
Telephone survey disadvantages
May not get accurate opnions, may create a negative view of the business, phone calls can be expensive, it is difficult to get people's phone numbers.
14 of 342
A given topic that can be filled in by an interviewer or by the person being asked the questions.
15 of 342
Questionnaire (Face to face)advantages
People are more likely to answer questions, the interviewer can ask more complex questions and explain them if necessary.
16 of 342
Questionnaire (face to face) disadvantages
It takes a long time, as it's less anonymous, the interviewee is more likely to lie or to refuse to answer a question.
17 of 342
Supplier feedback
Getting feedback from the people who supply the business with the things they need.
18 of 342
Supplier feedback advantages
Improve relationship, helpimprove the business.
19 of 342
Supplier feedback disadvantages
If the feedback is negative could damage reationship.
20 of 342
Customer feedback
Feedback from exsisting customers on how to improve the business and what current things they like about the business.
21 of 342
Customer feedback advantages
Competitive advantage, gain a good reputation for customer satisfaction, motivating.
22 of 342
Customer feedback disadvantages
May be unmotivating if negative, may not help improve the business if too vague.
23 of 342
Focus group
A small group of people meet together to examine a product and answer indepth questions. Usually used when a business creates a new product or brand image.
24 of 342
Focus groups advantage
In depth, less likely to be biased.
25 of 342
Focus group disadvantage
May be biased, more expensive.
26 of 342
Marketing mix
The marketing mix is the combination of product, price, place and promotion for any business venture.
27 of 342
The features and appearance of a good and service.
28 of 342
How much a customer pays for a product.
29 of 342
The point where products are made avaliable to customers.
30 of 342
How customer are informed about products.
31 of 342
Brand image
Personality of the product.
32 of 342
Target market
A specific group of consumers at which a company aims its products and services .
33 of 342
Product portfolio
range of items sold by a business. It can be analysed using the Boston Matrix.
34 of 342
Product differentiation
Making products that stand out from the competition in terms of price, quality or service
35 of 342
Why do small businesses adapt their products?
Competitive advantage, to fit their target market.
36 of 342
Demand is the amount of a product customers are prepared to buy at different prices.
37 of 342
The link between price and demand
An increase in demand following a successful advertising campaign usually causes an increase in price.
38 of 342
Where a business pays for messages about itself in mass media such as television or newspapers
39 of 342
Advertising advantage
Wide coverage, effective, builds brand loyality, control over the message.
40 of 342
Advertising disadvantages
Non-personal, expensive, lacks flexability.
41 of 342
Getting customers to talk to their friends and family about your product or service.
42 of 342
Word-of-mouth advantages
Free, trustworthy.
43 of 342
Word-of-mouth disadvantages
Impossible to control.
44 of 342
Gaining press coverage for your business.
45 of 342
Publicity advantages
Can be free.
46 of 342
Publicity disadvantages
Not controlled.
47 of 342
Direct mail
Sending promotional material directly to the consumer.
48 of 342
Direct mail advantage
49 of 342
Direct mail disadvantage
Often not read, low success rate.
50 of 342
Personal selling
Employing a person to visit potential customers to persuade them to buy your goods or services.
51 of 342
Personal selling advantages
Indivdual approach.
52 of 342
Personal selling disadvatages
May annoy customers, expensive.
53 of 342
Many business now have their own website on the internet to provide information about their business fpr consumers.
54 of 342
Website advantages
provide basic information, can be used for e-commerce.
55 of 342
Website disadvatages
Needs to be updated, needs be be found easily.
56 of 342
An internet advert shown on another firm's website in the form of a horizontal bar across the page.
57 of 342
An internet advert that 'pops up' in a new window when visiting another companies website.
58 of 342
Banner and pop-ups advantages
Can target people.
59 of 342
Banner and pop-ups disadvantages
May be ignored, can be seen as annoying.
60 of 342
Email advantage
Fast, 24/7, international, cheap, can be sent to indivduals or groups.
61 of 342
Email disadvatage
Needs access to the internet, viruses can be spread, phishing, no guarantee it will be read, may be regareded as spam.
62 of 342
Channel of distribution
How a product gets to a customer.
63 of 342
Transactions between people and business carried out entirely via the internet.
64 of 342
The person who makes the product.
65 of 342
Middleman ir distributor that buys in bulk, holds stock and sells mainly to retailers not consumers.
66 of 342
Persuading shops to stock products means customers can buy items locally.
67 of 342
Someone who makes direct contact with customers.v
68 of 342
Net cash flow
The difference between money in and money out.
69 of 342
Opening balance
The amount of money in the bank at the beginning of the month.
70 of 342
Spending funds
71 of 342
Money in
72 of 342
Net cash flow formula
money in (Payments) - money out (receipts)
73 of 342
Closing balance formula
Opening balance + Net cash flow
74 of 342
Attracting people to apply for a job vacancy.
75 of 342
Part-time workers
Working for a proportion of the full working.
76 of 342
Part-time workers advantage
Saves on wages, more flexible, good for busy times to provide better customer service.
77 of 342
Part-time workers disadvantage
May be less commited, less knowledge.
78 of 342
Full-time workers
Working for the normal full working week e.g 36hours
79 of 342
Full-time workers advantages
Fewer staff needed, lower recruitment or training costs, easier to control, more motivated staff, no other loyalties.
80 of 342
Full-time workers disadvantages
Difficult to get out of their contracts,
81 of 342
Internal recruitment
Appointing an existing employee of the business to fill a vacancy.
82 of 342
Internal recruitment advantages
Skills are already none, less training needed, cheaper, motivate employees.
83 of 342
Internal recruitments disadvantges
Creates a vacancy, creates jealousy
84 of 342
External recruitment
Appointing an employee of another business to fill a vacancy, may have other loyalties.
85 of 342
External recruitment advantages
New ideas and skills, more applicants, doesn't create another vacancy, no cause for jealousy
86 of 342
External recruitments disadvantages
Doesn't motivate staff
87 of 342
Job description
a detailed statement of the nature of the job and the tasks involved.
88 of 342
Person specification
A profile of the type of person likely to make a good applicant.
89 of 342
An unoccupied position or job.
90 of 342
A person who applies for a job.
91 of 342
A list of selected candidates from which a final choice is made.
92 of 342
This allows managers to see, in person, how the person is likely to fit into the business and how they respond to some challenging questions.
93 of 342
The ability to do something well.
94 of 342
Practical contact with and observation of facts or events.
95 of 342
A pass of an examination or an official completion of a course.
96 of 342
When a worker is paid a fixed amount per month or year, no matter what hours they work.
97 of 342
When an employee is paid a fixed amount for each hour or day they work.
98 of 342
Payments made to retired workers. In addition to the state pension, businesses are expected to offer their own pension schemes.
99 of 342
Fringe benefits
Rewards to employees that do not involve direct payments of money to them.
100 of 342
Without money.
101 of 342
The will to work due to the enjoyment of the work itself
102 of 342
Monetary rewards
Reward with money
103 of 342
When the employee gets a percentage of the amount they sell
104 of 342
Piece Rates
A fixed amount for producing each piece of work
105 of 342
Equal Pay Act 1970
Act of Parliament that estanlished in law equal pay for equal work to stop pay discrimination.
106 of 342
Minimum Wage Act 1998
Created a minimum wage across the UK
107 of 342
Discriminiation Legislation
Laws that make discrimination illegal on most grounds (race, sex, disability).
108 of 342
Employment rights
The legal rights of an employee and employer
109 of 342
Health & Safety Acts
Acts of law that protect the employee in the workkplace and set out the employers' obligations
110 of 342
Job production
Making one-off specialist products for each customer
111 of 342
Job Production advantages
Can charge customers more for specialist product. Higher customer satisfaction.
112 of 342
Job production disadvantages
Production costs can be high. Slow process. Higher labour costs
113 of 342
Batch production
Groups of identical items that pass through different stages of the production process at the same time.
114 of 342
Batch production advantages
Unit costs low. More efficient. Different consumer tastes can be met.
115 of 342
Batch production disadvantages
Can't customise products. Long time to switch batches. Finishing stock may take time.
116 of 342
Operational Efficiency
Producing goods and services to an acceptable standard with as few resources as possible to keep unit costs low
117 of 342
Unit cost
The average cost of making each unit
118 of 342
Unit cost formula
Total cost divided by output
119 of 342
Work is divided into separate tasks or jobs that allow workers to become skilled at one of them
120 of 342
Computerised stock control programmes
The use of computers to keep records of all stock and reorder necessary stock automatically.
121 of 342
The use of electronic technology to gather store, process and communicate information.
122 of 342
Design technology advantages
CAD enables designers to lay their works out on screen, quicker, reduced resource costs, reducing the risk of errors,
123 of 342
Computer-aided design (CAD)
Using computer based tools to design products.
124 of 342
A good or service that that meets customers' expectations and is therefore 'fit for purpose'.
125 of 342
Customer expectations
The minimum quality standards for a product or service that is acceptable to consumers.
126 of 342
Quality assurance
A system of agreeing and meeting quality standards at each stage of a production.
127 of 342
Customer service
Providing services to customers before, during and after purchases to standards that meet their expectations.
128 of 342
Opening at convenient times, keep appointment and keep promises.
129 of 342
Giving product advice on range of options available.
130 of 342
Service at times of purchase
Makes sure the product meets customers' needs, different purchasing methods (credit card etc).
131 of 342
After-sales service
helpline, advice on future products, repairs.
132 of 342
Good customer service advantages
Repeat business, word-of-mouth promotion, less complaints, more motivated staff.
133 of 342
Consumer protection
Laws that protect the intrests of consumers whem buying goods or services.
134 of 342
Sales of Goods act 1979 and Supply of Goods and Services act 1982
Goods and service sold to custoers must be as described, they must be 'fit for purpose', must be of satisfactory quality.
135 of 342
Consumer Protection Act 1987
Compensation must ve paid to a consumer who suffers injury or damage to property when currectly using the goods.
136 of 342
Competition Act 1998
Business must not agree to fix prices at a high level with other similar businesses.
137 of 342
Consumer Protection (distance selling) 2000
Firms must give clear information about the good or service, information must be provided in writing, fims must provide a cooling-off period of 7 days for customers to change their minds.
138 of 342
Consumer protection from unfair trading regulations 2008
Advertising must not mislead or deceive, it must be possible for consumer to check prive comparisions made in advertisements with other businesses.
139 of 342
Benefits of following consumer laws to the business
Consumers have the confidence to make purchases, reducing risk of losing customers, prevents unfair competition.
140 of 342
Benefits of following consumer laws to the consumer
Can't be taken advantage of by businesses, won't be mislead or decieved so can get products and srvices that are reliable.
141 of 342
Benefits of using IT for the consumer
Easier to access a business' details and products, easier to compare prices, 'comfort of their own home', easier to contact the business.
142 of 342
Limitations of using IT for the consumer
Must have access to a computer, wdebsites may not be up to date, cannot try on or test goods, there is no personal contact and may have a slow response.
143 of 342
Benefits of using IT for the business
Cheap to set up aswell as not having to pay for overheads, international.
144 of 342
Limitations of using IT for the business
needs to be updated frequently, may have to hire IT specialists, communication and transport problems for international, the business needs to be prepared to reply to emails quickly.
145 of 342
The buying and selling of goods and services over the internet.
146 of 342
Global marketing using e-commerce advantages
cheaper, same price for consumers to access no matter how far away, quicker orders(this leads to better customer service), cheaper suppliers can be bought, improved cutomer service and customer loyalty.
147 of 342
Global marketing using e-commerce disadvantages
Long distance deliverys can take a long time, may be seen as untrustworthy, limitations on perishable goods, small transactions may not be worth the cost of transport, communication problems (Wrong language).
148 of 342
Economies of scale
The reasons why average costs of each item fall as a firm expands.
149 of 342
Reasons for business growth: Economies of scale benefit
Reduce cost of each item.
150 of 342
Reasons for business growth: Economies of scale risk
It's hard to manage a large business and this could increase the cost of each product produced.
151 of 342
Reasons for business growth: Increase sales benefit
Increased profits.
152 of 342
Reasons for business growth: Increase sales risk
Profits will not increse if the business had to lower its prices too much in order to sell more.
153 of 342
Reasons for business growth: Increase market share
Retailers will be more prepared to stock the products of the business.
154 of 342
Reasons not to expand
Keep control, offer personal service, avoid risk, avoid increase worry and workload.
155 of 342
Organic growth
Expansion from within the business e.g by opening more shop branches.
156 of 342
Opening new branches benefits
Less risky, usually from profits no need for a loan, easier to control.
157 of 342
Opening new branches risks
Slow, market share could fall, no gains from intergrating with another business.
158 of 342
Franchises benefits
Business growth is paid for by franchisee, franchisees are likely to gave a high incentive to expand quickly, the franchisor has fewer staff and fewer management problems.
159 of 342
Franchises Disadvantages
A franchisee may not keep to their legal agreements, most profits are kept by the franchisee, if one frnachise is poor it will effect the businesses brand image.
160 of 342
Inorganic growth
Expansion by merging with or taking over another business.
161 of 342
Purchasing another business from its owners.
162 of 342
Takeover disadvantages
It can be expensive and may require a loan.
163 of 342
An agreement between between businesses and operate as a larger one.
164 of 342
Merger disadvantage
May have problems of managing and controlling a much larger business.
165 of 342
Horizontal intergration
Joining two businesses in the same industry and stage of production.
166 of 342
Horizontal intergration benefits
Increased market share, reducing competition, economies of scale,
167 of 342
Vertical backward integration
Joinging two businesses in the same industry but a different stage of production, towards the suplier.
168 of 342
Vertical backward integration benefits
Offers reliable supploes of materials.
169 of 342
Vertical foward intergration
Joining two businesses in the same industry but a different stage of production, towards the customer.
170 of 342
Vertical foward intergration benefits
Offers a relianle out let for products.
171 of 342
Joining two businesses in different industries.
172 of 342
Diversification benefits
Spreads risks over more than one industry.
173 of 342
Vertical intergration and diversification disadvantage
management may lack experience of the other business, the products they deal with and the markets they sell in.
174 of 342
Conflict between stakeholders
The differnent stakeholders have different goals for the business and therefore defend their intrests.
175 of 342
Someone who is affected by the business decisions.
176 of 342
Positive imapact of growth on owners (stakeholders)
There should be a higher level of sales and profit.
177 of 342
Negative impact of growth on owners
If the owners are the managers as well, there might be more responsibility and stress.
178 of 342
Positive impact of growth on workers (Stakeholders)
There might be more opportunies for promotion and, possibly, greater job security.
179 of 342
Negative impact of growth on workers (Stakeholders)
There may be job losses if jobs are dublicated in a merger or takeover. Shareholders will expect cost cuts.
180 of 342
Positive impact of growth on customers (Stakeholders)
Prices may be lower.
181 of 342
Negative impact of growth on customers (Stakeholders)
May be a rise in price due to the cost of merger or takeover, loss of personal customer service.
182 of 342
Positive impact of growth on suppliers (Stakeholders)
More orders may be recieved from a larger business.
183 of 342
Negative impact of growth on suppliers (Stakeholders)
The business may insist on lower prices for supplies.
184 of 342
Positive impact of growth on banks (Stakeholders)
Lending more finance to the expanding business makes this a more profitable.
185 of 342
Negative impact of growth on banks (Stakeholders)
Increase risks as if the expansion is unsuccessful the business can't repay its debt.
186 of 342
Postive impact of growth on the government (Stakeholders)
Strong and expanding businesses pay more tax.
187 of 342
Negative impact of growth on the government (Stakeholders)
If a monoply is created then the public intrest could be at risk.
188 of 342
Any business with more than 25% market share.
189 of 342
Ways to defend workers' intrests during an expansion
Prevent job losses, use trade unions to negotiate the best possible settlement, negotiate for higher paid, internal recruitment.
190 of 342
Ways to defend customers' intrests during an expansion
Check prices to see if cost saves are being passed on, use consumer groups and their websites to put pressure on a larger firms to offer good value to consumers,
191 of 342
Ways to defend suppliers' intrests during an expansion
Insist on reasonable prices for products and prompt payment.
192 of 342
Ways to defend a banks' intrests during an expansion
Keep a close watch on the firm's bank account, have a senior manager to sit in on the firm's Board of Directors meetings.
193 of 342
Ways to defend the government's intrests during an expansion
The Competition Commission can be asked to investigate and might recommend that a merger or takeover be stopped.
194 of 342
Limited company
A business recognised as a legal unit that offers inverstors (Shareholders) limited liability.
195 of 342
Private limited company (LTD)
A company that cannot sell shares to the general public. It is not listed on the Stock Exchange.
196 of 342
Public limited company (PLC)
A company able to sell shares to the general public by being listed on the Stock Exchange.
197 of 342
Limited liability
Inverstors (Shareholders) in a limited company can only lose their investments in the business if it fails, they cannot be forced to sell assests to pay off the firms debts.
198 of 342
Part owners of a limited comapany -they own shares in it.
199 of 342
Advantages of a LTD
More status, attracts private investors, orginal owners remain as directors so still have some control, limted liability.
200 of 342
Disadvantages of a LTD
Cannot be listed on the Stock Exchange, expansion is limited, shareholders can't be kept up to date, accounts are public.
201 of 342
Advantages of a PLC
Able to raise capitol by selling more shares, high status, shareholders are kept up to date, limited liability.
202 of 342
Disadvantages of a PLC
Loss of control, directors have different aims to shareholders, accounts are public, are at risk of takeovers.
203 of 342
Objective for expanding business: Increasing shareholder value
Share prices rise over time, increasing dividends can be paid out to shareholders.
204 of 342
Objective for expanding business: Managerial objectives
Increase their status, increase salaries, gained publicity.
205 of 342
Payment made to shareholders from company profits- usually made annually.
206 of 342
Divorce between ownership and control
When directors control a public limited company and thousands of shareholders own it, but the two groups may have different onjectives.
207 of 342
Ethical objective
A business aim to 'do do the right thing' accourding to the values and beliefs of managers, even if this not the most profitable way.
208 of 342
Enviromental objective
A business aim to protect the enviroment during its operations.
209 of 342
Social costs
The costs off business activity, including both finacial cost paid by the firm adn the costs on society.
210 of 342
Social Benefits
The benefits of a business activity, not just to the firm but to society.
211 of 342
Benefits of being ethical
Other firms want to work with you, motivated workers, more likely to get government contracts, gain more consumers, good relatonship with suplliers.
212 of 342
Location- cost of site
The costs of buying or renting a premises.
213 of 342
Location- Labour costs
The money spent on staffs wages. This can vary from country to country.
214 of 342
Location- Transport costs
If heavy raw materials are used in production the business will have to pay hight transport costs if the suplliers are long distance.
215 of 342
Location- sales potential
The sales of a business may be effected by the location.
216 of 342
Why is the cheapest location not always the best location?
Increased transport cost back to the 'home country' may outweigh the cost of having more expensive land.
217 of 342
Benefits of lacting abroad
Lower site or land prices, lower labour costs, avoid trade barriers if in the EU, take advantage of fast growing economies and markets,
218 of 342
Increasing trend for goods to be traded internationally and for companies to be located abroad.
219 of 342
Making products or parts of procuts in other countires. Services can be off-shored too, as with telephone call centres moving to India.
220 of 342
A business with operations in more than one country.
221 of 342
Product portfolio/ product mix
The rnage of products sold by a business.
222 of 342
Spreading risks by selling in different markets.
223 of 342
Product lifecycle
The life span of a product, recorded in sales from launch to being taken off the shelves.
224 of 342
Extension strategies
Steps taken to extend the life cycle of the product.
225 of 342
Competetive pricing
Setting a price for a product based in prices charged by competitiors.
226 of 342
Price skimming
Setting a price at a high level to create a high quality and exclusive image, Price is usually dropped after the first adopters.
227 of 342
Penetration price
Setting a price at a low level to gain greater market share and then increasing the price.
228 of 342
Cost plus pricing
Setting a price by adding a profit margin to the toal cost of making the product.
229 of 342
Loss-leader pricing
Setting a price below the cost hoping to gain other profitable shares.
230 of 342
Sales promotion
Activities to attract consumer attention to a product to increase ssale.
231 of 342
A business pays for an activityor event to gain publicity.
232 of 342
Promotional mix
The combination of promotion methods used by a business.
233 of 342
Factors that affect the choice of promotional mix
Cost and affordability, nature of the product, nature of the market and competitors' promotions.
234 of 342
Selling to customers through telephone contact.
235 of 342
Mail orders
Direct marketing through mail shots leading to goods being delivered directly to the customer.
236 of 342
Purpose of financial statements
See whether profit or loss is being made, how much cah is flowing into and out of the business, when suplliers must be paid.
237 of 342
Profit and loss account
This shows whether the business made a profit or loss over the last period (usually a year) It is also known as the income statement.
238 of 342
Costs of sales
The cost to the business of the goods sold.
239 of 342
Expenses of the business that are not directly part of the production process.
240 of 342
Gross profit
The difference between sales revenue and costs of making the products solds.
241 of 342
Gross profit formula
Gross profit= sales revenue-costs of sales
242 of 342
Net profit
The difference between sales revenue and total costs.
243 of 342
Formula of net profit
Net profit= gross profit-overheads
244 of 342
Gross profit margin
The percentage of sales revenue that is gross profit.
245 of 342
Gross profit margin formula
Gross profit margin%= (Gross profit / sales revenue) x100
246 of 342
Net profit margin
Th percentage of sales revenue that is net proft.
247 of 342
Net profit margin formula
Net profit margin%= (Net profit/sales)x100
248 of 342
Net profit
The difference between sales revenue and total costs of the business.,
249 of 342
Net profit formula
Net profit= gross profit-overheads
250 of 342
How can you increase gross profits?
increasing sales, reducing costs, reduced labour.
251 of 342
How can you increase net profit?
reduce costs, reduce overheads.
252 of 342
Balance sheet
This lists the value of a company's assest and liabilities.
253 of 342
Items of value owned by a business.
254 of 342
Fixed assests
Items owned by thge business with a lifespan of more than one year. E.g buildings, equipment and machinery.
255 of 342
Current assest
These are assets owned by the business that are either in a cash form or are likely to be turned into cash within one year. E.g stock, debtors, cash.
256 of 342
Net current assets
If the business has short term debts greater than current assets it may have difficulty paying these debts.
257 of 342
Total assets less current liabilities
This is the total number of assets owned by the company minus its short term debts.
258 of 342
Net assets
Value of assets after liabilities have been subtracted.
259 of 342
Capital and reserves
Share issued: value of shares bought by shareholders, Retained profit: profit kept by the business after tax and dividend have been paid.
260 of 342
Debts owned by a business.
261 of 342
Current liabilities
Short term debts of the business- they will have to be repaid within one year. E.g creditors or overdraft.
262 of 342
The value of products supplied by other businesses that have not been paid for yet.
263 of 342
The value of goods sold to customers that have not been paid yet.
264 of 342
May include raw materials, components and finished goods.
265 of 342
How easy it is for a business to pay its short-term debts.
266 of 342
Current ratio formula
Current assests/current liabilites
267 of 342
Acid test ratio formula
(Debtors + cash)/current liabilities
268 of 342
What does the current ratio show?
The company provides information on its ability to meet its short-term debts by publishing its current ratio. This assesses how many times it could afford to pay its current liabilities out of its current assets.
269 of 342
What does the acid test ration show?
This deducts the value of currently held stock to find the company's ability to meet its liabilities immediately. Stock is the least liquid current asset so it is deducted to give a more realistic view of the company's liquidity.
270 of 342
Organisational structure
The internal links between managers and workers showing lines of authority.
271 of 342
Layers of management
The number of differenct levels of management and responsibility in a structure.
272 of 342
Span of control
The number of junior employees each manager is directly responsible for.
273 of 342
Narrow span of control
Tall organisations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change.
274 of 342
Advatages of a tall organsational structure and narrow span of control
Easier to control fewer staff, less risk of workers making the wrong decision, lower training costs, controlled staff.
275 of 342
Flat organisational structure
Flat organisations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change.
276 of 342
Wide span of control
A wide span of control means that tasks must be delegated and managers can feel overstretched.
277 of 342
Advantages of flat structure and wide span of control
Quicker communitcation, more responsibility given is to each manager, training of workers could motivate them, workers are more involved.
278 of 342
Senior managers take all important decisions.
279 of 342
Advantages of centralisation
Senior managers have full control, quick decisions, decisions benefit the whole business.
280 of 342
Decision-making power is spread to managers in branches and devsions of the business.
281 of 342
Advantages of decentralisation
Motivates junior staff, the local managers have a better knowledge of the local area, junior managers gain experience.
282 of 342
To remove a layer of management in a hierarchy while expecting staff to produce the same level of output.
283 of 342
Attracting people to apply for a job vacancy.
284 of 342
Job analysis
Identifying the tasks and skills needed to perform a job well.
285 of 342
Job description
A detailed statement of the nature of the job and tasks involved.
286 of 342
Person specification
A profile of the type of person likely to make a good applicant.
287 of 342
Application form and personal details
These will be used to decide who to call for the next selective stage.
288 of 342
This allows managers to see, in person, how the person is likely to fit into the business and how they respond to some challenging questions.
289 of 342
Many firms now use some form of testing during the selcetion process. This can include apptitude and personality tests. this gives them a more accurate view than the personal impressions.
290 of 342
Induction training
Intial training to familiarise new recruits with the systems of the business.
291 of 342
On-the-job training
Takes place when employees recieve training as they are working at their place of work.
292 of 342
Off-the-job training
Takes place from the job at another place.
293 of 342
Staff appraisal
Assessing how effctively an employee is working.
294 of 342
Staff appraisal advatages
Provide feedback, staff know how to improve, increase motivation, set objectives, identifies needs, provides basis for wage increase.
295 of 342
Superior appraisals
The worker's senior manager assesses performance based on their knowledge of the recent work done.
296 of 342
Individuals carry out an assessment of their own work and progress, which can then be checked and agreed with a superior.
297 of 342
Peer appraisals
Carried out by work colleagues at the same level within the organisations.
298 of 342
Staff turnover
The amount of employees that go in and out of the busienss.
299 of 342
Autocratic management
Managers who believe in taking all decisions and just passing instructions to workers.
300 of 342
Democratic mangement
Manages who involve workers and less senior managers in decision-making.
301 of 342
Retaining staff
Keeping exsisting staff in the business, which cuts down the cost of recruitment, selection and training.
302 of 342
the will to work due to the enjoyment of the work itsef.
303 of 342
Piece rate
A fixed amount for producing each unit of work.
304 of 342
Piece rate advantage
Should lead to higher output if workers are only motivated by the chance of earning more money.
305 of 342
Piece rate disadvantage
May lead to poor quality,
306 of 342
Hourly wage
Paid based on the amount of hours they work.
307 of 342
Hourly wage advantage
Workers can calculate how much they should recieve each day or week,
308 of 342
Hourly wage disadvantage
Doesn't profide any direct incentive to increase output or effort.
309 of 342
Fixed annual sum, paid monthly.
310 of 342
Salary advantage
Provides pay security.
311 of 342
Salary disadvantage
No direct links between daily effort and pay.
312 of 342
Profit sharing
A share of annual profits given as a bonus in additional basic pay.
313 of 342
Profit sharing advantage
Makes workers responsble towards the company and keen to help it increase profits.
314 of 342
Profit sharing disadvantge
There might be some lack of pay security, such as during a recession where the business may make a loss.
315 of 342
Staff are paid for the number of items they sell.
316 of 342
Flow production
Large scale production where ach stage of production is carried out one after the other, continuously, on a production line.
317 of 342
Advantages of flow production
Low unit costs due to high output and efffciency, when computers are used the quality is high consisdatly, lower stock holding costs.
318 of 342
Disadvantages of flow production
High set up costs, if there is a problem it is costly to fix and the whole production has to stop, low motivated workers, basic standard product can't be changed.
319 of 342
Work is divided into seperate tasks or jobs that allow workers to become skill at one of them.
320 of 342
Division of labour
Breaking a job down into small, reptitive tasks thatcan be done quickly by workers or machines specialised in this one task.
321 of 342
Lean production
A production approach that aims to use fewer resources by using them more efficently.
322 of 342
Continuous improvements
323 of 342
Just in time producton
Ordering supllies so that when they are needed and making goods only when ordered by customers.
324 of 342
Just in time production advantages
Cuts stock holding costs, increases effeicient use of factory space, capital that was used for stock can be spent on other things, impoves cash flow efficiency of the cash flow, close contract with suppliers.
325 of 342
Just in time productuon disadvantages
customers have to wait longer of their products, costs of ordering supplies are hight, requires very reliable suppliers and transport.
326 of 342
Lean design
Producing new designs as quickly as possible.
327 of 342
Cell production
Cell production has the flow production line split into a number of self-contained units. Each team or ‘cell’ is responsible for a significant part of the finished article and, rather than each person only carrying out only one very specific task.
328 of 342
Disconomies of scale
The reasons why production costs of each item rises as a firm expands.
329 of 342
Economies of scale Bulk-buying
Delivering one very large order will be cheaper than delivering many smaller orders.
330 of 342
Economies of scale Tecnical economies
Larger factories and pieces of equipment are more efficent than smaller ones.
331 of 342
Economies of scale Specialist managers
A larger business can afford to buy specialist managers who can increse efficiency.
332 of 342
Economies of scale Finacial economies
Large firms have a larger security so are more likely to be given loans.
333 of 342
Disconomies of scale Poor communication
Sending and recieving messages become less efficent.
334 of 342
Disconomies of scale poor motivation
Workers may feel less uninvolved.
335 of 342
Disconomies of scale poor coordination
Having many locations it can make, making decsions difficult.
336 of 342
Quality product
Goods or service that meets customers' expectations and is therefore 'fit for purpose'
337 of 342
Using the businesses to make all or part of a product or provide or provide an aspect of the customer care.
338 of 342
Quality standards
The expectations of cusomers expressed in terms of the minimum acceptable production or services standards.
339 of 342
Quality assurance
Setting and trying to meet quality standards throughout the business.
340 of 342
Total quality management (TQM)
An approah to quality that aims to involve all employees in the quality improvement process.
341 of 342
What causes poor quality?
Poorly motivated by workers, no clearly responsibility for quality, lack of consistancy, outsourcing, inspection costs.
342 of 342

Other cards in this set

Card 2





Card 3


(Field research) involves gathering new data that has not been collected before. For example, surveys using questionnaires or interviews with groups of people in a focus group.


Preview of the back of card 3

Card 4


Accurate, up to date, specific, individual results, can be quick if online.


Preview of the back of card 4

Card 5


May take along time, expensive, may create misleading results.


Preview of the back of card 5
View more cards


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all All resources »