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Business Studies EDEXCEL IGSCE > Business Activity and influences on businesses :Unit 2 -5 > Flashcards

Business Activity and influences on businesses :Unit 2 -5 Flashcards

1
Q
  1. What are objectives for a business?
A
  • goals or targets set by a business.
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2
Q
  1. Who are executives?
A
  • managers in an organization who help make important decisions.
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3
Q
  1. What do you mean by diversify?
A

Diversify is when a business, company, or country diversifies, it increases the range of goods and services it produces.

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4
Q
  1. What are the 4 reasons businesses need to have objectives?
A
  • Employees need something to work towards.
  • Owners might need motivation to keep the business going
  • Objectives help decide where to take a business.
  • It is easier to assess the performance of a business if objectives are set.
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5
Q
  1. What are the 2 types of business objectives?
A
  • Financial objectives.
  • Non- financial objectives.
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6
Q
  1. What are the 5 financial objectives?
A
  • Survival
  • Profit
  • Sales
  • Increase market share
  • Financial security
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7
Q

6.5 What is profit maximization?
profit satisficing?

A
  • Profit maximization is making as much profit as possible in a given time period.
  • Profit satisficing is making enough profit to satisfy the needs of the business owners.
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8
Q
  1. What are the 4 non-financial objectives?
A
  • Social objectives
  • Personal satisfaction
  • Challenge
    -Independence and control
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9
Q
  1. Name the 5 reasons objectives change as businesses evolve.
A

-Market conditions
- Technology
- Performance
- Legislation
- Internal reasons

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10
Q
  1. What is are dividends?
A
  • Share of profit paid to shareholders in a company.
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11
Q
  1. What are a large business?
    - Small businesses?
A
  • A large business is a business that employs more than 250 people.
    A small business is a business that employs fewer than 50 people
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12
Q
  1. Who is an innovator?
A
  • Someone who introduces changes and new ideas.
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13
Q
  1. What is labor?
A
  • People employed in a business/ used in production.
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14
Q
  1. What is unincorporated business?
A

_ business where there is no legal difference between the owner and the business.

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15
Q
  1. What is incorporated business?
A
  • Incorporated business that has a separate legal identity from that of it owners.
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16
Q
  1. Who is sole trader?
A
  • Is a business owned by a single person.
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17
Q
  1. What is unlimited liability? limited liability?
A

Unlimited liability- is when the owner of a business is personally liable for all the business debts
Limited liability - is when a business owner is only liable for the original amount of money invested in the business

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18
Q
  1. What are the 6 advantages of a sole trader?
A
  • The owner keeps all the profit
    -They are independent - the owner has complete control.
  • It is simple to set up with no legal requirements.
  • Flexibility - for example can adapt to change quickly.
    -Can offer a personal service because they are small.
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19
Q
  1. What are the 6 disadvantages of a sole trader?
A
  • Have unlimited liability
  • May struggle to raise finance.
  • Independence may be too much of a responsibility.
  • Long hours and very hard work.
  • Usually too small to exploit economies of scale.
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20
Q
  1. What is partnership?
A
  • Partnership is a business owned by between 2 - 20 people
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21
Q
  1. What is a deed of partnership?
A
  • binding legal document that states the formal rights of partners.
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22
Q
  1. What are the 5 advantages of partnership?
A
  • Easy to set up and run - no legal formalities
  • Partners can specialize in their area of expertise.
  • The job of running a business is shared.
  • More capital can be raised with more owners.
  • Financial information is not published.
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23
Q
  1. What are the 5 disadvantages of partnership?
A
  • Partners have unlimited liability.
  • Profit has to be shared.
  • Partners may disagree and fall out.
  • Any partners’ decision is legally binding on all.
  • Partnerships still tend to be small.
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24
Q
  1. What is a limited partnership?
A
  • Limited partnership is a partnership where partners contribute capital and enjoy a share of the profit but do not take part in the running of the business.
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25
Q
  1. What are audits?
A

official examination of a company’s financial records in order to check they are correct.

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26
Q
  1. What is franchise?
A
  • Structure in which a business(the franchisor) allows another operator (the franchisee) to trade under their name.
27
Q
  1. What is merchandise?
A
  • Goods that are being sold.
28
Q
  1. What are the 4 advantages to franchisee of a franchise?
A
  • Less risk - tried and tested idea
  • Back up support is given
  • Set up costs are predictable
  • National marketing may be organized.
29
Q
  1. What are the 4 disadvantages to franchisee of a franchise?
A
  • Profit is shared with the franchisor.
  • Strict contracts have to be signed.
  • Lack of independence - strict operating rules apply.
  • Can be an expensive way to start a business.
30
Q
  1. What are the 4 advantages to franchisor of a franchise?
A
  • Fast method of growth.
  • Cheaper method of growth.
  • Franchisees take some of the risk
  • Franchisees more motivated than employees.
31
Q
  1. What are the 4 disadvantages to franchisors of a franchise?
A
  • Potential profit is shared with franchisee.
  • Poor franchisees may damage brand’s reputation.
  • Franchisees may get merchandise from elsewhere.
  • cost of support for franchisees may be high.
32
Q
  1. What is social enterprise?
A

Social enterprise is a business that aims to improve human or environmental well- being, charities for example.

33
Q
  1. What are the 5 types of social enterprises?
A
  • cooperatives
  • consumer cooperative
  • retail cooperative
  • worker cooperative
  • charities
34
Q
  1. What is a cooperative?
A

A company or organization in which all the people working there own an equal share of it.

35
Q
  1. What is a consumer cooperative?
A
  • a cooperative that is owned by its customers.
36
Q
  1. What is a retail cooperative?
A
  • cooperative of retail members, who often work together to assert their purchasing power.
37
Q
  1. What is worker cooperative?
A
  • a cooperative that is owned by its employees.
38
Q
  1. What are charities?
A
  • organizations that give money, goods, or help to people who are sick or in need.
39
Q
  1. What is a limited company?
    What are the two type of limited liability?
A
  • Limited company is a business organization that have a separate legal identity from that of their owners
40
Q
  1. Who is entrepreneur?
A

Entrepreneur is an individual who has the ability to combine land, labour and capital
to turn a business idea into reality

41
Q
  1. What is the certificate of incorporation?
A
  • document needed before a new company can start doing business.
42
Q
  1. What is a memorandum of association?
A

-it sets out the constitution and gives details about the company.

43
Q
  1. What is a private limited company?
A

A small to medium-sized firm that is usually family-owned which has limited liability but cannot issue shares to the public (Stock market).

44
Q
  1. What are stock market?
A

market for shares in PLCS.

45
Q
  1. What are the 4 features of private limited companies?
A
  • name ends in Limited or Ltd.
  • Shares can only be transferred “privately”.
  • they are often family businesses owned.
  • The directors of these firms tend to be shareholders and are involved in the running of the business.
46
Q
  1. What are the 5 advantages of private limited companies?
A
  • Shares have limited liability.
  • More capital can be raised.
  • control cannot be lost to outsiders.
  • Business continues if a shareholder dies.
  • Has more status.
47
Q
  1. What are the 5 disadvantages of private limited companies?
A
  • Financial information has to be made public.
  • costs money and takes time to set up.
  • Profits are shared between more members.
  • Takes time to transfer shares to the new owner.
  • Cannot raise huge amounts of money like PLCs.
48
Q
  1. What is a public limited company
A
  • a limited company whose shares are freely sold and traded.
49
Q
  1. What are the 6 advantages of public limited company?
A
  • Large amounts of capital can be raised.
  • Shareholders have limited liability.
  • PLCs can exploit economies of scale.
  • May be able to dominate the market.
  • Shares can be bought and sold very easily.
  • May have a very high profile in the media.
50
Q
  1. What are the 6 disadvantages of public limited company?
A
  • setting up costs can be very expensive.
  • outsiders can take control by buying shares.
  • More financial information has to be made public.
  • Maybe more remote from customers.
  • More regulatory control owing to Company Acts.
  • managers may take control rather than owners.
51
Q
  1. What is a multinational company?
A
  • large business with significant production or service operation in at least two different countries.
52
Q
  1. What are the 6 key features of a multinational?
A
53
Q
  1. What is a public corporation?
A
  • business organizations owned and controlled by the state/ government.
54
Q
  1. What are the 6 features of a public corporation?
A
  • State-owned.
  • Created by law.
  • Incorporation.
  • state-funded.
  • Provide public services.
  • Public accountability.
55
Q
  1. What is portfolio?
A
  • collection of business interests or products.
56
Q
  1. What is infrastructure?
A

infrastructures are basic systems and structures that a country/organization needs in order to work properly.

57
Q
  1. What are the 5 reasons for public ownership of businesses?
A
  • Avoid wasteful duplication.
  • Maintain control of strategic industries.
  • Save jobs.
  • fill the gaps left by the private sector.
  • Serve unprofitable regions.
58
Q
  1. What is natural monopoly?
A
  • market where it is more efficient to have just one organization meeting the total market demand.
59
Q
  1. What are the 4 reasons against public ownership of business?
A
  • Cost to government.
  • Inefficiency.
  • Political interference.
  • Difficult to control.
60
Q
  1. What is subsidize?
A
  • paying part of the costs (often by the government in business)
61
Q
  1. What is privatization?
A

privatization of public sector resources to private sector(business)

62
Q
  1. What are the 4 ways of privatization?
A
  • Sale of public corporations.
  • Deregulation.
  • Contracting out.
  • The sale of land and property,
63
Q
  1. Why does privatization take place? (4)
A
  • To generate income.
  • To reduce inefficiencies in the public sector.
  • As a result of deregulation.
  • To reduce political interference.

Business Studies EDEXCEL IGSCE (13 decks)

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