1.5

Question 1

What is an intrapreneur

Answer 1

The name given to the encouragement of entrepreneurial behaviour within larger business

Question 2

Define business objectives

Answer 2

Shorte term goals of a business used to eventually achieve the aims. Objectives should be smart “SMART”

Question 3

What does SMART stand for

Answer 3

Specific
Measurable
Achievable
Realistic
Time-bound

Question 4

Explain survival objective

Answer 4

Focus of on generating sufficient cash to sustain the business
TP= When starting up, or when a challenging external environment threatens the future of the business, such as a recession or the arrival of a new powerful competitor

Question 5

Explain profit maximisation +TC

Answer 5

Earning the most profit possible in a given time period
TC= A common objective of a business- reflecting the need to generate a profit for owners as a primary purpose of a business

Question 6

Explain sales maximisation +TC

Answer 6

Growing the number of customers, without a major focus n controlling costs
TC= In a rapidly growing market, firms may try to maximise their share of the market, with an expectation of generating profits once market growth has slowed + competition reduces

Question 7

Define market share +TC

Answer 7

Increasing market share to a dominant level helps to ensure long-term success through greater distribution + preventing new entrants from challenging in the market
TC= Market leaders will often see to increase their lead and thus power by increasing market share

Question 8

Define cost efficiency + TC

Answer 8

A focus on seeking to minimise the costs of producing a product or service + the running costs of the business.
TC+ This objective is key for firms who are trying to follow an aim to undercut their rivals on price. If they can keep their costs low, they should still be able to make a profit even with a low price

Question 9

Define employee welfare +TC

Answer 9

Looking after staff by treating them well and looking to develop them using training and external recruitment
TC+ Where people play a key role in gaining a competitive advantage whether that be through customer service or through innovation

Question 10

Define customer satisfaction +TC

Answer 10

Prioritising the need to ensure that every customer has a positive interaction with the business
TC= Crucial when attracting new customers is costly and losing existing customers is very expensive such as when providing a regular service such as mobile phones networks or banking

Question 11

Define social objectives + TC

Answer 11

Objectives that relate to the beneficial role a business can play within society
TC= Some businesses see improving society as a key purpose and will therefore set a social objectives in a meaningful way. Social enterprises will have social objectives as a top priority

Question 12

Sole trader def + 3adv 2 dis

Answer 12

A person who starts and runs a business without turning it into a company. The owner is liable for any business debts thus if the business goes bust, the owner has to use personal assets to repay those to whom the business owes money.
Adv -
Owner has full control of decisions
Owner keeps all profits that are made
Minimal paperwork needed to start up
Dis-
Owner has unlimited liability
Hard to finance

Question 13

Partnership def 3adv+2dis

Answer 13

A sole trader where several owners are allowed. Helps to raise finance as each partner can bring capital into the business. In addition burden of responsibility can be shared between the partners of whom may have various skills and experience. Partners, like sole traders have unlimited liability for debts incurred in running the business
Adv-
More owners can allow more finance to be raised
Partners may bring various skills and experience
Shared burden of responsibility among partners
Dis-
Partners have unlimited liability
Potential for disagreement among partners

Question 14

Private limited company (LTD) def 3 adv + 3dis

Answer 14

Businesses with limited liability where finance can be raised by privately selling shares
Adv-
Ability to raise finance through selling shares
Limited liability
Shareholders must be invited so are likely to be supportive
Dis-
More complex accounting and reporting requirments
High set up costs (legal and administrative)
Profits only shared with shareholders so may be difficult to motivate and control workers

Question 15

Public limited company (PLC) def 3 adv 3dis

Answer 15

A company able to offer its shares to the public
Adv-
Better access to capital
Offering shares to public spreads risk of company ownership
Growth+Expansion opportunities as a result of business being able to raise finance
Dis-
Have to publish their details to the public domain
Hard to control who is a shareholder could lead to owners losing control
Vulnerable to hostile takeovers

Question 16

Explain the meaning of stock market flotation

Answer 16

The process of converting a private limited company into a public limited company by issuing shares available for the public to purchase

Question 17

Define franchises

Answer 17

A license to use another businesses name and business model in return for payment

Question 18

Difference between franchisee and franchisor

Answer 18

Franchisee is an entrepreneur or company that buys a license to use another businesses name +business model whilsts a franchisor is a business that sells the right to use its name, logo and business model to other businesses or entrepreneurs.

Question 19

3 adv and 3 dis of being a franchisor

Answer 19

regular flow of income from franchisees
Risk shared with franchises
Rapid growth of franchise is possible
dis-
Reputation may be adversely affected by franchisees
Can be expensive to monitor franchisees
Profit from franchisor is shared with franchisees

Question 20

3 adv and 3 dis of being a franchisee

Answer 20

Adv-
Has access to free training and marketing
Part of an established business with loyal customers
Potentially lower risk than starting up a new business
Dis-
Must pay a % of profits to the franchisor (known as royalties)
Can be expensive to set up
Cannot make individual decisions without consulting franchisor

Question 21

What is a social enterprise

Answer 21

A business that reinvests its profits in projects that benefit society and the environment

Question 22

Define thee social enterprises: Co-operatives, worker co-operatives, mutual organisations, charities

Answer 22

Co-operatives are businesses owned by “member -owners” they are democratically controlled by their member-owners and each member gets a voice in how the business is run
Worker co-operatives are co-operatives owned and self-managed by its workers
Mutual organisations are private firms owned by its customers or policy holders. As such, they are entitled to receive a share of the profits generated by the mutual company.
Charities are businesses with mainly social or environmental objectives. Profits from business are principally reinvested for social objectives, rather than being used to maximise owner or shareholder value.

Question 23

What is meant by opportunity cost

Answer 23

The value of the next best option foregone when a business decision is made.

Question 24

What is meant by business choices

Answer 24

Any decision that affect a business operations, goals and future activities.

Question 25

What’s made by trade-offs?

Answer 25

The consequence/compromise of a choice made. More of one thing= less of another
Less market research= less successful new product launch

Question 26

Roles of an entrepreneur

Answer 26

Creating and setting up a business
b) Running and expanding/developing a business
c) Innovation within a business (intrapreneurship)
d) Barriers to entrepreneurship
e) Anticipating risk and uncertainty in the business
environment

Question 27

Barriers of entrepreneurship

Answer 27

Access to finance
Lack of entrepreneurial capacity
risk of failure
Lack of training / know how

Question 28

Reasons to entrepreneurs start a business

Answer 28

financial motives: profit maximisation and profit
satisficing
o non-financial motives: ethical stance, social
entrepreneurship, independence and home working

Question 29

4 difficulties faced by entrepreneurs in transitioning into a leader

Answer 29

Need to delegate tasks- can be difficult as used to having control of all business

Learning to listen to staff who may bring innovative ideas

Developing emotional intelligence
Need to understand how to understand and manage their and their staffs emotions

Being less reactive
Entrepreneurs usually very reactive, making quick decisions
As a leader, they must take a more strategic and measured approach to decision making