BUSINESS Flashcards
STUDY (55 cards)
what is a sole trader
a business that is owned and run by one person.
-> simple and inexpensive
-> unlimited liability (personally responsible for all business debts)
partnership
Partnership: a business that is owned by 2-20 people
-> inexpensive, shared workload and responsibility
-> unlimited liability
private limited company
business that is owned by private shareholders which aren’t available to the public.
Minimum of one shareholder, and maximum of 50. At least one director
-> limited liability (when shareholders will not be held personally responsible for business debts)
-> higher establishment costs
public listed company
an incorporated business with a minimum of one shareholder, no max, and whose shares are openly traded on Australian Securities Exchange.
-> limited liability, easier to raise money through selling extra shares
-> highly complex and time consuming
social enterprise
a business that exists with the objective of fulfilling a social need.
-> encourages community support
-> difficult to obtain finance to begin business
example of a social enterprise
The Big Issue Magazine
-> works to alleviate poverty
-> employs homeless and disadvantaged people
-> they sell the magazine on the street.
government business enterprise
business that is government owned and operated. Objective is to make a profit.
-> relies on government for investment
-> management of GBE may be less effective
profit?
profit is what is left after all the business expenses have been deducted
market share?
expenses have been deducted
Market Share: proportion
efficiency?
how well a business uses resources to achieve objectives
effectiveness?
the degree to which a business has achieved its stated objectives
fulfil market need?
business may exist to meet customer expectations that isn’t available in market.
fulfil social need?
selling goods/services with purpose of making the world a better place.
meet shareholder expectations
shareholders expects to make a return on their investment. If part of the profit is returned to shareholder, the value of company’s shares increase.
stakeholders?
individuals/groups with an interest in a business’s activities
e.g: owners, managers, employees, customers, suppliers, community
owners
sole traders, partners, shareholders. Directly involved in business decisions.
managers
Responsible for running profitable business
employees
vital for production of goods/services
customers
expect quality products at reasonable prices
suppliers
Provide resources for production. Need good relationships for timely delivery of quality resources & prompt payment
general community
Businesses expected to be good corporate citizens and to give back to society, whilst adopting sustainable policies
example of conflict 1
management vs customers
Management may want to increase profit, so they’ll increases prices. This will upset customers as they expect high quality products for reasonable prices.
example of conflict 2
suppliers vs community
suppliers may use unethical practices to reduce costs, upsetting the community.
CSR
Going beyond legal requirements to improve the community, environment and workplace.
-> builds trust and loyalty, supports long term business sustainability
