BUSINESS FOUNDATIONS - 1A

Question 1

define sole trader

Answer 1

business with one person who owns and runs the business. owner is legally responsible for all aspects of the business including unlimited liability

Question 2

advantage/disadvantage of sole trader

Answer 2

complete control, unlimited liability

Question 3

define partnership

Answer 3

business with 2-20 owners. general is where all partners are equally responsible, limited is where liability for one or more partners is limited

Question 4

define company

Answer 4

owners within the business are called shareholders who have limited liability meaning their legal liability is limited to the extent of value of their shareholdings

Question 5

define private limited company

Answer 5

restricted to 50 shareholders with shares sold privately, not open to public trade

Question 6

advantage/disadvantage of partnership

Answer 6

inexpensive to set up, unlimited liability

Question 7

advantage/disadvantage of private company

Answer 7

limited liability, reporting requirements

Question 8

define public listed company

Answer 8

company has shareholders who own and directors who run it. listed on ASX for public to trade shares

Question 9

advantage/disadvantage of public company

Answer 9

limited liability, large expense to set up

Question 10

define social enterprise

Answer 10

business exists primarily to fulfil a vision that benefits the public rather than for profits, there to make a positive social impact on the community

Question 11

advantage/disadvantage of social enterprise

Answer 11

good reputation, can be hard to raise money

Question 12

define government business enterprise

Answer 12

organisation that undertakes a commercial activity ob behalf of the government, however are still run by an owner

Question 13

advantage/disadvantage of gbe

Answer 13

shared workload, may not gain as much profit

Question 14

define businesses

Answer 14

lawful commercial activities to earn a profit. is an entity involved in the provision of goods and services to customers

Question 15

define business objectives

Answer 15

business objectives are the goals or the direction that the business aims to achieve within a certain period of time. an example of this is the objective to increase market share

Question 16

what are the 4 shareholder expectations

Answer 16

to make a profit
to increase market share
to fulfil a market or social need
to meet shareholder expectations

Question 17

define to make a profit

Answer 17

the idea of making enough sales to exceed expenses, generating a profit through the sales of goods and services

Question 18

define to increase market share

Answer 18

market share is the proportion of the market controlled or owned by a particular business or product, in which businesses compete against each other to gain the most

Question 19

define to fulfil a market or social need

Answer 19

if enough people have a want or need, it creates a gap in the market which businesses can try to satisfy and fulfil the market or social need

Question 20

define to meet shareholder expectations

Answer 20

shareholders are the people who own the business which have an expectation to make a return on their investment, which is businesses fulfil, it means other people will be attracted to buy shares

Question 21

list the 8 stakeholders

Answer 21

managers
employees
community
government
suppliers
competitors
shareholders
customers

Question 22

define managers

Answer 22

responsible for different functions of the business, making decisions and giving directions helping to achieve objectives

Question 23

interests of managers

Answer 23

involved in setting objectives and ensuring the business is achieving them

Question 24

CSR consideration of managers

Answer 24

managers need to make decisions considering CSR and achieving long term goals

Question 25

define shareholders

Answer 25

those that own part of the company and expect some sort of return on their investment

Question 26

interests of shareholders

Answer 26

strive for a return on investments through capital gains and improved profits

Question 27

CSR of shareholders

Answer 27

managers being transparent with shareholders about future of the business

Question 28

define employees

Answer 28

those that work for the business, dedicating their time and efforts in exchange for money

Question 29

interests of employees

Answer 29

fair pay, safe working conditions and ongoing employment

Question 30

CSR of employees

Answer 30

ongoing training, extra pay / rates

Question 31

define customers

Answer 31

purchases goods or services for the business

Question 32

interests of customers

Answer 32

expect good quality at a fair price

Question 33

CSR of customers

Answer 33

sourcing from ethical suppliers

Question 34

define suppliers

Answer 34

those that provide a business with materials and other resources so they can produce products

Question 35

interests of suppliers

Answer 35

expect strong relationships and to be paid on time

Question 36

CSR of suppliers

Answer 36

local and ethical suppliers

Question 37

define competitors

Answer 37

rival businesses that sell similar products in the same market, creating possible combative advantage against the other

Question 38

interests of competitors

Answer 38

expect fair and healthy competition

Question 39

CSR of competitors

Answer 39

fair competition and not going out of their way to ruin another business

Question 40

define government

Answer 40

group of people with the authority to govern a particular area in which businesses need to adhere to

Question 41

interests of government

Answer 41

expect to help the economy and community by providing local employment and paying taxes

Question 42

CSR of government

Answer 42

using local employees

Question 43

define community

Answer 43

businesses have a responsibility to the community they operate in

Question 44

interests of community

Answer 44

expect businesses to give back to community and providing employment for locals

Question 45

CSR of community

Answer 45

ethical waste disposal, minimising environmental impact

Question 46

define CSR

Answer 46

commitment displayed by a business to consider ethical, environmental and community based mannerisms. involves the business's ability to go beyond legal requirements within social, environmental and economical aspects

Question 47

potential conflicts between employees and shareholders

Answer 47

employees require safe working conditions and reasonable wages, which would decrease profit and dividends to shareholders

Question 48

potential conflicts between management and customers

Answer 48

management attempts to make a profit and high prices to satisfy shareholders needs whereas customers want low prices

Question 49

potential conflicts between management and suppliers

Answer 49

management wishes to keep costs low but suppliers providing ethical materials will charge more

Question 50

define operations

Answer 50

responsible for production of the businesses product with managers ensuring they are produced correctly

Question 51

what does operations involve

Answer 51

planning activities | purchasing inputs

Question 52

operations relation to BO

Answer 52

allows the business to produce a good product which will increase sales, increasing product

Question 53

define finance

Answer 53

responsible for managing the financial aspects of the business

Question 54

what does finance involve

Answer 54

developing financial policies | raising finance

Question 55

finance relation to BO

Answer 55

important that a business is able to manage its finances well so that profit can be increased

Question 56

define human resources

Answer 56

responsible for coordinating all activities involved from acquiring to terminating employees and managing performance

Question 57

what does human resources involve

Answer 57

establishment, maintenance and termination of employees

Question 58

human resources relation to BO

Answer 58

employees need to have a good understanding of business and products to be able to efficiently sell the product

Question 59

define sales and marketing

Answer 59

responsible for marketing mix, promoting the business and selling to potential customers

Question 60

what does sales and marketing involve

Answer 60

promoting the business | selling products

Question 61

sales and marketing relation to BO

Answer 61

important for increasing market share, profit and sales

Question 62

define technology support

Answer 62

responsible for installing and maintaining technology, as well as providing assistance to employees

Question 63

what does technology involve

Answer 63

installing software | laptops, PC's, mobile phones

Question 64

technology relation to BO

Answer 64

important for business objectives because you need to be up to date with technology including having an online store to increase sales