Business Organisations & Their Stakeholders Flashcards Preview

ACCA: F1: A: The Business Organisation, Stakeholders and the External Environment > Business Organisations & Their Stakeholders > Flashcards

Flashcards in Business Organisations & Their Stakeholders Deck (37)
Loading flashcards...
1

An important difference between Profit and Non-Profit orientation is...

Profit orientated = profit maximisation (Driving factor)
Non-Profit = Provision of a good / service

2

The difference between ownership of Private and Public sector organisations is: Public organisations are...

...owned / run by central or local government or government agencies

3

Ownership vs control in individuals: (3)

1. Shareholders: Owners; Ltd rights over day to day running
2. Directors: Run the company; Accountable to shareholders;
3. Operational Management: Accountable to the board

4

Executive vs Non-Executive Directors

Executive: Daily operations
Non-Executive: Advisory capacity; Particular skills / experience; Some overall guidance

5

Types of Limited company: (2)

1. Private limited companies
2. Public limited companies

6

Private and Public Limited companies differ by: (4)

1. Number of shareholders
2. Transferability of shares
3. Directors as shareholders
4. Source of capital

7

Sources of capital in Private vs Public Limited companies:

Private:
1. Founder / promoter
2. Business associates
3. Venture capitalists

Public: Additionally:
1. Public
2. Institutional investors (recognised markets)

8

Advantages of limited companies: (6)

1. More money
2. Reduced risk
3. Separate legal personality
4. Ownership separate from control (investors need not get involved)
5. Unrestricted size
6. Flexibility (capital + enterprise)

9

Disadvantages of limited companies: (2)

1. Legal compliance costs (audited financials)
2. Shareholders - little practical power

10

Key characteristics of the public sector: (4)

1. Accountability (to parliament)
2. Funding (3 ways...)
3. Demand for services (limitless!)
4. Limited resources

11

The public sector can obtain funds in 3 main ways: (3)

1. Raising taxes
2. Making charges (prescriptions)
3. Borrowing

12

Advantages of the public sector include: (6)

1. Fairness (access to health)
2. Gaps in Private Sector (Street lights)
3. Public interest
4. Economies of scale
5. Cheaper finance
6. Efficiency (Lower costs; serve more people)

13

Disadvantages of the public sector include: (3)

1. Accountability (ignore inefficiency)
2. Interference (pressures to get elected)
3. Cost (Perfect service without the cost!)

14

The definition of an organisation is... (4)

1. Social arrangement
2. Collective goals
3. Self-control of performance
4. Environmental boundary

15

Common characteristics of organisations are... (5)

1. Preoccupied with performance (meeting / improving standards)
2. Formal, documented systems & procedures
3. People: Different tasks / specialise
4. Pursue various objectives
5. Process inputs into outputs

16

Organisations exist because... (5)
(be more productive!)

1. Overcome individual limitations
2. Enable specialisation
3. Save time
4. Accumulate & share knowledge
5. Synergy (combined exceeds individual)

17

The ways organisations differ are... (8)

1. Ownership
2. Control
3. Activity
4. Profit / Non-profit
5. Legal status (Ltd, Partnership)
6. Size
7. Source of finance
8. Technology (Google vs. Fish & Chips)

18

Organisational activities include: (7)

1. Agriculture
2. Manufacturing
3. Extractive (Raw materials)
4. Energy
5. Retailing (Distribution)
6. Intellectual production
7. Service (Retail, distribution, transport, banking, medicine, education)

19

The 3 broad types of stakeholders are: (3)

1. Internal (employees; management)
2. Connected (Shareholders; customers; suppliers; financiers)
3. External (Community; government; pressure groups)

20

Internal stakeholders are interested in... (2)

1. Organisation's continuation and growth
2. Individual interests and goals
(Employees & management)

21

Connected stakeholders: Shareholders are interested in... (7)

1. Changes in shareholder value; Long-term share price growth
2. Increase in shareholder wealth
3. Profitability
4. P/E ratios
5. Market capitalisation
6. Dividends
7. Yields
(Shareholders)

22

Connected stakeholders: Bankers are interested in... (2)

1. Security of loan
2. Adherence to loan agreements
(Deny credit; Higher interest / Receivership)

23

Connected stakeholders: Suppliers are interested in... (3)

1. Profitable sales
2. Payment for goods
3. Long-term relationship
(Refusal of credit; Court action; Wind down)

24

Connected stakeholders: Customers are interested in... (2)

1. Goods as promised
2. Future benefits
(Buy elsewhere; Sue)

25

External stakeholders: Government is interested in... (3)

1. Jobs
2. Training
3. Tax
(Legal action; Regulation; Increases)

26

External stakeholders: Interest / Pressure groups are interested in... (3)

1. Pollution
2. Rights
3. Other
(Publicity; Direct action; Sabotage; Pressure on government)

27

External stakeholders: Professional bodies are interested in... (1)

1. Members' ethics
(Impose standards)

28

Another approach: Primary vs Secondary stakeholders:

Those with a contractual agreement:
1. Primary stakeholders (Internal & Connected)
2. Secondary stakeholders (External)

29

Mendelow: Stakeholder Mapping (4)

Matrix of:
1. Power held and
2. Likelihood of showing interest

30

Mendelow: Segment D

High interest; High power
Key players / major customers