business paper 3 MUST KNOW Flashcards
(27 cards)
What are some business ownership types?
- sole trader
- partnership
- public limited company
- private limited company
- non-profit
- franchising
what is the difference between private and public limited company’s?
Private - can only sell shares to friends and family, not on the stock market.
Public - can sell to public and on the stock exchange to allow them to be openly traded.
What are some internal and external sources of finance?
internal,
- retained profits
- sale of assets
external,
- bank loan
- share capital
- venture capital
- mortgage
- debt factoring
- trade credit
- overdrafts
What is the formula for market capitlisation?
Current share price x Shares sold
What are the 4 leadership styles and do they link to soft or hard HRM?
Soft,
- democratic
- laissez-faire
Hard,
- autocratic
-paternalistic
What is the tannenbaum schmidt continuum and how do leadership styles link to it?
- 1,2 tells,sells autocratic
- 3,4 suggests,consults paternalistic
- 5,6 joins,delegates democratic
- 7 abdicates laissez-faire
What are the four quadrants to stakeholder mapping?
- high power high interest, manage closely
- high power low interest, keep satisfied
- low power high interest, keep informed
- low power low interest, monitor
What’s the formula for PED and YED?
% change in demand/ % change in (PRICE/INCOME)
What are the 7 p’s?
-price
-people
-product
-place
-process
-promotion
-physical environment
What is the difference between a trade union and a work council?
Trade union - a group outside the workplace you can join
Works council - a section within a business helping protect employees
Why are cash flow and profit important?
Cash flow - allows the business to run smoothly and pay people on time.
Profit - keeps the business running and helps for any expansion opportunity’s, shows the business is working.
Explain elkingtons triple bottom line model.
People - how well you take care of employees and community
Profit - if the business is profitable and successful
Planet - what the company does to help with the planet and things like climate change
Explain Carroll’s CSR pyramid.
Necessary,
Economic - make sure the business is profitable and operating properly
Legal - a business has got to follow all laws and regulations
Optional,
Ethical - do what’s right and go beyond legal actions, implement fair trade etc.
Philanthropic - a good corporate citizen, help charity
What are the three investment appraisals and there formulas?
Payback - profit each year and then how far into the year they will get the remaining cash
ARR - average profit over period/initial cost x 100
NPV - (cash flow x discount factor) - initial investment
What is the difference between economies of scope and scale
scope - a wide product base help reduce unit costs e.g machinery or relations
scale - a large amount being produced allows bulk buying and will help reduce costs
What is diseconomies of scale and how does it happen?
things become less efficient as business is too big
How,
- poor communication
-lower motivation as employees feel less valuable
-slow decision making
-hard to operate
What is the difference between patent and copyright?
Patent - new inventions or process, normally a product
Copyright - original creative work, normally text or some programming
What is lewin’s force field analysis?
various driving and resistive forces about a change within a company
What is the difference between scientific and hunch decision making, including some advantages and disadvantages?
scientific - a data driven approach to come to a decision
(lower risk, slower, easier to get employees on board as it can be proven)
hunch - making decisions based on experience (quick, cheaper, riskier, could lead to company not liking you)
What is penetration pricing and price skimming?
penetration pricing - setting a low price initially to gain market share
price skimming - high price at launch to maximise profits e.g apple.
What are Kotter and Schlesinger’s four reasons for resisting change?
-Self interest - people only want what is best for them
-Lack of trust - employees may feel that the company won’t do what’s right for the employees and will do things for profit
-Different assessment - employees may not think the change is necessary
-Fear of unknown - employees are worried for what might come from the change and so dont want it
What are the 6 ways of overcoming resistance to change?
Education and communication
-Participation and involvement (take them along with the process of change)
-Facilitation and support ( provide support to help make more comfortable)
-Negotiation and agreement (offer incentives to make the personal change worth it)
-Manipulation (influence groups)
-Explicit and implicit coercion (forceful change, normally a last resort)
What are some advantages and disadvantages of CPA?
+) helps reduce risk,helps spot necessary activities
-)not always accurate, doesn’t guarantee success, could be too complicated with too many activities
How do you calculate float on a CPA diagram?
when there is a difference between EST and LFT, LFT from node after activity - duration - EST from node before activity
