Flashcards in Decisions exam prep Deck (32)
Act of obtaining or furnishing money or capital for a purchase or enterprise.
The contribution that the owners make to the purchase of a business or its growth.
Principle, amount borrowed
Interest, cost of borrowing
A registered document that specifies property pledged as security for a loan. All mortgages are loans, but not all loans are mortgages
Land, buildings, livestock. Regular payments are the same each time (unless interest rate changes). Interest charged only on outstanding principal (start with money towards interest, then money towards principal). Total interest paid depends on frequency of payments, the longer the term, the smaller the payments/time.
Term loan/reducing loan
Principal repaid in equal amounts through life of loan. Interest calculated on amount outstanding.
Flat loan/interest only
Often used for second mortgage. Second mortgage is needed if first is not enough to obtain the asset. Can only be used in the short to medium term to have more disposable income, can be changed at the end to a table loan, can be paid in full at the end.
Table loan equation
A = P x ((i(1+i)^n))/((1+i)^n-1))
A = payment per period
P = principal sum borrow
i = periodic interest rate (annual rate/no of payment periods)
n = no of period payments
Credit Worthiness (5 C's)
Character (record and appearance), capacity (ability to repay), collateral (assets as security), capital (borrowers stake/equity in business), conditions (external and internal)
Low cost strategy
Employ young people at low cost. Issues - work performance, staff turnover, breakages, drugs, absenteeism, motivation
Training focused strategy
Develop a reputation for providing high quality training for staff. Issues - attract high quality staff but staff turnover is a problem as they move onto better positions
High commitment strategy
Long-term strategy to build employee commitment - grow with the business
Employee a 'suitable' person. Once employed it is difficult to fire them if they are unsuitable. It involves two sub-processes - recruitment and selection
Requires the manager to plan and acquire staff. HR planning, job analysis and job description, selection and orientation
External forces that influence human resource management
Legal, customers, union/employees, labour market, political, labour market changes, society, globalisation, economic, industry, tech, shareholders
Requires the manager to plan and acquire staff. HR planning, job analysis and job description, selection and orientation. identify a job vacancy, define requirements for performance, gather applicants
Internal document that contains the essential job requirements, duties, responsibilities, and skills required. More detailed descriptions include title, essential functions, reporting relationships, authority level, tasks, duties, crucial features
Human Rights Act
prohibits discrimination between employees or potential employees
applications cant request info that isn't used for employee selection
Fair Trading Act
the enterprise cannot misrepresent itself through its job advertising
Compare and assess applicant attributes in relation to job requirements, provide info to applicants so they can make informed decisions, notify applicants of employment status
Stock (livestock, plants), grain, inputs (chemical, fertiliser)