Key Words End Of Year Year 10

Question 1

Limited liability

Answer 1

Means that a business owner or owners are onto responsible for business debts up to the value if the financial investment in the business.
Only applies to some business for example private limited companies

Question 2

Unlimited liability

Answer 2

Means that business owner or owners are personally responsible for all the debts of the business no matter the value.

Question 3

Private limited company adv

Answer 3

Owners have limited liability
Individuals are there own boss
Any new shareholders need to be invited which protects business from influence
Shares in business can be sold to raise money

Question 4

Private limited companies (LTD)

Answer 4

A company with one or more owners who can sell its shares to only the people known by the existing shareholders.

Question 5

Private limited company (dis-adv)

Answer 5

More paperwork to do as a business has to register with the companies house
These records are public
File annual financial reports

Question 6

Stakeholders

Answer 6

Shareholders and owners
Managers
Employees
Customers
Suppliers
Local community
Pressure grouos
Government

Question 7

Internal growth

Answer 7

Franchising
Outsourcing
E commerce
Opening new stores

Question 8

Franshcising

Answer 8

A franchise is a business that gives right to another person or business to sell goods or services using its name,
they do this by providing them with a licence. To become part of a franchise a new business must pay a fee.
In return they get too benefit firm the business name products marketing and equipment

Question 9

Opening new stores

Answer 9

Can be done nationally or internationally.
Business must have access to enough finance and find a suitable location

Question 10

E commerce

Answer 10

Involves selling products online
Provides a business with a much larger market and the ability to make sales at any time.
It can be expensive to set up and manage

Question 11

Outsourcing

Answer 11

When a business pays another firm to produce there products .
Allows the business to increase its capacity
But the business will lose control and have a ruined reputation if the product is not the same quality

Question 12

Internal growth (adv)

Answer 12

Can maintain its own values
Lower risk
Higher production means the business can benefit firm economies of scale and lower average costs

Question 13

Internal growth (dis adv)

Answer 13

Return in investment could take a long time
Slower growth
Growth may be limited and is dependant I’d reliability of sale forecast

Question 14

External growth

Answer 14

Merging
Takeovers

Question 15

Merger

Answer 15

Occurs when two businesses join to form a new larger one

Question 16

Factors effecting location

Answer 16

Proximity to market
Availability of raw materials
Suitable supplies of labour
Competition
Costs

Question 17

Proximity to the market

Answer 17

If a business is close to its market it’s location will be convenient for customers
Important for industries such as cinemas, food retailers and restaurants.

Question 18

Availability of raw materials

Answer 18

Easy availability of raw materials can be important for businesses that manufacture products

Question 19

Suitable supplies of labour

Answer 19

Locating where there are supplies of labour with the correct skills and the lowest wages.
Important for a banking

Question 20

Competition

Answer 20

Sometimes business will locate near competitors as they know there are customers. However there are some businesses where they may locate away from rivals such as a gas station

Question 21

Costs

Answer 21

Some business will try locate in the cheapest locations as possible.

Question 22

Characteristics is enterperneurs

Answer 22

Willingness to take risks
Hardworking amd committed
Innovative
Organised

Question 23

Primary sector

Answer 23

First stage of production eg agriculture forestry and mining

Question 24

Secondary

Answer 24

Converts resources from the primary sector into products. For example constructing or car manufacturing

Question 25

Tertiary sector

Answer 25

Buisness that supply services. For example a restaurant or health care

Question 26

Takeover

Answer 26

When one business buys control of another one.

Question 27

Advantages of growth

Answer 27

Economies of scale Advertising and publicity - business can afford to spend more money on this Attracting the best employees - a larger business can provide more opportunity’s for promotions.

Question 28

Dis advantages of growth

Answer 28

Diseconomies of scale Failure to meet customers needs - larger business have a larger market it can be hard to reach the different needs of these groups

Question 29

Economies of scale

Answer 29

When the cost of producing each individual product falls, allowing it to be sold more cheaply or more profit made. This can be achieved by: Bulk buying may receive discount lowering the price per unit. Technical economies when a business buys machinery which enables a product to be produced more cheaply

Question 30

Dis economies of scale

Answer 30

When unit costs being to rise, usually occurs if a business grows too much. It can be difficult for employees within very large firms to communicate It can be difficult to co ordinate a large business and employees might be not working to the same goals Some employees may feel isolated and poorly managed

Question 31

Legislation

Answer 31

A set of rules that governs the way society operates. It is another term for laws.

Question 32

Consumer law

Answer 32

Goods supplied by a business must be of a satisfactory quality, fit for any specified purpose, and must match any description given

Question 33

Health and safety law

Answer 33

outlines the responsibilities that both employers and employees have in keeping the working environment safe. This includes appropriate training, regular breaks and a suitable work place temperature

Question 34

Employment laws

Answer 34

- minimum wage - holidays - parenthood - contract of employment -

Question 35

Protected characteristic

Answer 35

Designed to prevent discrimination - age - disability - gender - marital status - pregnancy - religion - sexual orientation

Question 36

Effects of legislation ( cost )

Answer 36

Costs may increase due to minimum wage having to be met, payed paternity leave, holiday pay and training has to be payed for

Question 37

Effects of legislation ( motivation )

Answer 37

A safe working environment will help protect workers from injuries and illness, training will give employees more skills and build self esteem. A minimum rate of pay and payed holidays will also motivate an employee

Question 38

Effects of legislation ( number of employees )

Answer 38

Because the cost of having employees is more expensive businesses may decide to recruit fewer employees and perhaps make more use of machinery

Question 39

flat structure

Answer 39

A structure with few layers in the hierarchy. Managers have a wide span of control And the structure has a short chain of command.

Question 40

Tall structure

Answer 40

A business with many layers of management. They have a long chain of command And narrow span of control.

Question 41

Chain of command

Answer 41

The line of authority within an business in which communication passes.

Question 42

Delayering

Answer 42

The removal of one or more levels of hierarchy in a business organizational structure.

Question 43

Delegation

Answer 43

Passing authority down an organizational structure to more junior employees.

Question 44

Internal recruitment

Answer 44

When it appoints someone already in the business who it already employs. This can be shown through noticeboards, by word, newsletters and intranets

Question 45

External recruitment

Answer 45

When people are employed from outside the business. Common when a business is expanding .

Question 46

Internal recruitment ( adv )

Answer 46

Adv - can motivate employees and improve performance Less risky and cheaper Employees will already have knowledge on the business

Question 47

Internal recruitment ( dis adv )

Answer 47

- limited choice in people to recruit - may have to pay to train employees who do not have the skills required

Question 48

External recruitment ( adv )

Answer 48

Can bring new ideas to an organization Provide business with a wider choice for candidates May not be necessary for training as they should have skills required

Question 49

External recruitment ( dis adv )

Answer 49

More expensive Employee will be less familiar with the business

Question 50

Contracts of employment

Answer 50

A legal contract that sets out the conditions under which a person is employed.this includes : Hours Place of work Duties Payed holidays Rates of pay

Question 51

Non financial methods of motivation

Answer 51

- job enlargement - job enrichment - training - management style

Question 52

Financial Methods of motivation ( salary )

Answer 52

A fixed amount of money played by the employer on a regular basis. Monthly. Expressed as an annual sum.

Question 53

Financial Methods of motivation ( wage )

Answer 53

Workers are paid either weekly or monthly or by the hour. Any extra hours are payed and are classified as over time and will be paid at a higher hourly rate.

Question 54

Financial Methods of motivation ( commission )

Answer 54

Payment made to an employee based on the value of sales achieved over a specific time. Employees may be payed only by commission or by a low salary with commission on top.

Question 55

Financial Methods of motivation ( profit share )

Answer 55

Staff will receive there hourly rate or salary but an additional payment is made based on the performance of the business.

Question 56

Non Financial Methods of motivation ( job enlargement )

Answer 56

Gives staff a greater variety of tasks to perform making the work more interesting. This may take place through job rotation

Question 57

Non Financial Methods of motivation ( job enrichment )

Answer 57

Giving staff more responsibility and a wider range of more complex tasks. Employees will experience an increased sense of achievement.

Question 58

Non Financial Methods of motivation ( Training )

Answer 58

Will motivate there staff to do there job well learn new techniques be trained for future positions and promotions. Employees will feel more valued by there business.

Question 59

Non Financial Methods of motivation ( management style - autocratic )

Answer 59

an approach by leaders or managers to keep control of decision making and ensure that employees are closely supervised

Question 60

Non Financial Methods of motivation ( management style - democratic )

Answer 60

managers and employees working together to make decisions.

Question 61

Non Financial Methods of motivation ( management style - paternalistic )

Answer 61

management style where a leader considers their subordinates part of a large, extended family

Question 62

Non Financial Methods of motivation ( management style - Lassiez faire )

Answer 62

employees are allowed to make decisions and solve problems on their own with little guidance from management