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Module 1 revision cards Flashcards

(54 cards)

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1
Q

Name 3 sectors of business activity

A

Primary, Secondary & Tertiary

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2
Q

Tertiary can be split into what 2 further sections

A
  1. Quaternary - knowledge sector. Scientific research, IT
  2. Quinary - high level decision makers and domestic activities. Gov officials, childminders
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3
Q

How do you define the size of a company

A

Number of employees & turnover. Micro, small, medium and large

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4
Q

What are SME’s

A

Small and medium sized enterprises

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5
Q

Why size an organisation

A

Helps to inform gov policy e.g. tax rates and decide who is eligible for subsidies

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6
Q

What is a limited liability structure

A

Can only lose what money has been invested/put in

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7
Q

What is an unlimited liability structure

A

Can lose their business and personal possessions up to the value of what is owed

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8
Q

Name all 6 types of organisation in the private sector

A

1.Sole Trader
2.Partnership - General, Limited Liability & Limited
3. Limited Companies - by shares (public or private) or guarantee
4. Parent & Subsidiary
5. Unincorporated Associations
6. Co-operatives

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9
Q

Name all types of organisation in the public sector

A
  1. Central & Local Government
  2. Public Corporations
  3. Municipal Enterprises
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10
Q

Name all types of voluntary organisations

A
  1. Charities
  2. Foundations
  3. Community Groups
  4. Recreational Clubs
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11
Q

Company objectives are dependant on what factors

A
  1. Business sector
  2. Legal structure/ownership type
  3. Goals of stakeholders
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12
Q

What are the objectives of a private sector organisation

A

Breakeven
Survival
Profit maximisation
Growth

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13
Q

What are the objectives of public sector organisations

A

Service provision
Reducing costs
Value for money
Meeting charitable purposes

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14
Q

What are the objectives of voluntary sector organisations

A

Helping a particular cause
Benefit and enrich society
Meet charitable purposes

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15
Q

What 3 statements are used to help achieve company objectives

A

Mission
Vision
Value

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16
Q

What are the main internal and external uses of vision and mission statements

A

Internal - help strategic planning, develop KPIs, motivate employees to work to common goals, develop ethical framework

External - encourages support from 3rd parties, better relationships with customers, suppliers and external stakeholders. good PR tool

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17
Q

What is the purpose of org charts

A

Show how work roles are delegated, controlled and coordinated
Show how information and work flow through an organisation

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18
Q

What should be considered when structuring workforce

A

Type of business and how complex operations are
Efficiency of operations
Culture and future growth
Layers of management
Where decision making lies

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19
Q

What 2 ways can organisations be designed/divided

A

Vertical/tall
Horizontal/flat

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20
Q

Characteristics of vertical organisation

A

Many layers of management (CEO and delegating down)
Employees and departments have well defined responsibilities
Must have strong leadership at the top to avoid poor decision making. reduced productivity and low morale

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21
Q

Characteristics of a horizontal organisation

A

Flat structure with less layers of manager
Better employee morale as they feel more part of decision making process
Faster response to issues as less layers
Cost less to run as less managers to pay
More transparent as easier for information to flow through the biz
May have less defined roles which can cause problems and make task delegation difficult
If organisation grows, becomes difficult to manage

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22
Q

Authority for decision making can be structured in 2 ways, what are they

Study These Flashcards
A

Centralised
Decentralised

23
Q

Explain the characteristics of centralised authority

Study These Flashcards
A

Senior managers who delegate to middle/lower managers = well defined command

Good control and consistency across the business

Quick decision making

Info stored in one place

Less flexible when responding locally

Demotivating for managers lower down

Example: military

24
Q

Explain the characteristics of decentralised authority

Study These Flashcards
A

Decisions can be made more locally

Quicker decisions that affect local areas

Less control and consistency through business

Information not all stored centrally

More motivation for lower managers in decision making

More opportunities for staff development

Less bureaucracy

Incurred costs for role duplication

Policies can be harder to impliment company wide

25
Organisational structures are designed in 3 ways, what are they
Functional Divisional Matrix
26
How is a board made up and what is their role
Chair CEO Executive directors Non executive directors Independent directors Senior independent director
27
What are the factors that make an NED independent
not an employee in the last 5 years no material business relationship in the last 3 years no additional remuneration except director fee no close family tie with senior employees or advisors doesnt represent a significant shareholder hasnt served on the board for 9 years from first appointment
28
3 committees that INEDs are involved in
Remuneration Audit Nomination
29
Why is it important to separate the role of chair and CEO
Avoid dominance of 1 person Encourage constructive challenge and discussion Avoid poor decision making
30
What must be considered in board size and composition
A balance of skills and abilities No domination of one person Clear division of leadership of the board and leadership of the business Excluding the chair at least half directors should be INEDs Diverse in gender and ethnicity
31
Name the 2 types of board structure and how they are different
Unitary Two tier
32
What is the definition and role of stakeholders
Individuals, groups or organisaitons who have an interest or stake in the business They affect and influence the decisions made by the business
33
How are stakeholders grouped
Primary and secondary (by proximity to the business) Internal and external (by their connection to it)
34
Define internal and external stakeholders
Internal - aware and involved in the internal matters of the business External - do not know about the day to day matters but are affected by its activities Based on their proximity to the business
35
Name internal stakeholders
Shareholders Employees
36
Name external stakeholders
Financial institutions Customers Suppliers Creditors Debtors Government Trade unions
37
Define primary stakeholders
Anyone who has direct engagement, functional or financial interest in the business
38
Define secondary stakeholders
Those who have an interest in the business but no direct engagement or direct involvement
39
Give examples of conflicts between different types of stakeholder
Owners high profit may not want to pay high wages Directors focus on increased sales, owners want high profit Business move customer service abroad may impact customer service
40
Explain stakeholder theory of corporate governance
Business should make decisions considering and creating all stakeholders and not just owners or shareholders Responsibility business has to society as a whole Argues in favour of corporate social responsibility
41
Define "business environment"
A set of factors that have a DIRECT effect on the companies operations e.g technology, financial resource
42
Define internal and external organisation environment
Internal - factors inside the org that may affect the way it operates e.g company structure and resources to carry out its biz activities External - factors outside of the org that may affect the way it operates e.g customers, suppliers, competitors
43
Define situational analysis and give example of types of analysis used
The process of collecting, evaluating and organising info regarding internal and external environments e.g SWOT & LoNGPESTEL to help determine where the biz is and where help to where it wants to go
44
List benefits of performing situational analysis
Thorough understanding of how biz operates Devise clear path from where it is to where it wants to go Helps realise company vision Identify issues and anticipate changes in advance so can plan
45
What does LoNGPESTEL stand for
Local National Global Politics - policy and legislation Environment - climate change, eco friendliness Sociocultural - consumer behaviour, demographics Technology - advancements in mobile, new production Economic - taxes, inflation, wage costs Legal - health and safety, consumer protection
46
List benefits and drawbacks of PESTEL
Focuses specifically on key external areas Doesnt consider internal Relies heavily on sourcing external data and info Some data not easy to find Factors can change quickly
47
What does SWOT stand for
Strengths - internal to the org, tangible and intangible assets Weaknesses - internal to the org, things that place biz at a disadvantage Opportunities - external to the org, attractive factors that would allow the business to thrive and prosper Threats - external to the org, factors beyond the biz control but can help foresee and put a plan in place to avoid
48
List benefits and drawbacks of SWOT
Looks at both internal and external factors Doesn't rely on obtaining potentially difficult info Provides a visual overview Quite black and white Doesn't cover anything that doesn't fit into the 4 options Doesn't allow overlap into more than one area Subjective to the individual creating the analysis Doesnt specify where to focus attention
49
What are the 3 sectors of business
Private companies Public companies Voluntary organisations
50
What is the purpose of the vision, mission and values statements
To help with the companies strategic planning and company objectives
51
What is the purpose of the values statement for a company
Sets out the behaviour, principles and values that the leaders will follow when actioning their mission and values statements
52
Name the 3 types of partnership and how the differ
General - all equal for the debts and liabilities of co Limited - General partner = liability. Silent partners = no liability. Silent must have no day to day running in the business Limited liability - Assets of other partners not at risk if one is sued
53
What is the purpose of situational analysis
To collate, evaluate and organise information on internal and external environments to help devise a clear path from where the company is towards their desired position
54
Consequences of not understanding a business external environment
Management implementing unrealistic strategy Declines in profit, reputation and market share Not responding to opportunities or risks

Business environment (1 decks)

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