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Understanding Business Flashcards

1
Q

What is the Primary Sector?

A

A business concerned with extracting natural resources from the earth.
Example: Farming, Mining, Fishing

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2
Q

What is the Secondary Sector?

A

A business that are in the manufacturing industry, These businesses use materials extracted by the primary sector and then turn them into products
Example: Wood into furniture

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3
Q

What is the Tertiary Sector?

A

A business that produce a service

Example: Banking, Hairdressing, Tourism

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4
Q

What is the Quaternary sector?

A

A business that provides information services.

Example: Research, App Development, Market Research Organisations

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5
Q

How many people own a Public Limited Company? (PLCs)

A

Owned by a minimum of 2 shareholders

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6
Q

Who controls a Public Limited Company? (PLCs)

A

Controlled by a Board of Directors

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7
Q

How are Public Limited Companies financed? (PLCs)

A

Financed by shareholder investment, bank loans, retained profits

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8
Q

Who are the Public Sector owned and controlled by?

A

Central government and Local Government

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9
Q

How are the Public Sector financed?

A

Financed via taxes payed by the public

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10
Q

What are the objectives of a Public Limited company? (PLCs)

A

Maximise profits, maximise sales, grow and market dominance

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11
Q

What are the objectives of the Public Sector?

A

To provide essential services and make effective use of funds

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12
Q

What is corporate social responsibility?

A

When a business aims to act in an ethical way so that they benefit society or the environment.
Example: Good pay and working conditions, reducing packaging, charity donations

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13
Q

What is growth?

A

To make the business larger

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14
Q

What is satisfying?

A

Aiming for a satisfactory result rather than the ‘best possible’ result, allows level of profit which satisfies shareholders, suppliers and employees

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15
Q

What is managerial objectives and working with budget?

A

When mangers set objectives they believe will improve the status of the company
Example: expand into new markets
Sticking to annual budget and not overspend

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16
Q

What methods of growth are available to organisations?

A

Internal and External

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17
Q

Describe an External method of growth

A

Growth from out with the business

Example: Takeover of competitor, Merger with competitor

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18
Q

Describe an Internal method of growth

A

Growth from within a business

Example: launching new products, hiring new staff, advertising campaigns

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19
Q

Why do businesses want to grow?

A

To reduce the risk of failure
To gain a better reputation in the market place
To remove a competitor
To increase profits and sales

20
Q

Disadvantages of External methods of growth

A

There is more of a risk

Usually more expensive

21
Q

Disadvantages of Internal methods of growth

A

Slower growth

22
Q

What is outsourcing?

A

When an organisation employs an outside business to carry out certain activities
Example: marketing, accounting, printing etc. This outside organisation will usually be a specialist

23
Q

What does the P in PESTEC stand for?

A

Political

24
Q

What does the first E in PESTEC stand for?

A

Economic

25
Q

What does the S in PESTEC stand for?

A

Social

26
Q

What does the T in PESTEC stand for?

A

Technological

27
Q

What does the second E in PESTEC stand for?

A

Environmental

28
Q

What does the C in PESTEC stand for?

A

Competitive

29
Q

Impacts that Political ( PESTEC ) have on organisations

A

Can have an impact on the economy as a whole and on individual businesses
For example: changes to law, new legislation, government targets etc

30
Q

Impacts that Economic ( PESTEC ) have on organisations

A

When the economy is doing well, customers buy more

31
Q 
Economic Policy (PESTEC)
Fiscal Policy-
A

Fiscal Policy: increasing income tax rates- customers have less money to spend
Increasing VAT- Selling price may have to be raised
Increasing corporation Tax- Will reduce profit for the year

32
Q 
Economic Policy (PESTEC) 
Monetary Policy-
A

Monetary Policy: increase/ decrease interest rates (borrowing money)

33
Q

Impacts that Social (PESTEC) have on organisations

A

Changes in shopping habits- More online shopping, Apple Pay etc.
Ageing population- Must cater for older members of the public
Lifestyle changes- healthier populations, moving away from weekly shops
Constant changes in fashion tastes and trends

34
Q

Impacts Technological (PESTEC) have on organisations

A 
Increased use of 
social media 
Smart phones 
E-commerce 
Order tracking 
Mobile pay
35
Q

Impacts Environmental (PESTEC) have on organisations

A 
Weather 
Recycling 
Pollution and carbon emissions 
Ethical sourcing (supply chain)
Sourcing local produce 
Reducing packaging
36
Q

Impacts Competitive (PESTEC) have on organisations

A

Opening up a store next to a competitor can bring choice for customers and trade in the area.
Competition brings new ideas and keeps prices low.
To keep up with competition businesses may have to reduce their prices or lose customers to competition.
The competition can launch new products to keep up.

37
Q

Info about flat structures

A
  • Only a few levels of management
  • Short chain of command
  • Managers have a wider span of control
  • Managers are directly responsible for employees
38
Q

Advantages of a flat structure

A

Info flows quickly
Consulting staff of decisions takes less time
Business is more able to respond to market change
Customers needs are quickly identified and dealt with

39
Q

Disadvantages of a flat structure

A

Removal of management levels means there is less control throughout the business
Mistakes are easier to make

40
Q

Info about hierarchical (tall) structures

A
  • Many layers of management
  • Long chain of command
  • Each manager has a narrow span of control
  • Information and decisions need to go through each level
41
Q

Advantages of a hierarchical (tall) structure

A

Great deal of control and supervision
Clearly defined roles and procedures to follow
All members of staff are supervised
Staff have the chance to become experts in their roles

42
Q

Disadvantages of a hierarchical (tall) structure

A

Decision making can take a long time as every level must be consulted
Communication can be slow therefore customer needs may take a while to be met
Not being able to adapt to changes in market can quickly make the business vulnerable

43
Q

Factors that affect the quality of decision making

A

STAFF- Managers ability/ experience, how much risk they are willing to take, staffs resistance to change.
FINANCE- Whether finance is available to address the weakness or for growth, financial constraints may mean that the best solution for the problem cannot be used.
TECHNOLOGY- Spreadsheets can improve accuracy, email can be used to communicate decisions and gather opinions on them, video-conferencing can reduce the need for travel allowing decision making meetings to be made more easily

44
Q

Ways to measure the success of decision making

A 
By measuring:
Profit levels 
Sales levels 
Staff absence levels 
Feedback from customers and staff
Researching review sites
45
Q

Roles managers play in decision making

A 
Planning 
Organising 
Commanding 
Co-ordinating 
Controlling
Delegating 
Motivating

Business (5 decks)

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