Understanding Business Flashcards
(25 cards)
Types of organisations
Partnerships
Business that is owned by 2-20 people
Shared responsibility, partners can specialise in different areas-A
Profits are shared,arguments can occur-D
Unlimited liability-Owner is personally responsible for the businesses debts
Types of Organisations
Private Limited Company
Company who’s shares are owned privately (not available to the public)
Control of company is not lost, more finance can be raised-A
Profits are shared,profits can’t be sold to the public-D
Types of organisations
Public Limited company
Company who’s share are available to the public
Owned by shareholders, limited liability-A
Profits are shared-D
Sectors of the economy
Private
Businesses that are privately owned
- sole trader, partnerships, private limited company
Aim- maximise profits, fill gaps in the market, expand the business
Sectors of the economy
Public
-Police, schools, hospital, army
Aim- To provide a high quality service to everyone in a country/ make good use of the taxpayers money
Sectors of the economy
Voluntary/third
Aims- To provide support for worthy causes, to promote awareness of good causes, to provide the best possible service
Shelters, food, clothing, funding
Sectors of industry
Primary
Businesses that extract natural foods from the earth
-Fishermen,farmers, oil drilling
Sectors of industry
Secondary
Businesses that are involved with making things
- Shipbuilding, construction
Sectors of industry
Tertiary
Businesses that do not produce goods, but provide services
-Shops, hotels, banks, hairdressers
Business objectives
Long term goals which businesses aim to achieve
-allow employees, customers and suppliers to know what the business is Woking towards
7 Main objectives
PROFIT MAXIMISATION SURVIVAL GROWTH CUSTOMERS SATISFACTION SOCIAL RESPONSIBILITY SERVICE PROVISION SOCIAL ENTERPRISE
Internal factors
Management and leadership
Finance available
Labour available
Information available
ICT and technology available
External factors
Political- government legislation, health and saftey, minimum wage.
Economic-inflation rates, interest rates
Social-increase car ownership( resulted in more out of town shopping centres) diff tastes and trends.
Technology- need to keep up to date to remain competitive.
Environmental-storms, floods,pollution
Can stop distribution
Competitive- increase in e-commerce- business are facing threat from not only local competitors but global ones too.
Stakeholders/ Shareholders
A person, group or organisation that has an interest(therefore an influence) on how the business is run.
External- from outside the business
Internal- from within the business
Shareholders- someone who owns a part of the business( a share)
External stakeholders
Customers
interest- want the best quality service/products for the cheapest price, range of goods/services
Influence- choose whether or not to purchase goods, may recommend the business to f&f
Banks & Lenders
Interest- want to make sure the cash flow is atable( ensure repayment)
Influence- choose whether to grant or withhold loans, change the loan repayment period/ interest rates
Suppliers
Interest- want the business to be successful(ensure repeat custom), depend on this for survival
Influence- change prices/ lead times, offer discounts
Internal stakeholders
Employee
Interest- good salary, job satisfaction, job security, good working conditions
Influence- help change the standard of work, industrial action
Managers
Interest- good salary, bonuses, job satisfaction, responsibility and status
Influence- make decisions( hiring staff, selling products)
Shareholders
Interest- want firm to be profitable, healthy dividends
Influence- can influence decision making, vote for certain directors, choose to sell their shares.
Stakeholders conflict
MANAGERS want to make high profits but CUSTOMERS want low prices
MANAGERS may want to close a branch to save on wages but EMPLOYEES want to keep their jobs.
Types of organisations
Sole trader
A business that is owned and managed by 1 person
-Keep all profits,makes all decisions-A
Long working hours, hard to get loans-D
Goods
- Something you can touch (tangible)
Service
- Something you cannot touch(intangible)
something that is provided
Need
- very basic items
- FOOD,WATER,CLOTHES
Want
- things you do not need
- COMPUTERS, PHONES
Skills & Qualities
- confident
- creative
- determined
- communication skills
- management skills
- risk taking
Factors of production
LAND- natural resources ( water, land ,coal)
LABOUR- the workforce of the business
CAPITAL- the man made resources(machinery,equipment,tools)
ENTERPRISE- this is where the entrepreneur will use all the factors to achieve a business idea.
