Understanding the nature and purpose of business Flashcards Preview

AS AQA Business Studies > Understanding the nature and purpose of business > Flashcards

Flashcards in Understanding the nature and purpose of business Deck (15)
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1

What is the 'mission' of a business?

A business aim (general statement of where the business is heading) expressed to make it seem especially purposeful and motivating

2

What are SMART objectives?

Stated measurable target of how to achieve business aims

3

What makes up SMART objectives?

  • Specific
  • Measurable
  • Agreed
  • Realistic
  • Time specific

4

Why do businesses set objectives?

  • Managers can feel confident in making decisions
  • Motivation
  • Basis for devising the strategy
  • Budgeting

5

What are the 5 legal structures that a business can choose from?

  1. Social enterprise
  2. Sole trader
  3. Partnership
  4. Limited company
  5. Non-for-profit

6

What are the advantages of being a sole trader?

  • Quick and easy to set up
  • Owner has complete control over decision making
  • Minimal paperwork
  • Easy to close/shut down
  • 1 person benefits financially
  • No administrative costs to pay when setting up

7

What are the disadvantages of being a sole trader?

  • Unlimited liability
  • Limited source of finance
  • The business is the owner e.g. the business suffers if the owner is ill
  • Pay more tax than a company

8

What are the advantages of being a partnership business?

  • Minimial paperwork once set up
  • Expertise and efforts from more than 1 owner
  • Specialist skills
  • Greater potential to raise finance

9

What are the disadvantages of being in a partnership?

  • Unlimited liability
  • A poor decision made by 1 owner may damage the interests of other partners
  • Harder to raise financre than a company
  • Complicated to sell or close

10

What are the advantages of being a limited company?

  • Shareholders are protected
  • Easier to raise finance
  • Stable form of structure - business continues if shareholders change
  • Can pay less tax

11

What are the disadvantages of being a limited company?

  • Greater admin costs
  • Public disclosures of company's information
  • Director's legal duties
  • Have to follow more expensive rules e.g. producing audited accounts

12

What do political influences include?

  • Services
  • Infrastructure
  • Tax policy
  • Regulation
  • The UK in the EU
  • Change of government
  • Terrorism and violence

13

What do economic influences include?

  • Growth rate
  • Inflation
  • Labour costs
  • Business cycle (boom or recession)
  • Unemployment and employment rates
  • Exchange rates
  • The stock market

14

What do social influences include?

  • Demography e.g. age structure, immigration, refugees
  • Education
  • Cultural norms
  • Income distribution

15

What do technological influences include?

  • Online/digital developments on sales and marketing
  • Robotics/automation on processes such as manufacturing
  • Development of new productws which might make others obselete
  • Payment methods