Unit 2: Types Of businesses Pg 6-22 Flashcards Preview

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Flashcards in Unit 2: Types Of businesses Pg 6-22 Deck (29):
1

Identify the core business sectors.
Primary industry (Primary Sector)
Extractive.

Primary industries (Primary Sector) - oil drilling, diamond mining, fishing, farming/agriculture, coal mining, quarrying, lumbering, logging, rubber plantation, ore mining, vineyard,

2

Identify the core business sectors.
Secondary Industry (Secondary Sector)
Manufacturing/Construction
Industries that make, build, assemble products.

Secondary Industry (Secondary Sector) - furniture making, computer manufacturing, petrol-refining/refinery, tyre-making, books, oil rigs, car manufacturing, chocolate making. Producing fresh ice cream, butter, yogurt.

3

Identify the core business sectors.
Tertiary Industry (Tertiary Sector/Service Sector)
Services.

Tertiary Industry (Tertiary Sector/Service Sector) - banking and insurance, transportation, communication, wholesaling and retailing, hospitality, professional and business services; consultancy, hairdressing, cloth retailing and insurance services, school, hydroponics farm, garment factory. Hotel, spa, audit company, tax consultancy company, tuition center.

4

Explain the features of the three core business sectors.
Primary Industry.

Primary Industry - refers to firms/industries involved in the extraction of natural resources, have little choice in their location.

5

Explain the features of the three core business sectors.
Secondary Industry

Secondary Industry - Refers to firms/industries involved in the conversion of raw materials obtained from the primary industries into manufactures components or finished goods.

6

Explain the features of the three core business sectors.
Tertiary Industry

Tertiary Industry - refers to firms involved in the provision of supporting services to any industry or to the final consumer.

7

Explain terms related to large businesses.
Helen should ask for more tunas and marakel.

Holding Company -
#A holding company is formed for the sole purpose of acquiring a controlling ownership in two or more competing corporations within an industry.
#The holding company has voting rights and management control in these acquired companies.

Acquired companies refers to subsidiary.

8

Explain terms related to large businesses.
helen Should ask for more tunas and marakel.

Subsidiary company -
# A subsidiary company is one that effectively controlled through either partial or complete ownership of its voting stock of another company.
#The controlling entity is called its holding company.

9

Explain terms related to large businesses.
helen should Ask for more tunas and marakel.

Associate company -
#Business relationship between two companies.
#One company owns substantial interest, but less than a majority of the voting stock (between 20%-50%) of another company.
#Two companies related because they are both subsidiaries of a holding company; they are associates.

10

Explain terms related to large businesses.
helen should ask For more tunas and marakel.

Franchises -
#Franchising refers to the methods of practicing and using another persons's philosophy of business.
#The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and royalty fee.
##Various tangibles and intangibles such as national or international advertising, training, and other supporting services are commonly made available by the franchisor.

11

Explain terms related to large businesses.
helen should ask for MorE tunas and marakel.

Management buy-outs -
# A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.
# The managers and/or executives of a company purchase controlling interest in a company from existing shareholders.

12

Explain terms related to large businesses.
helen should ask for mORe tunas and marakel.

Management buy-outs pt2 -
# Management will buy out all the outstanding shareholders and then take the company private "because it feels it has the expertise to grow the business better if it controls the ownership."
@Quite often, management will team up with a venture capitalist to acquire the business because it is a complicated process that requires significant capital.

13

Explain terms related to large businesses.
helen should ask for more Tunas and Marakel.

Takeovers and mergers - {Mergers}
# A merger involves the mutual decision of two companies to combine and become one entity; it can be seen as a decision made by two "equals".
@The combined business, through structural and operational advantages secured by the merger, can cut costs and increase profits, boosting shareholder values for both groups of shareholders.

14

Explain terms related to large businesses.
helen should ask for more TUNAS and marakel.

Takeovers and mergers -
# A takeover or acquisition is characterized by the purchase of a smaller company by a much larger one.
@This combination of "unequals" can produce the same benefits as a merger, but it does not necessarily have to be a mutual decision.
@A larger company can initiate a hostile takeover of a smaller firm, it amounts to buying the company in the face resistance from the smaller company's management.

15

Explain features of small and large businesses.
o L S N I I

Owner managed -
# Normally managed and controlled by the owner himself.
# Relationship between owner and the employee is closer and less formal than in a large organisation.

16

Explain features of small and large businesses.
O l S N I I

Limited Capital -
#Financed by either personal savings or loans from relatives and friends.
#More difficult to obtain finance from commercial banks and other financial institutions because collateral is needed.
#Financing is a main problem for SME.

17

Explain features of small and large businesses.
O L s N I I

Small Number of Workers -
#Most employ small number of workers, mainly family members or relatives.
#Owner-manager often plays multiple roles.

18

Explain features of small and large businesses.
O L S n I I

Neighbourhood-based -
#Small business such as, p,p, and c.
#Serve the neighbouring community.
#Have a friendly and close relationship with their customers.

19

Explain features of small and large businesses.
O L S N i I

Inadequate Bookkeeping -
# Do not keep proper business accounts.
@therefore they have difficulties in computing real profit made.

20

Explain features of small and large businesses.
O L S N I i

Indispensable Owner Management -
#The owner is indispensable as he/she is the only person who knows the details of the operation.
@It is common to find changing ownership upon the retirement or death of the founder owners.

21

Explain features of unincorporated business.
Sole proprietorship.

Sole Proprietorship -
#Owned, controlled by owner.
#Oldest and most common form.
#Easiest to form. Register under the business registration act.
@Apply through Accounting & Corporate Regulatory Authority.
# Most are in retail and wholesale trading, building and construction, and service industries.
@Small scale of operation
#No legal entity; no legal distinction between the personal property of the owner and assets of the business.
@Unlimited Liability; extend to his personal properties.

22

Explain features of small and large businesses.
s P P P

Partnership - 9
#Pooling of resources by 2 to 20 except professional firms.

23

State the features, advantages and disadvantages of unincorporated and incorporated Organizations.

P

24

Explain features of Incorporated Organisation.
Private Limited Company
Public Limited Company

Incorporated Companies -
#Legal entity create for purpose of carrying on a business. (can buy/sell, enter into contract, own property, sue/be sued by other people in its name)
#Owners of the company contribute money to the common stock and agree to share profits and losses in an agreed proportion.
@ Losses are limited to the amount of money they have committed to invest in the company. {limited liability}
#A separate legal entity.
#Most complex to form. Register under the Companies Act.
#Potential shareholders:
@Seek the advice of lawyers and public accountants.
@Who will help them with the legal formalities
before a company can be registered under the Companies Act.

25

Disguise between private and public sector Organisations.

P

26

The public sector.
Three types of public enterprises.
Ministries.

Ministries, which set the strategic and policy direction for the various sectors. It oversees the development and regulation of the various sectors under its purview.
Example, Ministry of Health, Ministry of Manpower, Ministry of Transport, Ministry of Defence, Ministry of Education.

27

The public sector.
Three types of public enterprises.
STATUTORY BOARDS

Statutory Boards, established by an Act of Parliament, specialize in carrying out specific plans and policies of the Ministry with higher autonomy.
For example, Institute of Technical Education and Economic Development Board.

28

The public sector.
Three types of public enterprises.
Government Linked Companies (GLCs)

Government-linked companies, incorporated under the Companies Act, engage themselves heavily in diverse sectors of the national economy. The Government may wholly or partially own most of these companies.
Eg. SIA, ST engineering Ltd, DBS, SingTel, Mediacorp, Singapore Temasek Holdings.

29

Limited Partnership

Limited partnership
#This is a form of partnership similar to partners except that in addition to one or more general partners, there are one or more limited partners.
@The limited partners have limited liability. {liable on debt incurred by the firm to the extent of their registered investment and they have no management authority}
#The general partners pay the limited partners a return on their investment.