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BM Exam > Unit 3, Aos 1 > Flashcards

Unit 3, Aos 1 Flashcards

1
Q

Sole trader

A

a business structure that is owned by one individual
* Has full decision-making power and is legally responsible for all aspects of the business

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2
Q

Sole trader +

A

+ Owner has full control and decision-making power -> low risk of disputes
+ Owner keeps all the net profits

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3
Q

Sole trader -

A
  • Unlimited liability plus the owner’s personal assets at risk (can be seized to pay off business debts)
  • Knowledge and skills are limited to the owner, the owner may not have appropriate expertise in various areas
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4
Q

Partership

A

a business structure that is owned by 2 to 20 people

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5
Q

Partnership +

A

+ Limited liability for shareholders
+ Greater variety of expertise and ideas as more people are involved

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6
Q

Partnership -

A
  • Complex reporting requirements such as annual reports, need to be published for shareholders
  • It is expensive to set up and operate as there are higher set-up and ongoing administration costs
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7
Q

Public listed company

A

an incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX

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8
Q

Public listed company +

A

+ Shareholders have limited liability
+ Greater variety of expertise and ideas as more people are involved

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9
Q

Public listed company -

A
  • Conflicts could arise through shared decision-making between directors
  • There are complex reporting requirements, such as annual financial reports, that need to be published to the public
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10
Q

Social enterprise

A

type of business that aims to fulfill a community or environmental need by selling goods or services

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11
Q

Social enterprise +

A

+ Community benefits from the business’s activities
+ Employees have purposeful work so they are more likely to be satisfied with their job

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12
Q

Social enterprise -

A
  • Difficult to balance the achievement of financial objectives with social objectives
  • May be difficult to obtain a bank loan as the business does not solely focus on financial objectives
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13
Q

Government business enterprise

A

a business that is owned and operated by the government

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14
Q

GBE +

A

+ Delivers goods and services that help the community and the community’s needs
+ Provides healthy competition to private sector/provide services that the private sector would hesitate to invest in

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15
Q

GBE -

A
  • Governments and politicians can interfere and change the strategic direction of the business
  • Productivity may be lower than private-sector businesses as there tends to be a lack of accountability in the public sector
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16
Q

 Incorporated:

A

is a legal status of a company whereby the company is established as a separate legal entity to the shareholders

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17
Q

Unincorporated

A

legal status of a business whereby the business owner and the business are viewed as the same legal entity

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18
Q

Limited liability

A

when shareholders are only liable to the extent of their original investment, meaning they are not personally responsible for the business debts

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19
Q

Unlimited liability

A

personal legal responsibility a business owner has for an unincorporated business’s debts

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20
Q

Business objectives

A

specific goals a business intends to achieve in a specified period of time

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21
Q

Types of business objectives

A
  • to make a profit
  • to increase market share
  • to meet shareholder expectations
  • to fulfil a market need
  • to fulfil a social need
  • to improve efficiency
  • to improve effectiveness
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22
Q

Market share

A

is a business’s percentage of total sales within an industry

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23
Q

Market need

A

when a business fills a gap in the market, which involves addressing customer needs that are currently unmet or underrepresented by other businesses in the same industry

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24
Q

Social need

A

improving society and the environment through business activities

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25
Q

Efficiency

A

how productively a business uses its resources when producing a good or service

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26
Q

Effectiveness

A

extent to which a business achieves its stated objectives

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27
Q

Stakeholders EG

A
  • owners
  • managers
    -employees
    -customers
    -suppliers
    -general community
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28
Q

stakeholders

A

a person or group with a vested interest in a business

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29
Q

Owners

A

individuals who establish, invest and have a share in a business, often with the goal of earning a profit from its operations

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30
Q

Managers

A

individuals who oversee and coordinate a business’s employees and lead its operations to ultimately achieve the business’s objectives

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31
Q

Employees

A

are individuals who are hired by a business to complete work tasks and support the achievement of its objectives

32
Q

Customers

A

individuals or groups who interact with a business by purchasing and utilising its goods and services

33
Q

Suppliers

A

individuals or groups that source raw materials, component parts, and processed materials and sell them to a business for use in the production of its goods and services

33
Q

General community

A

: individuals and groups who are impacted by a business’s operations and decisions, often because they are located in close proximity to the business

33
Q

Owners vested interest

A
  • Establishing and fostering positive relationships with other stakeholders to enhance business reputation and performance
  • Receiving a return on their investment, often through business growth in the form of increases in share price, dividends, or profits
34
Q

Managers vested interest

A
  • Being recognised for the achievement of business objectives
  • Having opportunities to increase their status and engage in career advancement and promotion
  • Receiving bonuses from business owners for achieving business objectives
  • Receiving appropriate wages and working conditions that reflect their managerial role and responsibility within the business
35
Q

Employees vested interest

A
  • Provision of long-term job security
  • Receiving fair pay and working conditions
  • Having opportunities to engage in personal and professional development, as well as training to advance their careers and receive promotions
36
Q

Customers vested interest

A
  • Provision of long-term job security
  • Receiving fair pay and working conditions
  • Having opportunities to engage in personal and professional development, as well as training to advance their careers and receive promotions
37
Q

Suppliers vested interest

A
  • Increasing their revenue
  • Earning a profit from the raw materials and resources they supply
  • Having reliable and honest relationships with businesses they supply
38
Q

General community vested interest

A
  • Observing business activities that lead to improvements in the community and environment
  • Increasing the local employment rate and boosting the local economy
39
Q

Autocratic management style

A

involves a manager making decisions and directing employees without any input from them

40
Q

Autocratic +

A

+ Clearly defined roles with reduced responsibility and risk, as they only have to follow managers instructions

41
Q

Autocratic -

A
  • Businesses lack the opportunity to take into account a broader range of approaches and ideas from employees
  • Potential for promotions may be restricted as they are not given the opportunity to contribute to decision-making
42
Q

Persuasive management style

A

involves a manager making decisions and communicating the reasons for those decisions to employees without their input

43
Q

Persuasive +

A

+ Employees may feel a greater sense of involvement and engagement in the business when given explanations of business decisions
+ Work tasks can be completed quickly as management’s instructions are straightforward and structured, and employee compliance is immediate

44
Q

Persuasive -

A
  • Businesses lack the opportunity to take into account a broader range of approaches and ideas from employees
  • Potential for promotions may be restricted as they are not given the opportunity to contribute to decision-making
45
Q

Consultative management style

A

involves a manager seeking input from employees on business decisions but making the final decision themselves

46
Q

Consultative +

A

+ Management can gain multiple perspectives and suggestions from employees who carry out the work, which can lead to more informed decision-making outcomes
+ Employees may feel more motivated and involved with the business when asked to contribute their ideas, therefore improving their sense of value

47
Q

Consultative -

A
  • Employee conflict and resentment could arise if their ideas are ignored or overlooked when the final decision is enacted by the manager
  • The collection and consultation of different perspectives can take a significant amount of time, leading to slower decision-making processes
48
Q

Participative management style

A

involves a manager sharing information with employees so that employees can participate in decision-making

49
Q

Participative +

A

+ Relationships between management and employees may improve due to open two-way communication
+ Feel more motivated when contributing their ideas and participating in decision-making, therefore improving their sense of value

50
Q

Participative -

A
  • Potential for conflict between employees and managers when there is a disagreement between different views and opinions
  • Can be time-consuming to collate ideas and make decisions as a consensus between everyone must be reached
51
Q

Laissez-faire management style

A

involves a manager communicating business objectives to employees and giving them freedom to make decisions independently

52
Q

Laissez-faire +

A

+ Fosters an environment in which creativity and innovation are valued, leading to a broader scope of possible decisions
+ Employees may have increased motivation as they feel empowered and trusted in a work environment that fosters creativity

53
Q

Laissez-faire -

A
  • Business objectives may not be met by employees due to a lack of direction from managers
  • Decision-making may be very time-consuming due to extensive employee discussion and collaboration to reach a consensus
54
Q

Appropriateness of Management Styles

A

time, experience of employees, nature of the task, manager preference

55
Q

Time

A

Length of time in which a manager must complete a task or make a business

Time available for tasks;
Limited time<autocratic, persuasive, consultative, participative, laissez-faire>Extended time

56
Q

Experience of employees

A

level of experience employees have within that business

Experience of the employees;
Inexperienced tasks<autocratic, persuasive, consultative, participative, laissez-faire>Highly experienced task

57
Q

Nature of the task

A

highly complex, technical work

Nature of tasks;
Simple tasks<autocratic, persuasive, consultative, participative, laissez-faire>Complex tasks

58
Q

Manager preference

A

highly individualised and may determine which management style is most appropriate for them to use

Manager preference
High desire<autocratic, persuasive, consultative, participative, laissez-faire>Low desire

59
Q

Management Skills

A

planning, decision-making, communication, delegation, interpersonal, leadership

60
Q

Planning

A

the process of determining a business’s objectives and establishing strategies to achieve these aims

61
Q

Decision-making

A

is the skill of selecting a suitable course of action from a range of plausible options

62
Q

Communication

A

is the skill of effectively transferring information from one party to another

63
Q

Delegation

A

the skill of assigning work tasks and authority to other employees who are further down in a business’s hierarchical structure

64
Q

Interpersonal

A

the skill of creating positive interactions with other employees to foster beneficial professional relationships

65
Q

Leadership

A

is the skill of motivating others in order to achieve a business’s objectives

66
Q

Corporate Culture

A

the shared values and beliefs of a business and its employees

67
Q

Official corporate culture

A

involves the shared views and values that a business aims to achieve, often outlined in a written format

68
Q

OCC examples

A

shared objectives
policies
training
uniform
symbols

69
Q

Real corporate culture

A

involves the shared values and beliefs that develop organically within a business, and are practised on a daily basis by its employees

70
Q

RCC examples

A

business ideaologies
types of employees
workplace environment
management styles

71
Q

OCC RCC similarities

A
  • Both are connected with the shared values and beliefs of people in the business
  • Fostering both a positive official and positive real corporate culture can lead to improved business performance
  • Both aim to change the way employees interact with each other and the business
72
Q

OCC RCC differences

A
  • Official is often written in business documentation, whereas real is usually unwritten
  • Official is institutionalised by formal documents and rules, whereas real develops organically In unwritten interactions between employees
  • Official includes the ideals of businesses, whereas real includes what occurs in actuality
73
Q
A

BM Exam (5 decks)

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