Unit 3, Aos 1 Flashcards
(75 cards)
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
2
Q
Sole trader +
A
+ Owner has full control and decision-making power -> low risk of disputes
+ Owner keeps all the net profits
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
4
Q
Partership
A
a business structure that is owned by 2 to 20 people
5
Q
Partnership +
A
+ Limited liability for shareholders
+ Greater variety of expertise and ideas as more people are involved
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
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
8
Q
Public listed company +
A
+ Shareholders have limited liability
+ Greater variety of expertise and ideas as more people are involved
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
10
Q
Social enterprise
A
type of business that aims to fulfill a community or environmental need by selling goods or services
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
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
13
Q
Government business enterprise
A
a business that is owned and operated by the government
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
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
16
Q
Incorporated:
A
is a legal status of a company whereby the company is established as a separate legal entity to the shareholders
17
Q
Unincorporated
A
legal status of a business whereby the business owner and the business are viewed as the same legal entity
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
19
Q
Unlimited liability
A
personal legal responsibility a business owner has for an unincorporated business’s debts
20
Q
Business objectives
A
specific goals a business intends to achieve in a specified period of time
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
22
Q
Market share
A
is a business’s percentage of total sales within an industry
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
24
Q
Social need
A
improving society and the environment through business activities
25
Efficiency
how productively a business uses its resources when producing a good or service
26
Effectiveness
extent to which a business achieves its stated objectives
27
Stakeholders EG
- owners
- managers
-employees
-customers
-suppliers
-general community
28
stakeholders
a person or group with a vested interest in a business
29
Owners
individuals who establish, invest and have a share in a business, often with the goal of earning a profit from its operations
30
Managers
individuals who oversee and coordinate a business’s employees and lead its operations to ultimately achieve the business’s objectives
31
Employees
are individuals who are hired by a business to complete work tasks and support the achievement of its objectives
32
Customers
individuals or groups who interact with a business by purchasing and utilising its goods and services
33
Suppliers
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
General community
: 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
Owners vested interest
* 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
Managers vested interest
* 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
Employees vested interest
* 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
Customers vested interest
* 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
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Suppliers vested interest
* Increasing their revenue
* Earning a profit from the raw materials and resources they supply
* Having reliable and honest relationships with businesses they supply
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General community vested interest
* Observing business activities that lead to improvements in the community and environment
* Increasing the local employment rate and boosting the local economy
39
Autocratic management style
involves a manager making decisions and directing employees without any input from them
40
Autocratic +
+ Clearly defined roles with reduced responsibility and risk, as they only have to follow managers instructions
41
Autocratic -
- 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
Persuasive management style
involves a manager making decisions and communicating the reasons for those decisions to employees without their input
43
Persuasive +
+ 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
Persuasive -
- 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
Consultative management style
involves a manager seeking input from employees on business decisions but making the final decision themselves
46
Consultative +
+ 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
Consultative -
- 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
Participative management style
involves a manager sharing information with employees so that employees can participate in decision-making
49
Participative +
+ 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
Participative -
- 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
Laissez-faire management style
involves a manager communicating business objectives to employees and giving them freedom to make decisions independently
52
Laissez-faire +
+ 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
Laissez-faire -
- 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
Appropriateness of Management Styles
time, experience of employees, nature of the task, manager preference
55
Time
Length of time in which a manager must complete a task or make a business
Time available for tasks;
Limited timeExtended time
56
Experience of employees
level of experience employees have within that business
Experience of the employees;
Inexperienced tasksHighly experienced task
57
Nature of the task
highly complex, technical work
Nature of tasks;
Simple tasksComplex tasks
58
Manager preference
highly individualised and may determine which management style is most appropriate for them to use
Manager preference
High desireLow desire
59
Management Skills
planning, decision-making, communication, delegation, interpersonal, leadership
60
Planning
the process of determining a business’s objectives and establishing strategies to achieve these aims
61
Decision-making
is the skill of selecting a suitable course of action from a range of plausible options
62
Communication
is the skill of effectively transferring information from one party to another
63
Delegation
the skill of assigning work tasks and authority to other employees who are further down in a business’s hierarchical structure
64
Interpersonal
the skill of creating positive interactions with other employees to foster beneficial professional relationships
65
Leadership
is the skill of motivating others in order to achieve a business’s objectives
66
Corporate Culture
the shared values and beliefs of a business and its employees
67
Official corporate culture
involves the shared views and values that a business aims to achieve, often outlined in a written format
68
OCC examples
shared objectives
policies
training
uniform
symbols
69
Real corporate culture
involves the shared values and beliefs that develop organically within a business, and are practised on a daily basis by its employees
70
RCC examples
business ideaologies
types of employees
workplace environment
management styles
71
OCC RCC similarities
* 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
OCC RCC differences
* 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
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