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Business > Unit 3 AOS 1 > Flashcards

Unit 3 AOS 1 Flashcards

(59 cards)

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1
Q

Sole trader

A

The cheapest and simplest business type, unlimited liability, owned and controlled by one person, no perpetuity, individual tax rate, only need abn

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2
Q

Negatives of sole trader

A

Unlimited liability
Limited knowledge and skills available
No perpetuity

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3
Q

Positives of sole trader

A

Owner has full decision making power
Owner earns all profit
Easiest to register and set up

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4
Q

Partnership

A

2-20 partners, jointly responsible for all debts, no perpetuity, risk is shared

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5
Q

Limited partnership

A

Liability of one or more partners is limited, these partners are not involved in day to day operations, liability is in proportion to amount invested

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6
Q

General partnership

A

All partners are deemed equally responsible for management of the business

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7
Q

Partnership negatives

A

Unlimited liability
Business threatened by one partner leaving
Potential of disputes

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8
Q

Partnership positives

A

Risk is shared
Workload shared
Government regulations are minimal (ABN+annual tax return)

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9
Q

Company

A

A separate
legal entity (incorporated body) that is subject to the requirements of the Corporations Act 2001

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10
Q

ASIC

A

Independent Australian Government body that acts as Australia’s corporate regulator

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11
Q

ACN

A

A nine-digit number to be used on
a company’s common seal and all public documents involving the company

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12
Q

Limited liability

A

Shareholders are only personally liable to the level of their original investment in the company

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13
Q

Private limited company

A

1-50 shareholders, at least one director, optional company secretary, separate legal entity, has perpetuity

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14
Q

Negatives private limited company

A

High degree of complexity
More government control
Higher establishment and compliance costs

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15
Q

Prospectus

A

An invitation
to the public and potential investors to purchase shares in a particular company

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16
Q

Public company

A

Limited liability, has perpetuity, separate legal entity, no limit on shareholders, at least three directors, at least one company secretary

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17
Q

Negatives of public company

A

Highly complex structure
High establishment costs
Must ensure directors comply with directors duties

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18
Q

Positives of public company

A

Limited liability for shareholders
Able to gain additional capital through selling extra shares
Experienced management team

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19
Q

Corporate culture

A

Refers to the system of shared values and beliefs of people within a business

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20
Q

Official corporate culture

A

Formal written expression of values and beliefs desired by management

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21
Q

Real corporate culture

A

Unofficial practices and values that are actually held by the employees in the business

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22
Q

Ways to influence corporate culture

A

-Organisational mission
-Form of management structure
-Choice of management styles
-Choice of people hired
-Stories, narratives and rituals shared

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23
Q

Business objectives

A

The stated, measurable targets of how to achieve business goals

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24
Q

Three levels of business objectives

Study These Flashcards
A

-Strategic (long term 2-5 years)
-Tactical (medium term 1-2 years)
-Operational (short term day to day-up to 1 year)

25
List 7 business objectives
-Make a profit -Increase market share -Improve efficiency -Improve effectiveness -Fulfil a market need -Fulfil a social need -Meet shareholder expectation
26
Market share
Percentage of total sales within an industry that is controlled by the business
27
Efficiency
Making use of resources in the production of the product
28
Effectiveness
The degree to which a business achieves its objectives or how well it does what its trying to do. Determined by evaluating how well a strategy has helped to achieve a goal
29
Corporate social responsibility
The continuing commitment of a business to operate in an ethical manner, above and beyond minimum acceptable standard in an economically, socially, and environmentally sustainable manner whilst balancing the interests of diverse stakeholders.
30
Stakeholders
Individuals or groups who have a vested interest in the activities of the business
31
Stakeholders of businesses
-Owner/shareholder -Managers -Employees -Customers -Competitors -Suppliers -General community
32
Key concerns for stakeholders
-Is the business conducting its operations in an ethical manner? -Is the business acting in a socially responsible manner? -Is the business profitable?
33
Management styles (in order)
-Autocratic -Persuasive -Consultative -Participative -Laissez-faire
34
Characteristics that differentiate the management styles
-Centralised/decentralised decision making -One way or two way communication -Involvement of employees -Importance of achieving tasks vs employee satisfaction
35
Autocratic management
Centralised decision making, one way communication, little delegation or employee involvement. Suits high risk situations or when staff are inexperienced.
36
Advantages of autocratic management
Quick decision making Experienced person making decisions
37
Disadvantages of autocratic management
Employees can feel unvalued Doesn't allow for feedback
38
Persuasive management
Manager makes decisions, then convinces employees that its the right decision. Centralised decision making, one way communication, task oriented but with some concern for employees, suits when staff are inexperienced or in high numbers
39
Advantages of persuasive management
Employees more likely to support decision when they know why it's made Most experienced person making decisions
40
Disadvantages of persuasive management
Does not allow for employee feedback Employees may feel unvalued
41
Consultative management
Takes into account team member opinions in decisions. Centralised decision making, two way communication, medium level of employee involvement, suits large numbers and knowledgeable employees
42
Consultative management advantages
Motivates employees as they are involved Can foster culture of continuous improvement
43
Consultative management disadvantages
Employees may not understand complexity of issues Can lead to conflicting ideas
44
Participative management
Discuss problems and come up with decisions together. Decentralised decision making, two-way communication, employee focused, suits highly qualified employees and small teams.
45
Participative management advantages
Employees feel valued Ideas and suggestions from knowledgeable staff.
46
Participative management disadvantages
Can take longer to reach a decision Requires employees to be of similar skill and knowledge level
47
Laissez-faire management
Decentralised decision-making, two-way communication, lots of employee involvement, suits highly qualified and experienced teams, who work autonomously.
48
Laissez faire management advantages
Encourages high level of communication Good environment to foster creativity and innovation
49
List all management skills
-Communication skills -Delegation -Planning -Leading -Decision making -Interpersonal skills
50
Communication skills
Creating and exchanging information between people, produced a required response, can be written or oral.
51
Delegation
Passing down of authority down the hierarchy to perform tasks and make decisions
52
Delegation process (AABCA)
Analysis- Decide tasks to be delegated Appointment- Nominate subordinate to allocate task to Briefing- Define the task to be delegated Control- Monitor and encourage person undertaking task Appraisal- Review and revise
53
Planning
Formalised decision-making process that has a focus on the future, must understand business purpose and objectives
54
Three levels of planning
Strategic (long term) Tactical (medium term) Operational (short term)
55
Leading
Guiding, motivating and influencing employees towards achieving business goals and objectives
56
Decision making
Making a choice/selection between a range of different alternatives
57
Decision making process
-Identify problem, define objective -Gather information -Develop alternatives -Analyse alternatives -Choose and implement alternative -Evaluate
58
Interpersonal skills
Day-to-day skills used to communicate and interact with others. Implanted in a 'personal' capacity to build rapport.
59
Three levels of corporate culture
Artefacts- Clearly visible symbols/appearances Values: Shared rules residing just below the surface Assumptions: Beliefs about human nature and environment that reside just below the surface and are taken for granted.

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