Unit 3 AOS 1 Flashcards
(56 cards)
What are the characteristics of stakeholders?
Stakeholders are individuals or groups that interact with the business and have interests in its operations
Key stakeholders include owners, shareholders, managers, employees, customers, suppliers, and the general community.
What is the relationship between management styles and skills?
Management styles influence the skills needed for effective management
For example, an autocratic style may require strong decision-making skills, while a participative style may demand good communication skills.
What is a Sole Trader business structure?
A Sole Trader is owned and run by one person who handles all decisions and keeps all profits
This structure has unlimited liability, meaning personal and business liabilities are not separated.
What are the advantages of a Sole Trader business?
- Easy to establish
- Complete control
- Takes all profit
- Simplest form of business
- Overall lowest cost of entry
What are the disadvantages of a Sole Trader business?
- Unlimited liability
- Carries all losses
- Burden of management
- Overall lower profits compared to other business types
Define a Partnership in a business context.
A Partnership is owned by two or more people, typically with a maximum of 20 owners, and has unlimited liability
Each partner is responsible for the debts incurred by the business.
What is a Limited Partnership?
A Limited Partnership allows for partners who contribute financially but do not participate in management
This is often akin to investors providing capital without involvement in day-to-day operations.
What does incorporation mean?
Incorporation is the process of forming a new legal entity that separates the business from its owners
This allows for limited liability for shareholders.
What are Private Limited Companies?
Private Limited Companies must have at least one shareholder and one director, and shares are not publicly traded
They require shareholder agreement to close the business.
What are the advantages of Private Limited Companies?
- Limited liability
- Easier to attract finance
- Growth potential
- Less risk
- Experienced management
What are the disadvantages of Private Limited Companies?
- Overall higher set up costs
- Public disclosure requirements
- Potential management challenges
Describe Social Enterprises.
Social Enterprises produce goods and services to fulfill a social need while aiming to make a profit
They focus on improving community well-being.
What is the main objective of Government Business Enterprises (GBE)?
The main objective of a GBE is to make a profit while delivering community services and executing government policies.
What are the types of business objectives?
- Make profit
- Increase market share
- Improve efficiency
- Improve effectiveness
- Fulfill market need
- Fulfill social need
- Meet shareholder expectations
What is Corporate Social Responsibility (CSR)?
CSR is the practice of going beyond legal obligations to fulfill moral and ethical responsibilities
It can improve business performance through enhanced reputation and customer loyalty.
What is the Autocratic Management Style?
The Autocratic Management Style involves the manager making all decisions and closely supervising employees
This style is efficient for quick decision-making but can lead to employee dissatisfaction.
List the advantages of the Autocratic Management Style.
- Clear directions and procedures
- Defined roles minimize confusion
- Efficient use of time
List the disadvantages of the Autocratic Management Style.
- No employee input
- Decreased job satisfaction
- Potential for conflict
What is the Consultative Management Style?
The Consultative Management Style involves managers seeking employee input before making decisions, although the manager has the final say.
What are the advantages of the Participative Management Style?
- Higher employee acceptance of decisions
- Increased job satisfaction
- Greater skill acquisition opportunities
What are the disadvantages of the Participative Management Style?
- Time-consuming process
- Possible undermining of management authority
- Confusion over roles
What factors affect management style appropriateness?
- Nature of the task
- Time
- Experience of employees
- Preference of the manager
What are the key management skills?
- Communication
- Delegation
- Planning
- Leadership
- Decision-making
- Interpersonal skills
What is the purpose of delegation?
Delegation allows managers to assign authority and responsibility to employees, enabling them to take on tasks and develop skills.
Delegation can allow manager to pursue more urgent matters -> time efficient and less workload on manager
