Nature of Business
What is the formula of profit?
Revenue - Expenses
Why is it important for a business to set achievable goals
Provides direction, motivates employees, measures progress, supports decision-making, increases chances of success
What is a vision statement
What the business hopes to achieve in the future
what is the difference between incorporated and unincorporated business
Unincorporated share same legal identity (unlimited liability), incorporated is diff
What is a small to medium enterprise
A business with fewer than 200 employees or an annual turnover of under $50 million
What is the difference between a private and public company
A public company sells stock to the public and loses control of ownership, whereas a private company has full ownership
What are 8 management skills
Interpersonal, communication, strategic thinking, vision, problem-solving, decision-making, flexibility, adaptability to change, reconciling the conflicting interest of stakeholders
Define the term 'manager'
A manager is someone who works with other people to achieve business goals in a rapidly changing environment.
Identify 5 external influences of business
EFGSPLITCM
Why should managers adopt the contingency management approach
Flexibility in decision-making, responds to employee needs, improves problem-solving, enhances organisational performance, reduces resistance to change
Describe two internal influences on a business
Products, location, resources, management and business culture
What are the features of effective management
Planning Organising Leading Controlling
A manager introduces strict monitoring systems and performance targets. Which management feature is being emphasised?
Controlling
What are the ways for business to grow externally
Merger and acquisition
Higher customer satisfaction, increased efficiency, competitive advantage, improved employee morale, better compliance, long-term profitability
Describe the elements of the business life cycle
Establishment (start), growth (increase in sales, market awareness), maturity (sales peak) and post-maturity (renewal, steady or decline)
What is the difference between autocratic and democratic leadership styles
Autocratic (classical) is when an individual has control over the decisions, whereas democratic (behavioural) allows everyone to contribute
Describe two features of effective management
Leading: motivating employees to achieve goals.
Controlling: checking whether goals are being achieved.
Planning: setting business goals and determining strategies to achieve them.
Organising: arranging resources and tasks to implement plans.
What are SMEs
Small and Medium Enterprises (SMEs) provide roughly about half of the workforce employment in many economies.
Why is it important to engage in ethical business practices
Builds customer trust and loyalty, improves brand image, attracts and retains employees, long-term sustainability
Define two advantages and two disadvantages of a sole trader
Advantages: full control, simple and inexpensive set up, owner keeps all profits, privacy, flexibility
Disadvantages: unlimited liability, limited capital, high workload, limited skills and experience
What is the triple bottom line
Economic (profit), planet (environment) , and social
1. A manager clearly communicates a vision and motivates staff to achieve long-term goals. Which management function is most evident?
2. A manager allocates staff, budget and equipment to complete a project efficiently. Which management function is being demonstrated?
1. Leading
2. Organising
Describe the elements of a marketing mix
Product, Place, Price, Promotion
Explain two factors that can lead to a small to medium enterprise failure
Poor management skills, inadequate financial planning, lack of market research, ineffective marketing, economic downturn, poor location, resistance to change, legal or compliance issues