Business Structures
How many owners does a sole trader have?
One
Name a non-financial objective
To fulfil a social need
What are the interests of a manager for a business?
Setting goals and objectives, develop their career, make profits for the business, work for an ethical and socially responsibility business
What type of communication style does an autocratic manager have?
Top-down communication
Define corporate culture
Corporate culture is the values, ideas, expectations and beliefs shared by the staff and managers of the business
Define unlimited liability
Unlimited liability regers to when a business owner is personally responsible for all the debts of the business
Define 'to increase market share'
To increase market share refers to a business gaining more competitive advantage by having the highest proportion of total sales in the market/industry
What are the interests of the general community towards the business?
Benefit form employment opportunities created by the business, business participates in the community, business is socially, ethically and environmentally responsible
Which management style is known for collaborating with their employees to make decisions whilst retaining responsibility and accountability?
Participative management style
What is official corporate culture
It is the desired culture that the business wishes to establish
What is one advantage and one disadvantage of using a partnership is a business structure
Advantages - low cost, shared responsibility, business still runs if other owner is absent
Disadvantages - Personal unlimited liability, possible disputes, divided profits
Distinguish between the objectives to improve efficiency and to improve effectiveness
To improve efficiency measures the use of resources and maximising outputs created whereas to improve effectiveness measures how well you are achieving set objectives
What is a potential conflict between management and customers?
Managers want to maintain profits to satisfy shareholders so they raise prices but this upsets customers who want reasonably priced products and therefore will stop purchasing from the business
Idenfity 2 management skills and describe them
Communication; delegation; planning; leadership; decision-making; interpersonal
What is real corporate culture
It is the actual culture that exists within the business
What is one similarities and one difference of a private limited company and a public listed company
Similarities - need one shareholder minimum, limited liability, cost of formation is expensive
Differences - public can have anyone be a shareholder whilst private chooses who has shares in their business
Explain why a business would set the goal of fulfil a market need
A business would set this objective because it can allow them to meet customer expectations and receive profit or more market share as they are giving customers a product/service that they did not have access to before
What is a potential conflict between management and suppliers?
Suppliers create ethical materials which cost more to produce which managers do not want to pay for because they are trying to keep costs down for the business
You have a group of employees who are consistently making mistakes and causing issues within the production process of your business.
What management style would be used for this issue and which skills would you use and how?
E.g. autocratic style would be used as employees need direct instructions. Would use communication as the skills by having clear descriptions of what they are doing wrong and how they can improve on their issues
What are the 4 areas that create corporate culture?
Values and practices, symbols, rituals rites and celebrations, heroes
Describe 2 advantages and 2 disadvantages of a social enterprise
Advantages - Can open up to new markets, meets social needs which can increase profit and market share because of positive perspective
Disadvantages - difficult to obtain finances, costs a lot to operate, difficult to focus on social and financial objectives, one tends to be forgotten
Explain what meeting shareholder expectations is and describe why achieving this is beneficial for a business
Meeting shareholder expectations refers to a business making enough money and having a high enough market share that shareholders are making money form the businesses success. This is beneficial as if businesses meet these expectations, the shareholder will reinvest in the business allow for more finances to support them
Why is it important for a business to understand the interests of stakeholders?
It allows businesses to see what they should be providing to their stakeholders but also to attempt to decrease any conflicts that could potentially arise, if they know the interests they can provide for this
When is a persuasive management style most appropriate to use? Name 2 skills that are best used in this style and explain why.
Appropriate - lack of time for work so decisions need to be made quickly; employees lack experience; simple tasks
Skills - dependent on explanation
Why is it important for a business to have positive corporate culture? Explain the impacts of negative corporate culture
It is important because employees will feel valued within the business and want to stay. Additionally it gives the business positive reputation, making more people want to work for them and also have customers purchase from them.
If a business has negative CC, they will lose employees and struggle to continue with production due to understaffing and lack of motivation