Why businesses exist - CORRECT ANSWERS -Can make you money and you can
be your own boss
,Mission - CORRECT ANSWERS -a business aim expressed to make it seem especially
purposeful and motivating
Objectives - CORRECT ANSWERS -SMART Specific, Measurable, Achievable,
Realistic, Time-bound
Why businesses set objectives - CORRECT ANSWERS -- it is motivating to have a goal
to aim toward
- as a boss you can not make every decision
Profit - CORRECT ANSWERS -Revenue - total costs
What are the 5 types of business - CORRECT ANSWERS --sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - CORRECT ANSWERS -a business that is owned and operated by one
person
Private Limited Company (Ltd) - CORRECT ANSWERS -A small to medium sized
company, owned by shareholders who have limited liability. The company cannot sell its
shares to the general public.
Private Limited Company Advantages - CORRECT ANSWERS --Limited liability
-Additional capital can be raised by selling shares (not to the general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - CORRECT ANSWERS --You have to publish
the account information
-You need two share of £1 each
Public limited company (plc) - CORRECT ANSWERS -A limited company with more that
£50,000 of share capital. Any member of the public can buy shares. Public companies
must publish more detailed accounts
Public limited company Advantages - CORRECT ANSWERS --Raising capital through
public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
,-Separate legal entity to the owner
public limited company Disadvantages - CORRECT ANSWERS --More regulations that
could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - CORRECT ANSWERS -Organisations owned by
individuals or companies
Public sector organisations - CORRECT ANSWERS -Businesses owned by the
government.
Non-profit organisations - CORRECT ANSWERS -Businesses with a motive other than
profit, may be to provide a social benefit or service to society or to support a cause.
Share capital - CORRECT ANSWERS -The total value of capital raised from
shareholders by the issue of shares
Role of Shareholders - CORRECT ANSWERS -to raise important issues with the board
directors and raise funds
Why shareholders invest - CORRECT ANSWERS --Annual dividend payments
-A rise in the value of shares
Market capitalisation - CORRECT ANSWERS -Number of issued shares x current share
price
Influences on the price of shares - CORRECT ANSWERS --The profit after tax of the
company x the value investors place on on those earnings
Significance of share price changes - CORRECT ANSWERS -High = cheap and easy to
obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - CORRECT ANSWERS --Market
conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - CORRECT ANSWERS --The number of competitors in a particular
market
-The intensity of competitiveness
, -Total market available
-The rate at which the market is growing
Competition - CORRECT ANSWERS -The tighter the economic and market conditions,
the greater the competitive pressures tend to be
Factors that effect household incomes - CORRECT ANSWERS --Changes in the real
income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - CORRECT ANSWERS -If interest rates go up, businesses
and individuals spend less. If interest rates go down, businesses and individuals spend
more.
Demographic factors - CORRECT ANSWERS --Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - CORRECT ANSWERS -Concern for green issues
and ethical issues involved with business.
What do managers do - CORRECT ANSWERS -Set objectives, organize, motivate and
communicate, measure, develop people
What are the leadership styles - CORRECT ANSWERS --Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - CORRECT ANSWERS -Managers who centralise power and tell
employees what to do. They tend to use one-way, top-down communication.
Democratic managers (laissez-faire) - CORRECT ANSWERS -Managers that take the
view of their subordinates into account when making decisions as well as delegating
authority. Communication tends to be two-way. 'Laissez-faire' means 'Let it be"
Paternalistic managers - CORRECT ANSWERS -They try to do what is best for their
staff. There may be consultations to find out the views but the boss always makes the
final decision.
Blake and Mouton's Managerial Grid - CORRECT ANSWERS -looks at 'concern for
people' and 'concern for performance' then grades the people to see where they fall on
the grid.
be your own boss
,Mission - CORRECT ANSWERS -a business aim expressed to make it seem especially
purposeful and motivating
Objectives - CORRECT ANSWERS -SMART Specific, Measurable, Achievable,
Realistic, Time-bound
Why businesses set objectives - CORRECT ANSWERS -- it is motivating to have a goal
to aim toward
- as a boss you can not make every decision
Profit - CORRECT ANSWERS -Revenue - total costs
What are the 5 types of business - CORRECT ANSWERS --sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - CORRECT ANSWERS -a business that is owned and operated by one
person
Private Limited Company (Ltd) - CORRECT ANSWERS -A small to medium sized
company, owned by shareholders who have limited liability. The company cannot sell its
shares to the general public.
Private Limited Company Advantages - CORRECT ANSWERS --Limited liability
-Additional capital can be raised by selling shares (not to the general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - CORRECT ANSWERS --You have to publish
the account information
-You need two share of £1 each
Public limited company (plc) - CORRECT ANSWERS -A limited company with more that
£50,000 of share capital. Any member of the public can buy shares. Public companies
must publish more detailed accounts
Public limited company Advantages - CORRECT ANSWERS --Raising capital through
public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
,-Separate legal entity to the owner
public limited company Disadvantages - CORRECT ANSWERS --More regulations that
could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - CORRECT ANSWERS -Organisations owned by
individuals or companies
Public sector organisations - CORRECT ANSWERS -Businesses owned by the
government.
Non-profit organisations - CORRECT ANSWERS -Businesses with a motive other than
profit, may be to provide a social benefit or service to society or to support a cause.
Share capital - CORRECT ANSWERS -The total value of capital raised from
shareholders by the issue of shares
Role of Shareholders - CORRECT ANSWERS -to raise important issues with the board
directors and raise funds
Why shareholders invest - CORRECT ANSWERS --Annual dividend payments
-A rise in the value of shares
Market capitalisation - CORRECT ANSWERS -Number of issued shares x current share
price
Influences on the price of shares - CORRECT ANSWERS --The profit after tax of the
company x the value investors place on on those earnings
Significance of share price changes - CORRECT ANSWERS -High = cheap and easy to
obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - CORRECT ANSWERS --Market
conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - CORRECT ANSWERS --The number of competitors in a particular
market
-The intensity of competitiveness
, -Total market available
-The rate at which the market is growing
Competition - CORRECT ANSWERS -The tighter the economic and market conditions,
the greater the competitive pressures tend to be
Factors that effect household incomes - CORRECT ANSWERS --Changes in the real
income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - CORRECT ANSWERS -If interest rates go up, businesses
and individuals spend less. If interest rates go down, businesses and individuals spend
more.
Demographic factors - CORRECT ANSWERS --Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - CORRECT ANSWERS -Concern for green issues
and ethical issues involved with business.
What do managers do - CORRECT ANSWERS -Set objectives, organize, motivate and
communicate, measure, develop people
What are the leadership styles - CORRECT ANSWERS --Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - CORRECT ANSWERS -Managers who centralise power and tell
employees what to do. They tend to use one-way, top-down communication.
Democratic managers (laissez-faire) - CORRECT ANSWERS -Managers that take the
view of their subordinates into account when making decisions as well as delegating
authority. Communication tends to be two-way. 'Laissez-faire' means 'Let it be"
Paternalistic managers - CORRECT ANSWERS -They try to do what is best for their
staff. There may be consultations to find out the views but the boss always makes the
final decision.
Blake and Mouton's Managerial Grid - CORRECT ANSWERS -looks at 'concern for
people' and 'concern for performance' then grades the people to see where they fall on
the grid.
