1.5 Business

financial motivation

financial motivation

a motivation form where money is the incentive

non-financial motivation

motivation through a job which is designed to be more satisfactory

performance related pay

workers are paid based on performance or business' performance

leader

someone who influences and motivates employees enabling others to contribute to the business' success

manager

controls a group of people in order to achieve a specific goal

Laissez-faire

a hands off approach to leadership- support is offered but leaders rarely interfere in running the business

autocratic

leader makes the decisions on their own- dictator style

democratic

the leader encourages employees to participate in the decision making and listen as well as delegate responsibilities

paternalistic

softer form of autocratic- care about well being and motivation more

transformational

used when a business needs to change- highly innovative style, encouraging ideas on how to improve and inspire employees to make the changes

entrepreneur

a person who sets up a business taking on the risks

innovation

thinking of new ways of doing things

risk

considering the positive and negative outcomes and concluding whether or not to take the gamble

profit maximalisation

making as much profit as possible

profit satisfaction

making enough profit but not pushing to maximise it

business objectives

short term goals or targets presented through SMART

business aims

long term goals the business wants to achieve

SMART objectives

Specific Measurable Achievable Relevant Time-bound

survival

the first aim for a business

sole trader

an individual trading in their own name- self employed but can employ staff

partnership

a business owned by 2-20 people

private limited company LTD

business that issues shares privately (to family and friends)

limited liabilty LLC

a legal structure which limits the extent of an economic loss of assets to invested in an organisation

unlimited liability

public limited company PLC

a business which issues shares on the stock market that the public can buy

dividends

limited companies have a decision on how much to pay their shareholders

shareholders

a person or company that owns at least one share of a company's stock or mutual fund

franchising

an agreement which allows an individual to use a business' name, idea, model, product and reputation in exchange of an initial fee and ongoing royalty payments

lifestyle business

a business that is designed to allow the owner to live a particular lifestyle of their chosing

social enterprise

businesses set up with a core aim to use its profits to benefit society

trade off

deciding which resources to use- thinking carefully to allocate effectively e.g. increased flexibility of working hours but having blurred work/home life and lack of free time

opportunity cost

the value of the next best alternative given up

delegation

when an entrepreneur transfers authority and responsibility for specific tasks from one person to another

emotional intelligence

the ability to identify and manage emotions and recognise emotions of others and respond appropriately

less reactive

being proactive and more focused on growth than