Business Studies Revision Flashcards

Flashcards for business studies exam revision.

What is a sole trader?

A business owned by one person.

Define limited liability.

The liability of shareholders in a company is limited to the amount they invested.

What is unlimited liability?

The owners of a business can be held responsible for the debts of the business they own.

What is a partnership?

A form of business in which two or more people agree to jointly own a business.

What is a partnership agreement?

The written, legal agreement between business partners.

Define an unincorporated business.

A business that does not have a separate legal identity.

What is an incorporated business?

A business that has separate legal status from its owners.

Who are shareholders?

The owners of a limited company.

What is a private limited company?

A business owned by shareholders but it cannot sell shares to the public.

What is a public limited company?

A business owned by shareholders but it can sell shares to the public and its shares are tradable on the stock exchange.

What is an Annual General Meeting (AGM)?

A legal requirement for all companies where shareholders may attend and vote.

What are dividends?

Payments made to shareholders from the profits (after tax) of a company.

Define franchise.

A business based on the use of the brand names, promotional logos and trading methods of an existing successful business.

What is a joint venture?

When two or more businesses start a new project together, sharing capital, risks and profits.

What is a public corporation?

A business in the public sector that is owned and controlled by the state (government).

What is the definition of business objectives?

The aims or targets that a business works towards.

Define profit.

Total income (revenue) of a business less total costs.

What is market share?

The percentage of total market sales held by one brand or business.

Define a social enterprise.

A social enterprise has social objectives as well as an aim to make a profit to reinvest back into the business.

What is a stakeholder?

Any person or group with a direct interest in the performance and activities of a business.

Define motivation.

The reason why employees want to work hard and work effectively for the business.

What is a wage?

A payment for work, usually paid weekly.

What is time rate?

The amount paid to an employee for one hour of work.

Define piece rate.

An amount paid for each unit of output.

What is a salary?

Payment for work, usually paid monthly.

Define bonus.

An additional amount of payment above basic pay as a reward for good work.

What is commission?

Payment relating to the number of sales made.

Define profit sharing.

A system whereby a proportion of the company's profit is paid out to employees.

What is job satisfaction?

The enjoyment derived from feeling that you have done a good job.

Define job rotation.

Involves employees swapping around and doing each specific task for only a limited time and then changing around again.

What is job enrichment?

Involves looking at jobs and adding tasks that require more skill and/or responsibility.

Define teamworking.

Involves using groups of employees and allocating specific tasks and responsibilities to them.

What is training?

The process of improving an employee's skills.

Define promotion.

The advancement of an employee in an organisation, for example, to a higher job/managerial level.

What is organizational structure?

The levels of management and divisions of responsibilities within an organization.

Define organization chart.

A diagram that outlines the internal management structure.

What is hierarchy?

The levels of management in any organisation, from the highest to the lowest.

Define chain of command.

The structure in an organisation that allows instructions to be passed down from senior management to lower levels of management.

What is span of control?

The number of subordinates working directly under a manager.

Who are directors?

Senior managers who lead a particular department or division of a business.

Define line managers.

Managers who have direct responsibility over people below them in the hierarchy of an organisation.

What are supervisors?

Junior managers who have direct control over the employees below them in the organisational structure.

Define staff managers.

Specialists who provide support, information and assistance to line managers.

What is delegation?

Giving subordinates the authority to perform particular tasks.

Define leadership styles.

The different approaches to dealing with people and making decisions when in a position of authority

What is autocratic leadership?

The manager is in charge of the business, takes all decisions and expects orders to be followed.

Define democratic leadership.

All employees are involved in the decision-making process.

What is laissez-faire leadership?

Makes the broad objectives of the business known to employees, who are then left to make their own decisions and organise their own work.

Define trade union.

A group of employees who have joined together to ensure their interests are protected.

Give two advantages to an entrepreneur of setting up in business as a sole trader?

Own boss and easy to set up