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Premises
Buildings and land used by a shop or business.
Goods
Physical products such as mobile phones or a pair of shoes.
Services
Non-physical products such as banking and car washing.
Consumer Goods
Goods and services sold to ordinary people rather than businesses.
Producer Goods
Goods and services produced by one business for another.
Needs
Basic requirements for human survival.
Wants
People's desires for goods and services.
Consumer Goods
Final product ready for sale that is used by the consumer to satisfy current wants or needs
Producer Goods
Products used to produce other goods
Private Enterprise
Owned by individuals or groups of individuals who’s aim is to make profit.
Social Enterprise
Non-profit making (e.g. charity)
Public Enterprise
Owned by the government
Stakeholder
An individual or group with an interest in the operation of a business.
Stakeholder (examples)
. Customers - Buy goods/services
. Employees - Work for business
. Financiers - Lend money to a business
. Suppliers - Business that supplies raw materials
. Owners - The owners of the business
. Managers - Help to run the business
Objectives
Goals set by a business to achieve their aims.
Revenue
Money from the sale of goods and services.
Private Enterprise
Owned by individuals or groups of individuals with the aim to make profit.
Social Enterprise
Non-profit making organizations, for example charities.
Public Enterprise
Businesses owned by the government.
Limited Liability
Business owners are only liable for the original amount of money invested in the business.
Sole Trader
Business owned by a single person.
Partnership
Business owned by between 2 and 20 people.
Franchise
Structure in which a business (franchisor) allows another operator (franchisee) to trade under their name.
The importance of clear objectives
. Employees need something to work towards
. Objectives motivate people
. Objectives decide where to take a business and what steps are necessary to get there
.Makes easier to assess the performance of a business
Co-operative
Businesses aimed at supporting the wider community rather than just profit.
Limited Companies
Business organizations that have a separate legal identity from that of their owners.
Multinational
Large business with significant production or service operations in at least 2 different countries.
Dividend
A share of profit.
Public Corporation
Business organizations owned and controlled by the government.
Globalization
When businesses operate in more than one country around the world.
Globalisation Trends
Increased trade across national boundaries.
One company having subsidiary companies and plants in many countries.
One company producing material required from multiple countries.
One company selling its products in many different countries.
Growth of joint ventures and technical collaborations between companies from
different countries.
Lowering of trade barriers and simplified impact and export procedures
Exchange Rate
Rate at which one currency may be converted into another.
Fiscal Policy
Using changes in taxation and government expenditure to manage the economy.
Monopoly
When one business only provides a certain product, controlling the market and owning all market share.
Cash Flow Problems
Issues that arise from overtrading, over-borrowing, or unexpected expenditure affecting business liquidity.
Primary sector (industry)
Production involving raw material extraction
from the earth.
(e.g. agriculture, fishing, forestry,
mining and quarrying.)
Secondary sector (industry)
Production involving converting raw materials
into finished and semi-finished goods.
(e.g. metalworking, car production,
energy utilities and shipbuilding)
Tertiary
Production of services in thr
economy.
(e.g. commercial,
financial and household
services)
Factors influencing location of a business
Proximity to the market.
Proximity to labour.
Proximity to materials.
Proximity to competitors.
History and tradition.
Cost of premises.
Ventures
new business activity that involves taking risks
Exploitation
treating someone unfairly by asking them to do something for you
and you give them very little in return
MNE
Multinational Enterprise
MNC
Multinational corporations
Multinationals
Have a head office in one country but operate from many different countries with factories
around the world
Multinationals (Advantages)
Jobs are provided.
An injection to the local economy that it enters.
Training and education is provided for
employees.
MNE’s will pay tax in that country.
Helps the world’s knowledge and
understanding of other countries
Multinationals (Disadvantage)
High wage jobs aren’t given to locals.
Charge low prices as a large business,
pushing smaller local competition out.
Can influence government’s decisions with regards to grants, tax and land.
Economy
how developed a country is and how much money it has
Imports
goods and services bought from overseas
Exports
goods and services sold overseas.
Effects of Imports
Increase in value of currency → Cheaper costs -→ Imports rise
Decrease in value of currency → Expensive costs → Imports fall
Effects on Exports
Increase in value of currency → Expensive costs -→ Exports Fall
Decrease in value of currency → Cheaper costs → Exports Rise
What is happening outside a business that affects it
(STEP)
Social Factors - things that affect people like fashion and changes in society
Technological Factors - as technology improves and changes, the economy
advances.
Environmental Factors - as economies grow, environmental damage increases.
Sustainable development- whatever you use, you have to replace
Political Factors - government makes laws and regulations that all businesses
should follow
Measures of Success
- Revenue
- Market share
- Customer satisfaction
- Profit
- Growth
- Shareholder satisfaction
- Employee satisfaction
Reasons for business Failure
- New entrants
- Ineffective marketing
- Lack of business skills
- Poor leadership
Cash Flow Problems
- Overtrading
- Investing too much in fixed assets
- Allowing too much credit
- Over-borrowing
- Seasonal factors
- Unexpected expenditure
- External factors
- Poor financial management
Communication Channels
Routes along which information might travel in a business
Downward Communication
When information is passed from the top of the organisations hierarchy to the bottom
Upward communication
Messages past from the bottom of the businesses hierarchy to those at top
Horizontal communication
An exchange of information sent between peers within the same level of the organisation’s hierarchy
Internal communication
Communication which takes place within the business and it’s workers
External communication
Communication which is done between those inside the organisation and those outside, this could include customers, suppliers, investors
Importance of downward communication
Subordinates will look to management for leadership
It allows the decisions made by those in management to be carried out by their employees
Gives the management control, demand and organisation
Importance of upward communication
Helps managers to understand the views of their employees
Points out problems or issues
Helps staff morale as they feel they’re valued
Gives managers information which may be useful for future decisions
Face to face communication (examples)
Press conference
Presentation to investors
Interview
Dealing with customers in a shop
Written communication (Examples)
Letters
Reports
Staffroom notice board
Memo
Form
Electronic communication (examples)
Social Media
Video-conferencing
Mobile phones
Internet
Poor communication effects
Mistakes occur
Costs rise
Decision making slows down
Staff Motivation will suffer
Face to face communication advantages
Allows immediate feedback
Encourages cooperation
Allows new ideas to be generated
Saves time
Disadvantages of Face to Face communication
Negative body language can create a barrier
Some people may not listen or be distracted
A record of the message may not be kept
Letters (advantages)
Evidence of formal communication
Formal written communication
Letters (disadvantages)
Time consuming
Can be destroyed easily
Can be lost
Reports (advantages)
Reports (disadvantages)
Able to provide a lot of information in 1 document
Can be distributed to all stakeholders
Reports (Disadvantages)
Time consuming to be produce
Data can become out of date quickly
Memorandums (advantage)
Quick and easy to pass on
Memorandums (disadvantages)
Not always received
Misplaced easily
Not an effective form of communication
Forms (advantage)
Official/applications/documents for registering and obtaining information
Forms disadvantages
They can be time consuming to produce require a lot of paper work and can be misplaced of lost easily
Barriers to communication
Lack of Clarity
Technological breakdown
Poor communication skills
Long chain of command
Using wrong method of communication
Lack of clarity
When an message is unclear it may be ignored or misunderstood due to vague language or insufficient detail.
Technological break down
Occurs when technology fails, disrupting communication and workflow.
Poor communication skills
Some people may have a limited vocabulary or poor listeners, while some messages are misspelled or come of in the wrong tone
Long chain of command
Too many layers of management can prolong the communication process or information can become inaccurate along the way
Using the wrong method of communication
refers to selecting an inappropriate channel (e.g., email instead of face-to-face) that can lead to misunderstandings or ineffective messaging.
Effects of ineffective communication
Poor relationship with customers and suppliers
Higher legal costs
Higher staff turnover
Poor customer service
More work related injuries
Lower profits
Overcoming communication barriers
Recruiting staff with good communication skills
Staff training in communication
Shorter chain of command
Repairing faulty technology
Full time employment
Works a full working week, long-term employment
Part-time employment
Works fewer hours that full time, often has more flexibility with work hours
Job share
2 Part time employees sharing work shifts and pay of a full time employee (e.g two doctors taking shifts to do a surgery)
Causal Employment
Work is often variable, needs to be on call often no full guarantee on work by the employer
Seasonal Employment
When a business needs more employees at a certain time of year (e.g ski resort)
Temporary Employment
Staff who are hired for short periods of time (e.g to replace absent workers)
Why a business needs new staff
Business Growth
Staff leave
Promotions
Temporary cover needed
Job Analysis
The HR team will identify what the business will need for the new employee also handling the type of contracts
Job description
This document covers the jobs duties for the successful candidate and what they are expected to do or who they will report to
Person specification
This documents created by HR, will highlight the desired qualities of the successful candidate, such as qualifications or previous experiences
Job advert
Comprised of both Job description and person specification
Application form
Standard documents used to collect information from the job applicant
Curriculum Vitae (CV)
This document is used by a job seeker who will list their qualifications, work experience, references and other details, this is sent in to apply for the job position
Selection methods
The various techniques and processes used by employers to assess and choose candidates for job positions, including interviews, tests, CV, cover letters and assessments.