BUSINESS

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GCSE Business course

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440 Terms

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Premises

Buildings and land used by a shop or business.

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Goods

Physical products such as mobile phones or a pair of shoes.

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Services

Non-physical products such as banking and car washing.

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Consumer Goods

Goods and services sold to ordinary people rather than businesses.

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Producer Goods

Goods and services produced by one business for another.

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Needs

Basic requirements for human survival.

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Wants

People's desires for goods and services.

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Consumer Goods

Final product ready for sale that is used by the consumer to satisfy current wants or needs

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Producer Goods

Products used to produce other goods

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Private Enterprise

Owned by individuals or groups of individuals who’s aim is to make profit.

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Social Enterprise

Non-profit making (e.g. charity)

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Public Enterprise

Owned by the government

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Stakeholder

An individual or group with an interest in the operation of a business.

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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

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Objectives

Goals set by a business to achieve their aims.

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Revenue

Money from the sale of goods and services.

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Private Enterprise

Owned by individuals or groups of individuals with the aim to make profit.

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Social Enterprise

Non-profit making organizations, for example charities.

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Public Enterprise

Businesses owned by the government.

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Limited Liability

Business owners are only liable for the original amount of money invested in the business.

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Sole Trader

Business owned by a single person.

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Partnership

Business owned by between 2 and 20 people.

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Franchise

Structure in which a business (franchisor) allows another operator (franchisee) to trade under their name.

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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

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Co-operative

Businesses aimed at supporting the wider community rather than just profit.

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Limited Companies

Business organizations that have a separate legal identity from that of their owners.

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Multinational

Large business with significant production or service operations in at least 2 different countries.

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Dividend

A share of profit.

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Public Corporation

Business organizations owned and controlled by the government.

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Globalization

When businesses operate in more than one country around the world.

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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

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Exchange Rate

Rate at which one currency may be converted into another.

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Fiscal Policy

Using changes in taxation and government expenditure to manage the economy.

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Monopoly

When one business only provides a certain product, controlling the market and owning all market share.

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Cash Flow Problems

Issues that arise from overtrading, over-borrowing, or unexpected expenditure affecting business liquidity.

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Primary sector (industry)

Production involving raw material extraction
from the earth.
(e.g. agriculture, fishing, forestry,
mining and quarrying.)

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Secondary sector (industry)


Production involving converting raw materials

into finished and semi-finished goods.
(e.g. metalworking, car production,
energy utilities and shipbuilding)

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Tertiary

Production of services in thr
economy.
(e.g. commercial,
financial and household
services)

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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.

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Ventures

new business activity that involves taking risks

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Exploitation

treating someone unfairly by asking them to do something for you
and you give them very little in return

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MNE

Multinational Enterprise

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MNC

Multinational corporations

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Multinationals

Have a head office in one country but operate from many different countries with factories
around the world

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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

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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.

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Economy

how developed a country is and how much money it has

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Imports

goods and services bought from overseas

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Exports

goods and services sold overseas.

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Effects of Imports

Increase in value of currency → Cheaper costs -→ Imports rise

Decrease in value of currency → Expensive costs Imports fall

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Effects on Exports

Increase in value of currency → Expensive costs -→ Exports Fall

Decrease in value of currency → Cheaper costs Exports Rise

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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

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Measures of Success


- Revenue

- Market share
- Customer satisfaction
- Profit
- Growth
- Shareholder satisfaction
- Employee satisfaction


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Reasons for business Failure

- New entrants
- Ineffective marketing
- Lack of business skills
- Poor leadership

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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

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Communication Channels

Routes along which information might travel in a business

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Downward Communication

When information is passed from the top of the organisations hierarchy to the bottom

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Upward communication

Messages past from the bottom of the businesses hierarchy to those at top

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Horizontal communication

An exchange of information sent between peers within the same level of the organisation’s hierarchy

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Internal communication

Communication which takes place within the business and it’s workers

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External communication

Communication which is done between those inside the organisation and those outside, this could include customers, suppliers, investors

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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

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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

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Face to face communication (examples)

  • Press conference

  • Presentation to investors

  • Interview

  • Dealing with customers in a shop

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Written communication (Examples)

  • Letters

  • Reports

  • Staffroom notice board

  • Memo

  • Form

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Electronic communication (examples)

  • Email

  • Social Media

  • Video-conferencing

  • Mobile phones

  • Internet

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Poor communication effects

  • Mistakes occur

  • Costs rise

  • Decision making slows down

  • Staff Motivation will suffer

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Face to face communication advantages

  • Allows immediate feedback

  • Encourages cooperation

  • Allows new ideas to be generated

  • Saves time

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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

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Letters (advantages)

  • Evidence of formal communication

  • Formal written communication

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Letters (disadvantages)

  • Time consuming

  • Can be destroyed easily

  • Can be lost

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Reports (advantages)

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Reports (disadvantages)

  1. Able to provide a lot of information in 1 document

  2. Can be distributed to all stakeholders

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Reports (Disadvantages)

  1. Time consuming to be produce

  2. Data can become out of date quickly

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Memorandums (advantage)

Quick and easy to pass on

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Memorandums (disadvantages)

  1. Not always received

  2. Misplaced easily

  3. Not an effective form of communication

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Forms (advantage)

Official/applications/documents for registering and obtaining information

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Forms disadvantages

They can be time consuming to produce require a lot of paper work and can be misplaced of lost easily

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Barriers to communication

  • Lack of Clarity

  • Technological breakdown

  • Poor communication skills

  • Long chain of command

  • Using wrong method of communication

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Lack of clarity

When an message is unclear it may be ignored or misunderstood due to vague language or insufficient detail.

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Technological break down

Occurs when technology fails, disrupting communication and workflow.

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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

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Long chain of command

Too many layers of management can prolong the communication process or information can become inaccurate along the way

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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.

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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

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Overcoming communication barriers

  • Recruiting staff with good communication skills

  • Staff training in communication

  • Shorter chain of command

  • Repairing faulty technology

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Full time employment

Works a full working week, long-term employment

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Part-time employment

Works fewer hours that full time, often has more flexibility with work hours

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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)

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Causal Employment

Work is often variable, needs to be on call often no full guarantee on work by the employer

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Seasonal Employment

When a business needs more employees at a certain time of year (e.g ski resort)

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Temporary Employment

Staff who are hired for short periods of time (e.g to replace absent workers)

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Why a business needs new staff

  • Business Growth

  • Staff leave

  • Promotions

  • Temporary cover needed

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Job Analysis

The HR team will identify what the business will need for the new employee also handling the type of contracts

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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

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Person specification

This documents created by HR, will highlight the desired qualities of the successful candidate, such as qualifications or previous experiences

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Job advert

Comprised of both Job description and person specification

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Application form

Standard documents used to collect information from the job applicant

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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

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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.