Business Management: Business Types, Objectives, Stakeholders, and Management Styles

Comprehensive review flashcards covering types of businesses, business objectives, stakeholders and their conflicts, Corporate Social Responsibility, and management styles based on lecture notes.

What is limited liability?

A legal condition where owners (shareholders) are only responsible for company debts up to the amount they invested, protecting their personal assets.

How is a sole trader defined?

A business owned, controlled, and operated by one person.

What are the key disadvantages of operating as a sole trader?

Personal (unlimited) liability for business debts and the requirement to perform a wide variety of tasks, creating a difficult work-life balance.

What is a partnership?

A business owned and operated by two or more people, with a maximum limit of 20 people.

What is the role and purpose of a sleeping partner in a limited partnership?

They contribute financially to increase capital or finance but take no part in running the business.

What is a private limited company?

An incorporated business with a minimum of one shareholder and a maximum of 50 non-employee shareholders, whose shares are offered only to people approved by the directors.

What are two disadvantages of a private limited company?

Low liquidity (cannot sell shares to the general public) and profit sharing among shareholders rather than retention by one owner.

What defines a public listed company?

An incorporated business with a minimum of one shareholder and no maximum, whose shares are openly traded on the Australian Stock Exchange and include 'Limited' or 'Ltd' in its name.

What are the main disadvantages of a public listed company?

It must publish an audited financial report annually for public viewing, faces increased public scrutiny, and experiences market pressure for short-term quarterly profits over long-term growth.

What is a social enterprise?

A business that primarily operates to fulfill a social need, producing goods and services for a market and making a profit while concentrating on fulfilling environmental or community needs.

What are Government Business Enterprises (GBEs), and what are two examples?

Businesses owned and operated by the government at the state or federal level; examples include AUSPOST and VICROADS.

What is the definition of a business objective?

A desired goal, outcome, or specific result that a business intends to achieve over a specific period of time.

What is profit, and when does a loss occur?

Profit is what remains after business expenses have been deducted from sales revenue; a loss occurs when expenses exceed revenue.

What is the difference between efficiency and effectiveness?

Efficiency measures how well a business uses its resources to achieve objectives, while effectiveness is the degree to which a business achieves its business objectives.

What are Key Performance Indicators (KPIs)?

Criteria used to measure the success, efficiency, and effectiveness of a particular area of business operations.

How are stakeholders defined in a business context?

Groups and individuals who interact with the business and have a vested interest in its activities.

What conflict can arise between business owners and employees?

Owners seek to maximise profit by cutting costs on bonuses or financial incentives, whereas employees want fair pay, bonuses for their efforts, and good working conditions.

What is Corporate Social Responsibility (CSR)?

The obligations a business has over and above its legal responsibilities to the wellbeing of employees, customers, shareholders, the community, and the environment.

What are the characteristics of an autocratic management style?

The manager makes all decisions, dictates work methods, limits employee knowledge, and frequently checks performance ('do it the way I tell you').

What defines a persuasive management style?

The manager makes the decisions and attempts to convince ('sells') employees that their way is correct.

How does a consultative management style operate?

The manager consults staff to gather a variety of ideas before making the final decision ('asks').

What are the advantages and disadvantages of a participative management style?

Advantages include increased job satisfaction, motivation, and skill development; disadvantages include being time-consuming and slowed decision-making due to differing views.

What is a laissez-faire management style?

A style where employees are given responsibility for workplace operations ('lets go'), allowing open communication but risking loss of control and misuse of resources.