business summarised / basic flashcards

• What does a mission statement define?

  Corporate aims, values, and strategy
• What are corporate objectives?

  Overall goals of the business
• What are business objectives?

  Measurable targets like profit and growth
• What does SMART stand for in objectives?

  Specific, Measurable, Achievable, Realistic, Time-specific
• How do you calculate revenue?

  Price per unit × Quantity sold
• What is the formula for total costs?

  Fixed costs + Variable costs
• How is profit calculated?

  Total revenue - Total costs
• What is the formula for total variable costs?

  Variable cost per unit × Units sold
• What does PESTLE stand for?

  Political, Economic, Social, Technological, Legal, Environmental/Ethics
• What influences market conditions?

  Labour supply, unemployment, recession/boom, seasonal demand
• What are external factors affecting cost and demand?

  Competition, income levels, interest rates, demographics, marketing, environmental issues
• What is a sole trader?

  Quick to set up, unlimited liability
• What are the advantages of a partnership?

  Shared skills and profits, more finance
• What is a Private Limited Company (LTD)?

  Shares not sold publicly, typically small businesses
• What characterizes a Public Limited Company (PLC)?

  Shares sold on the stock exchange
• What is the focus of a Not-for-Profit organization?

  Community benefit rather than profit
• What is unlimited liability?

  Owners are personally responsible for debts
• What is limited liability?

  Owners are not personally responsible for debts
• What is ordinary share capital?

  Original value of shares sold
• How is market capitalisation calculated?

  Number of shares issued × Current share price
• What are dividends?

  Payments to shareholders from profits
• What are the main sectors of the economy?

  • Public Sector: Owned by the government, serves the public (e.g., NHS)
  • Private Sector: Owned by individuals for profit
• What are the main roles of managers?

  Leading, reviewing, setting objectives, making decisions
• What does leadership involve?

  Guiding a group of people or an organization
• What qualities do effective leaders possess?

  Confidence, ability to take risks, drive, passion
• What factors influence decision-making?

  Rewards, risks, and uncertainty
• What are the different leadership styles?

  • Autocratic: Little employee input, clear authority
  • Democratic: Employee involvement, boosts motivation
  • Laissez-faire: Full control to employees, high motivation
  • Paternalistic: Decisions made for staff welfare
• What is a disadvantage of autocratic leadership?

  It decreases motivation and stifles innovation
• What is a benefit of democratic leadership?

  Boosts motivation and authority among employees
• What is a potential drawback of laissez-faire leadership?

  Lack of direction and low manager input
• What does paternalistic leadership focus on?

  Staff’s welfare, ensuring satisfaction and loyalty
• What is scientific decision-making?

  Gathering data, analyzing it, making logical decisions
• What is a disadvantage of scientific decision-making?

  It can be time-consuming and expensive
• What is intuitive decision-making?

  Relying on managers' experience for quick decisions
• When is intuitive decision-making most useful?

  In high-risk situations with experienced managers
• What are decision trees used for?

  Visually mapping options, outcomes, and probabilities
• What is a limitation of decision trees?

  They can oversimplify complex scenarios
• What does opportunity cost represent?

  Potential missed benefits from a chosen option
• Who are stakeholders in a business?

  • Individuals or groups affecting or affected by a business
  • Internal: Owners, managers, employees
  • External: Customers, suppliers, government, communities, creditors
• What is stakeholder mapping used for?

  Determining stakeholders' power and interest