BM U1

• The laissez-faire leadership style involves giving employees a high degree of autonomy and allowing them to make decisions without much guidance or supervision.
• However, this approach may not be effective when dealing with new or less experienced staff members, as they may require more direction and support.
• This type of leader allows their team members to take ownership of tasks and projects, which can lead to increased motivation and job satisfaction.
• The main types of businesses are sole traders, partnerships, limited companies, public limited companies (plcs), private limited companies (lts) and not-for-profit organisations.
• A democratic leadership style allows employees to participate in decision making and encourages collaboration and teamwork.
• A disadvantage of this leadership style is that it requires a high level of competence from team members, who must have sufficient knowledge and skills to complete tasks independently.
• Partnership - Two or more people owning and running a business together.
• Limited company - A separate legal entity from its owners, with shareholders having limited liability.
• Sole trader - A business owned by one person who is responsible for all aspects of the operation.
• A business plan is a document that outlines the objectives, strategies, and financial projections of an organization.
• Limited company - The liability of owners is limited to the amount invested in the company.
• Partnership - Two or more people share responsibility for running the business and have equal say in decision making.
• Sole trader - A business owned by one person who has unlimited liability for its debts.
• Public limited company (PLC) - Can be bought by anyone on the stock market, has at least two shareholders, and must meet strict requirements set out by Companies House.
• Not-for-profit organisation - Run by volunteers and aims to make money for charity rather than profit.
• Private limited company (LTD) - Owned by one person or a small group of individuals, cannot sell shares to the general public, and does not need to publish financial information.
• Human resources

  Manages the personnel of the organization. Personnel issues include: Workforce planning, Recruitment, Training, Appraisals, Dismissals, Redundancies, Outsourcing HR strategies
• Finance

  Manages the organization's money. Accurate recording and reporting of financial documents must take place to: Comply with legal requirements (e.g., taxation laws), Inform stakeholders such as shareholders and potential investors
• Marketing

  Responsible for identifying and meeting the needs and wants of customers. Key functions focus on the seven Ps of marketing: Product, Price, Place, Promotion, People, Processes, Physical evidence
• Operations management

  Responsible for the process of converting raw materials and components into finished goods. Operations management also applies to the process of providing services to customers
• Primary sector

  Businesses in this sector are involved in the extraction, harvesting and conversion of natural resources
• Secondary sector

  Businesses in this sector are involved in the manufacturing or construction of products
• Tertiary sector

  Businesses in this sector specialize in providing services to the general population
• Quaternary sector


  Businesses in this sector are involved in intellectual, knowledge-based activities that generate and share information
• The chain of production links all the production sectors by tracking the stages of an item's production from the extraction of raw materials all the way through to it being delivered the consumer</b>
• As the item makes its way through the chain of production, value is added to the item
• Entrepreneur


  An individual who plans, organizes and manages a business, taking on financial risks in doing so
• Characteristics of entrepreneurs


  • Taking substantial risks
  • Having a vision for the business
  • Rewarded with profit
  • Responsibility for employees
  • Failure may result in personal costs
• Opportunities for starting up a business

  • Growth
  • Earnings
  • Transference and inheritance
  • Challenge
  • Autonomy
  • Security
  • Hobbies
• Concepts in Business Management

  • Change
  • Creativity
  • Ethics
  • Sustainability
• Types of business entities

  • Sole traders
  • Partnerships
  • Privately held companies
  • Publicly held companies
  • Private sector for-profit social enterprises
  • Public sector for-profit social enterprises
  • Cooperatives
  • Non-governmental organizations (NGOs)
• Private sector


  Businesses owned and operated by private individuals or companies, usually with the goal of making a profit
• Public sector


  Businesses owned and operated by the government, usually with the goal of providing public services
• Sole traders


  • Owned by individuals who own and run a personal business
  • Relatively easy to set up
  • Start-up capital from personal savings and borrowing
  • Unlimited liability
• Partnerships


  • Owned by two or more persons (partners)
  • At least one partner has unlimited liability
  • Start-up finance from pooled personal funds
  • Legal document (deed of partnership) formalises agreements
• Privately held companies


  • Shares owned by friends and/or family
  • Shares cannot be traded publicly
  • Shareholders need prior permission to sell shares
  • Often family businesses
• Publicly held companies


  • Shares can be sold on the stock exchange
  • Shares held by the general public
  • No prior permission required to sell shares
• Limited liability companies


  • Advantages: Raising finance, Limited liability, Continuity, Economies of scale, Productivity, Tax benefits

  Disadvantages: Communication problems, Added complexities, Compliance costs, Disclosure of information, Bureaucracy, Loss of control
• Private sector for-profit social enterprises


  • Operate like traditional for-profit businesses
  • Aim to make a surplus to achieve social aims
  • Produce goods/services and compete with similar businesses
  • Often use the triple bottom line accounting framework
• Public sector for-profit social enterprises


  • State-owned to operate commercially
  • Help raise government revenues to provide essential services to society
  • May be inefficient and undesirable if left solely to the private sector