Business

• Social enterprise


  business that aims to improve human or environmental wellbeing
• Financial objective


  a goal that businesses set for financial success and growth
• Increase market share


  businesses with a larger market share may be able to dominate the market and make more profit.
• Financial security


  the ability to afford your expenses, live comfortably on your income and save for the future
• One reason why owners do not seek to maximize profits

  because they do no want to take on the extra responsibility of expanding their business
• External factor


  things outside a business that will have an impact on its success such as competition, technology, society and economic taxation
• Tertiary sector 


  production of services in the economy such as:

  • commercial services
  • financial services
  • household services
  • leisure services
  • professional services
  • transport
• Demand


  the consumers desire to purchase a particular good or service
• Measure the success of a business:

  • customer satisfaction
  • employee satisfaction
  • profitability
• Why do businesses fail?

  • poor planning
  • ignoring customer needs
  • not having objectives
  • poor leadership
  • not being competitive
• Partnership


  a partnership exists when between 2 and 20 people own a business together. the owners will share responsibility and profits
• Advantages of a partnership

  • easy to run
  • the job of running a business is shared
  • more capital can be raised with more owners
  • no legal formalities
• Disadvantages of a partnership

  • have unlimited liability meaning the owners are personally liable for all debts
  • profit has to be shared
  • could disagree and fall out
• Sole trader


  a business that is owned by a single person
• Advantages of a sole trader

  • owner keeps all of the profit
  • they are independent and have complete control
  • no legal requirements so its easy to set up
• Disadvantages of a sole trader

  • have unlimited liability (personally responsible for all debts)
  • long hours and hard work
  • independence can be too much of a responsibility
• Multinational business


  a multinational company is a large business with significant production or service operations in at least two different countries
• Key features of a multinational

  • ownership and control is centered in the host country
  • powerful advertising
  • very efficient
• Revenue

  money that comes in from the sale of goods and services
• Primary sector

  production involving the extraction of raw materials from the earth
• Exchange rate


  value of one currency in terms of another
• Labor sales 


  represents an employee or a group of employees having similar skills and qualifications and are able to preform specific tasks or services
• Public cooperation

  business organizations owned and controlled by the state/government
• State two possible financial objective that businesses want to achieve

  • making a profit
  • employing more employees
• One benefit of being in a multinational business


  Multinational businesses are global

  so if the sales are low in one country, then they can make this up with high sales in another country this means they are spreading the risk for the business

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• One way to measure the success of a business

  • Profit can be used to measure the success of a business
  • If the business is monitoring the level of profit they are making they, can they make decisions on expanding the business in the future
• Fringe benefits


  perks over and above the normal wage or salary
• Globalization


  growing integration of the world's economies
• Employee documents


  the final and complete agreement between the employer and employee
• Centralized structure


  type of organization where most decisions are made at the top of the organization and then passed down the chain of command
• Hierarchical structure


  has many layers of management and a long chain of command
• Flat structure


  an organizational structure with only a few layers of management and a short chain of command. Flat structures are used by smaller businesses
• Secondary sector


  production involving the conversion of raw materials into semi-finished goods
• Stakeholder


  an individual or group with the interest in the operation of a business
• Tertiary sector


  production of services in the economy
• Temporary staff


  hired to work for a company temporarily, typically for a specific time or project
• Benefits of motivating employees (6 mark question)

  • (positive)employees should be motivated by things such as promotion which can increase their performance in work.
  • (positive)if the employees are motivated it will meet the customers needs who want to purchase goods and products which can provide good customer service
  • (negative) if employees are not motivated, it can result in lower sales of products.
  • (negative) if employees are less motivated, this will make achievements harder for a business to achieve
• Short chain of command

  faster decision-making and communication
• Benefits of hiring full-time employees

  hiring full time employees can provide stability and commitment to the business, leading to long term growth and loyalty from these dedicated staff members
• Why would business employ temporary staff?

  to handle seasonal workloads or to cover for regular employees on leave