Business AOS1 key termss

• Sole Trader


  A business owned and operated by one person who is legally responsible for all aspects of the business
• Unlimited liability


  The business owner is personally responsible for all the debts of his or her business.
• Partnership

  A business owned by a minimum of two and maximum of 20 people, unincorporated.
• Limited partnership

  Passive investors are not involved in day to day business operations. Liability is limited in proportion to the amount invested.
• Incorporation


  The process that businesses go through to become a registered company and separate legal entity
• Social enterprise

  A privately owned business that exists primarily to fulfil a vision that benefits the public or community rather than shareholders.
• Government business enterprise

  type of business that is owned and operated by the government with the goal of making a profit
• Objective

  A desired goal, outcome or specific result that a business intends to achieve
• Strategy

  Outlines the actions taken in order to achieve an objective
• Business objectives

  • To make a profit
  • To increase market share
  • To improve efficiency
  • To improve effectiveness
  • To fulfil a social need
  • To meet shareholder expectations
• Profit


  The amount of income or money remaining when expenses are deducted from revenue
• Market share

  The percentage of sales that one business had compared to competitors in the same industry
• Market need

  involves filling consumer wants and needs or using innovation to fill a gap in the market.
• Social need

  When businesses set a target to develop strategies which benefit the community
• Shareholder


  An individual or entity who has invested money in a business, hoping to earn dividends and increase the value of their shares
• efficiency


  How well a business uses resources to achieve objectives
• Effectiveness


  The degree to which stated objectives have been achieved
• Stakeholder


  An individual or group of individuals who have vested interest in the success of an organisation
• Owners


  A person or group of people that possess a company
• Managers


  The people who have the responsibility for successfully achieving the objectives of the business
• Employees


  The people who work for the business and who expect to be paid fairly, trained properly and treated ethically in return for their contribution to production.
• Customers


  The people who purchase goods and services from the business, expecting high quality at competitive prices
• Suppliers


  Businesses or individuals who supply materials and other resources to a business so that it can conduct its operations.
• autocratic management style

  Involves a manager making decisions and directing employees without any input from them. Centralized and one-way communication
• A Persuasive Management Style

  Involves a manager making decisions and communicating the reasons for those decisions to employees without their input. centralized decision making
• consultative management style


  Involves a manager seeking input from employees on business decisions but making the final decision themselves. centralized and 2 way communication
• participative management style

  Involves a manager sharing information with employees so that employees can participate in decision-making. Decentralized control two-way communication
• laissez-faire management style(hands off)

  involves a manager communicating business objectives to employees and giving them the freedom to make decisions independently. Two-way communication and employees high level of responsibility.
• Management skills

  are the abilities or competencies that managers use to help them to complete the tasks that are necessary for the achievement of business objectives.
• Communication

  is the transfer of information from a sender to a receiver. Communication can occur both within and outside the business.
• Private limited companies

  Is an incorporated buisness structure that has at least one director and a maximum of 50 shareholders.
• Public listed companies

  Is an incorporated buisness that has an unlimited number of shareholders and lists and sells it shares on ASX.
• Real corporate culture

  involves the shared values and beliefs that develop organically within a business and are practiced on a daily basis by its employees. It includes unwritten rules and behaviors that determine how employees interact with the business they work for.
• Official corporate culture

  involves the shared views that a business aims to achieve, often outlined in a written format. These can include formal documents such as a business's mission statements, vision statements and policies.
• Delegation

  is where formal authority is passed down
• Planning


  is the process of determining a business's objectives and establishing strategies to achieve their aims
• Communication 


  is the transfer of information from a sender to a receiver. Communication can occur both within and outside the business.
• Corporate culture


  Is the shared values and beliefs of a business and its employees.
• The 6 Stakeholder

  • owners
  • Managers
  • Employees
  • Customers
  • suppliers
  • General community
• Advantage and disadvantage of Autocratic Management style

  -Decision making can be quick because decisions are made by the manager and limited consulting.

  -Employees have clearly defined roles and reduced responsibility and risks

  • There limited amount of views and ideas
  • lack of envolvment in decision making can lead to low employee motivation.