Definitions

• sole trader


  a business owned by one person with unlimited liability (a sole trader can employ other people - but there’s only one person who owns the business)
• limited liability


  the liability of shareholders in a company is limited to only the amount they invested
• unlimited liability


  owners of a business can be held responsible for the debts of the business they own - liability is not limited to the investment they made in the business
• Partnership 


  a form of business in which two or more people agree to jointly own a business
• partnership agreement


  the written and legal agreement between business partners - isn’t essential for partnerships to have such an agreement but it’s always recommended
• unincorporated business


  a business that doesn’t have a separate legal identity
• legal identity


  any company or organisation that has legal rights and responsibilities, including tax filings
• incorporated business


  companies that have separate legal status from their owners
• shareholders 


  owners of a limited company, they buy shares which represent part-ownership of the company
• private limited companies


  businesses owned by shareholders but they can’t sell shares to the public
• public limited companies


  businesses owned by shareholders but they can sell shares to the public and their shares are tradable on the Stock Exchange
• annual general meeting


  a legal requirement for all companies, shareholders may attend and vote on who they want to be on the Board of Directors for the coming year
• dividends


  payments made to shareholders from the profits (after tax) of a company, they’re the return to shareholders for investing in the company
• franchise


  a business based upon the use of the brand names, promotional logos, and trading methods of existing successful business - franchisee buys the licence to operate this business from the franchisor
• joint venture


  where two or more businesses start a new project together, sharing capital, risks, and profits
• public corporation


  a business in the public sector that’s owned and controlled by the state (government)
• Organisational structure


  Organisational structure refers to the levels of management and division of responsibilities within an organisation
• Organisational chart


  Organisational chart refers to a diagram that outlines the internal management structure
• Hierarchy


  Hierarchy refers to the levels of management in any organisation, from the highest to the lowest
• Level of hierarchy


  A level of hierarchy refers to managers/supervisors/other employees who are given a similar level of responsibility in an organisation
• Chain of command


  Chain of command is the structure in an organisation which allows instructions to be passed down from senior management to lower levels of management
• Span of control


  The span of control is the number of subordinates working directly under a manager
• Directors


  Directors are senior managers who lead a particular department or division of a business
• Line managers


  Line managers have direct responsibility for people below them in the hierarchy of an organisation
• Supervisors


  Supervisors are junior managers who have direct control over the employees below them in the organisational structure
• Staff managers


  Staff managers are specialist who provide support, information and assistance to line managers
• Delegation


  Delegation means giving a subordinate the authority to perform particular tasks
• Leadership styles


  Leadership styles are the different approaches to dealing with people and making decisions when in a position of authority - autocratic, democratic or laissez-faire
• Autocratic leadership


  Autocratic leadership is where the manager expects to be in charge of the business and to have their orders followed
• Democratic leadership


  Democratic leadership gets other employees involved in the decision-making process
• Laissez-faire leadership


  Laissez-faire leadership makes the broad objectives of the business known to employees, but then they are left to make their own decisions and organise their own work
• Trade union


  A trade union is a group of employees who have joined together to ensure their interests are protected
• Closed shop


  A closed shop is when all employees must be a member of the same trade union
• Recruitment


  Recruitment is the process from identifying that the business needs to employ someone up to the point at which applications have arrived at the business
• Employee selection


  Employee selection is the process of evaluating candidates for a specific job and selecting an individual for employment based on the needs of the organisation
• Job analysis


  A job analysis identifies and records the responsibilities and tasks relating to a job
• Job description


  A job description outlines the responsibilities and duties to be carried out by someone employed to do a specific job
• Job specification


  A job specification is a document which outlines the requirements, qualifications, expertise, physical characteristics, etc., for a specified job
• Internal recruitment


  Internal recruitment is when a vacancy is filled by someone who is an existing employee of the business
• External recruitment


  External recruitment is when a vacancy is filled by someone who is not an existing employee and will be new to the business