Unit 3 AOS 1 Business foundations

• Sole trader

  Is a business structure that is owned and operated by one individual.
• Partnership

  Is a business structure that is owned by two to 20 owners.
• Private limited company

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

  Is an incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX.
• Social Enterprise

  Is a type of business that aims to fulfil a community or environmental need by selling goods or services.
• Government business enterprise (GBE)

  Is a business that is owned and operated by the government.
• Business objectives

  Are the goals a business intends to achieve
• Profit

  Is total revenue earned minus total expenses incurred.
• Market share

  Is a business’s percentage of total sales within an industry.
• To fulfil a market need

  Is when a business fills a gap in the market, which involves addressing customer needs that are currently unmet other businesses in the same industry.
• To fulfil a social need

  Is improving society and the environment through business activities.
• Efficiency

  Is how productively a business uses its resources when producing a good or service
• Effectiveness

  Is the extent to which a business achieves its stated objectives.
• Stakeholders

  Are individuals, groups, or organisations who have a vested interest in the performance and activities of a business
• Owners

  Shareholders of a company or owners, they invest funds into a business and want a return on their investment.
• Managers

  Are those that oversee different areas of the business and make decisions to achieve business objectives.
• Employees

  Workers in a business they complete work in a business in exchange for a wage.
• Customers

  Are those who purchase goods and services from a business.
• Suppliers

  Are providers of the inputs required for production of goods and services.
• Autocratic Management Style

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

  Involves a manager making decisions and communicating the reasons for those decisions to employees without their input. Centralized and one-way communication.
• Consultative Management Style

  Involves a manager seeking input from employees on business decisions but making the final decision themselves. Centralized and two-way communication.
• Participative Management Style

  Involves a manager sharing information with employees so that employees can participate in decision-making. Centralised and two-way communication.
• Laissez-faire management style

  Involves a manager communicating business objectives to employees and giving them the freedom to make decisions independently. Decentralized and two-way communication.
• Planning

  Is the process of determining a business’s objectives and establishing strategies to achieve these aims.

  Strategic planning - long term 2 to 5 year

  Tactical planning - medium term 1 to 2 years

  Operations planning - day to day, monthly
• Decision-making

  Is the skill of selecting a suitable course of action from a range of possible options.
• Communication

  Is the skill of effectively transferring information from one party to another.
• Delegation

  Is the skill of assigning work tasks and authority to other employees who are further down in a business’s hierarchical structure.
• Interpersonal

  Is the skill of creating positive interactions with other employees, to foster beneficial professional relationships.
• Leadership

  Is the skill of motivating others in order to achieve a business’s objectives.
• Corporate culture

  Is the shared values and beliefs of a business and its employees.
• Official corporate culture

  Involves the shared views and values that a business aims to achieve, often outlined in a written format.
• Real corporate culture

  Actual or prevailing the culture that exists within a business. E.g Office Layout