|Distinguish between Unlimited Liability and Limited Liability.||Unlimited liability - owner(s) are personally liable for all of its debts (can lose house and car if debts need to be repaid) Limited liability - owner(s) personal liability for any debts occured is a fixed sum i.e. the same as what they initially invested in the business.|
|What are Ethical objectives and corporate social responsibility (CSR)||Ethical objectives are the goals set by an organization that fall within an established set of moral guidelines or fair business practices. CSR refers to a firm's duties to its internal and external stakeholders by behaving in a positive way which will positively impact society.|
|What is the difference between private limited companies and public limited companies||Both company types are owned by shareholders and ran by directors. Owners have limited liability. Private Limited Companies tend to be quite small, shares usually owned by family and close friends and cannot be sold on stock exchange. Public Limited Companies tend to be quite large, shares are bought and sold on stock exchange, they can have as many shareholders as they like.|
Limited liability, unlimited liability, CSR, Private Limited Company vs Public Limited Company, Sole Trader vs Partnership, Social Enterprises (with examples) mission vs vision statements, strategy vs tactics, internal stakeholders vs external stakeholders, Ansoff Matrix, Internal growth, joint ventures vs strategic alliances, horizontal integration vs vertical integration.
|What is the difference between for profit and not for profit social enterprises? (Can you remember the examples?)||Social Enterprise are "Businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community, rather than being driven by the need to maximise profit for shareholders and owners'. For profit social enterprises do want to make a profit once they have helped the community, not for profit give all surpluses to their particular causes. For Profit is Micro Finance, Cooperatives, Public Private Partnerships (PPP), Not for Profit are Charity and NGOs|
|Economies of Scale vs Diseconomies of Scale||Economies of scale refer to lower average costs of production as firm operates on a larger scale due to gains in productive efficiency, e.g. easier and cheaper access to finance. Financial, Managerial, Production, Marketing and Purchasing vs Diseconomies of scale are the cost disadvantages of growth. Unit costs are likely to eventually rise as a firm grows due to a lack of control, coordination and communication|
|Distinguish between Vision statement and mission statement||Vision statement is optimistic declaration of what the business wants to be in the future whereas the mission statement is a clear declaration of what the organization's current fundamental purpose.|
|Explain the Ansoff matrix process for different growth strategies of a given organization||Ansoff Matrix is a management growth tool to help businesses decide how to grow. The four stages are Market Penetration, Market Development, Product Development and Diversification.|
|External growth methods: joint ventures vs Strategic Alliances||When 2 or more businesses join forces to create a new separate business entity. When 2 or more businesses work together in order to achieve a common goal (might share resources etc). However, a new business is not formed|
|External growth horizontal vs vertical integration||Horizontal is when you takeover, merge, acquire a business which is on the same stage of production as you. Vertical is when you takeover, merge, acquire a business which is on the different stage of production as you|
|Discuss the impact of MNCs on the host countries (pros and cons)||Positives - 1) New skills and ideas|
2) Economic Growth
3) Greater variety of choice.
4) Improve infrastructure. Negatives - Local businesses lose market share
2) Brain drain: People became richer and moved out the country, leaving the poor behind.
3) Repatriation of profits/ economic leakage.
4) Resource depletion.
5) Environmental damage.
|STEEPLE analysis of a given organization - What does STEEPLE mean/stand for?||STEEPLE are 7 factors which influence the external environment that a business is operates. As it is external, the business has very little control over this. (Social, Technological, Environment, Ethical, Political, Legal, Economic)|
|Define the term Stakeholders and state the 4 aspects of the stakeholder map||Any person, organization or group which is affected or influenced by the actions of a business. Stakeholder Map A - Minimal Effort, B - Keep Informed, C - Keep Satisfied, D - Maximum Effort|