Business Ownership and Legal Structures
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Business Ownership and Legal Structures

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@EnrapturedWillow

Questions and Answers

What is the main difference between a sole trader and a partnership?

The number of owners involved in the business

What is a characteristic of a private limited company?

Its shares are not available to the public and are limited to a maximum number of shareholders

What is the primary objective of a social enterprise?

To pursue social and/or environmental goals

What does the 'M' in SMART stand for in setting business objectives?

<p>Measurable</p> Signup and view all the answers

What is the purpose of a mission statement?

<p>To define the purpose and primary objectives of the business</p> Signup and view all the answers

What is a common objective of a private sector business?

<p>To make a profit</p> Signup and view all the answers

What is a characteristic of a government business enterprise?

<p>It is owned by the government and operates using a corporate model</p> Signup and view all the answers

What is the main difference between a public sector business and a private sector business?

<p>The ownership structure of the business</p> Signup and view all the answers

What is the primary purpose of a values statement in a business?

<p>To reflect the company's shared values and cultural priorities</p> Signup and view all the answers

Why is it important to regularly revisit business objectives?

<p>To ensure they remain relevant and aligned with current market conditions</p> Signup and view all the answers

Who are stakeholders in a business?

<p>Owners, managers, employees, customers, suppliers, and the general community</p> Signup and view all the answers

What can arise due to differing interests between stakeholders?

<p>Conflicts between stakeholders</p> Signup and view all the answers

How can businesses address the concerns of stakeholders regarding ethical and socially responsible operations?

<p>By engaging in transparent communication and implementing ethical practices</p> Signup and view all the answers

What is the characteristic of an autocratic management style?

<p>Centralized decision-making with little input from employees</p> Signup and view all the answers

What does the contingency approach assess in determining the appropriate management style?

<p>The task's nature, time frame, and organizational culture</p> Signup and view all the answers

What is the characteristic of a laissez-faire management style?

<p>Minimal managerial control, employees have high autonomy</p> Signup and view all the answers

Study Notes

  • Types of business ownership and legal structures: sole traders, partnerships, private limited companies, public listed companies, social enterprises, and government business enterprises
  • Sole trader: owned and operated by one individual
  • Partnership: involves two or more individuals who share ownership and responsibilities
  • Private limited companies: shares are not available to the public, limited to a maximum number of shareholders
  • Public listed companies: shares are traded publicly on the stock exchange
  • Social enterprises: pursue social and/or environmental goals
  • Government business enterprises: government-owned entities operating using a corporate model to achieve commercial objectives

Business Objectives

  • Common business objectives: make a profit, increase market share, improve efficiency, fulfill a market need, fulfill a social need, and meet shareholder expectations
  • SMART principle in setting business objectives: Specific, Measurable, Achievable, Relevant, and Time-bound
  • Vision statements: outline long-term aspirations of the business
  • Mission statements: define the purpose and primary objectives of the business
  • Values statement: reflects the business's shared values and cultural priorities, guiding behavior and decision-making
  • Importance of revisiting business objectives regularly: ensure relevance and alignment with current market conditions and internal capabilities

Stakeholders

  • Stakeholders in a business: owners, managers, employees, customers, suppliers, and the general community
  • Potential conflicts between stakeholders: differing interests, such as profit maximization vs. job security, cost reduction vs. quality, and environmental impact vs. operational efficiency
  • Addressing stakeholder concerns: transparent communication, ethical practices, community and environmental initiatives, and fair treatment of all stakeholders

Management Styles

  • Autocratic: centralized decision-making with little input from employees
  • Persuasive: manager makes decisions and persuades employees to accept them
  • Consultative: manager consults employees before making decisions
  • Participative: employees are actively involved in decision-making
  • Laissez-faire: minimal managerial control, employees have high autonomy
  • Contingency or situational management approach: assesses variables such as task nature, time frame, and employee skills to determine the appropriate management style

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