Business Ownership Structures and Management Styles
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Questions and Answers

What are the four main forms of business ownership?

  • Sole proprietorship, Partnership, Joint Venture, Cooperative
  • Sole proprietorship, Partnership, Corporation, Crown Corporation (correct)
  • Sole proprietorship, Partnership, Limited Liability Company (LLC), Franchise
  • Sole proprietorship, Partnership, Corporation, Nonprofit Organization

Which of the following is NOT a pro of a sole proprietorship?

  • Profits go directly to the owner
  • Unlimited liability (correct)
  • Be your own boss
  • Easy to start and end

Which of the following is a pro of a partnership?

  • Shared responsibilities (correct)
  • Unlimited liability
  • Limited capital
  • Difficult to dissolve

Which of the following is a con of a corporation?

<p>Double taxation (B)</p> Signup and view all the answers

What is a key advantage of a Crown Corporation?

<p>Providing essential services and jobs (D)</p> Signup and view all the answers

Which management style involves the manager making all decisions without input from employees?

<p>Autocratic Style (B)</p> Signup and view all the answers

Which management style is considered most appropriate for creative tasks requiring teamwork?

<p>Democratic Style (B)</p> Signup and view all the answers

Which management style is suitable when employees are experienced and knowledgeable?

<p>Laissez-Faire Style (D)</p> Signup and view all the answers

Which management style is considered the best and why?

<p>Democratic, because it focuses on a balanced approach, integrating teamwork and productivity.</p> Signup and view all the answers

What does CSR stand for and what does it mean?

<p>Corporate Social Responsibility. It means companies are responsible for their impact on society, the environment, and the economy. They go beyond just profit-making.</p> Signup and view all the answers

CSR is only about making profits.

<p>False (B)</p> Signup and view all the answers

What is the break-even point for a business?

<p>The point where total revenue equals total costs.</p> Signup and view all the answers

Society is interdependent, meaning that people and industries rely on each other and their actions affect each other's outcomes.

<p>True (A)</p> Signup and view all the answers

What is the main role of the HR Department in a company?

<p>To manage employees, including hiring, training, and benefits.</p> Signup and view all the answers

What is debt financing?

<p>When a business raises money by borrowing from external sources like banks or investors.</p> Signup and view all the answers

How do you calculate profit?

<p>Profit = Total Revenue - Total Expenses</p> Signup and view all the answers

What is the term used to describe something a person or business owns?

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

What does the law of demand state?

<p>Higher prices lead to lower demand, and lower prices lead to higher demand.</p> Signup and view all the answers

Which of the following is NOT a benefit of competition in a market?

<p>Higher prices for consumers (B)</p> Signup and view all the answers

What is disposable income?

<p>Gross pay minus deductions.</p> Signup and view all the answers

What is discretionary income?

<p>Disposable income minus necessary expenses.</p> Signup and view all the answers

What is savings?

<p>Discretionary income minus non-necessary expenses.</p> Signup and view all the answers

What is the main difference between direct and indirect competition?

<p>Direct competition is between businesses offering very similar products or services, while indirect competition involves businesses offering products or services that fulfill similar needs or wants.</p> Signup and view all the answers

How do you calculate interest?

<p>Interest = Principal x Rate x Time</p> Signup and view all the answers

What is the relationship between Gross Income, Deductions, and Disposable Income?

<p>Disposable Income is calculated by subtracting Deductions from Gross Income.</p> Signup and view all the answers

Which of the following is the most liquid asset?

<p>Cash (B)</p> Signup and view all the answers

A market surplus exists when there is more demand than supply.

<p>False (B)</p> Signup and view all the answers

What is an import?

<p>A good or service brought into a country from another country.</p> Signup and view all the answers

What is the Fundamental Accounting Equation?

<p>Assets = Liabilities + Equity</p> Signup and view all the answers

Which of the following are examples of fixed long-term assets?

<p>Land and buildings (C)</p> Signup and view all the answers

What is gross income?

<p>All money earned before deductions, including income from jobs and investments.</p> Signup and view all the answers

Which of the following are examples of current liabilities?

<p>Accounts payable (D)</p> Signup and view all the answers

What is profit margin also known as, and how is it calculated?

<p>Rate of return. Profit margin is calculated by dividing net income by revenue and multiplying by 100.</p> Signup and view all the answers

What additional information is needed to more accurately assess two companies, beyond their balance sheets and income statements?

<p>Debt levels, growth trends, and efficiency.</p> Signup and view all the answers

What are two factors that can affect supply and demand?

<p>Natural disasters disrupting production and a product becoming outdated.</p> Signup and view all the answers

Robbin banks needs a $25,000 loan at 3% for 4 years. What are the total interest payments over the 4-year period?

<p>$$1668.62$</p> Signup and view all the answers

Which of the following is NOT a factor to consider when starting a business?

<p>Personal interests (D)</p> Signup and view all the answers

Which of the following is NOT a key employability skill?

<p>Artistic ability (A)</p> Signup and view all the answers

What are two advertising media you would choose to advertise the opening of a new amusement park in Sudbury, and why?

<p>Social media platforms and radio advertising (D)</p> Signup and view all the answers

Which is more liquid: Land or Shares?

<p>Shares (A)</p> Signup and view all the answers

Which is safer: GIC or Shares?

<p>GIC (A)</p> Signup and view all the answers

Which has a higher rate of return: Savings account or Shares?

<p>Shares (A)</p> Signup and view all the answers

Which is less liquid: RRSP or Shares?

<p>RRSP (B)</p> Signup and view all the answers

Which has a lower rate of return: Chequing account or RRSP?

<p>Chequing account (A)</p> Signup and view all the answers

What are the 4 P's of marketing?

<p>Product, Place, Price, Promotion</p> Signup and view all the answers

Flashcards

Unlimited Liability

The owner is personally responsible for all debts and legal obligations of the business. Think about a small business owner losing their home if their business fails.

Limited Liability

The business is a separate legal entity from its owners. Think about a corporation being a 'person' that can own property and enter into contracts.

Liquidity

The process of converting assets into cash. Think about selling something like a piece of furniture to get money.

Disposable Income

Income that's left after paying taxes and other necessary expenses. Think about the money you have left after paying bills.

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Revenue

The amount of money a business earns by selling its goods or services. Think about the money you get for selling goods or services.

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Break Even Point

The point at which a business's total revenue equals its total costs. Think about the point where a business makes enough money to cover its expenses.

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Dissolution

The legal process by which a business ceases to exist. Think about shutting down a business permanently.

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Price

The price at which a product or service is sold. Think about the value of a product or service in dollars.

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Market Segmentation

The ability to sell a product or service to a specific group of people. Think about a business that targets a specific customer base.

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Debt Financing

A type of financing where a business borrows money from others and agrees to repay it with interest. Think about taking out a loan from a bank.

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Equity Financing

A type of financing where a business raises money by selling ownership shares. Think about selling a part of your business to raise funds.

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Resource Allocation

The process of deciding how to use a business's resources to achieve its goals. Think about making choices based on available resources.

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Product Development

The process of creating a product or service that meets the needs and wants of customers. Think about creating something that people will buy.

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Location Strategy

The process of finding a suitable location for a business. Think about choosing a place to open a store or office.

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Marketing

The activity of promoting a product or service to reach potential customers. Think about advertising a product or service.

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Gross Income

All the money earned by an individual before taxes and other deductions. Think about the total income you make.

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Deductions

An amount of money that is deducted from an individual's income. Think about money subtracted from your paycheck.

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Disposable Income

The amount of money an individual has left after paying taxes and other deductions. Think about money remaining after paying bills.

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Discretionary Spending

Money spent on things that are not strictly necessary. Think about spending money on entertainment or hobbies.

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Guaranteed Investment Certificate (GIC)

A type of financial instrument with relatively low risk and a fixed interest rate. Think about a safe investment with guaranteed returns.

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Registered Retirement Savings Plan (RRSP)

A type of retirement savings plan that offers tax deductions on contributions and tax-deferred growth. Think about saving money for retirement with tax benefits.

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Chequing Account

A type of personal savings account that offers easy access to money. Think about a bank account where you can withdraw your money anytime.

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Partnership

A type of business ownership structure with two or more owners who share profits and losses. Think about a partnership between two friends who run a business together.

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Corporation

A type of business ownership structure where the business is a separate legal entity from its owners. Think about a company that has its own identity and can enter into contracts.

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Crown Corporation

A type of business ownership structure where the business is owned by the government. Think about a government-run company like a post office.

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Autocratic Management

A style of management where the manager focuses on control and makes most decisions independently. Think about a boss who gives orders without asking for feedback.

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Democratic Management

A style of management where the manager involves employees in decision-making and seeks their input. Think about a boss who asks for ideas and listens to feedback.

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Laissez-Faire Management

A style of management where the manager gives employees freedom to work independently with minimal supervision. Think about a boss who trusts their employees to do their jobs autonomously.

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Corporate Social Responsibility (CSR)

A business's responsibility to act ethically and consider the impact of its operations on society, the environment, and the economy.

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Total Costs

A business's total cost of producing its goods or services. Think about all the expenses a business incurs.

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Financial Management

The process of making decisions about how to use a company's money to achieve its goals.

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Management

The process of planning, organizing, leading, and controlling a company's resources to achieve its goals.

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Profitability

The relationship between the total revenue and total costs of a business.

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Recruitment

The process of finding and hiring the right people for a job. Think about interviewing candidates and selecting the best person for the role.

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Assets

Something that is owned by a business. Think about assets like buildings, equipment, and money in the bank.

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Liabilities

Something that a business owes to others. Think about debts like loans and bills.

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Equity

The value of the business that belongs to its owners. Think about the net worth of the business after deducting liabilities.

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Balance Sheet

The financial statements that show a company's assets, liabilities, and equity at a specific point in time. Think about a snapshot of a company's financial health.

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Study Notes

Business Ownership Structures

  • Sole Proprietorship: Owned by one person; easy to start and end; owner keeps all profits; unlimited liability; financing can be difficult.
  • Partnership: Owned by two or more people; shared responsibilities and ideas; more capital available; potential for disagreements amongst partners; unlimited liability; shared profits.
  • Corporation: Owned by shareholders with a board of directors; limited liability for owners; easier transfer of ownership; complex and costly start-up; double taxation; lack of direct decision-making by owners.
  • Crown Corporation: Owned by the government; provides essential services and jobs; competition might be affected; tax-funded.

Management Styles

  • Autocratic: Manager makes all decisions; appropriate for emergencies; high short-term productivity but can lower morale; example: sports coach.
  • Democratic: Manager involves employees in decision-making; appropriate for creative tasks; employees feel involved and work harder; more time-consuming; example: elections.
  • Laissez-Faire: Manager allows employees to make decisions independently; appropriate for experienced employees; good for skilled teams but not for those needing guidance; example: independent creative work.

Corporate Social Responsibility (CSR)

  • Definition: Businesses taking responsibility for their social, environmental, and economic impact beyond profit.
  • Importance: Builds customer trust (e.g., ethical sourcing); boosts employee morale (e.g., charitable donations); promotes long-term growth (e.g., sustainable practices).

Financial Concepts

  • Break-even point: Total revenue equals total costs.
  • Interdependence: People and industries relying on each other; actions affect each other's outcomes.
  • Human Resources (HR): Manages employees (hiring, training, benefits).
  • Debt financing: Borrowing money from external sources with interest payments.
  • Profit calculation: Profit = Total Revenue - Total Expenses.
  • Assets: Items a business owns.
  • Law of demand: Higher price, lower demand; lower price, higher demand.
  • Competition benefits: Innovation, motivation, differentiation.
  • Disposable income: Gross pay minus deductions.
  • Discretionary income: Disposable income minus necessities.
  • Savings: Discretionary income minus non-necessities.
  • Direct competition: Competitors offering similar products/services (e.g., McDonald's vs. Burger King).
  • Indirect competition: Competitors offering substitute products/services (e.g., Netflix vs. traditional cable TV).
  • Interest calculation: Interest = Principal × Rate × Time.
  • Liquid assets: Easily converted to cash (e.g., cash).
  • Market surplus: More supply than demand.
  • Import: A good or service brought into a country.
  • Fundamental accounting equation: Assets = Liabilities + Equity.
  • Fixed assets: Land, buildings, machinery, vehicles (long-term).
  • Gross income: All income before deductions.
  • Current liabilities: Accounts payable and operating expenses.
  • Profit margin (return): Net income ÷ revenue × 100 (0-5% low, 10-20% decent, 20%+ great).

Business Analysis

  • Assessing companies: Consider debt levels, growth trends, and efficiency besides balance sheets and income statements.

Supply and Demand

  • Factors affecting supply and demand: Natural disasters disrupt production; a product becomes obsolete.

Loan Calculations

  • Loan calculations (example): Calculate loan payments and interest using provided formulas.

Starting a Business

  • Startup factors: Market research, business plan, funding, location, skills.

Employability Skills

  • Employability skills: Communication, problem-solving, teamwork.

Advertising

  • Advertising media (example): Social media and local radio stations (pros and cons of each).

Financial Considerations

  • Liquidity: Shares are more liquid than land; GICs are safer than shares.
  • Return: Shares have a higher return potential than savings accounts; RRSPs are less liquid than shares but can offer tax benefits.
  • 4 Ps: Product, Place, Price, Promotion.
  • 2 Cs: Competition, Consumer (target market)

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Description

This quiz focuses on understanding various business ownership structures such as sole proprietorships, partnerships, and corporations, as well as management styles like autocratic and democratic leadership. Test your knowledge on the advantages and disadvantages of each structure and style, and learn how they impact business operations. Perfect for students of business studies or anyone looking to deepen their understanding of organizational dynamics.

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