ocr A level business
1. factors of production: -land-natural resources e.g. fields
-labour-all human resources except entrepreneur
-capital-buildings, machinery and tools, but not money
-enterprise-the entrepreneur that organises the other 3 factors
2. value added calculation: value of output-value of input
3. what is a constraint on a business: a restraining factor e.g. environment,
competition, legislation and the economy
4. functions within a business: -accounting and finance
-operations management and production
-marketing and support services
-human resource management (HRM)
5. sectors of business activity: -primary-raw materials e.g. farming
-secondary-manufacturing e.g. factories
-tertiary-output of services e.g. supermarkets
6. deindustrialisation: a decline in the size of the secondary sector of the economy
7. private vs public sector: -private-businesses owned and run by private individ-
uals, usually for profit
-public-businesses owned and run by local or central gov, usually to provide a
service
8. sole trader: -an individual who owns and runs their own business
-unincorporated
-unlimlited liability
-pros-cheap and easy to set up, keep all profits, make all decisions
-cons-little capital for investment
9. partnership: -2-20 owners
-unincorporated
-unlimited liability
-pros-cheap and easy to set up, more skills, share workload
-cons-share profits, share responsibility, cause arguments, less control
10. private limited companies (ltd): -owned by shareholders who tend to be fam-
ily/friends of the entrepreneur
-incorporated
-limited liability
-pros-raise money through selling shares
-cons-greater responsibilities
11. public limited companies (plc): -able to sell shares on stock market
-incorporated
-limited liabilities
, ocr A level business
-pros-press coverage from stock market, raise funds by selling shares
-cons-media scrutiny, risk of takeover
12. limited liability: an investors liability/financial commitment are limited to the total
amount invested or promised in share capital
13. unlimited liability: owners of a business are responsible for total amount of debt
of the business
14. incorporated: a business with a seprate legal entity from its owners
15. unincorporated: a business and its owners have the same legal entity and are
therefore responsible for actions
16. third sector: -not in the public nor private sector
-includes charities, co-operatives
-motivated by the desire to achieve social goals
-profit is reinvested to improve the service being provided
17. business size thresholds-employees: -micro-<10
-small-10-50
-medium-50-250
-large->250
18. business size thresholds-turnover (£mil): -micro-<2
-small-2-10
-medium-10-50
-large>50
19. ways of measuring business size: -no of employees
-no of factories, shops or offices
-turnover and profit levels
-stock market value
-capital employed
20. factors affecting business size: -market size
-nature of product
-personal preference
-ability to access resources for expansion
21. organic growth: growth through increased sales e.g. sell more to existing cus-
tomers and finding new customers
22. joint venture: 2 or more businesses agree to commit to work together, both
invest money, time and effort
23. merger: 2 companies come together to make 1, mutual agreement
24. takeover/acqusition: involves acquiring control of a business through buying its
shares (own 51%)
25. strategic alliance: similar to joint venture, but less permanent and involves,
alliance means co-operation
, ocr A level business
26. stakeholder: a person or party with an interest in the success of a business
27. types of stakeholders: owners, employees, customers, suppliers, lenders,
community, gov
28. what does setting objectives do: -greater sense of direction for the business
-motivates employees
-aid to controlling existing and future operations in business
29. strategic objective: how a business plans to achieve its aims/goals, often a long
term approach
30. tactical objective: day-to-day objectives needed to ensure the strategic objec-
tives are achieved
31. SMART objectives: -specific
-measurable
-agreed
-realistic
-time-bound
32. internal constraints: -lack of finance to meet chosen objectives
-poor communication within business
-conflict of interests between departments
-industrial dispute with the work force
33. external constraints: -changes in law that affect business
-state of economy
-behaviour of competitors
-opinions and behaviour of external stakeholders
34. mission statement: gives a general idea of what the business exists to do and
its purpose is to set this down for the benefit of all stakeholders
35. internal audit: allows a business to assess it strengths and weaknesses in
relation to its competitors across the whole of the business
36. external audit: looks at the opportunities open to a business and the threats
which it faces in its external environment (PEST)
37. business plan: formal written document that explains in detail how a business
is going to achieve its objectives
38. pros of a business plan: -gives business a sense of direction
-forces evaluation of current strategic and tactical objectives
-encourages communication and co-operation between departments and stakehold-
ers
39. cons of a business plan: -spending longer on planning rather then implement-
ing reduces enthusiasm
-plan may be too rigid and leave little room for creativity
-plan may be disregarded or altered by someone who doesn't like it
1. factors of production: -land-natural resources e.g. fields
-labour-all human resources except entrepreneur
-capital-buildings, machinery and tools, but not money
-enterprise-the entrepreneur that organises the other 3 factors
2. value added calculation: value of output-value of input
3. what is a constraint on a business: a restraining factor e.g. environment,
competition, legislation and the economy
4. functions within a business: -accounting and finance
-operations management and production
-marketing and support services
-human resource management (HRM)
5. sectors of business activity: -primary-raw materials e.g. farming
-secondary-manufacturing e.g. factories
-tertiary-output of services e.g. supermarkets
6. deindustrialisation: a decline in the size of the secondary sector of the economy
7. private vs public sector: -private-businesses owned and run by private individ-
uals, usually for profit
-public-businesses owned and run by local or central gov, usually to provide a
service
8. sole trader: -an individual who owns and runs their own business
-unincorporated
-unlimlited liability
-pros-cheap and easy to set up, keep all profits, make all decisions
-cons-little capital for investment
9. partnership: -2-20 owners
-unincorporated
-unlimited liability
-pros-cheap and easy to set up, more skills, share workload
-cons-share profits, share responsibility, cause arguments, less control
10. private limited companies (ltd): -owned by shareholders who tend to be fam-
ily/friends of the entrepreneur
-incorporated
-limited liability
-pros-raise money through selling shares
-cons-greater responsibilities
11. public limited companies (plc): -able to sell shares on stock market
-incorporated
-limited liabilities
, ocr A level business
-pros-press coverage from stock market, raise funds by selling shares
-cons-media scrutiny, risk of takeover
12. limited liability: an investors liability/financial commitment are limited to the total
amount invested or promised in share capital
13. unlimited liability: owners of a business are responsible for total amount of debt
of the business
14. incorporated: a business with a seprate legal entity from its owners
15. unincorporated: a business and its owners have the same legal entity and are
therefore responsible for actions
16. third sector: -not in the public nor private sector
-includes charities, co-operatives
-motivated by the desire to achieve social goals
-profit is reinvested to improve the service being provided
17. business size thresholds-employees: -micro-<10
-small-10-50
-medium-50-250
-large->250
18. business size thresholds-turnover (£mil): -micro-<2
-small-2-10
-medium-10-50
-large>50
19. ways of measuring business size: -no of employees
-no of factories, shops or offices
-turnover and profit levels
-stock market value
-capital employed
20. factors affecting business size: -market size
-nature of product
-personal preference
-ability to access resources for expansion
21. organic growth: growth through increased sales e.g. sell more to existing cus-
tomers and finding new customers
22. joint venture: 2 or more businesses agree to commit to work together, both
invest money, time and effort
23. merger: 2 companies come together to make 1, mutual agreement
24. takeover/acqusition: involves acquiring control of a business through buying its
shares (own 51%)
25. strategic alliance: similar to joint venture, but less permanent and involves,
alliance means co-operation
, ocr A level business
26. stakeholder: a person or party with an interest in the success of a business
27. types of stakeholders: owners, employees, customers, suppliers, lenders,
community, gov
28. what does setting objectives do: -greater sense of direction for the business
-motivates employees
-aid to controlling existing and future operations in business
29. strategic objective: how a business plans to achieve its aims/goals, often a long
term approach
30. tactical objective: day-to-day objectives needed to ensure the strategic objec-
tives are achieved
31. SMART objectives: -specific
-measurable
-agreed
-realistic
-time-bound
32. internal constraints: -lack of finance to meet chosen objectives
-poor communication within business
-conflict of interests between departments
-industrial dispute with the work force
33. external constraints: -changes in law that affect business
-state of economy
-behaviour of competitors
-opinions and behaviour of external stakeholders
34. mission statement: gives a general idea of what the business exists to do and
its purpose is to set this down for the benefit of all stakeholders
35. internal audit: allows a business to assess it strengths and weaknesses in
relation to its competitors across the whole of the business
36. external audit: looks at the opportunities open to a business and the threats
which it faces in its external environment (PEST)
37. business plan: formal written document that explains in detail how a business
is going to achieve its objectives
38. pros of a business plan: -gives business a sense of direction
-forces evaluation of current strategic and tactical objectives
-encourages communication and co-operation between departments and stakehold-
ers
39. cons of a business plan: -spending longer on planning rather then implement-
ing reduces enthusiasm
-plan may be too rigid and leave little room for creativity
-plan may be disregarded or altered by someone who doesn't like it
