U3 - AoS1 (BM)

• Private Sector: owned by private individuals, groups, or institutions
• Public Sector: owned by the government

• Sole Trader:
• D - Is a small business, owned and operated by a single proprietor, often with the primary objective of making a profit.
• - An individual owner of a business, entitled to keep all profits after tax has been paid but liable for all losses.
• - Private sector, unlimited liability
• P - Simple and inexpensive to set up
•    - Owner has total control over business
•    - Minimal Government regulation
• C - Unlimited liability for owner
•    - Harder for owner to get finance for the business
•    - Reliant on owners own knowledge and skills

• Partnership:
• D - Is a type of business where 2 or more people combine their knowledge, time and capital to own and operate the business together.
• - A legal form of business that is owned by two or more people
• - Private sector, unlimited liability
• P - Simple and inexpensive
•    - Risk and workload shared between partners
•    - Broader access to capital, knowledge, skills and expertise.
• C - Unlimited liability; liability for debts incurred by other partners
•    - Perpetuity not guaranteed; business could be threatened by a partner leaving
•    - Potential for disputes and personality clashes.

• Company:
• - A separate legal entity that is subject to the requirement of the Corporations Act 2011, owned by shareholders who have limited liability, run by directors and has perpetual succession.
• - Private sector, limited liability
• Private:
• P - Limited liability
•    - Extra capital can be obtained by issuing more shares
•    - Existence not threatened by death or removal of one of the shareholders
• C - Highly complex structure
•    - High establishment costs
•    - Needs more accountability and compliance paperwork
• Public:
• P - Ability to gain extra capital through selling extra shares
•    - Separate legal entity
•    - Existence not threatened by death or removal of one of the shareholders (perpetuity)
• C - Highly complex structure
•    - High establishment costs
•    - Needs more accountability and compliance paperwork
•    - Must declare financial information to the public

• Social Enterprise:
• D - Is a business that applies commercial strategies to maximise improvement to social and environmental wellbeing.
• - Private sector business that distributes surplus funds to benefit the community rather than individual shareholders
• - (Most) Adopt legal structure of a company.
• - Purpose to benefit community, by having a commercial product on the side and make a profit.
• P - Meeting a social need can encourage community support, increasing profits
•    - Improved morale within the business as employees value the work they are doing
• C - Difficult to obtain the finance to begin the business
•    - Difficult to focus on both financial and social objectives and balancing the two

• Government Business Enterprise (GBE):
• - A business that is government owned and operated. GBEs seek to run profitably by controlling costs and selling their goods and services at a price to cover costs.
• - Public sector-owned by government
• P - Relies on the government for the initial investment
•    - Provides healthy competition to private sectors
•    - a GBE can carry out government policies and areas where private sector businesses may hesitate to invest in
• C - There can be interference from politicians in the day-to-day operations of the business
•    - Strategic directions can change when the government changes which can be difficult for the employees
•    - May be inefficiencies cause by government's strict regulations and processes (e.g., having to get major decisions approved).

- Business Objectives are statements of desired achievements which provide direction for the business.

• To make a profit:
• - financial objective
• - revenue minus expenses

• To increase market share:
• - financial objective
• - the proportion of total sales controlled by a business in an industry
• - increase demonstrates that the business is making more sales compared to competitors

• To improve efficiency:
• - how well a business uses its resources (time, materials, labour, technology, etc)
• - A business hopes to use resources efficiently - to minimise resources used and maximise outputs generated through inputs.

• To improve effectiveness:
• - The extent to which a business achieves its stated objectives
• - improved effectiveness = performing better at meeting targets

• To fulfil a market need:
• - When a gap in the market is being filled. (goods or services in demand are not being produced)
• - Increases customer demand, increasing sales and will increase the likelihood of a business achieving their financial objectives.

• To fulfil a social need:
• - Relating to the role of a business in the community.
• - Go beyond financial objectives, and revolve around being a good citizen

• To meet shareholder expectations:
• - Shareholders expect that business make a profit and for any shares purchased, to increase in value and dividends paid.
• - Important as shareholders own a business, and expectations need to be met in order to achieve growth.

• An individual or group that has a direct or vested interest in the activities of an organisation
• - can either affect or be affected by the operations of a business

• Owners:
• The person/people who invest in a business expecting a return on their investment.

• Interests include:
• - Profitability of business
• - To receive dividends
• - Increased share prices
• - Ethical business operations
• - Socially responsible behaviour.
• CSR of B- Communicate with shareholders in open and honest manner

• Managers:
• The person who has the responsibility for successfully achieving business objectives.

• Interests include:
• - Involvement in setting goals and objectives
• - To secure their position within the business and work on their career development
• - To receive a fair remuneration package
• - To gain job satisfaction
• - To work for a business that is ethical and socially responsible

• Employees:
• The people who work for a business and who expect to be paid fairly, trained properly and treated ethically, in return for their contribution to the production.

• Interests include:
• - Expect to be paid fairly
• - Expect to receive adequate training and development opportunities
• - Know their job is secure into the future
• CSR of B- provide training to improve skills
• - Offer flexible working conditions

• Customers:
• The people who purchase goods or services from the business, expecting high quality at competitive prices.

• Interests include:
• - Expect to purchase quality products at reasonable prices.
• - Potentially establish long-term relationship with business
• - Ensure products are Australian-made; support Aus-owned businesses
• - Increased awareness of SR businesses - will purchase from businesses with SR practices.
• CSR of B- Provide high quality products that exceeds customer expectations, e.g., lasts beyond warranty period

• Suppliers:
• Businesses or individuals who supply materials and other resources to a business so that it can conduct its operations.

• Interests include:
• - Providing quality materials that are delivered reliably to ensure the business makes a profit
• - Develop long-term relationship with business for steady revenue stream
• - Expect to be paid promptly and in full
• CSR of B- Use local suppliers to reduce carbon emission
• - Ask supplier to sign code of conduct to ensure ethical acts
• - Open and honest communication

• General Community:
• Members of the community who expect a business will support and give back to the local citizens and community at large.

• Interests include:
• - To benefit from the employment opportunities created by the business.
• - Expect the business to show concern for the environment
• - Expect the business to give back to society from what they earn
• - For business to participate in local community.
• CSR of B- Reduce environmental impact on community
• - Keep operations local to maximise jobs in community
• - Volunteer in local community

• Employees and shareholders:
• Employees – safe working conditions and fair wages; shareholders - costs kept low to increase their return.  

• Management and customers:
• Management – increase profits through increasing prices; customers – wanting to pay a lower price 

• Management and the community:
• Management – cut costs through neglecting maintenance; community – kept safe and environment taken into consideration 

• Suppliers and the community:
• Suppliers – use unethical practices;
• community – ethical codes upheld 

• Management and Suppliers:
• Management – reduce costs through using unsustainable suppliers;
• suppliers – prefers to use ethical methods to source supplies

• Employees and Management:
• Employees - increased remuneration, opportunities for development and advancement;
• Management - achieving business success (goals such as profit), interest in opportunities for advancement and praise for work.

A management style is the manner and approach of providing direction, implementing plans and motivating people.

• Communication:
• - one-way
• - two way

• Decision-making:
• - top-down/centralised
• - joint/decentralised

• Orientation:
• - task
•  -people

• Autocratic:
• - one-way
• - centralised decision making
• - task orientated

• Persuasive:
• - one-way communication
• - centralised decision making
• - task orientated

• Consultative:
• - two-way communication
• - centralised decision making
• - people orientated

• Participative:
• - two-way communication
• - decentralised decision making
• - people orientated

• Laissez-faire:
• - two-way communication
• - decentralised decision making
• - people orientated
• - evident in art/creative industries

• Nature of Task?
• - Classified or open?
• - Unpopular but necessary decision?

• Time:
• - Quick decision required, or lots of time available?

• Experience of employees:
• - Experienced or new employees?

• Manager Preference:
• - A good decision maker or good leader?

(Management) Skills refer to the ability to do something well, gained through experience and training. 

• Communication:
• The process of creating and exchanging information between people that produces the required response.

• Delegation:
• The passing of authority down the hierarchy to perform tasks or makes decisions; responsibility remains with the person delegating.

• Planning:
• The process of determining objectives and devising strategies in order to achieve them.

• Leadership:
• The ability of a manager to influence and motivate people to
• work towards the achievement of organisational objectives.

• Decision-making:
• Is a multi-step approach whereby a selection is made between a range of different alternatives.

• Interpersonal:
• The skills used every day to communicate and interact with other people, both individually and in groups.

Corporate culture is the shared values and beliefs of people within an organisation.

• Official Corporate Culture:
• - The set of values and beliefs that the business wants to present to the public.
• - Visible through company documents, mission and values statements, slogans, logos, etc.

• Real Corporate Culture:
• - The actual or prevailing values and beliefs of a business.
• - Can be identified through observation of what actually occurs and the real relationships and interactions between people
• - e.g., language used, management style etc.