Business Management - Yellow Topic

Factors of Production
1. Land
2. Labour
3. Capital
4. Enterprise
Limited Liability VS Unlimited Liability
1. Unlimited: Owner will not lose more than he or she invested into the business
2. Limited: Owners have responsibility for the businesses debts. Owner may lose their personal assets
Public Limited Company
1. Limited liability
  1. Easier to trade shares
    1. Huge sums of capital can be raised from institutional investors such as PensionFunds
  2. Advantages
2. Disadvantages
  1. They must publish annual reports.
  2. In large companies employees may feel out of touch (alienated)
  3. Legal procedures required for setting up is costly.
Cooperative
1. Advantages
  1. employees have incentive to work hard because they own part of the business
    1. employees can contribute towards decision making
2. Disadvantages
  1. Longer decision making
    1. Possibility of Conflict
Multinational
1. Advantages
  1. secure cheaper premises and labour
    1. Avoid trade barriers
      1. Health and safety legislations may be more relaxed in other countries
2. Disadvantages
  1. Other countries may not respect copyright
    1. Complex to meet other countries legislative requirements
3. Multinational HOST COUNTRY
  1. Advantages
    1. Provide jobs and income
      1. Improve level of expertise of local workers
        Economies of scale
  2. Disadvantages
    1. Jobs may only be low levelled skills
      1. Profits go back to home country
        May force out local companies
CSR
1. Disadvantages
  1. May lose competitive edge
    1. Increased short term costs
      1. Increased training required
2. Advantages
  1. Increased customer loyalty
    1. Attract high quality staff
      1. Good reputation

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Business Management - Yellow Topic

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