Pancyprian TS Bus. Org. cheat sheet

Business environment layers: internal (owners, employees, resources, culture), task/micro (customers, suppliers, competitors, intermediaries), and macro (PESTLE: political, economic, social, technological, legal, environmental).

PESTLE factors are outside the firm's control; the firm responds through strategy, not direct control.

Stakeholders are any party affected by or affecting the business: shareholders, employees, customers, suppliers, creditors, government, local community, pressure groups.

SWOT separates internal factors (strengths, weaknesses) from external factors (opportunities, threats); it is an analysis tool, not a strategy in itself.

Business cycle phases: expansion, peak, contraction/recession, trough; demand, hiring and investment move with the cycle.

Sectors: primary (extraction), secondary (manufacturing), tertiary (services), quaternary (knowledge/information).

Opportunity cost = value of the next best alternative forgone when a resource is committed to one use.

A business adds value when output value exceeds the total cost of inputs; profit = total revenue − total costs.

Sole proprietorship: one owner, unlimited liability, no separate legal personality, profits taxed as owner's income.

Partnership: two or more owners; ordinary partners have unlimited liability; a limited partnership includes limited partners whose liability is capped at their contribution.

Private limited company: separate legal personality, limited liability, shares not offered to the public; transfer of shares usually restricted.

Public limited company: shares may be offered to the public; typically higher minimum share capital and stricter disclosure requirements.

Cooperative: owned and democratically controlled by members, usually one member one vote, profits distributed as dividends to members.

Franchise: franchisor licenses brand, systems and support to a franchisee who pays an initial fee plus continuing royalties.

Joint venture: two or more firms create a shared entity or project, sharing capital, control, risk and profit.

Liability rule: unlimited liability exposes personal assets to business debts; limited liability caps loss at the amount invested.

Planning hierarchy: strategic (long-term, top management), tactical (medium-term, middle management), operational (short-term, first-line).

SMART objectives: specific, measurable, achievable, relevant, time-bound.

Organising allocates tasks, authority and resources; leading directs and motivates people; controlling compares actual performance with standards.

Control cycle: set standard → measure actual performance → compare → identify deviation → take corrective action.

Management by objectives (MBO): objectives set jointly by manager and subordinate, performance reviewed against agreed targets.

Span of control = number of subordinates reporting directly to one manager; wide spans need fewer management layers.

Delegation transfers authority for a task while accountability for the outcome remains with the delegator.

Decision-making steps: define problem → gather information → generate alternatives → evaluate → choose → implement → review.

Functional structure groups by specialism (marketing, finance, operations); divisional structure groups by product, region or customer.

Matrix structure combines functional and project reporting, giving two bosses; it increases coordination but creates dual-authority conflict.

Tall structure: many levels, narrow spans, longer communication chains; flat structure: few levels, wide spans, faster decisions.

Centralisation concentrates decision authority at the top; decentralisation pushes it to lower levels closer to the customer.

Chain of command is the line of formal authority from top to bottom; the scalar principle requires an unbroken line.

Line authority directly commands subordinates; staff authority advises and supports without commanding.

Delayering removes management levels to cut cost and speed communication; downsizing reduces headcount.

Mechanistic structures suit stable environments (rules, specialisation); organic structures suit change and innovation (flexible, team-based).

HRM cycle: human resource planning → recruitment and selection → induction and training → performance appraisal → reward → retention or separation.

Maslow's hierarchy: physiological, safety, social, esteem, self-actualisation; lower needs are met before higher needs motivate.

Herzberg two-factor theory: hygiene factors (pay, conditions, policy) prevent dissatisfaction; motivators (achievement, recognition, responsibility) create satisfaction.

McGregor Theory X assumes workers dislike work and need control; Theory Y assumes workers seek responsibility and self-direction.

Vroom expectancy theory: motivation = expectancy × instrumentality × valence; a zero in any factor removes motivation.

Job design levers: job rotation, job enlargement (more tasks at same level), job enrichment (more responsibility and autonomy).

Labour turnover rate = (number of leavers ÷ average number of employees) × 100.

Absenteeism rate = (days lost ÷ total possible working days) × 100.

Marketing mix 4Ps: product, price, place, promotion; services extend to 7Ps adding people, process and physical evidence.

Market segmentation divides a market by demographic, geographic, psychographic or behavioural criteria; targeting selects segments; positioning defines the perceived place in the customer's mind.

Product life cycle: introduction, growth, maturity, decline; pricing and promotion tactics change at each stage.

Pricing methods: cost-plus (cost + mark-up), penetration (low launch price), skimming (high launch price), competitive, and value-based.

Price elasticity of demand = % change in quantity demanded ÷ % change in price; |E| > 1 elastic, |E| < 1 inelastic.

Market share = (firm's sales ÷ total market sales) × 100.

Marketing research split: primary data collected first-hand; secondary data already published.

AIDA promotion model: attention, interest, desire, action.

Operations transform inputs (materials, labour, capital, information) into outputs (goods and services) through a transformation process.

Production methods: job (one-off), batch, mass/flow, and continuous; capital intensity and flexibility trade off against unit cost.

Productivity = output ÷ input; labour productivity = output ÷ number of workers.

Capacity utilisation = (actual output ÷ maximum possible output) × 100.

Break-even output (units) = fixed costs ÷ (selling price per unit − variable cost per unit).

Margin of safety = current output − break-even output.

Quality approaches: quality control (inspection after production), quality assurance (process design prevents defects), total quality management (continuous improvement, everyone responsible).

Inventory: holding stock buffers demand but ties up working capital; just-in-time minimises stock and depends on reliable suppliers.

Lean production removes waste (overproduction, waiting, transport, over-processing, inventory, motion, defects).

Accounting equation: assets = liabilities + owners' equity.

Balance sheet lists assets, liabilities and equity at a point in time; income statement reports revenue, costs and profit over a period.

Gross profit = revenue − cost of goods sold; net profit = gross profit − operating expenses.

Gross profit margin = (gross profit ÷ revenue) × 100; net profit margin = (net profit ÷ revenue) × 100.

Current ratio = current assets ÷ current liabilities; ideal is commonly cited around 2:1.

Acid-test (quick) ratio = (current assets − inventory) ÷ current liabilities; benchmark about 1:1.

Return on capital employed (ROCE) = (operating profit ÷ capital employed) × 100.

Cash flow forecast records inflows and outflows by period; profit is not cash, since credit sales and depreciation distort timing.

Sources of finance: internal (retained profit, asset sales) and external (bank loan, overdraft, share issue, debenture, leasing, trade credit).

Corporate social responsibility covers economic, legal, ethical and philanthropic responsibilities (Carroll's pyramid).

Triple bottom line reports three results: profit, people (social) and planet (environmental).

Stakeholder theory holds the firm accountable to all affected groups; shareholder theory holds it accountable primarily to owners.

Ethical codes and whistleblowing channels are governance mechanisms for reporting misconduct without retaliation.

Sustainability means meeting present needs without compromising the ability of future generations to meet theirs.

Environmental management tools: environmental impact assessment, carbon footprint measurement, waste hierarchy (prevent, reuse, recycle, recover, dispose).

Ethical decision tests: is it legal, does it respect stakeholder rights, would it survive public disclosure.

Fair trade and ethical sourcing certify that producers in supply chains receive minimum prices and safe conditions.

Entrepreneur traits commonly cited: opportunity spotting, risk-taking, self-confidence, initiative, perseverance.

Business plan sections: executive summary, business description, market analysis, marketing plan, operations plan, management team, financial plan, risk assessment.

Start-up funding sequence: personal savings and family, grants and seed capital, bank finance, equity investors (business angels, venture capital).

Break-even analysis and cash flow forecasts are core financial-plan components; lenders and investors test both.

Market gap analysis identifies unmet customer needs; a unique selling proposition states why customers choose the venture.

Risk register lists identified risks with likelihood, impact and mitigation action.

Exit strategies for founders: trade sale, management buy-out, initial public offering, or family succession.

Small firms' constraints: limited finance, limited specialist skills, higher unit costs, but greater flexibility and closer customer contact.