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Business Chapter 1
| Term | Definition |
|---|---|
| Business Plan | Document that sets out the business ideas, it's goals and objectives and other details of how the business operates |
| Business | organizations in the production of goods or the provision of services. |
| Consumers | People or organizations who actually use the products |
| Customers | People or organizations that buy the product |
| Entrepreneurs | owners or operations of an organization who manage, organize and plan the other three factors of production. |
| Intrapreneurship | act of behaving as an entrepreneur but as an employee within a large business organization. |
| Needs | Basic necessities that a person must have to survive |
| Primary Sector | businesses involved in the cultivation or extraction of natural resources |
| Product | refers to both goods and services. Goods are physical products and services are intangible products |
| Quartenary Sector | Businesses that are involved in the intellectual field |
| Secondary Sector | section of the economy where business activities are concerned with construction and manufacturing |
| Sectoral Change | Shift in the relative share of gross domestic products and employment |
| Tertiary Sector | section of the economy where business activities are concerned with the provision of services to consumers |
| Wants | People's desires |
| Charities | Non-profit social enterprises that provide voluntary support for good causes |
| Cooperatives | For-profit social enterprises set up and owned and run by their membranes |
| Company | refers to the business that is owned by shareholders. Contains a certificate of incorporation so it has a separate legal identity from it's owners |
| Deed of partnership | legal contract signed by the owners of a partnership. Specifies the name and responsibilities of each partner and their shares of the profits |
| Incorporation | Legal difference between owners of a company and the business itself |
| Initial Public Offering | When a business sells all or part of its business to shareholders on a stock exchange for the first time |
| Limited Liability | restriction on the amount of money that owners can loose if their business goes bankrupt |
| Microfinance | Type of financial service aimed at entrepreneurs of small businesses |
| Non-governmental organization | private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming to make a profit |
| Partnerships | Type of private sector business owned by 2-20 people. They share responsibilities and burdens of running and owning the business |
| Private Limited Company | Business owned by shareholders with limited liability. The shares cannot be bought or sold to the general public. |
| Private Sector | Part of the economy run by private individuals and businesses, rather than by the government |
| Public Limiter Company | Incorporated business that allows the general public to buy and sell shares in the company via a stock exchange |
| Public-private partnerships | When the government works together with the private sector to jointly provide certain goods or services |
| Public Sector | Part of the economy controlled by the government. EG: Hospitals, education services |
| Sole Trader | self-employed person who runs and controls the business and is the person responsible for its success or failure |
| Social Enterprise | Revenue-generating business with social objectives at the core of their operations. They can be for-profit or non-profit but all profits are reinvested for that social purpose. |
| State-owned Enterprise | Organizations fully owned by the govenrment |
| Stock Exchange | Market place for trading stock and shares of public limited companies. EG: London Stock Exchange |
| Unlimited Liability | Features sole traders and partnerships so their personals possessions can be used to pay for their debts. |
| Aims | long terms goals of a business that is expressed in the firm's mission statement |
| Ansoff matrix | analytical tool to devise various product and market growth strategies |
| Corporate Social Responsibility | Consideration of ethical and environmental practices related to business activity |
| Ethical Code of Practice | Documented beliefs and philosophies of an organization |
| Ethics | Moral principles that guide decision-making and strategy |
| Mission Statement | Declaration of an organization's overall purpose and sets objectives for the business |
| Objectives | short tern targets of an organization |
| SMART Objectives | Targets that are : Specific, Measurable, Achievable, Realistic, Time Constrained |
| Strategies | plan of action that a businesses use to achieve their targets |
| SWOT analysis | analytical tool that looks at the internal strengths and weaknesses and the external opportunities and threats of a business and decisions |
| Tactics | Short-term plans of action that firms use to achieve their objectives |
| Vision Statement | Organization's long-term aspirations |
| Conflict | refers to situation where stakeholders have disagreements on certain matters due to differences in their opinions. |
| External Stakeholders | individuals and organizations not part of the organization but have a direct interest in its activities and performance |
| Internal Stakeholders | Business members of an organization like the employees or managers. |
| Pressure groups | Individuals with a common concern who seek to place demands on organizations to act in a particular way. |
| Shareholders | owners of a limited liability company |
| Stakeholders | Individuals or organizations with a direct interest in the activities and performance of a business |
| Business Cycle | Fluctuation in the level of business activity over time. |
| Deregulation | removal of government rules and regulations which constrain an industry to enhance efficiency and encourage more competition within the industry |
| Economic Growth | changes in the GDP of a country over time. |
| Exchange Rate | Value of a country's currency in terms of other currencies |
| Inflation | When the general price level in an economy continuously rises. Measured by changes in the cost of living for the average household in a country |
| Interest Rate | Measure of the price of money in terms of the amount of charged for borrowed funds or how much is offered on money that is saved |
| Protectionist measures | Any measure taken by a government to safeguard its industries from overseas competitors. They are threat to businesses trying operate in foreign markets |
| STEEPLE analysis | analytical framework used to examine the opportunities and threats of the external environment on business activity |
| Unemployment | number of people in the workforce who are willing and able to work but cannot find employment |
| Backward vertigal integration | when a business amalgamates with a firm operating in an earlier stage of production |
| Conglomerates | Businesses that provide a diversified range of products and operate in an array of different industries |
| Diseconomies of scale | cost disadvantages of growth. |
| Diversification | High risk growth strategy that involves a business selling new products in new markets |
| Economies of Scale | Lower average costs of production as a firm operates on a larger scale due to gains in production efficiency |
| Forward vertical intergration | growth strategy that occurs with the amalgamation of a firm operating at a larger stage in the production process |
| Franchise | Agreement between franchisor selling its rights to other businesses called franchisees. This allows them to put the products under their names in return for a fee and regular royalty payments |
| Globalization | Growing integration and interdependent of the worlds economies causing consumers around the world to have increasingly similar habits and tastes |
| Horizontal Integration | External growth strategy that occurs when a business amalgamates with a firm operating at the same stage of production |
| Internal Growth | Also known as organic growth. When a business grows using capabilities and resources to increase the scale of its operations and sales revenue. |
| Joint Venture | Growth Strategy that combines the contributions and responsibilities of two different organization in a shared project by forming s separate legal enterprise. |
| Lateral Integration | Refers to the mergers and acquisitions between firms that have similar operations but do not directly compete with each other. |
| Merger | Form of external growth where two or more firms agree to form a new organization and loose their original identities |
| Multinational Companies | Firms that operate in two or more countries with head offices in the originating country |
| Optimal Level of output | Most efficient scale of operation for a business, which occurs at the level of output where average costs of production are minimised. |
| Decision Tree | Quantitative organizational planning tool that calculates the probably values of different options, helping managers to minimise the risks in decision making |
| Force Field Analysis | Deals with forces for and against change. |
| Driving Forces | Forces that show the benefits of a change |
| Restraining Forces | Forces that are against a change |
| Fishbone diagram | organizational planning tool based on identifying and dealing with the root causes of a problem or issue facing a business |
| Gantt Charts | Visual representation of all the tasks in a particular project plotted against the timescale |
| Organizational Planning tools | Various methods that businesses use to aid their decision making. EG: decision trees, fishbone diagrams |
Created by:
priyankamenon
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