1.1 What is a Business Flashcards
Glossary of Key Terms
Adding value
The process of producing a particular good or service that is worth more than the cost of the resources used to produce it
Business
A decision-making organization established to produce goods and/or provide services
Consumers
The individuals or organizations that actually use a product
Entrepreneurs
the individuals who take risks in overseeing a business organization or business venture, usually in pursuit of profit
Customers
The individuals or organizations that purchase a product
Entrepreneurship
The knowledge, skills and experiences of individuals who have the capability to manage the overall production process
factors of production
the collective term for the resources used in the production process
I.e. land, labour, capital and entrepreneurship
Finance and accounts
function of an organization responsible for ensuring that the the business has sufficient funds in order to conduct its daily operations
Human Resources (HR)
the business function that handles all aspects related to the workforce, involving all aspects of a firm’s operations related to staff within an organization
Marketing
business function of identifying the needs and wants of customers so that the organization can provide goods and services to meet these requirements and desires, usually in a profitable way
needs
the basic necessities that an individual must have in order to survive, such as food, water and shelter
Operations management
the business function referring to the process of making goods and providing services from the available resources of a business to meet the needs and wants of its customers
primary sector
business activity involved with the extraction of natural resources
e.g. fishing, mining and agriculture
production
the process of creating goods and/or services using the factors of production available to the business
Quaternary sector
business activity involving the creation or sharing of knowledge and information
Secondary sector
business activity involved with the manufacturing or construction of finished products
services
intangible products
such as haircuts, tourism, public transport, banking, insurance education, and healthcare
tertiary sector
business activity that involves providing services to customers
i.e. consumers and business clients
value added
the numerical difference between the cost of factor inputs in the production process and the price that the final output is sold for
wants
these are the desires of individual customers
i.e. the goods and services that they would like to have
