3.1 Business growth and objectives Flashcards
what is a firm?
an organisation that brings together factors of production in order to produce output
what is a horizontal merger?
a merger between two firms at the same stage of production in the same industry
what is horizontal integration?
the result of a horizontal merger
what is private sector?
made up
of firms that are privately
owned
what is public sector?
made up of
state-owned organisations,
including those that
run central and local
government activities and
some enterprises in public ownership
what is non-profit organisation?
organisations such as
charities that operate on a
non-profit-making basis
what is principal agent problem?
a problem arising
from conflict between the
objectives of the principals
and those of the agents
who take decisions on their
behalf
what is organic growth?
when
a firm grows internally
by reinvesting profits or
borrowing from banks
what is a vertical merger?
a merger
between two firms in the
same industry, but at
different stages of the
production process
what is a backwards integration?
a process under which a firm
merges with a firm that is
involved in an earlier part
of the production chain
what is forward integration?
a process under which a firm
merges with a firm that is
involved in a later part of
the production chain
what is a conglomerate merger?
a merger between two firms
operating in different
markets
what is a transnational company?
a firm that conducts its
operations in a number of
countries
