Definitions AS

Question 1

Consumer goods

Answer 1

The physical and tangible goods sold to the general public

Question 2

Consumer services

Answer 2

The non-tangible products sold to the general public

Question 3

Capital goods

Answer 3

The physical goods used bu the industry to aid in the production of other goods and services

Question 4

Creating value

Answer 4

The process of increasing the difference between the cost of the bought-in materials and the price at which the finished good is sold for

Question 5

Added value

Answer 5

The difference between the cost of the bought-in materials and the price at which the finished good is sold for

Question 6

Opportunity cost

Answer 6

The benefit of the next most desired option which is given up

Question 7

Entrepreneur

Answer 7

Someone who takes the financial risk of starting and managing a new venture

Question 8

Social enterprise

Answer 8

A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximising returns to owners

Question 9

Triple bottom line

Answer 9

The three objectives of social enterprises: economic, social and environmental

Question 10

Primary sector business activity

Answer 10

Firms engaged in industries that extract natural resources so that they can be used and processed by other firms

Question 11

Secondary sector business activity

Answer 11

Firms that manufacture and process products from natural resources

Question 12

Tertiary sector business activity

Answer 12

Firms that provide services to consumers and other businesses

Question 13

Public sector

Answer 13

Comprises organisations accountable to and controlled by the state

Question 14

Private sector

Answer 14

Comprises businesses owned and controlled by individuals or groups of individuals

Question 15

Sole trader

Answer 15

A business in which one person provides the permanent finance and, in return has full control of the business and is able to keep all of the profits

Question 16

Partnership

Answer 16

A business formed by two or more individuals to carry on a business together, with shared capital investment and usually, shared responsibilities

Question 17

Limited liability

Answer 17

The liability the shareholder has that if the company fails, the amount invested into the company is lost, not he shareholder’s total wealth

Question 18

Private limited company

Answer 18

A small to medium sized business that a is owned by shareholders who are often members of the same family (employees or friends but cant sell to general public)

Question 19

Share

Answer 19

A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights

Question 20

Shareholder

Answer 20

A person or institution owning shares in a limited company

Question 21

Public limited company

Answer 21

A limited company, often large, with he legal rights to sell shares to the general public

Question 22

Memorandum of association

Answer 22

This states the name of the company, the address of the head of dice through which it can be contacted, the maximum share capital for which the company seeks authorisation and the declared aims of the business

Question 23

Articles of association

Answer 23

This document covers the internal workings and control of the business e.g. the names of directors, the procedures that will be followed at meeting etc.

Question 24

Franchise

Answer 24

A business that uses the name, logo and trading systems of an existing successful business

Question 25

Joint venture

Answer 25

Two or more business agree to work together on a particular project and create a separate business division to do so

Question 26

Holding company

Answer 26

A business organisation that owns and controls a number of separate businesses, but does not unite the into one unified company

Question 27

Public corporations

Answer 27

A business enterprise owned and controlled bu the state - aka nationalised industry

Question 28

capital employed

Answer 28

The total value of all long-term finance invested in the business

Question 29

Market capitalisation

Answer 29

The total value of a company’s issued shares

share price x number of shares issued

Question 30

Market share

Answer 30

The sales of the business as a proportion fo total market sales

If it has 25% or more it is a monopoly

(Company’s revenue/ industry revenue x 100)

Question 31

Internal growth

Answer 31

The expansion of a business by means of opening new branches, shops or factories
Aka organic growth

Question 32

Mission statement

Answer 32

A statement of the business’ core aims, phrased in a way to motivate employees and stimulate interest by outside groups

Question 33

Corporate social responsibility (CSR)

Answer 33

the concept businesses that consider the interests of society carry out, by taking responsibility for the impact of their decisions on different stakeholders and the environment

Question 34

Management by objectives

Answer 34

A method of coordinating and motivating allo staff in an organisation by dividing its overall aim into specific targets for each department, manager and employee

Question 35

Ethical code (code of conduct)

Answer 35

A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees

Question 36

Stakeholders

Answer 36

People or groups who can be affected by and therefore have an interest in any action taken by an organisation

Question 37

Stakeholder concept

Answer 37

The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders