Introduction To Business Enterprise

Question 1

International business

Answer 1

Business activities that straddle two or more countries.

Question 2

For-profit organisations

Answer 2

Businesses that aim to make money.

Question 3

Non-for-profit organisations (NPO)

Answer 3

Organisations such as charities, which exist for the purpose of promoting good causes, rather than to make a profit.

Question 4

Social enterprise

Answer 4

An enterprise that lies somewhere between the for-profit and the NPO, aiming to make money but using it mainly for social causes.

Question 5

Market

Answer 5

A location where exchange transactions take place, either with formal standing or informality.

Question 6

Emerging economies/markets.

Answer 6

Fast-growing developing countries.

Question 7

BRIC Countries

Answer 7

Collective reference to Brazil, India, Russia and China, which are grouped together loosely as emerging economies.

Question 8

Segment

Answer 8

In marketing, a group of identifiable consumers, such as an age group, socioeconomic group or culturally distinct group.

Question 9

Stakeholder

Answer 9

Broad category including individuals, groups and even society generally, that exerts influence on the company or that the company is in position to influence.

Question 10

Outsourcing

Answer 10

The process by which an owner contracts out to another firm a business process, such as product manufacturing or a business service, usually under a licence agreement.

Question 11

Corporate social responsibility (CSR)

Answer 11

An approach to business which recognises that the organisation has responsibilities in society beyond the economic role, extending to legal, ethical, environmental and philanthropic roles.

Question 12

Sustainability

Answer 12

The principle that business should be carried out in ways which do not cause a detriment to the ability of future generations to fulfil their needs.

Question 13

Entrepreneur

Answer 13

A person who starts up a business and imbues it with the energy and drive necessary to compete in markets.

Question 14

Sole trader

Answer 14

The person who is in business on his or her own account, also referred to as self employed person.

Question 15

Small to medium size enterprise (SME)

Answer 15

Business ranging from micro-enterprises of just one person to firms with up to 249 employees.

Question 16

Born-global firm

Answer 16

SME which aims to become global from the outset, often in a high-technology sector.

Question 17

Franchising

Answer 17

Business agreement by which a business uses the brand, product and business format of another firm under licence.

Question 18

Company

Answer 18

A legal form of an organisation which has separate legal identity from its owner(s); also called a corporation.

Question 19

Shareholders

Answer 19

Legal owners of a company, known as ‘members’ who enjoy rights such as receiving dividends from company profits.

Question 20

Equity

Answer 20

In corporate finance, the share capital of a company.

Question 21

Limited liability

Answer 21

Principle that the shareholder is liable up to the amount invested in the company.

Question 22

Private limited company

Answer 22

Company who’s shares are not publicly traded in a stock exchange.

Question 23

Public company

Answer 23

Company which lists on a stock exchange and offers shares to the public.

Question 24

Initial public offering (IPO)

Answer 24

First offering by a company of its shares to the public on a stock exchange; also known as ‘flotation’.

Question 25

Rights issue

Answer 25

For a company, a means of raising capital whereby existing investors are asked to increase their investment.

Question 26

Multinational enterprise (MNE)

Answer 26

An organisation which acquires ownership or other contractual ties in other organisations (including companies and unincorporated businesses) outside its home country.

Question 27

Transnational corporation (TNC)

Answer 27

A company which owns and controls operations in one or more countries other than its home country.

Question 28

Affiliates

Answer 28

Organisations connected through ownership or other strategic ties to an MNE.

Question 29

Subsidiary company

Answer 29

A company owned wholly or substantially by another company, which is in a position to exert control.

Question 30

Privatisation

Answer 30

Process of transforming a state owned enterprise into a public company and selling off a proportion of shares to the public, usually while retaining a stake and a controlling interest by the government.

Question 31

Sovereign wealth fund

Answer 31

Entity controlled by a government, which invests state funds and pursues as investment strategy; often active global financial markets.

Question 32

Corporate governance

Answer 32

A company’s structure and process for decision making at the highest level.

Question 33

Organisation for economic co- operation and development (OECD)

Answer 33

Organisation of the worlds main developed economies which supports market economies and democratic institutions.

Question 34

Directors

Answer 34

People appointed by the company to bear ultimate responsibility for the company’s activities.

Question 35

Co-determination

Answer 35

Principle of stakeholder participation in corporate governance, usually involving a two tier board, with employee representation in the supervisory board.

Question 36

Executive directors

Answer 36

Directors who actively manage the company

Question 37

Chief executive officer (CEO)

Answer 37

The company’s senior executive, who oversees its management and is accountable to the board of directors.

Question 38

Non-executive directors

Answer 38

Part-time company directors who are independent of the firms management and owners.

Question 39

Functions

Answer 39

Activities of a business which form part of the overall process of providing a product for a customer.

Question 40

Business

Answer 40

Any type of economic activity in which goods or services (or a combination of both) are supplied in exchange for some payment, usually money.