Keywords Flashcards
Interdependence
The way in which all the businesses in different sectors depend on each other no matter what sector it is, as each sector is needed for the chain of production, for example, diamonds are mined (primary sector), then made into rings (secondary sector), then sold by a shop jeweller (tertiary sector)
Stakeholder
Is an individual group or people who have an interest or concern in a business
Owners/shareholders
Someone who owns a share of a business, for example companies are owned by shareholders
Managers
Someone who manages the business
Employees
People who work for the business
Customers
People who buy the product or use the services
Suppliers
People who employ the business with what they need
Local community
People who live in the area where the business is
Government
This who run the country
Pressure groups
Groups who have something they are fighting for or believe in
Competitors
Businesses who are similar to one another
Specialisation
When a business concentrates on one main activity, for example, farmers concentrate on growing cocoa and Cadbury concentrate on making chocolate
Public sector
Organisations that are owned to control and funded by the government, they exist to prove a service, for example, NHS
Private sector
Businesses that are owned by people or groups of people, most exist to make a profit, for example Nandos
Voluntary or not for profit sector
Organisations that exist to benefit a community or cause often ran by volunteers, for example, St John’s Ambulance
Mission statement
Explains the main purpose of the business and the activities it is doing to achieve this
Vision statement
Focuses on the future and it explains what the business is hoping or planning to do, ideally should be inspirational
Unlimited liability
When the business and sole proprietor become as one
Limited liability
Where the owners of the business (shareholders) will not be personally responsible for any debts the business may have
Minority shareholders
Where private individuals usually only own a small percentage of most public limited companies because they can’t afford to buy large numbers of shares
Institutional investors
Where major shareholders like banks and investment companies will own a large number of shares and these shareholders have a greater influence on how the company is operated
Franchise
Where a business sells a sole proprietor the right to set up a business using their name, for example, McDonalds
The franchiser
Is the business or person who sells the right to another business to operate a franchise, they may want to run a number of their own business but also may want to let others run the business in other parts of the country
Franchisee
The business is bought by the franchisee, once they have bought the franchise they have to pay a portion of their profits to the fanchisor on a regular basis
Multinational company
Is one that operates in more than one country and typically operates in a number of major global markets
Globalisation
When businesses trade on an international level
Footloose
Where a business can locate anywhere
Internal expansion
This is where the business grows by increasing its production, perhaps by building new factories and shops
External expansion
- Takeover - where one business takes over another business this is achieved by buying enough shares in the flier it be able to outvote shareholders
- Merge - where two or more businesses agree to join together to become one large business, for example, Curry’s PC World
