Partial 1 Flashcards
Capital Goods
Goods used to produce other goods, such as tools, equipment and machinery.
Consumers
Individuals or organizations who use a product.
Consumer Goods
Goods produced for general use by the public. They can be durable and non-durable.
Customers
People or organization that buy a product.
De-industrialisation
The decline in manufacturing.
Division of labour
Specialisation in specific tasks or skills by individuals.
Factors of production
Resources used by business to produce goods and services.
Limited Company
A business organisation which has a separate legal entity from that of its owners.
Markets
Anywhere that buyers and sellers communicate to exchange goods and services.
Money
Any substance which is generally accepted as a means of exchange.
Needs
Basic necessitates that a person must have to survive.
Opportunity Cost
The benefit of the next best option foregone when making a choice between a number of alternatives.
Primary Production Sector
Activities or businesses involved in the cultivation or extraction of natural resources.
Private Limited Company
Company with limited liability, and the capital is divided into shares privately and all members must agree in the sale of this shares. (LTD)
Public Limited Company
Company with limited liability, and the capital is divided into, shares are bought and sold on the stock market, by anyone who wants. (PLC)
Secondary Production Sector
It is the section of the economy where business activity is concerned with the construction and manufacturing of products.
Specialisation
In business, the production of a limited range of goods.
Tertiary Production Sector
It refers to the section of the economy where business activity is concerned with the revision of services to customers.
Deed of partnership
A binding legal document which states the formal rights of partners.
Limited Liability
Where a business owner is only liable for the original amount of money invested in the business.
Limited partnership
A partnership where some members contribute capital and enjoy a share of profit, but do not participate in the running of the business. At least one partner must have unlimited liability.
Organisation
A body set up to meet a need.
Partnership
A business organisation which is usually owned by between 2-20 people
Private Sector
Businesses that are owned by individuals or groups of individuals.
Sole Trader or Sole Proprietor
It is a self-employed person who runs and controls the business and is the sole person held responsible for its success (profits) or failure (unlimited liability).
Unlimited liability
It is a feature of sole traders and ordinary partnerships who are legally liable for all monies owed to their creditors, even if this means that they have to sell their personal possessions to pay for their debts.
Merit goods
Goods which are underprovided by private sector businesses.
Nationalised industries
Public corporations previously part of the private sector which were taken into state ownership.
Natural Monopoly
A situation where production costs will be lower if one firm is allowed to exist on its own in the industry, due to the existence of huge economies of scale.
Privatisation
The transfer of public sector resources to the private sector.
Private public partnerships
These involve the private sector in the operation of public services
Public corporations
Organisations set up by law to run services on behalf of government.
Public goods
Goods where consumption by one person does not reduce the amount available to others and, once provided, all individuals will benefit.
Public Sector
Part of the economy controlled by the government.
Consumer co-operative
A business organization which is run and owned jointly by the members, who have equal voting rights.
Not-for-profit organization
Organizations that are run according to business principles, but that do not aim to make a profit.
Pressure groups
Groups of people that attempt to influence decision makers in politics, business and society.
Public sector
Business organizations owned and controlled by central or local government.
Worker co-operative
A business organization owned by employees who contribute to production and share in profit.
Non Governmental Organizations (NGO)
It is any non-profit, voluntary citizens’ group which is organized on a local, national or international level.
Corporate objectives
The objectives of a medium to large-sized business as a whole.
Functional (or departmental) objectives
The objectives of a department within a business.
Mission statement
A brief statement, written by the business, of its purpose and its objectives, designed to encapsulate its present operations.
Objective or goal
A target or outcome for a business which allows it to achieve its aims.
SMART
Acronym or the attributes of a good objective. -specific, measurable, agreed, realistic and time specific.
Aim
The intention or purpose of a business; what a business is ultimately striving to achieve.
Profit maximisation
Earning the highest profit possible over the period of time.
Profit satisficing
Making enough profit to satisfy the needs of the shareholder whilst pursuing at least aim such as rewarding managers and directors.
Shareholder value
The value of the company to owners over a period of time as measured by a combination of the size of its dividend payments rise in its share price.
Vision statement
A statement about the purpose values of an organisation, outlining what it would deal in an ideal world.
External audit
An audit of the external environment in which a business finds itself, such as the market within which it operates or government restrictions on its operations
Internal audit
An analysis of the business itself and how it operates
Longterm objective
Objective of business over the next 3 to 5 years
Operation objectives
Small scale, shorter objectives to be achieved on a day to day basis.
Short-term objectives
Objectives of a business which are likely to be achieved within the next 12 months
Strategic analysis
Auditing the internal and external environments of the business to understand where the business is today and how it could develop in the future.
Strategic objectives
The main objectives of a business designed to achieve its aims.
Tactical objectives
Short-term objectives which help a business to achieve its strategic objectives.
Tactics
Short-term-specific ways in which the short term objectives of the business can be achieved.
