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IB Business Management SL 2016+ > Unit 1 - Business Organisation > Flashcards

Unit 1 - Business Organisation Flashcards

1
Q

added value

A

difference between a product’s price and the total cost of the inputs that went into making it; extra worth created in the production process

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2
Q

aim

A

long-term goals of a business, often expressed in the firm’s mission statement

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3
Q

Ansoff’s matrix

A

tool to analyse product and market growth strategies

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4
Q

backward vertical integration

A

business buys a firm operating in an earlier stage of production, e.g. firm buys supplier

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5
Q

business

A

organisation involved in the production of goods and/or provision of services

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6
Q

business cycle

A

cyclical fluctuations in economic activity; the business cycle shows that economies typically move through a pattern of economic growth with the phases: recovery, boom, recession, trough

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7
Q

business plan

A

report detailing how a business sets out to achieve its aims and objectives

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8
Q

capital

A

all non-natural resources used in the production process, e.g. money, machines, buildings

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9
Q

charities

A

non-profit organisations established to support good causes

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10
Q

company

A

business that is owned by shareholders with a separate legal identity from its owners

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11
Q

conflict

A

situation where people have disagreements or certain matters due to differences in their opinions

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12
Q

conglomerates

A

businesses with a diversified range of products and operations in different industries, e.g. Virgin

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13
Q

corporate social responsibility CSR

A

consideration of ethical and environmental issues relating to business activity

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14
Q

deregulation

A

removal of government rules and regulations which constrain an industry

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15
Q

differentiation

A

firm makes its products distinct from those of its competitors, e.g. by packaging, by branding

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16
Q

diseconomies of scale

A

cost disadvantages of growth as unit costs eventually rise as a firm grows, e.g. lack of control

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17
Q

diversification

A

growth strategy that involves selling new products in new markets

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18
Q

economic growth

A

increase in the GDP of a country

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19
Q

economies of scale

A

cost advantages of growth as unit costs eventually decrease as a firm grows, e.g. bulk buying

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20
Q

ethics

A

moral values that determine and affect business behaviour and decision-making

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21
Q

entrepreneurs

A

people who organise the other 3 factors or production and take the risk

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22
Q

exchange rate

A

value of a currency in terms of another currency

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23
Q

external growth

A

business grows by collaborating, buying up or merging with another firm

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24
Q

external stakeholders

A

are not part of the organisation but have direct interest in its actions, e.g. customers, suppliers, government

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25
Q

factors of production

A

inputs necessary for the production process (land, labour, capital, entrepreneurship)

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26
Q

forward vertical integration

A

business buys a firm operating in a later stage of production, e.g. firm buys costumer

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27
Q

franchise

A

agreement between a franchisor selling its rights to other businesses to allow them to sell products under its name in return for a fee, e.g. McDonald’s, Subway, Benetton

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28
Q

free trade

A

trade without trade barriers

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29
Q

globalization

A

integration and interdependence of economic, social, technical and cultural issues of the world’s economies

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30
Q

Gross Domestic Product (GDP)

A

total value of all goods and services produced in an economy in one year

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31
Q

horizontal integration

A

business buys a firm operating in the same stage of production, e.g. firm buys competitor

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32
Q

inflation

A

steady increase in the price level

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33
Q

interest rate

A

price of borrowed money

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34
Q

internal growth

A

business grows by using its own resources to increase the scale of its operations and sales revenue

35
Q

internal stakeholders

A

are members of the organisation, e.g. employees, shareholders, managers

36
Q

joint venture

A

two or more different organisations share costs, risks, control and rewards and form a separate legal enterprise, e.g. Sony-Ericsson

37
Q

labour

A

physical and mental effort

38
Q

land

A

all natural resources, e.g. land itself, water, wood

39
Q

limited liability

A

restriction on the amount of money the owners of a company can lose if the business goes into bankruptcy

40
Q

market development

A

growth strategy that involves selling existing products in new markets

41
Q

market penetration

A

growth strategy that involves selling more existing products in existing markets

42
Q

merger

A

form of external growth whereby two or more firms agree to form a new organisation

43
Q

mission statement

A

declaration of an organisation’s overall purpose

44
Q

multinational corporations (MNCs)

A

companies that operate production or service facilities outside their home country

45
Q

non-governmental organisations (NGOs)

A

private sector organisations that operate for the benefit of others rather than aiming to make a profit, e.g. Oxfam, Amnesty International

46
Q

objectives

A

short-term targets of an organisation

47
Q

partnerships

A

form of business owned by 2 – 20 people with shared responsibilities and burdens of running and owning the business

48
Q

PEST analysis

A

decision-making framework used to analyse the opportunities and threats of the political, economic, social and technological environment

49
Q

pressure groups

A

individuals with a common concern who seek to place demands on organisations to act in a particular way or to influence a change in their behaviour

50
Q

primary sector

A

cultivation or extraction of natural resources, e.g. farming, mining, fishing, forestry

51
Q

private limited company

A

business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public

52
Q

private sector

A

part of the economy under the control of private individuals or businesses

53
Q

protectionism

A

any measure taken by a government to protect the domestic industry from foreign competition

54
Q

public limited company

A

business owned by shareholders with limited liability whose shares can be bought by or sold to the general public via a stock exchange

55
Q

public sector

A

part of the economy under the control of the government

56
Q

secondary sector

A

construction and manufacturing of products

57
Q

shareholders

A

owners of a company

58
Q

SMART objectives

A

objectives that are specific, measurable, achievable, realistic and time-specific

59
Q

sole trader

A

self-employed person who runs the business on their own and has sole responsibility for its success or failure

60
Q

stakeholders

A

individuals or organisations that have direct interest in the activities and performance of a business

61
Q

stock exchange

A

market place for trading stocks and shares of public limited companies, e.g. LSE, NYSE

62
Q

strategic alliance

A

two or more different organisations share costs, risks, control and rewards, but don’t form a separate legal enterprise, e.g. Star Alliance

63
Q

strategy

A

medium- to long-term methods that businesses can use to achieve its goals

64
Q

SWOT analysis

A

analytical tool used to assess internal strengths and weaknesses and external opportunities and threats

65
Q

tactics

A

short-term methods that businesses can use to achieve their objectives

66
Q

takeover or acquisition

A

form of external growth whereby on firm buys up another by purchasing enough shares to hold a majority

67
Q

tertiary sector

A

provision of services

68
Q

unemployment

A

number of people in a country who are willing and able to work but cannot find a job

69
Q

unlimited liability

A

feature of sole traders and partners who are legally liable for all money owed to their creditors, even if it means that they have to sell their personal possessions to pay for this

70
Q

vision statement

A

organisation’s long-term aspirations, i.e. where it ultimately wants to be

71
Q

consumers

A

people or organizations who actually use a product

72
Q

cooperative

A

for-profit social enterprise set up, owned and run by their members

73
Q

customers

A

people or organizations who buy a product

74
Q

ethical code of practice

A

documented beliefs and philosophies of an organization

75
Q

initial public offering

A

(IPO) occurs when a business sells all or part of its business to shareholders on a stock exchange for the first time

76
Q

microfinance

A

type of financial service aimed at entrepreneurs of small very businesses

77
Q

needs

A

basic necessities that a person must have to survive

78
Q

optimal level of output

A

most efficient sale of operation for a business which occurs at the level of output where average costs of production are minimized

79
Q

product

A

refers to both goods and services: goods are physical products, services are intangible products

80
Q

public-private partnership

A

government creates commercial partnerships with the private sector to provide certain goods or services

81
Q

social enterprise

A

revenue-generating business with social objectives at the core of their operations and can be for-profit and non-profit, but all surpluses are reinvested for the social purpose

82
Q

STEEPLE analysis

A

analytical framework used to analyse the opportunities and threats of the external environment (social, technological, economic, environmental, political, legal and ethical environments)

83
Q

structural change

A

shift of the relative share of national output and employment that is attributed to each business sector

84
Q

want

A

people’s desires

IB Business Management SL 2016+ (5 decks)

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