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Business Management > Unit 1 key terms > Flashcards

Unit 1 key terms Flashcards

1
Q

Adding value

A

The process of producing a particular good or service that is worth more than the cost of the resources used to produce it

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2
Q

Business

A

A decision-making organization established to produce goods and/or provide services

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3
Q

Consumers

A

Individuals who use a product

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4
Q

Customers

A

Individuals who buy a product

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5
Q

Entrepreneurs

A

Individuals who take risks in overseeing a business organization or business venture, usually in pursuit of knowledge

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6
Q

Entrepreneurship

A

The knowledge, skill and experiences of individuals who have the ability to manage the overall production process

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7
Q

Factors of production

A

The collective terms for the resources used in the production process i.e Land, Labour, Capital and Entrepreneurship

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8
Q

Finance and accounts

A

Function of an organization responsible for ensuring that the business has sufficient funds in order to conduct its daily operations

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9
Q

Goods

A

Tangible (physical) products

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10
Q

Human Resources (HR)

A

The business function that handles all aspects of a firm’s operations related to staff within an organization

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11
Q

Marketing

A

Business function identifying the needs and wants of customers so that the organization can provide the goods and services to meet these requirements and desires in a profitable way

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12
Q

Needs

A

The basic necessities that an individual needs in order to survive

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13
Q

Operations/ Operation management

A

The business function that refers to the process of making goods and providing services from the available resources of a business to meet the needs and wants of its customers

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14
Q

Primary sector

A

Business activity involved in the extraction of natural resources

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15
Q

Production

A

The process of creating goods and/or services using the factors of production available to the business

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16
Q

Quaternary sector

A

Business activity involved in the creation or sharing of knowledge and information

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17
Q

Secondary sector

A

Business activity involved in the manufacturing or construction of finished products

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18
Q

Services

A

Intangible products

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19
Q

Tertiary Sector

A

Business activity involved in providing services to customers

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20
Q

Value added

A

The value between the cost of factor inputs in the production and the price that the final output is sold for

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21
Q

Wants

A

The desires of individual customers

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22
Q

Companies (corporations)

A

Refers to any business organization that’s owned by its shareholders, who have limited liability. They comprise of private and publicly held companies

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23
Q

Cooperatives

A

These are for-profit social enterprises owned and run by their members, Their primary goal is to create value for their member owners

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24
Q

Deed of partnership

A

A legally binding contract that all joint owners of a partnership sign. stating the purpose of a business, the formal rights of the partners and how many profits should be split

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25
Q

Incorporation (incorporated)

A

This means that there is legal difference between the owners (shareholders) and the business entity itself. Ensures that the owners are protected by limited liability.

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26
Q

Initial public offering (IPO)

A

Occurs when an organization sells all or part of its business to shareholders on a public stock exchange for the first time. This changes the legal status of the business to publicly held company

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27
Q

Limited liability

A

The legal status of a business enables its shareholders not to liable for more than the original money they invested into the business

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28
Q

Limited partnership

A

This is a special type of partnership where one or more partners contributes capital and enjoys a share of the profits but does not participate in the running of the business. However, at least one partner must have unlimited liability.

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29
Q

Non-governmental organizations (NGOs)

A

A type of non-profit organization (NPO) which operates in the private sector of the economy for the benefit of others in society rather than its shareholders

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30
Q

Partnerships

A

A business alliance consisting between 2 and 20 individual owners who are jointly responsible for the business

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31
Q

Private sector

A

The section of the economy that is made up of businesses that are owned by individuals or groups of individuals rather than the government

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32
Q

Privately held company

A

The is a business owned by shareholders with limited liability but the shares cannot be traded on the public stock exchange

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33
Q

Publicly held company

A

This is a business owned by shareholders. The shares can be bought and sold on the general stock exchange without prior approval of existing owners.

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34
Q

Public sector

A

Businesses in this section of the economy are run and owned by the government in order to provide essential services for society as a whole

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35
Q

Sleeping partner (silent partner)

A

An investor in a partnership who does not get involved in the daily running and management of the organization

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36
Q

Social enterprises

A

These organizations are revenue generating businesses with social objectives at the core of their operations in order to benefit the general public rather than the private shareholders

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37
Q

Sole trader

A

An organization which is owned by a single entrepreneur who has exclusively responsibility for the running of the business

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38
Q

Stock exchange

A

This is any marketplace where the general public and other companies can buy and/or sell shares

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39
Q

Unlimited liability

A

This means that the owners of a business is personally liable for any business debts, even if it requires the debts to be settled by selling off personal assets

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40
Q

Corporate social responsibility (CSR)

A

This is an organization’s decision and actions that impact society in a positive way

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41
Q

Ethical code of practice

A

The formal documented philosophies and values of a business so that stakeholders know what is considered acceptable or not acceptable within the organization

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42
Q

Ethical objectives

A

Organizational gals based on moral guidelines that determine decision making

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43
Q

Ethics

A

These are moral guidelines or codes of practice which govern good organizational behaviour

44
Q

Mission statement

A

A declaration of an organization’s purpose of existence, who they are and what they do

45
Q

Objectives

A

Clearly defined targets of a business in order to achieve its aims.

46
Q

SMART objectives

A

Framework for setting organizational objectives which are specific, measurable, achievable, relevant and time-bound

47
Q

Strategic objective

A

The long term goals of a business which could include profit maximization, growth and increased market share

48
Q

Strategies

A

Various long term plans of action and approaches used by a business to achieve its goals

49
Q

Tactic

A

Short term methods, often on a daily basis, used to implement business strategy

50
Q

Tactical objectives

A

The relatively short term and specific goals of a business. They are used to guide the daily functioning of the organization

51
Q

Vision statement

A

An inspiring declaration of what an organization ultimately strives to be or to achieve in the distant future

52
Q

Arbitration

A

Methods of stakeholder conflict resolution with all stakeholder groups in conflict agreeing to accept the decision or judgement of the independent arbitrator

53
Q

Competitors

A

The firm’s rivals, which operate in the same industry and contest for the same customers

54
Q

Conciliation

A

Method of stakeholder conflict resolution which aims to align the incompatible interests of different stakeholder groups by helping different parties to better understand each others interests

55
Q

Conflict

A

Refers to mutually exclusive and incompatible interests of different stakeholder groups. If this is not manged, it often leads to protracted disagreements, disputes and arguments in the workplace

56
Q

Customers

A

The firm’s clients, individuals and other businesses who purchase the organizations goods and/or services.

57
Q

Directors (executives)

A

Group of senior managers who run a company on behalf of the owners of the company

58
Q

Employees

A

These are the workers within and organization.

59
Q

External stakeholders

A

Stakeholder groups that are not directly involved in the running of an organization but have direct interest in its operations

60
Q

Financiers

A

Financial institutions and individual investors who provide a source of finance for businesses.

61
Q

Government

A

The ruling authority within a state or nation.

62
Q

Internal stakeholders

A

These stakeholders are part of the organization such as employees, managers, directors and shareholders

63
Q

Local community

A

The general public and local businesses that have a direct interest in the activities of the organization and the firm’s ability to create jobs and to operate in a socially responsible way

64
Q

Managers

A

The people hired to be responsible for overseeing certain functions, operations or departments within an organization

65
Q

Pressure groups

A

Individuals who comes together or organizations that are set up for a common concern.

66
Q

Shareholders

A

The people or organizations that have shares in a company, their interests are financial

67
Q

Stakeholder conflict

A

Refers to differences in the varying needs, perspectives and priorities of the numerous stakeholder groups of an organization

68
Q

Stakeholder mapping

A

A business management model used to determine the relative interest of stakeholders and their level of influence on an organization

69
Q

Stakeholders

A

The individuals, organizations or groups with a vested interested in the actions and outcomes of a specific organization. They are directly affected by the performance of the business

70
Q

Suppliers

A

Organizations that provide the goods and support services for other businesses.

71
Q

Acquisition

A

A method of external growth that involves one company buying a majority stake in another with the agreement and approval of the target company’s board of directors

72
Q

Backwards vertical integration

A

A method of external growth that involves a company buying another company that is further away from the consumer in the chain of production

73
Q

Conglomerate

A

The form of external growth that occurs when two or more businesses in unrelated industries integrate through a merger, acquisition or takeover

74
Q

Demerger

A

Occurs when a company sells off a part of its business, thereby separating into two or more separate entities.

75
Q

Diseconomies of scale

A

Excessive growth that results in inefficiencies and higher average costs of production

76
Q

Economies of scale

A

Lowering of average costs by increasing size of its operations and its efficiency

77
Q

External EOS

A

Category of EOS that occurs when a firms avg cost of production falls as the industry grows (al firms in the industry benefit)

78
Q

External growth

A

Takes place when an organization requires the support of a partner organization for its growth

79
Q

Financial EOS

A

Banks and other lenders charge lower interest to larger businesses for overdrafts, loans, and mortgages as they represent lower risk

80
Q

Forward vertical integration

A

External growth that occurs when a company buys another business that is closer to the consumer in the chain of production

81
Q

Franchise

A

Growth strategy that involves the right to trade using another company’s products, brand name and corporate logo

82
Q

Franchising

A

Growth method that involves two parties in which the franchisor gives the licensing rights to a franchisee to ell goods and services using the franchisor’s brands and products

83
Q

Horizontal integration

A

External growth strategy where a merger, acquisition or takeover takes place between two or more companies operating within the same industry (reducing competition)

84
Q

Internal DOS

A

Higher unit costs of production that occur due to internal problems of mismanagement as a business organization grows

85
Q

Internal EOS

A

Category of EOS that occurs for and within a particular organization as it grows in size

86
Q

Internal growth

A

Takes place when an organization expands without the help of an external partner firm

87
Q

Joint venture

A

An external growth method that involves two or more organizations agreeing to create a new business entity usually for a finite period of time

88
Q

Lateral integration

A

External growth method involving two or more firms in a merger, improves organizations efficiency and productivity

89
Q

Marketing EOS

A

Larger businesses can spread their fixed costs of marketing by promoting and advertising a greater range of brands and products

90
Q

Managerial EOS

A

Larger business can afford to hire specialist functional managers, improving the organizations efficiency and productivity

91
Q

Merger

A

External growth that involves two or more companies agreeing to form a single, larger company thereby benefiting from operating on a larger scale

92
Q

Optimal output level

A

The level of output where the avg cost of production is at its lowest value, so profit is maximized

93
Q

Purchasing EOS

A

Larger firms can gain huge cost savings by buying vast quantities of stock

94
Q

Risk bearing EOS

A

Large businesses can bear greater risks due to a greater product portfolio.

95
Q

Specialization EOS

A

Larger firms can afford to hire and train specialist workers which boosts output, efficiency, productivity etc.

96
Q

Strategic alliances

A

Formed when two or more organizations join to benefit from external growth without having to set up a new separate legal entity

97
Q

Synergy

A

Key benefit of growth when the whole is greater than the sum of the individual parts. Creates greater levels of outputs and efficiency

98
Q

(Hostile) Takeover

A

Occurs when a company buys a controlling interest in another firm without the prior agreement or approval of the target company’s board of directors

99
Q

Target company

A

The business that is the focus of being bought out by the purchasing company in an acquisition or takeover

100
Q

Technical EOS

A

Cost savings by greater use of large-scale mechanical processes and specialist machinery

101
Q

Vertical integration

A

When an acquisition or takeover occurs between two companies operating in different industries

102
Q

Foreign direct investment (FDI)

A

Refers to cross-border investment in which a foreign company establishes an ongoing and significant stake in its operations in another economy

103
Q

Host country

A

A nation that allows an MNC to set up in its country

104
Q

Globalization

A

Refers to the process of greater integration and interdependence of businesses and economies throughout the world

105
Q

Gross domestic product (GDP)

A

A measure of the monetary value of a country’s annual output or its national income.

106
Q

Multinational company (MNC)

A

A business that operates in two or more countries or is legally registered in more than one country

107
Q

Protection policies

A

These are measures imposed by a country to reduce the competitiveness of imports.

Business Management (1 decks)

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