Unit 1 - Understanding Business Activity Flashcards
Business Objective
Business goals or aims of owners, managers and employees of a business.
Business Stakeholders
People and organizations who have interest directly or indirectly in the business and its activities.
Business Plan
A document containing the business idea, resources required and how it will be organized to achieve the objectives of the business owners.
Business Target
An aim represented by a value or volume set by the business owners to be achieved within a period of time.
Bankruptcy
A term used in law to declare that a business is unable to pay its debt.
Capital-Intensive
A firm or production process that uses more capital than labour to produce its goods and services.
Consumer
People and organizations who are buyers of goods and services.
Consumption
The using up of goods and services to satisfy consumer needs and wants.
Creditors
Individuals, suppliers and other organizations in which a business owes money to.
Developed Economy
A country with an industrialized economy, with a large tertiary sector.
Developing Economy
A country rapidly developing its resources to create jobs, increase incomes and living standards through industrialization.
De-Industrialization
Developed economies with declining manufacturing activities following a growth in the service sector.
Diversification
A business strategy that expands its business activities into different markets and industries by developing a wide variety or range of products and services to reduce the risk of business failure in the event of a fall in demand of any single product or market.
Division of Labour
The division of a production process or activity into specialized tasks, that will be completed by a different workers or group of employees.
Enterprise
Willingness and ability to start and operate a business while taking considered financial and other business risks.
Entrepreneur
A person who is willing and able to take risks and make decisions to organize resources to produce goods and services by starting and operating a business to earn a profit.
Entrepreneurship
The process of identifying a business opportunity, organizing the resources to produce goods and services to meet the needs and wants of consumers through business activities to earn profits or sustain a business.
External Growth
Expansion of firm through takeovers or mergers with other enterprises.
Firms
Organizations that utilizes factors of production to produce goods and services.
Floatation
Where shares of a public limited company are available for sale or purchase by the public in a stock exchange for the first time.
Franchise
Licensing or agreement between one business organisation and another to use of trademark or brand name of a company to distribute or produce goods or services.
General partner
A business partner that has unlimited liability
Going Concern
A business that has sufficient financial capability and resources to operate and sustain.
Government Grant
Financial aid given by the government to individuals or organisations that meets a particular requirement, to help the government achieve its economic objectives or aim.
Horizontal Integration
The establishment of a larger enterprise through merger or takeover between two or more firms within a similar industry at the same stage of production.
Incorporated Business
A business organization that has a separate legal identity from its owners.
Internal Growth
Expansion by scaling its production or business activity of a firm through more employment or additional factors of production.
Industrial Sector
A group of firms specializing in producing certain similar products or using similar production processes.
Industrial Structure
The size and importance of different industrial sectors in an economy.
Insolvency
Describes a business organisation that is unable to pay its short-term debts.
Joint-Stock Companies
Liimited companies or corporations that are jointly owned by their shareholders.
Lateral Integration
The takeover or merger of two or more firms from different industries or sectors to form a larger enterprise.
Limited Liability
The legal responsibility of repaying business debts are limited to the amount of capital invested in the business.
Limited Partner
A business partner that has limited liability.
Liquidity
The ability of a business to raise cash from its current assets to repay its short-term debts
Liquidation
A legal procedure that sells off all remaining assets to pay off the debts of a bankrupt business
Manufacturing
The process of using natural resources to produce physical goods.
Market Share
The proportion of total sales of a product or service achieved by a firm.
Market Size
The total sales revenue for a particular product or service over period of time.
Merger
Combining two or more firms by the owners to form a larger enterprise.
Mission statement – a statement or declaration of the purpose and objectives of a business organisation
Mixed Economy
An economy that integrates private and public sectors ownership and allocation of resources to goods and services.
Opportunity Cost
The lost of benefits of not consuming or producing the next best alternative product.
Overstocking
A situation whereby a business stores more than adequate quantity of goods or inventory necessary.
Over trading
When a business accepts more work than it is able to finance and complete too quickly.
Partnership
When two or more people agree to legally jointly own, finance and operate a business to share its profits
Primary Sector
Industries that produce or extract natural resources
Private Benefits
Financial benefits from a business activity
Private Sector
The sector of the economy owned and operated by private individuals and privately owned businesses.
Production
Process of using resources to produce goods and services to meet consumer needs and wants.
Profit Maximization
Choosing resources, production methods, outputs and prices that will earn the most profit to operate the business.
Profit
Gross profit less expenses
Profit
A surplus of revenue over costs of production
Profitability
The ability of a business to generate optimum profit consistently.
Public Corporation
A government-owned enterprise that functions to provide public services.
Public sector
That sector of the economy owned and controlled by government and government-owned organizations
Revenue
Financial amount from sale of goods and services to customers.
Secondary Sector
Industries such as manufacturing or construction that involves processing natural resources to produce physical goods or infrastructure.
Separate Legal Identity
A business organization that is legally a separate entity from its owners.
Shareholders
Owners of limited companies or corporations
Social Entrepreneur
A person who uses their business skills to start and run a business with the objective of improving social and environmental well-being rather than profit.
Social Enterprise
A private sector organization with that reinvest most of its profits to grow and meet its social or environmental objectives.
Sole Trader
A business organization owned and controlled by one person.
Specialization
Focuses on producing a single or limited range of products to optimize the use of factors of production and resources.
Stock market
The location where the purchase and sale of new or existing shares (or stocks) in public limited companies can be made.
Takeover
A firm acquires another firm with or without the agreement of its owners.
Tertiary Sector
Service industries.
Trade Union
An organisation setup by employees in a particular workplace or industry to represent them with the aim of advocating and negotiating for better welfare and working conditions such as better wages.
Unlimited Liability
Legally responsible to repay all debts acquired by the business.
Value Added
The difference between the price of a product and the cost of the natural and man-made materials, components and resources used to produce it.
Vertical integration
The establishment of a larger enterprise through merger or takeover between two or more firms at different stages of production of the same product.
Mission Statement
A statement or declaration of the purpose and objectives of a business organisation.
