What is business management(Definitions) Flashcards
To prepare for IB Business Management Exams
Input
a human, physical or financial resource needed to create a product
Output
a product created using inputs that satisfy consumer’s needs
Entrepreneur
a person who starts a business
Physical resources
the raw materials, semi-finished products(e.g. steel), and capital goods that a business needs to start producing its product
Capital goods
goods that are used to make consumer products
Financial resources
the funds needed to set up a business
Short-term financing
the financial solutions that a business uses to cover their immediate needs(e.g. inputs, salaries, etc.)
Long-term financing
the financial solutions that a business seeks to use for extended periods of time and is typically reserved for major investments or projects
Stock
the inventory held by a business to sell to customers(finished products)
Inventory
a term used to refer to both the raw materials used in production and the finished goods which are ready for sale
Human resources
the people needed to run a business
Enterprise
a business venture(new business/business activity that involves the potential for both risk and return
Goods
tangible outputs which satisfy consumer needs(e.g. furniture, stationer, etc.)
Services
intangible outputs which satisfy consumer needs(e.g. healthcare, education, etc.)
Feedback
the process by which the output of a system becomes an input to the same system
Sustainability
meeting the needs of the present without compromising the ability of future generations to meet their own needs
Economy
a system for producing and provisioning goods and services among a group of people
Primary sector
the extraction or production of raw materials from the Earth
Secondary sector
the processing of raw materials into finished goods
Tertiary sector
the provision of services for consumers or other businesses
Quartenary sector
the provision of knowledge-based services(e.g. IT, consultancy, research, etc.)
Supply chain
the steps involved in creating products
Intergrated business
a business where activities span one or more sectors
Outsourcing
the process of having one or more internal functions of a business performed externally by another person or business
Opportunity(SWOT)
a favourable external condition or trend that is beneficial to the business
Threat(SWOT)
an unfavourable condition or threat which harms the business
Business plan
a written document that describes a business, its objectives and its strategies, the market that it is in and its financial forecasts
Expansion
when the total value of all goods and services in a country(GDP) increases
Recession
when the total value of all goods and services in a country(GDP) decreases(usually for 6 or more months)
Inflation
an increase in the general price level(usually expressed as a percentage change)
Deflation
a decrease in the general price level(usually expressed as a percentage change)
Interest rate
the cost of borrowing money(as a percentage of the principal amount)
Exchange rate
the price of one country’s currency in terms of another country’s currency
Subsidy
government payment to businesses
Tax
payment from individuals and businesses to the government
Total revenue
all the income received by the business in a specified period of time
Total costs
all the capital spent on a business in a specified period of time
