Business Y10 IGCSE CIE

Business

An organization involved in the trade of goods, services, or both to consumers.

Entrepreneur

A person who takes the risk of starting and managing a business.

Opportunity cost

The next best alternative that is foregone when making a decision.

Need

A basic requirement necessary for survival, such as food, water, and shelter.

Want

A desire for goods and services that are not essential for survival.

Goods

Physical, tangible products that can be touched or stored.

Services

Intangible products that involve performing tasks for others.

Factors of production

The resources used in the production of goods and services

Land

All natural resources used to produce goods and services.

Labor

Human effort used in the production of goods and services.

Capital

Man-made resources (money, tools, machinery) used to produce goods and services.

Entrepreneurship

The skill and risk-taking ability to combine the other factors of production to produce goods and services.

Specialization

Focusing on a specific task or skill, improving efficiency in production.

Division of labor

Splitting the production process into smaller tasks, each completed by a different worker.

Added value

The difference between the cost of inputs and the price of the final product.

Business plan

A document outlining the objectives, strategies, and financial forecasts of a business.

Business organization

The way in which a business arranges itself to achieve its objectives.

Sole trader

A business owned and run by one person, who has unlimited liability.

Partnership

A business owned and run by two or more people who share responsibility and liability.

Limited company

A business whose owners' liability is limited to the amount they have invested in the business.

Private limited company (Ltd)

A company whose shares are owned by a small group of shareholders, not available to the public.

Public limited company (PLC)

A company whose shares are traded on a stock exchange and can be bought by the public.

Shareholder

A person or organization that owns shares in a company.

Shares

Units of ownership in a company, purchased by investors.

Dividends

A share of the profits paid to shareholders.

Memorandum of association

A legal document that sets out the company’s structure and purpose.

Articles of association

A legal document that defines the internal rules and regulations of a company.

Board of directors

A group of people elected to represent shareholders and oversee the company’s activities.

Limited liability

A legal structure where an owner’s financial liability is limited to the amount invested in the company.

Unlimited liability

A legal structure where the business owner is personally responsible for all the business debts.

Business growth

The increase in the size, scale, or capacity of a business.

Internal growth

Growth achieved through expanding the business's own operations, like opening new branches.

External growth

Growth achieved through mergers, takeovers, or partnerships with other businesses.

Merger

The combination of two companies into a single entity.

Takeover

The acquisition of one company by another.

Franchise

A business arrangement where a franchisor allows a franchisee to use its brand and business model in return for a fee.

Economies of scale

Cost advantages gained by producing on a larger scale, lowering the per-unit cost.

Diseconomies of scale

The disadvantages of growing too large, leading to inefficiencies and higher costs.

Integration

A business strategy involving the combining of firms to reduce competition and expand market share.

Horizontal integration

The merging of companies at the same stage of production in the same industry.

Vertical integration

The merging of companies at different stages of production within the same industry.

Marketing

The process of identifying, anticipating, and satisfying customer needs and wants.

Market research

The collection and analysis of data about customer preferences, market trends, and competitors.

Primary research

First-hand data collected through surveys, interviews, or observations.

Secondary research

Data that has already been collected by others, such as reports or articles.

Target market

The specific group of customers a business aims to serve.

Market segmentation

Dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics.

Product life cycle

The stages a product goes through from introduction to decline.

Branding

The process of creating a unique name, image, or reputation for a product or company.

Advertising

A paid form of communication intended to persuade customers to purchase a product or service.

Promotion

The activities used to inform customers about a product or encourage them to buy.

Pricing strategy

The method a company uses to set the price of its products or services.

Product positioning

The process of positioning a product in the market to appeal to a particular group of customers.

Place

The distribution channels used to get a product to customers.

Finance

The management of money and investments in a business.

Revenue

The total income generated from the sale of goods or services.

Costs

The expenses incurred in the production and sale of goods or services.

Profit

The financial gain obtained when revenue exceeds costs.

Gross profit

Profit calculated by subtracting the cost of goods sold from total revenue.

Net profit

Profit after all expenses, taxes, and costs have been subtracted from gross profit.

Break-even point

The point at which total revenue equals total costs, resulting in neither profit nor loss.

Cash flow

The movement of cash into and out of a business.

Balance sheet

A financial statement showing a company’s assets, liabilities, and equity at a specific point in time.

Income statement

A financial statement showing a company’s revenue, costs, and profits over a period of time.

Assets

Resources owned by a business that are expected to provide future economic benefits.

Liabilities

The financial obligations or debts of a business.

Human resources

The people who work for a business and the management of those people.

Recruitment

The process of finding and hiring suitable candidates for a job.

Selection

The process of choosing the most appropriate candidate for a job from the pool of applicants.

Job description

A document that outlines the duties, responsibilities, and expectations of a job position.

Person specification

A document that outlines the qualifications, experience, skills, and attributes required from a candidate for a job.

Internal recruitment

Filling job vacancies from within the organization, by promoting or transferring existing employees.

External recruitment

Filling job vacancies by hiring candidates from outside the organization.

Application form

A form completed by job applicants, containing personal details, qualifications, and experience.

CV (Curriculum Vitae)

A written overview of an individual’s education, qualifications, work experience, and skills.

Interview

A formal meeting in which an employer assesses a potential employee's suitability for a job.

Training

The process of improving employees' skills, knowledge, and abilities to enhance their performance at work.

Induction training

The initial training provided to new employees to familiarize them with the business and their role.

On-the-job training

Training that occurs at the workplace while employees are performing their normal duties.

Off-the-job training

Training provided away from the workplace, often in classrooms or external courses.

Performance appraisal

A formal review of an employee’s job performance, often used to inform decisions about pay, promotion, and further training.

Motivation

The internal drive or enthusiasm that encourages employees to work towards organizational goals.

Financial motivation

Rewards that are monetary, such as salary increases, bonuses, and profit sharing.

Non-financial motivation

Rewards that are not monetary, such as recognition, responsibility, and career development opportunities.

Teamwork

The collaborative effort of a group to achieve a common goal or task.

Organizational structure

The way in which a company arranges its people and jobs to achieve its objectives.

Delegation

The process of assigning responsibility and authority to employees for specific tasks or projects.

Span of control

The number of subordinates a manager is responsible for overseeing.

Hierarchy

The organizational structure of a business, showing the levels of authority and the relationships between employees.

Chain of command

The line of authority within an organization, showing who reports to whom.

Centralization

A management structure where decision-making authority is concentrated at the top levels of the organization.

Decentralization

A management structure where decision-making authority is distributed throughout the organization.

Dismissal

The process of terminating an employee's employment due to poor performance or misconduct.

Redundancy

The process of laying off employees because their roles are no longer needed due to factors such as automation or downsizing.

Trade union

An organization that represents and defends the rights and interests of workers.

Employment contract

A formal agreement between an employer and an employee that outlines the terms and conditions of employment.