IGCSE Business Studies Vocabulary

Comprehensive vocabulary flashcards covering the key terms, definitions, and concepts across all units of IGCSE Business Studies based on Mr. Assem El Nady's lecture notes.

Need

Something necessary for life, such as food, water, and shelter.

Want

Something desired to improve the quality of life, such as mobile phones and cars.

Factors of Production

The essential resources needed to start and run a business: Land, Labor, Capital, and Enterprise.

Entrepreneur

An individual who takes the initiative, skills, and risk to combine the factors of production to start a business.

Scarcity

The economic problem where human wants and needs are unlimited, but resources are limited.

Opportunity Cost

The sacrifice or next best alternative given up when choosing one option over another.

Productivity

The rate at which units of output are produced relative to the inputs used.

Efficiency

Producing maximum output using the least amount of resources by saving time, money, and raw materials.

Specialization

Splitting up production into separate tasks so that each worker focuses on a specific task (division of labor).

Stakeholder

Any individual or group involved in, having an interest in, or affected by a business.

Sole Trader

A small business owned and controlled by a single individual.

Partnership

A business owned and controlled by two or more people (usually up to 20) who share capital, profits, and responsibility.

Unlimited Liability

A legal condition where business owners are personally responsible with their personal wealth for all debts if the business fails.

Limited Liability

A legal condition where owners are only responsible for the amount they invested in the company if it fails.

Share

A unit of ownership in a company that can be bought by investors.

Dividend

A financial payment made to shareholders from company profits after tax as a return on their investment.

Private Limited Company (ltd)

An incorporated business owned by shareholders where shares are sold privately to family and friends, not publicly on the stock exchange.

Public Limited Company (plc)

An incorporated business owned by shareholders where shares can be bought and sold by the general public via the stock exchange.

Joint Venture

An agreement between two or more businesses to start a project together.

Franchise

A contract allowing a business (franchisee) to use the brand name, logo, and operational model of an established business (franchisor).

Social Enterprise

A business that has social and environmental goals, but also aims to make a profit to reinvest into its purpose.

Globalization

The increase in world trade and movement of products and people between countries.

Multinational Business (MNC)

A business that has investments, such as branches, factories, or offices, in two or more countries.

Import Tariff

A tax placed on imported products when they enter a country.

Import Quota

A physical limit on the number of products that can be imported into a country over a specific time.

Private Sector

Businesses owned and controlled by individuals rather than the government.

Public Sector

Businesses and services owned and operated by the government.

Primary Sector

Businesses that extract or harvest natural resources from the earth.

Secondary Sector

Businesses that transform raw materials provided by the primary sector into manufactured goods.

Tertiary Sector

Businesses that provide services to final consumers and other economic sectors.

Inflation

The general and sustained rise in the average price level of products over time in an economy.

Gross Domestic Product (GDP)

The total value of goods and services produced in a country in one year.

Business Cycle

A general pattern of periodic changes in GDP growth rate in a country over time, passing through Boom, Recession, Slump, and Recovery.

Fiscal Policy

Government economic decisions involving changes in taxation and public expenditure to achieve economic objectives.

Monetary Policy

Government economic decisions involving changes in interest rates to influence economic activity.

Supply Side Policy

Government measures used to increase business efficiency, lower costs, and increase international competitiveness.

Monopoly

A market structure where a single seller controls the entire market with no direct competition or close substitutes.

External Cost

Costs paid by society rather than the business as a result of a business decision, such as pollution.

External Benefit

Gains enjoyed by society as a result of a business decision, such as job creation.

Horizontal Integration

When one business merges with or takes over another business at the same stage of production in the same industry.

Forward Vertical Integration

When a business merges with or takes over another business at a later stage of production (closer to consumers) in the same industry.

Backward Vertical Integration

When a business merges with or takes over another business at an earlier stage of production (closer to raw materials) in the same industry.

Conglomerate Integration

When a business merges with or takes over another business in a completely different, unrelated industry.

Economies of Scale

The reduction in average cost per unit as a business increases its size and level of output.

Diseconomies of Scale

An increase in a business's average cost per unit when it grows beyond a certain size.

Organizational Structure

The formal arrangement showing how management is organized, and how authority and responsibility are distributed in a business.

Span of Control

The number of subordinates working directly under a manager.

Chain of Command

The line through which authority and communication pass down through levels of management in a business hierarchy.

Delegation

Giving a subordinate the authority to perform a specific task.

Functions of Management

The five essential managerial responsibilities: Planning, Organizing, Directing (Commanding), Coordinating, and Controlling.

Maslow's Hierarchy of Needs

A motivation theory structuring worker needs into five levels: Basic (Physiological), Safety, Social, Esteem, and Self-actualization.

Democratic Leadership

A leadership style where the manager consults subordinates and considers their opinions before taking decisions.

Autocratic Leadership

A leadership style where the manager takes decisions alone without consulting subordinates.

Piece Rate

A system of payment based on the number of output units produced by a worker.

Time Rate

A system of payment based on the number of hours spent at work.

Job Enrichment

Adding tasks of a more challenging and higher level of responsibility to develop worker skills and job satisfaction.

Labor Turnover

The rate at which employees leave a business during a year.

On-the-job Training

Training that takes place at the workplace by watching and learning from a more experienced employee.

Off-the-job Training

Training given to employees away from their normal workplace, such as at a specialized training center.

Trade Union

An organization of workers established to protect and improve the working conditions, rights, and wages of its members.

Mass Marketing

Creating and selling a standardized product that appeals to the whole market without targeting specific segments.

Niche Marketing

Targeting a small, specific segment of a larger market where customers have specialized needs.

Market Segment

A sub-group of a larger market where consumers share similar characteristics and preferences.

Market Share

The total sales of a business expressed as a percentage of total market sales.

Primary Research

The collection of new, first-hand data directly from consumers for a specific business purpose.

Secondary Research

The collection and use of second-hand information that has already been gathered by others.

Cost-plus Pricing

A pricing strategy of adding a fixed profit percentage (markup) to the unit cost of a product.

Penetration Pricing

Setting a price lower than competitors' prices when introducing a product to enter a competitive market quickly.

Price Skimming

Setting a very high price for a new product to reflect high quality or innovation and maximize profits before competitors enter.

Wholesaler

An intermediary that buys products in bulk from producers and resells them in smaller quantities to retailers.

Retailer

A shop that buys products from wholesalers or producers and sells directly to final consumers.

E-Commerce

The buying and selling of goods and services using the internet and digital technology.

Startup Capital

The finance needed by an entrepreneur to establish a business and buy essential assets.

Working Capital

Capital needed to pay for day-to-day operational expenses, calculated as $\text{Working Capital} = \text{Current Assets} - \text{Current Liabilities}$.

Income Statement

A financial report that shows a business's sales revenue, costs, and profits over a period of time.

Statement of Financial Position

A financial report showing the assets, liabilities, and owner's equity of a business at a specific point in time.

Acid-Test Ratio

A liquidity ratio measuring a business's ability to cover short-term debts without depending on selling inventory.

Breakeven Chart

A graphical representation showing total costs and total revenue at various output levels, identifying the breakeven point.

Job Production

A production method where a single customized product is made at a time to meet specific customer specifications.

Batch Production

A manufacturing process where a group (batch) of identical products is made together before switching to another batch.

Flow Production

A continuous manufacturing process of producing large quantities of standardized products using assembly lines.

Lean Production

Manufacturing strategies aimed at eliminating waste in the production process to improve productivity and efficiency.

Just in time (JIT)

An inventory management method where raw materials arrive exactly as needed for production, reducing storage waste.

Quality Control

A product-oriented quality management approach based on inspecting finished goods and discarding defects.

Quality Assurance

A process-oriented quality management approach setting quality standards and checking quality across every production stage.