AICE Business AS Vocab

Entrepreneur

An individual who has the idea for a new business starts it up and carries most of the risks but benefits from the rewards.

Customers

An individual consumer or organization that purchase goods or services from a business.

Consumers

An individual who purchases goods or services for personal use

Consumer Goods

The physical and tangible goods sold to consumers that are not intended for resale. Includes durable and non-durable goods.

Consumer Services

The non-tangible products sold to consumers that are not intended for resale.

Factors of Production

The resources needed by a business o produce goods or services.

Capital Goods

The physical goods used by industry to aid in the production of other goods and services, such as machines and commercial vehicles.

Enterprise

The action of showing initiative to take the risk to set up a business.

Adding Value

Increasing the difference between the cost of bought-in materials and the selling price of the finished goods.

Added Value

The difference between the cost of purchasing bought -in materials and the selling price of the finished goods.

Branding

The process of differentiating a product by developing a symbol, name, image, or trademark for it.

Opportunity Cost

The next most desired option that is given up

Multinational Business

A business organization that has its headquarters in one country, but has operating branches, factories, and assembly plants in other countries.

Intrapreneur

A business employee who takes direct responsibility for turning an idea into a profitable new product of business venture.

Business Plan

A written document that describes a business, its objectives, its strategies, the market it is in, and its financial forecasts.

Primary Sector Business Activity

Firms engaged in farming, fishing, and extracting natural resources so they can be used and processed.

Secondary Sector Business Activity

Firms that manufacture and process products from natural resources

Tertiary Sector Business Activity

Firms providing services to consumers and other businesses

Quaternary Sector Business Activity

Businesses providing information services

Public Sector

Organizations accountable to and controlled by the state

Private Sector

Businesses owned and controlled by individuals or groups of individuals

Mixed Economy

Economic Resources are owned and controlled by both private and public sectors

Free-Market Economy

Economic resources are owned largly by the private sector with very little state intervention

Command Economy

Economic resources are owned, planned, and controlled by the state

Public Corporation

A business enterprise owned and controlled by the state

Sole Trader

A business in which one person provides the permanent finance and has full control of the business.

Unlimited Liability

Business owners have full legal responsibility for the debts of their businesses

Partnerships

A business formed by two or more people to carry on a business together, with shared capital investment and responsibilities

Limited Liability

If the business fails, the shareholders’ personal assets and wealth are protected

Private Limited Company (ltd)

A business that is owned by shareholders who are often members of the same family, this company cannot sell shares to the general public

Share

A certificate confirming part ownership in a company and entitling the shareholder right to dividends

Shareholder

A person or intitution that owns shares in a limited company

Public limited company

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

Initial Public Offering

An offer to the public to buy shares in a public limited company

Memorandum of Association

A document that states the name, address, maximum share capital, and objectives of a company

Articles of Association

A document that covers the internal workings and controls of a business

Cooperatives

A jointly owned business operated by members for their mutual benefit, to produce or distribute goods or services

Franchise

The legal right to use name, logo, and trading systems of an existing successful business

Franchiser

A person or business that sells the right to open stores and sell products or services, using the brand name and identity

Franchisee

A person or business that buys the right from a franchiser to open a franchise

Joint Venture

Two or more businesses agree to work closely together on a particular project and create a separate business division to do so

Holding Company

A business that owns and controls separate businesses, but does not try to merge them into one company

Social Enterprise

A business with mainly social objectives that re-invests most of its profits into benefiting society rather than maximizing returns to owners

Business Objective

A stated measurable target that a business plans to achieve

Corporate Social Responsibility 

When businesses consider the interests of society by taking responsibility for the impact of their decisions and activities on stakeholders

Pressure Group

Organisations created by people with a common interest or aim, who put pressure on businesses and governments to change policies so that an objective is reached

Triple Bottom Line

The three objectives of social enterprises: Economic, Social, and Environmental

SMART Objectives

Aims that are specific, measurable, achievable, relevant, and time-limited

Business Aims

A long-term goal that a business hopes to achieve

Mission Statement

A brief statement of the business’s core aims, phrased in a way to motivate employees and to stimulate interest from outside groups

Annual (Company) Report

A document that gives details of a company’s activities over the year, including its financial accounts

Business Strategy

A long term plan of action for a business

Tactic

A short term plan as part of an overall strategy

Target

A short term goal that must be reached before an overall objective can be achieved

Budget

A detailed financial plan for the future

Ethical Code (Code of Conduct)

A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees

Stakeholder

Individuals or groups who can be affected by, and have interest in, any action taken by an organisation

External Stakeholders

Individuals or groups who are separate from the business but are affected by or interested in its operations

Internal Stakeholders

Individuals or groups who work within the business, or own it, and are affected by the operations of the business

Trade Union

An organisation of working people with the objective of improving the pay and working conditions of its members and providing them with support and legal services

Stakeholder Concept

The view that a business and their managers have responsibilities to a wide range of groups, not just shareholders

Revenue

The total value of sales made during the trading period

Capital Employed

The total value of all long-term finance invested in the business

Market Capitalisation

The total value of a company’s issued shares

Market Share

Sales of the business as a proportion of total market share

Internal (Organic) Growth

Expansion of a business by means of opening new branches, shops, or factories

External Growth

Business expansion achieved by integrating with another business by either merger or takeover

Merger

An agreement by owners and managers of two businesses to bring them together in a combined business

Takeover

When a company buys more than 50% of the shares of another company and becomes its controlling owner

Horizontal Integration

Integration with a business in the same industry and same stage of production

Vertical Integration

Integration with a business in the same industry

Forward Vertical Integration

Vertical integration with a customer business

Backward Vertical Integration

Vertical integration with a supplier business

Conglomerate Integration

Integration with a business in a different industry

Synergy

The new business will be more successful than the original separated ones

Strategic Alliance

Agreement between two organisations to commit resources to achieving a specific objective while remaining independent.