Untitled Flashcard Set

Adding value

The process of transforming inputs into a good or service that customers value more than the cost of the inputs used.

Business

An organization that makes decisions and uses resources to produce goods and/or provide services.

Consumers

Individuals or organizations that use a good or service.

Customers

Individuals or organizations that buy a good or service.

Entrepreneurs

People who organize resources, make business decisions, and accept the risks of starting or running a business venture.

Entrepreneurship

The process of identifying a business opportunity and organizing resources while accepting risk in order to create and run a venture.

Factors of production

The resources used to produce goods and services: land, labour, capital, and entrepreneurship.

Finance and accounts

The business function that manages money, records financial transactions, and ensures that the organization has enough funds to operate.

Goods

Physical, tangible products, such as food, furniture, clothing, and smartphones.

Human resources (HR)

The business function responsible for managing the workforce, including recruitment, training, pay, performance, and employee relations.

Marketing

The business function that identifies and satisfies customer needs and wants, usually in a profitable way.

Needs

Basic necessities required for survival and well-being, such as food, water, shelter, and clothing.

Operations (operations management)

The business function that organizes resources and processes to produce goods and provide services.

Primary sector

Business activity involving the extraction or collection of natural resources, such as farming, fishing, forestry, and mining.

Production

The process of using factors of production to create goods and/or services.

Quaternary sector

Business activity based on creating, processing, or sharing knowledge and information, such as research and information technology.

Secondary sector

Business activity that manufactures or constructs finished and semi-finished products from raw materials.

Services

Intangible products, such as education, healthcare, transport, tourism, banking, and haircuts.

Tertiary sector

Business activity that provides services to consumers or other organizations.

Value added

The selling price of a product minus the cost of the bought-in materials and components used to make it.

Wants

Goods and services people would like to have but do not require for basic survival.

Companies (corporations)

Incorporated businesses owned by shareholders, who normally have limited liability.

Cooperatives

Member-owned and democratically controlled enterprises that operate primarily to benefit their member-owners.

Deed of partnership

A legally binding agreement that states the partners' rights and responsibilities.

For-profit social enterprise

A revenue-generating business that uses commercial methods to pursue social or environmental objectives.

Incorporation (incorporated)

The legal process that makes a company a separate legal entity from its owners.

Initial public offering (IPO)

The first sale of a company's shares to the general public on a stock exchange.

Limited liability

A legal protection that limits an owner's potential loss to the amount invested in the business.

Limited partnership

A partnership with at least one general partner who has unlimited liability and one or more limited partners.

Microfinance providers

Organizations that offer small loans and other financial services to people or businesses with limited access to conventional banking.

Non-governmental organizations (NGOs)

Private-sector, non-profit organizations that work for social, humanitarian, or environmental purposes.

Non-profit organizations (NPOs)

Organizations that operate for collective or social benefit and reinvest any financial surplus.

Non-profit social enterprises

Social enterprises that trade to achieve social objectives and reinvest any surplus.

Partnership

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

Private sector

The part of the economy made up of organizations owned by private individuals or groups.

Private sector companies

For-profit companies owned by private individuals or groups operating in the private sector.

Privately held company

A company owned by shareholders whose shares cannot be offered for sale publicly.

Public sector

The part of the economy owned or controlled by government.

Public sector companies

Commercial organizations wholly or partly owned or controlled by government authorities.

Publicly held company

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

Shareholders (stockholders)

Individuals or organizations that own shares in a company.

Sleeping partner

A partner who invests in the business but does not participate in day-to-day management.

Social enterprises

Revenue-generating organizations with social or environmental objectives.

Sole trader (sole proprietor)

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

Stock exchange

A regulated marketplace where shares and securities are bought and sold.

Surplus

The excess of an NPO's or non-profit social enterprise's income over its costs.

Unlimited liability

A legal position in which business owners are personally responsible for business debts.

Corporate social responsibility (CSR)

A business's responsibility for its social and environmental effects, beyond legal requirements.

Ethical code of practice

A written statement of the principles and standards of behavior expected within an organization.

Ethical objectives

Business goals based on moral principles.

Ethics

Moral principles that guide judgments about acceptable business behavior.

Growth

An increase in the size or scale of a business, measured through various indicators.

Mission statement

A concise statement explaining an organization's present purpose and what it does.

Objectives (business objectives)

Specific targets set by an organization to achieve broader aims.

Profit

The positive difference between total sales revenue and total costs over a period.

Shareholder value

The financial return created for company owners through dividends and market value increases.

SMART objectives

Objectives that are specific, measurable, achievable, realistic, and time-bound.

Strategic objectives

Long-term goals that guide the overall direction of a business.

Strategies

Long-term plans used to achieve an organization's objectives.

Tactic

A short-term action used to implement a business strategy.

Tactical objectives

Short-term targets that support strategic objectives.

Vision statement

An aspirational statement describing what an organization hopes to achieve in the future.

Advocacy group

An organized group that seeks to influence business decisions or public opinion.

Arbitration

A conflict-resolution process where parties accept the decision of an independent arbitrator.

Board of directors (BOD)

A group elected by shareholders to oversee the company and protect shareholders' interests.

Chief executive officer (CEO)

The most senior executive responsible for the organization's overall performance.

Compromise

A method of resolving conflict where each party makes concessions.

Conciliation

A conflict-resolution process where a third party helps parties reach an agreement.

Conflict

A situation in which stakeholders have incompatible interests or objectives.

Customer satisfaction

The degree to which a product or service meets customer needs and expectations.

Decision-making power

The authority of a stakeholder to influence or make choices about an organization's activities.

Directors

People legally responsible for directing a company and making decisions for shareholders.

Dividend

A payment made from a company's profits to shareholders.

Employees

People hired by a business to provide labor.

External stakeholders

Individuals or groups outside the organization who are affected by its decisions.

Financiers

Banks, investors, or other institutions that provide finance.

Functional roles

Responsibilities carried out by business departments.

Industrial democracy

A system of employee participation in organizational decision-making.

Internal stakeholders

Individuals or groups within the organization.

Job security

The extent to which an employee can expect to keep their job.

Labour union (trade union)

An organization that represents employees in relation to pay and working conditions.

Local community

People and organizations in the surrounding area affected by a business's activities.

Managers

Employees responsible for planning, organizing, leading, and controlling resources.

Mutual benefits

Outcomes that benefit two or more stakeholder groups.

Stakeholder mapping

An analytical tool for classifying stakeholders according to their power and interest.

Stakeholders

Individuals or groups that affect, or are affected by, a business's activities.