Learn: Business Management Quiz Terms

Production

The process of creating goods and/or services, adding value in the process.

Adding value

The practice of producing a good or service that is worth more than the cost of the resources used in the production process.

Goods

Physical products produced and sold to customers.

Entrepreneurs

The people who manage organize and plan the resources needed for business activity in pursuit of organizational objectives. They are risk takers who exploit business opportunities in return for profits.

Consumers

The people or organizations that actually use a product.

Needs

The basic necessities that a person must have to survive

Wants

People's desires, i.e. the things they would like to have.

Primary sector

Refers to businesses involved in the cultivation or extraction of natural resources.

Secondary sector

Refers to businesses concerned with the construction and manufacturing of products.

Tertiary sector

Refers to businesses involved with the provision of services to customers.

Quaternary sector

A sub-category of the tertiary sector, where businesses are involved in intellectual and knowledge-based activities that generate and share information.

The private sector

The part of the economy run by private individuals and businesses, rather than by the government.

The public sector

The part of the economy controlled by the government.

A sole trader

A self-employed person who runs the business on his/her own. This means s/he has exclusive responsibility for its success and has unlimited liability.

Partnerships

A type of private sector business entity owned by 2-20 partners. They share the responsibilities and burdens of running and owning the business.

Deed of partnership

The legal contract signed by the owners of a partnership. The formal deeds specify the name and responsibilities of each partner and their proportion of any profits or losses.

A company (or corporation)

Refers to a limited liability business that is owned by shareholders. A certificate of incorporation gives the company a separate legal identity from its owners (shareholders).

A privately held company

A business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public on a Stock Exchange.

A publicly held company

An incorporated limited liability business that allows shareholders to buy and sell shares in the company via a public Stock Exchange.

Social enterprises

Revenue-generating businesses with social objectives at the core of their operations. They can be for-profit or non-profit business entities, but all profits or surpluses must be reinvested for that social purpose rather than being distributed to shareholders and owners.

Cooperatives

For-profit social enterprises set up, owned and run by their members, who might be employees and/or customers.

Non-governmental organizations (NGOs)

Private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming to earn a profit.

A mission statement

Refers to the declaration of an organization's overall purpose. It forms the foundation for setting the objectives of a business.

A vision statement

An organization's long-term aspirations, i.e. where the business ultimately wants to be.

Objectives

Specify what an organization strives to achieve. They are the goals of an organization.

Strategic objectives

The longer-term goals of a business

Tactical objectives

Short-term goals that affect a unit of the organization. They are specific goals that guide the daily functioning of certain departments or operations.

Ethical objectives

Organizational goals based on moral guidelines, determined by the business and/or society, which direct and determine decision-making.

Corporate social responsibility (CSR)

The conscientious consideration of ethical and environmental practice related to business activity. A business that adopts CSR acts morally towards all of its various stakeholder groups and the well-being of society as a whole.