AICE Business Vocab

Entreprenuer

an individual who has the idea for a new business, starts it up and carries most of the risk, but benefits from the rewards

Customers

an individual consumer or a business that purchases another company's goods or services

Consumers

an individual who purchases goods and services for personal use

Consumer Goods

the physical and tangible goods sold to consumers

Consumer Services

the non-tangible product sold to consumers that are not intended for resale

Factors of Production

the resources needed by a business to produce goods or services

Capital Goods

the physical goods used by an industry to aid in the production of other goods and services

Enterprise

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

Adding Value

increasing the difference between the cost of purchasing materials and the selling of finished goods

Added Value

the difference between the cost of purchasing 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 benefit of the next most desired option which is given up

Multinational Business

a business or organization that has its HQ in one country, but with operating branches, factories, and assembly plants in other countries

Intrapreneur

a business employee who takes direct reponsibility for turning an idea into a profitable new product or business virtue

Business Plan

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

Primary Sector Business Activity

Firms engaged in industries that extract natural resources so that they can be used and processed

Secondary Sector Business Activity

firms that manufacture and process products from natural resources

Tertiary Sector Business Activity

Firms that provide services to consumers and other businesses

Quaternary Sector Business Activity

business providing information services

public sector

Organisations accountable to and controlled by central or local government

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 largely 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 (nationalized industry)

sole trader

A business in which one person provides the permanent finance, and in return, has full control of the business and is able to keep all of the profits

unlimited liability

business owners have full legal responsibilities for the debts of the business

partnership

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

limited liability

the only liability a shareholder has, if the company fails, is the amount invested in the company, not the total wealth of the shareholder

Private limited company

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

share

A certificate confirming part ownership of a company and entitling the shareholder to dividends and certain shareholder rights

shareholder

A person or institution owning shares in a limited company

public limited company

a company whose shares are traded on a 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

this states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and the declared aims of the business

Articles of Association

this document covers the internal workings and control of the business - for example, the names of directors and the procedures to be followed at meetings

cooperative

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

franchise

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

franchiser

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

franchisee

a person or business that buys the right from the franchiser to operate the 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 company created to buy and possess the shares of other companies, which it then controls.

social enterprise

A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximising returns to owners

Taylor

After studying factory efficiency, he concluded workers are motivated mainly by pay, so breaking tasks down and using piece-rate pay increases productivity.

Mayo

From the Hawthorne experiments, he found workers perform better when they feel noticed and valued, so social factors and attention boost motivation.

Maslow

He proposed that people are motivated by a hierachy of needs, meaning basic needs (food, safety) must be met before higher ones like esteem and self actualization

Herzberg

From studying job satisfaction, he concluded that hygiene factors (pay, conditions) prevent dissatisfaction, but motivators (achievement, recognition) actually increase motivation.

McGregor

He suggested managers’ assumptions shape motivation: Theory X assumes workers dislike work and need control, while Theory Y assumes they are self-motivated and seek responsibility.

Revenue

Selling price x quantity sold = 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 capitalization

The total value of a company's issued shares

Market share

Sales of the business as a proportion of total market sales

Internal growth

When a business decides to expand its own activities by launching new products and/or entering new markets

External growth

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

Merger

An agreement by owners and managers of two businesses to bring them together in a new 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 at the same stage of production

Vertical integration

Integration with a business in the same industry

Backward vertical integration

Vertical integration with a supplier business

Forward vertical integration

Vertical integration with a customer business

Conglomerate integration

integration with a business in a different industry

Synergy

"The whole is greater than the sum of parts" It is often assumed that the new business will be more successful than the original separate business

Strategic alliance

Agreement between 2 organizations to commit resources to achieving a specific objective while remaining independent

Business objectives

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 customers, employees, communities and the environment

Pressure group

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

Tripple Bottom Line

The three objectives of social enterprises: economic, social and environmental

SMART objectives

Aims that are specific, measurable, achievable, realistic and time-specific

Business Aim

a long term goal that 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, designed to achieve a particular objective

tactic

a short-term action 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

Stakeholders

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

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 organization 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 businesses and their managers have responsibilities to a wide range of groups, not just shareholders

External recruitment

When a business aims to fill a vacancy with a suitable applicant from outside of the business, such as an employee of another organization.

Internal recruitment

When a business aims to fill a vacancy from within its existing workforce.

Training

Work-related education to increase workforce skills and efficiency.

Induction Training

Introductory training program to familiarize new recruits with the systems used in the business and the layout of the business site.

On-the-job training

Instruction at the place of work on how a job should be carried out

Off-the-job training

Training undertaken away from the place of work

Human resource management

The strategic approach to the affective management of employees so that they help the business gain a competitive advantage

Workforce planning

Forecasting the number of workers and the skills that will be required by the organization to achieve its objectives

Workforce audit

A check on the skills and qualifications of all existing workers/managers

Labour turnover

Measures the rate at which employees are leaving an organization

100 x number of employees leaving in 1 year/average number of people employed

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, and attracting suitable candidates for the job

Selection

The series of steps by which candidates are interviewed, tested and screened to choose the most suitable person for a vacant post

Recruitment agency

A business that offers the service of recruiting applicants for vacant posts.

Job Description

A detailed list of the key points about the job to be filled, stating all its key tasks and responsibilities

Person specification

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have

Curriculum vitae

A detailed document highlighting all of a person's professional and academic achievements, work experience, and awards

Application form

A set of questions answered by a job applicant to give a potential employer information about the applicant, such as educational background and work experience

Resume

A less detailed document than a CV (curriculum vitae), which itemizes work experience, educational background and special skills relevant to the job being applied for

Reference

Comment from a trusted person about an applicants character or previous work experience