Nature of Business and Management Flashcards

Comprehensive vocabulary flashcards covering the Nature of Business, types of classification, legal structures, environmental influences, and core management functions based on the lecture transcript.

Business

An organised effort to produce and sell goods or services for profit.

SMEs (Small to Medium Enterprises)

Businesses with fewer than $200$ employees; including small ($0-19$ employees) and medium ($20-199$ employees) and making up $98\%$ of Australian Businesses.

Production

Activities undertaken by businesses that combine resources to create products that satisfy customers needs and wants.

Vertical Integration

When a business expands by acquiring businesses in a related level of production.

Horizontal Integration

When a business acquires other businesses in the same industry to reduce competition.

Acquisition

When one business takes control of another.

Franchise

Buying the rights of another business to distribute products under the same name (e.g., KFC).

IPO (Initial Public Offering)

The process of a business becoming a public company by listing on the stock exchange.

Prime Function

A company's core activity; the main thing that it exists to do.

Primary Industry

Includes all businesses in which production is directly associated with natural resources, such as farming or fishing.

Secondary Industry

Turning raw materials into finished or semi-finished products, such as manufacturing or construction.

Tertiary Industry

Involves selling and transportation of products, such as retail stores or courier services.

Quaternary Services

Services that include the processing of information, such as telecommunications, teaching, and banking.

Quinary Services

Includes domestic-style services such as nursing, tourism, hospitality, and entertainment.

Transnational Corporation (TNC)

A global business operating across the world with a home base in one country.

Limited Liability

A status in incorporated businesses where the owner's potential loss is limited to the amount they invested.

Unlimited Liability

A status in unincorporated businesses where the owner is fully responsible for all business debts.

Proprietary (Pty Ltd) Company

A private company with $2-50$ owners whose shares are only sold to invited people and are not listed on the ASX.

Public Company (Ltd)

A large business listed on the ASX where the public can buy and sell shares without restriction.

Globalisation

The increasing integration and connection of economies, businesses, and markets around the world through trade, technology, and communication.

Demography

The statistical study of a population, including its size, age structure, distribution, and changes over time.

Monopoly

A market structure where a single company is the exclusive seller of a product or service with no close substitutes.

Oligopoly

A market structure dominated by a small number of large firms, where the top players often control $60-80\%+$ of the industry.

Business Culture

The shared values, beliefs, and attitudes within a business that influence how employees behave and work together.

Stakeholders

Any individual or group with an interest in, or who is impacted by, a business's operations.

Liquidity

Having enough cash or assets that can be easily converted into cash to pay short-term debts.

Viability

A business's long-term survival and profitability.

Diversification

Expanding a business by adding new products or entering new markets to reduce risk.

Efficient

Achieving maximum output with minimum input.

Effective

Successfully achieving intended business goals.

Target Market

The specific group of consumers a business aims to sell its products to.

Market Segmentation

Dividing a market into smaller groups with similar characteristics.

Marketing Mix (4 Ps)

The combination of Product, Price, Place, and Promotion used by a business to reach its target market.

Redundancy

A form of involuntary separation where an employee's position is no longer required by the business.

Cash Flow Statement

A financial record showing the movement of cash inflows and outflows over a period to monitor liquidity.

Income Statement

A summary of a business’s revenue, expenses, and profit (Gross and Net) over a specific period.

Balance Sheet

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

Accounting Equation

$$\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$$

Triple Bottom Line

Measuring business success across three pillars: Profit (economic), People (social responsibility), and Planet (environment).

Total Quality Management (TQM)

A holistic approach focusing on continuous, ongoing improvement and customer satisfaction involving all employees.