Business Management HL Notes (Units 1.1 - 1.6)

Flashcards created from Business Management HL lecture notes to aid exam preparation.

What is a business?

A business is an organization that exists to satisfy the needs and wants of individuals or organizations by producing goods and/or providing services.

What are the four types of business inputs?

Land, labour, capital, enterprise.

What is an example of a primary sector industry?

Farming, which involves the extraction of natural resources.

What is a sole trader?

A business owned and operated by one person.

List two advantages of a sole trader.

Full control, keeps all profits.

What is a disadvantage of a partnership?

Disagreements among partners can occur, and partners have unlimited liability.

What is the main characteristic of a Private Limited Company (Ltd)?

Shares are owned by shareholders but not sold to the public.

What is an advantage of a Public Limited Company (PLC)?

Easy access to capital through stock exchange.

What is a cooperative?

A business owned and run by its members for mutual benefit.

What is the objective of profit maximization?

To achieve the highest possible profit.

What are stakeholders?

Individuals or groups affected by or affecting a business's operations.

What is the conflict example between shareholders and employees?

Shareholders want profit, which may involve cutting costs, while employees want higher wages.

What is internal growth (organic)?

Growth using a business’s own resources.

What is external growth (inorganic)?

Growth via mergers, acquisitions, or joint ventures.

What is the difference between a merger and an acquisition?

A merger is when two firms join to form one, while an acquisition is when one firm buys another.

What is a multinational corporation (MNC)?

A business that operates in multiple countries with its headquarters in one.

One advantage of MNCs for host countries is: __.

Job creation.

One disadvantage of MNCs for host countries is: __.

Exploitation of resources/labour.