IB BM - Introduction to Business Management: Sectors, Business Forms, Social Enterprises, and Strategy (Vocabulary)

Vocabulary flashcards covering key terms from the lecture notes on sectors, organizational forms, social enterprises, NGO types, and related strategic concepts.

Primary sector

Involves extraction, harvesting, and conversion of natural resources (e.g., agriculture, fishing, mining, forestry, oil). Important in low-income countries; uses more mechanization in high-income countries as development occurs.

Secondary sector

Transforms raw materials from the primary sector into finished or semi-finished products (e.g., clothing, electronics, buildings); key for growth and jobs but declines in high-income countries due to automation.

Tertiary sector

Service-oriented industries (retail, transport, banking, healthcare, leisure) where services, not just products, are the focus (e.g., chefs and wait staff in a restaurant).

Quaternary sector

Sub-category of the tertiary sector focused on knowledge-based activities like ICT, research and development, and consultancy; mainly found in high-income countries.

Chain of production

Interdependencies among sectors where demand from manufacturers and end-users drives input extraction and supply; services and knowledge-based activities now drive much output in modern economies.

Sole trader

An unincorporated business owned by one person; usually small; unlimited liability; simple to set up with few start-up formalities.

Unlimited liability

Owner’s personal assets can be used to cover all business debts; applies to sole traders and partnerships unless otherwise structured.

Partnership

An unincorporated for-profit business owned by two or more people; profits and control shared; unlimited liability unless limited by deed or incorporation.

Private Limited Company (Ltd)

An incorporated business with limited liability; shares are privately held and not offered to the public; transfers require board approval; ownership and management are typically separate.

Public Limited Company (PLC)

An incorporated, limited-liability company whose shares can be traded on a stock exchange after flotation; regulated and publicly listed with limited liability for shareholders.

IPO (Initial Public Offering)

The process of offering a company’s shares to external investors for the first time; raises equity capital and broadens ownership base.

Privately held company

Shares are owned privately and not traded on public markets; governance usually by a board; limited liability; transfers are restricted.

Public sector / state-owned enterprises

Owned and controlled by the government to deliver essential services; may intervene to achieve social objectives and stability; examples include national postal services and transport authorities.

Cooperatives

For-profit social enterprises owned and run by members (employees or customers) with the goal of creating value for members; profits are shared; democratic governance; main types: consumer, worker, producer.

Triple Bottom Line (TBL)

Aims for economic, social, and environmental outcomes; profitability, social impact, and ecological sustainability are considered together.

Non-profit social enterprises

Operate commercially but reinvest surplus to achieve social goals rather than distributing profits to owners.

For-profit social enterprise

Revenue-generating business with social objectives at its core; aims to return surplus for social gain rather than personal profit; can be private or public sector.

Private sector companies

For-profit entities that reinvest or donate surplus to create positive social change; ownership is private rather than public.

Public sector companies

State-owned or government-backed enterprises that operate commercially to provide essential services and raise revenue.

Non-governmental organizations (NGOs)

Private sector not-for-profit organizations pursuing relief, development, environmental protection, or community services; two broad types: operational NGOs and advocacy NGOs.

Operational NGOs

NGOs that deliver services directly to beneficiaries (relief, development, community programs).

Advocacy NGOs

NGOs that campaign to influence policies, laws, or public opinion through lobbying and awareness campaigns.

Vision statement

Long-term, inspirational statement describing what an organization aims to become in the future.

Mission statement

Present-purpose statement describing why the organization exists and what it aims to do now; guides daily decisions and values.

Growth (business objective)

Increasing sales or market share to stay competitive and avoid decline.

Profit (business objective)

Traditional aim of private-sector firms; rewards risk, enables dividends, and sustains business operations.

Shareholder value

Long-term value delivered to owners; balanced with dividends and reinvestment.

Ethical objectives

Moral principles guiding decisions, such as fair treatment, consumer safety, and environmental care.

CSR (Corporate Social Responsibility)

Ethical and environmental practices by a business toward stakeholders and society; involves transparency and accountability; can enhance reputation but may incur costs.

SWOT analysis

Strategic tool assessing Strengths, Weaknesses, Opportunities, and Threats to inform decision-making.

Economies of scale

Cost per unit falls as output increases, due to spreads of fixed costs, purchasing power, and specialization.

Diseconomies of scale

Cost per unit rises as output expands, often due to coordination, communication, and bureaucratic inefficiencies.

External economies of scale

Cost advantages arising from external factors like geographic clustering, skilled labor pools, and favorable legislation.

Geographic cluster

Concentration of related firms in a region that lowers costs through shared services, infrastructure, and access to talent.

Outsourcing

Hiring external firms to perform business tasks or produce goods to reduce costs or access specialized capabilities.