Business Activity and Influences on Business Flashcards

Flashcards to help review Unit 1 from Business Activity and Influences on Business lecture notes.

Business

Organization that produces goods and services.

Goods

Physical products such as toys.

Services

Non-physical products such as banking services.

Needs

Basic goods that are required for human survival.

Wants

Desires for goods and services which are infinite

Scarcity

Resources with limited availability

Private enterprise

Owned by individuals or groups of individuals, main aim is to make profits

Social enterprise

Nonprofit making organizations, exists for serving the society and good causes other than profits

Public enterprise

Owned and controlled by the central or local government, main aim is to provide goods and services that private sectors may be incapable of providing

Stakeholder

An individual or group who have interest in the operation and running of a business.

Objectives

Goals or target set by a business

Profit maximization

Making as much profit at a given period of time

Dividends

Share of profit paid to shareholders in a company

Profits satisficing

Making enough profits to satisfy the needs of the owner

Revenues

Money generated from sale of goods and services

Large businesses

Business that employs more than 250 people

Small businesses

Business that employs less than 50 people

Labor

People employed in a business used in production

Unincorporated

Business in which there is no legal difference between the owner and the business.

Incorporated

Business that has separate legal identity from that of the owner’s.

Unlimited liability

Owner of the business is personally liable for all business debts

Cooperative

Organization in which all the people working own equal share of it

Consumer cooperative

Cooperatives that’s owned by consumers

Worker cooperative

Cooperatives that are owned by workers

Limited liability

Business owner is only liable for the original amount invested

Certificate of incorporation

Document that’s required before a new business can start trading

Private limited company

It’s a company that’s owned by family and close friends, they have limited liability and do not trade in the stock market

Stock market

Market for share in PLCs

Public limited company

Company that’s owned by outsiders and trade in the stock market. They are very large businesses

Multinational company

Large business that have their headquarters in one country and their operation facilities all over the world.

Public corporation

A business or an organization that’s owned and controlled by the government

Privatization

It is a transfer of a state owned assets to the private sector

Subsidies

Government offering financial benefits for firms in order to make them do something.

Brownfield sites

Areas of land that were once used for urban developments.

Green field sites

Remote areas which is usually on the outskirts of the town.

Trade blocs

Group of countries who are located in the same region and they join together to abolish all trade barriers

Globalization

Growing integration of the world’s economies

Saturated market

To offer so much of a product for sale that there is more than people want to buy.

Hostile takeovers

Takeovers that the company being taken over doesn’t want or agree

Exports

Goods and services sold overseas

Imports

Goods and services bought from overseas

Visible trade

Goods

Invisible trade

Services

Balance of trade

Difference between the visible exports and visible imports

Exchange rate

Value of a currency in terms of another currency

Appreciate

Rise in the value of a currency in terms of another currency

Depreciate

Fall in the value of a currency in terms of another currency

Barriers to entry

Restrictions which means its difficult for new firms to enter the market.

Mergers

2 or more businesses joining together to form one large business

Dumping

Where businesses sells goods in another country below the costs

Trade barriers

Measures designed to restrict the trade

Quotas

Physical limits on the quantity of imports allowed into the country

Subsidies

Financial support given to a domestic producer to help compete with an overseas firm.

Tariffs

A tax that makes the imports more expensive.

Administrative barriers

Use of strict health and safety regulations to make the imports more awkward

Interests

Prices of borrowed money and the reward to savers

Urbanization

Process of constructing more building on villages

Capital intensive

Using more machineries than labor

Market orientated

When a business concentrates more on its consumers rather than products

Sustainable developments

Idea of that people must satisfy their basic needs for survival and improve their living standards ensuring that they don’t compromise the quality of life for future generations.

Pressure groups

Groups or organizations that try to influence the opinions of ordinary people and persuade the government to take actions

Capital employed

Amount of money that is being invested in the starting of the business usually or in the middle

Jargon

Word or a phrase that is used between members of a specific group but will be meaningless to others

Recruitment

This is the process of employing people due to reasons such as expansion.

Job description

Document that shows the responsibilities and tasks of the employee after being employed.

Person specification

Personal profile of the type of person required to do the job

Internal recruitment

Recruiting people from inside the business

External recruitment

Recruiting people from outside the business

Discrimination

Choosing one person instead of another based on their characteristics

Minimum wage

Minimum amount per hour that all employers are supposed to pay to the workers or employees.

Training

It means to increase the skills and knowledge of the workers to enable them to do their work effectively.

Induction training

Training that’s given to a fresh employee

On the job training

Training that’s given in the workplace by another employee

Off the job training

Training that’s given by a specialist in another premise

Hygiene factors

Things at work that result in dissatisfaction

Motivators

Things at work that result in satisfaction

Job enrichment

Making a job more interesting and challenging

Maslow’s hierarchy of needs

Order of people’s needs starting with basic human needs.

Remuneration

Money that is paid to the employees for their work.

Time rate

Payment system based on the amount of time employees spend on work.

Salary

Pay to non-manual workers expressed as yearly figure but paid monthly.

Piece rate systems

Payment system in which employees receive an amount of money for the number of units produced

Performance related pay

A payment system or non-manual workers where increase in pay is given if targets are met

Organizational charts

Diagram that shows the different job roles in a business and how they relate to each other

Span of control

Number of people a person is directly responsible in a business.

Centralized

Type of organization where the decisions made come from the top level management to the workers in the lower level along a chain of command

Decentralized

Type of organization system where decision making comes from the bottom level workers to the top along a chain of command

Human resource

Deals with issues related to employees

Finance department

Deals with the issues related to money and suppliers

Production department

Deals with the issues related to producing the product

Marketing department

Deals with issues related to the sales of the product

Contracts of employment

A written agreement between an employer or employee in which each has certain obligations

Short term finance

Money borrowed for one year or less

Long term finance

Money borrowed for more than one year

Capital

Finance provided by the owners to a business

Internal finance

Finance generated by the business from its own means

Retained profits

Profit held by the business without returning to the owners and which may be used in the future

External finance

Finance obtained from outside the business

Cash flow

flow of money into and out of a business

Insolvent

inability to meet debts.