AICE Business AS Level Unit 1 Vocabulary

consumer goods

the physical and tangible goods sold to the general public - includes durable and non-durable goods

consumer services

the non-tangible products sold to the general public

capital goods

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

creating value

increasing the difference between the cost of purchasing materials and the price the finished goods are sold for

added value

the difference between the cost of purchasing materials and the price the finished goods are sold for (number value)

opportunity cost

the benefit of the next most desired option which is given up

entrepreneur

someone who takes the financial risk of starting and managing a new venture

social enterprise

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

triple bottom line

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

primary sector business activity

firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed by other firms

secondary sector business activity

firms that manufacture and process products from natural resources, including computers, brewing, baking, clothes-making and construction

tertiary sector business activity

firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications

public sector

comprises organizations accountable to and controlled by central or local government

private sector

comprises businesses controlled and owned 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

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

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 - or potential loss - 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 small to medium sized business that is owned by shareholders who are often members of the same family; this company cannot sell shares to the general public

share

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

shareholder

a person or institution owning shares in a limited company

public limited company

a limited company, often a large business, with the legal right to sell shares to the general public - share prices are quoted on the national stock exchange

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

franchise

a business that uses the name, logo and trading systems of an existing successful business

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 business organizations that owns and controls a number of separate businesses, but does not unite them into one unified company

revenue

total value of sales made by a business in a given period of time

capital employed

the total value of all long term finance invested in a business

market capitalization

the total value of a company's issued shares

internal growth

expansion of a business by means of opening new branches, shops or factories (aka organic growth)

corporate social responsibility CSR

this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment

management by objectives

a method of coordinating and motivating all staff in an organization by dividing its overall aim into specific targets for each department, manager and employee

ethical code (code of conduct)

a document detailing a company's rules and guidelines on staff behavior that must be followed by all employees

public corporation

a business enterprise owned and controlled by the state - also known as nationalized industry

stakeholders

people or groups of people who can be affected by - and therefore have an interest in - any action by an organization

stakeholder concept

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

enterprise

the skill needed to make a new idea work

Intellectual capital

involves the intelligence of the workforce - this includes the ability to develop new ideas, find new solutions to problems and spot a business opportunity

scarcity and choice

there are limited resources in an economy at any moment but unlimited human wants; decisions have to be make about how to allocate these resources

transformation process

business activity that involves taking inputs and transforming them in some way to produce outputs for consumers