IB Business Management SL Quiz 1

business

decision-making organization involved in the process of using inputs to produce goods and/ or to provide services

inputs of a business?

resources that a business uses in the production process

CELL: capital, enterprise, land, labour

eg. raw materials, components, machinery, equipment, labour

processes

turning inputs into goods/services

FOHM: finance, operations management, human resources, marketing

operations management

responsible for the process of converting raw materials and components into finished goods. also applies to the process of providing services to customers

adding value

the practice of producing a good or service of services to customers. that is worth more than the cost of the resources used in the production process

consumers

the people or organizations that actually use a product

customers

the people or organizations that buy the product

entrepreneurs

the people who manage organize and plan the resources needed for business activity in pursuit of organizational objectives. They are risk takers who exploit business opportunities in return for profits

entrepreneurship

the collective knowledge, skills and experiences of entrepreneurs.

goods

physical products produced and sold to customers, such as laptops, books, contact lenses, perfumes and children's toys

needs

the basic necessities that a person must have to survive, including food, water, warmth, shelter and clothing

primary sector

businesses involved in the cultivation or extraction of natural resources, such as farming, mining, quarrying, fishing, oil exploration and forestry

production

is the process of creating goods and/or services, adding value in the process

quaternary sector

a sub-category of the tertiary sector, where businesses are involved in intellectual and knowledge-based activities that generate and share information, such as research organizations

secondary sector

businesses concerned with the construction and manufacturing of products

tertiary sector

businesses involved with the provision of services to customers

wants

people's desires, i.e. the things they would like to have, such as new clothes, smartphones, overseas holidays and jewellery

cooperative

for-profit social enterprises set up, owned and run by their members, who might be employees and/or 2. What is a sole trader? customers.

company/corporation

limited liability business as a business entity? that is owned by shareholders. A certificate of incorporation gives the company a separate legal identity from its owners 4. What is a partnership? (shareholders)

deed of partnership

legal contract signed by the owners as a business entity? of a partnership. The formal deeds specify the name and responsibilities of each partner and their proportion of any 6. What is a privately held company? profits or losses

incorporation

there is a legal difference between the owners of a company and the business itself. This ensures that the owners are protected by limited liability

initial public offering

occurs when a business sells all or part of its business to shareholders on a public stock exchange for the first time. This changes the legal status of the business to a publicly held company

limited liability

a restriction on the amount of money that owners of a company can lose if the business goes bankrupt, i.e. shareholders cannot lose more than the amount they invested in the company

Non-governmental organizations (NGOs)

private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming to earn a profit, such as Oxfam and Friends of the Earth

partnerships

a type of private sector business entity owned by 2-20 people (known as partners). They share the responsibilities and burdens of running and owning the business

private sector

the part of the economy run by private individuals and businesses, rather than by the government, such as sole traders, partnerships, privately held companies and publicly held companies

privately held company

a business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public on a Stock Exchange

publicly held company

an incorporated limited liability business that allows shareholders to buy and sell shares in the company via a public Stock Exchange

public sector

the part of the economy controlled by the government. Examples include state healthcare and education services, the emergency services, social housing and national defence

sole trader

a self-employed person who runs the business on his/her own. This mean s/he has exclusive responsibility for its success (profits) or failure (unlimited liability)

social enterprises

revenue-generating businesses with social objectives at the core of their operations. They can be for-profit or non-profit business entities, but all profits or surpluses must be reinvested for that social purpose rather than being distributed to shareholders and owners.

stock exchange

a marketplace for trading stocks and shares of publicly held companies (or public limited companies). Examples include the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE)

unlimited liability

a feature of sole traders and ordinary partnerships who are legally liable or responsible for all monies owed to their creditors, even if this means that they have to sell their personal possessions to pay for their debts