IB Business Management - Vocabulary

Consumer Goods

The physical and tangible goods sold to the general public.

Consumer Services

Non-tangible products that are sold to the general public.

Capital Goods

Physical goods that are used by industry to aid in the production of other goods and services.

Primary Sector Business

Businesses engaged in farming, fishing, oil extraction and all other industries that extract natural resources.

Secondary Sector Business

Businesses that manufacture and process products from natural resources.

Tertiary Sector Business

Businesses that provide services to consumers and other businesses.

Quaternary Sector Business

Businesses that are focused on information Technology (IT) businesses and information service.

Entrepreneur

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

Intrapreneur

Someone within a large corporation who takes direct responsibility for turning an idea into a profitable finished product.

Business Plan

A written document that describes a business, it's objectives and its strategies, the market it is in and its financial forecasts.

Public Sector

Comprised of businesses accountable to and controlled by central or local government.

Private Sector

Comprised of businesses owned and controlled 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 that state.

Privatisation

The sale of public sector organisations to the private sectore

Public Corporation

A business enterprise owned and controlled by the state

Sole Trader

A business in which one person provides the permanent finance and has full control.

Partnership

A business formed by two or more people to carry on a business together, with shared capital investment and 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.

Share

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

Shareholders

Individuals or institutions that buy/own shares in a limited company.

Private Limited Company

A small to medium-sized business that is owned by shareholders who are often members of the same family. Can not sell shares.

Public Limited Company

A limited company often a large business, with the legal right to sell shares to the general public. Share price is quoted on the national stock exchange.

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 need to take economic, social, and ecological factors into account when making business decisions.

Cooperative

A group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically.

Microfinance

The provision of very small loans by specialists finance businesses, usually not traditional commercial banks.

Non-Profit Organisation

Any organisation that has aims other than making and distributing profit. Governed by a voluntary board.

Non-Governmental Organisation (NGO)

A legally constituted body with no participation or representation of any government which has a specific aim and purpose.

Mission Statement

Outline the overall purpose of the organisation.

Vision Statement

Outlines how the future will look if the organisation achieves its mission.

Corporate Aims

The long-term goals which a business hopes to achieve.

Divisional/Operational Objectives

Short-or-medium-term goals targets - usually specific in nature - which must be achieved for an organisation to attain its corporate aims.

Strategy

A long-term plan of action for the whole organisation, designed to achieve a particular goal.

Business Tactic

Short-term policy or decision aimed at resolving a particular problem or meeting a specific part of the overall strategy.

Ethics

Moral guidelines that determine decision-making.

Ethical Code (code of conduct)

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

Stakeholders

People or groups of people who can be affected by, and therefor have a stake and interest in any action by the business.

Corporate Social Responsibility

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.

Business Strategy

Is a plan to achieve a strategic objective in order to work towards the aims of the business.

SWOT Analysis

A business tool to help develop a business set objectives - usually SMART objectives. Used to help in the planning process and help managers brainstorm perceived strengths, weaknesses, opportunities and threats facing the business.

Ansoff Matrix

A business tool to help plan and set objectives. The matrix looks at the growth potential in terms of the market and product and considers both the existing markets and products and new markets and products.

Market Penetration

Occurs when a business grows by increasing its market share, selling more of its existing products in the same market.

Market Development

Expands the market by looking for new products or for new market segments in the existing market.

Product Development

Development of new products for the existing market.

Diversification

Introducing a new product into a new market.

Internal Stakeholders

Individuals or groups that work within the business and have an internal stake in any action taken by the business.

External Stakeholders

Individuals or groups that are outside the business and have an external stake in any action taken by the business.

Competitor

Another business offering very similar goods or services.

Steeple Analysis

A business tool used to analyze and focus on external elements. The external factors that are highligted are: Social, Technological, Economic, Ethical, Political, Legal and Ecological

Economies of Scale

The reduction in average unit cost as a business increases in size.

Diseconomies of Scale

An increase in average unit cost as the business increases in size.

Fixed Costs

Costs which do not change according to the amount of goods or services produced by the business.

Variable Costs

Costs which increase or decrease according the amount of goods or services produced.

Average Cost

Costs that refer to the total cost per unit.

Internal Growth

Known as organic growth - occurs slowly and steadily and occurs out of the existing operations of the business.

External Growth

Known to be quick and a riskier method of growing a business.

Integrated

A component of the external growth strategy (M&As), which takes two businesses and either joins them together to form a bigger business (Merger) or by one business taking over the other (Acquisition).

Merger

When two businesses come integrated by joining together and forming a bigger combined business.

Acquisition

When two businesses integrate by one business taking over the other.

Franchisor

An original business that developed the business concept and product, then sells to other businesses the right to offer the concept and sell the product.

Franchisees

Businesses that buy the right to offer an original business concept and product.

Globalization

The process by which the world's regional economies are becoming on integrated global unit.

Human Resource Management (HRM)

The strategic approach to effective management of an organisation's workers so that they help the business achieve its objectives gain a competitive advantage.

Workforce Planning

Analysing and forecasting the numbers of workers and the skills of those workers that will be required by the organisation to achieve its objectives.

Workforce Plan

Numbers of workers and skills of those workers required over a future time period.

Workforce Audit

A check on the skills and qualifications of all existing employees

Labour Turnover

Measures the rate at which employees are leaving an organisation.

Occupational Mobility of Labour

Extent to which workers are willing and able to move to different jobs requiring different skills.

Geographical Mobility of Labour

Extent to which workers are willing and able to move geographical region to take up new jobs.

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person to fill it.

Job Description

A detailed list of the key points about the job to be filled, stating all the key tasks and responsibilities of it.

Person Specficiations

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have.

Training

Work-Related education to increase workforce skills and efficiency.

On-The-Job Training

Instruction at the place of work on how a job should be carried out.

Induction Training

Introductory training program to familiarize new recruits with the systems used in the business and the layout of the business site. This form of training is usually on-the-job.

Off-The-Job Training

All training undertaken away from the business. Work-related college courses.

Cognitive Training

Exercises designed to improve a person's ability to understand and learn information.

Behavioral Skills Training

Is designed to improve an individual's ability to communicate and interact with others both inside and external to the organisation.

Employee Appraisal

The process of assessing the effectiveness of an employee judged against preset objectives.

Contract of Employement

A legal document that sets the the terms and conditions governing a worker's job.

Dismissal

Being removed or 'fired' from a job due to incompetence or breach of discipline.

Unfair Dismissal

Ending a worker's employment contract for a reason that the law regards as being unfair.

Redundancy

When a job is no longer required so the employee doing this job becomes redundant through no fault of his or her own.

Teleworking

Staff working from home but keeping contact with the office by means of modern IT communications.

Portfolio Working

The working pattern of following several simultaneous employment at any one time.

Outsourcing

Using another business (a 'third party') to undertake a part of the production process rather than doing it within the business using the firm's own employees.

Flexi-Time Contract

Employment contract that allows staff to be called in at times most convenient to employers and employees.

Temporary Employment

Employment contact that lasts for a fixed time period.

Part-Time Employment Contract

Employment contract that is for less than the normal full working week of 40 hours.

Offshoring

The relocation of a business process done in one country to the same or another company in another country.

Re-Shoring

Reversal of offshoring; the transfer of a business process or operation back to its country of origin.

Hard HRM

An approach to managing staff that focuses on cutting costs.

Soft HRM

An approach to managing staff that focuses on developing staff so that they reach self-fulfillment and are motivated to work good and stay with the business.

Dismissal

Being removed or 'sacked' from a job due to incompetence or breach of discipline.

Levels of Hierarachy

Refers to how many levels of responsibility are in a business. Each level indicates a level of seniority in the business.

Line Managers

People who have the authority to make decisions and who bear responsibility for the outcomes of those decisions.

Chain of Command

This is the formal route by which a decision must travel through the organization.

Span of Control

Refers to how many subordinates are directly under the authority of a manager and whom managers are responsible for.