Unit 1 Business Management

Consumer goods

products and services that satisfy human wants directly

Consumer services

Businesses that provide services primarily to individual consumers, including retail services and education, health, and leisure services

Capital goods

Buildings, machines, technology, and tools needed to produce goods and services.

Primary sector

the part of the economy that draws raw materials from the natural environment

Human resource management (HR)

the management function focused on maximizing the effectiveness of the workforce by recruiting world-class talent, promoting career development, and determining workforce strategies to boost organizational effectiveness

Finance and accounts

Function of an organization responsible for ensuring that the business has sufficient funds in order to conduct its daily operations.

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Operations management

The management of systems or processes that create goods and/or provide services

Entrepreneur

A person who organizes, manages, and takes on the risks of a business.

Intrapreneur

someone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it

Business plan

a formal written document that describes the nature of a business and how it will operate

International Labour Organisation

Improved working conditions, women's rights, helped refugees

secondary sector

the part of the economy that transforms raw materials into manufactured goods

tertiary sector

the part of the economy that involves services rather than goods

quaternary sector

Jobs that deal with the handling and processing of knowledge and information.

Private Sector

the part of the economy that involves the transactions of individuals and businesses

Public Sector

the part of the economy that involves the transactions of the government

Sole Trader

business owned and operated by one person

Partnership

a business owned by two or more people

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.

Cooperatives

a farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits.

Non Profit Business

functions like a business but uses the money it makes to fund the cause identified in its charter

Non Profit Organization (NPO)

A business that does not primarily aim to earn a profit but to serve a purpose beyond the organization itself, for the betterment society as a whole.

Non Government Organization (NGO)

different organizations that play a major role in international development, with the priority to promote economic development, humanitarian ideas, and sustainable development. Examples include Oxfam, CARE, Mercy Corps, Greenpeace, Amnesty International, Global 2000 and Doctors without Borders.

Charities

organizations for helping those in need or the environment

Pressure Groups

a group that tries to influence public policy in the interest of a particular cause.

Initial Public Offering

the first time a company issues stock that may be bought by the general public

Incorporation

A process that extended the protections of the Bill of Rights against the actions of state and local governments

Limited Liability

A form of business ownership in which the owners are liable only up to the amount of their individual investments.

Public Private Partnership (PPP)

Involvement of the private sector, in the form of management expertise and/or financial investment, in public sector projects aimed at benefiting the public

State Owned Enterprises

Companies in which a majority of ownership control is held by the government.

Stock Exchange

a market for buying and selling stock

Unlimited Liability

The owner is personally and fully responsible for all losses and debts of the business

Silent Partner

An individual who takes no active part in the management of a partnership, but has capital invested in the business.

Board of Directors

a group of persons elected by the stockholders to manage a corporation

Social Enterprises

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

Mission statement:

a statement of the organization's purpose - what it wants to accomplish in the larger environment

Vision Statement:

expresses what the organization should become, where it wants to go strategically

Strategic objective:

a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a time frame

Tactical objective:

day-to-day objectives needed to ensure the strategic objectives are achieved

Operational objective:

A specific goal set to guide day-to-day operations. It should be compatible with a strategic objective and the mission statement of the organisation.

Hierarchy of Objectives

lower-level objectives help to accomplish higher-level ones

SWOT analysis/matrix

strengths, weaknesses, opportunities, threats

Growth Strategies

strength meats opportunity

Defensive Strategies

weakness meets threat

Re-Orientation Strategies

weakness meet opportunity

Defusing Strategies

strength meets threat

Ansoff Matrix

New and existing market vs new and existing product

Internal stakeholders

employees, owners, board of directors

Shareholders

Investors who purchase shares of stock in a corporation.

External stakeholders

people or groups in the organization's external environment that are affected by it

Competitor

one who competes against others

CEO/managing director

in charge of business

Pressure groups

a group that tries to influence public policy in the interest of a particular cause.

Financiers

a person concerned with the management of large amounts of money on behalf of governments or other large organizations.

Customers

people who buy goods and services

Suppliers

companies that provide material, human, financial, and informational resources to other companies

External environment

everything outside an organization's boundaries that might affect it

Internal environment

the events and trends inside an organization that affect management, employees, and organizational culture

STEEPLE

Social

Technological

Economic

Environmental

Political

Legal

Ethical

Economies of scale

factors that cause a producer's average cost per unit to fall as output rises

Diseconomies of scale

increases in cost per unit when output increases

Fixed costs

Costs that do not vary with the quantity of output produced

Variable costs

costs that vary with the quantity of output produced

Average costs

Total Costs divided by quantity. ATC = TC/Q

Unit costs

Total costs / output

Average unit costs

Total production costs divided by the total output

External economies/diseconomies of scale

factors outside the business that effect economies/diseconomies of scale

internal economies/diseconomies of scale

factors inside the business that effect economies/diseconomies of scale