introduction to busman ibdp

business

an organization that provides goods/services and satisfies needs/wants in a profitable or non profitable way

goods

tangible products that are sold

services

intangible offerings that provide value or satisfaction to consumers, often through performance or expertise

primary sector

economy sector which involves the extraction of raw materials, such as agriculture, mining, fishing, and forestry

secondary sector

economy sector that involves the manufacturing and processing of goods from raw materials, including industries such as construction and manufacturing

tertiary sector

economy sector that provides services rather than goods, facilitating the distribution of products and offering support services such as retail, healthcare, and education

quartenary sector

economy sector focused on knowledge-based services, including research, information technology, and financial services

private sector

economy sector that is owned and operated by private individuals or organizations, funded privately and aimed at profit generation - it is only available to those willing or able to purchase the good/service

public sector

economy sector that is owned and operated by the government, providing public services and funded by taxation - it is available to the whole of society

limited liability

A type of financial structure where an investor's liability is limited to the amount they invested, protecting personal assets from business debts

unlimited liability

A legal obligation where the owner of a business is personally responsible for all debts and liabilities, meaning creditors can pursue personal assets to satisfy business debts

sole trader

A business structure where an individual operates a business independently, assuming all risks and liabilities while retaining all profits

partnership

A business structure of two or more people running a business together, usually friends or associates - sharing profits, responsibilities, and liabilities

privately held company

A privately held company is owned by private individuals or families, not listed on stock exchanges, and often emphasizes limited transparency - typically focused on profit distribution among owners rather than shareholders

publicly held company

A publicly held company is a corporation whose shares are traded on stock exchanges, allowing public investors to purchase ownership stakes - such companies are required to disclose financial information and adhere to regulations

shareholders

individuals or entities which own a share of a business, meaning they receive a part of their profits while remaining a separate legal entity

private for-profit social enterprise

a private for-profit social enterprise is a business model that aims to achieve social objectives while generating profits - balancing social mission with financial sustainability, often reinvesting profits to further its social goals

public for-profit social enterprise

a business which aims to generate profits while also addressing social or environmental issues, often through the sale of goods or services to the public - producing goods/service provided by the public sector, sometimes helping to raise government revenue for essential services

cooperatives

a business structure owned by owners, reffered to as members, which both run and work for the business. all members are equally involved and all have limited liability

for-profit social enterprise

business structure which focuses on profit whilst having a social/environmental purpose at their core - they usually reinvest profits into the business

non-profit social enterprise (ngos)

a business structure located in the private sector, operating solely to improve social/environmental issues. as they are funded by grants and donations, all their surplus must be reinvested into the company and they do not face taxes

vision

an aspirational guideline or idea of the future or long-term identity of a business, put into place by the ceo

mission

a more concrete statement, addressing what the business wants, what it does, and how it plans to achieve their vision, put into place by the ceo

aims

the multiple long-term goals of the company to achieve its vision and mission, put into place by the ceo

objectives

clearly defined, measurable targets which clarifying how a business plans to achieve its aims, put into place by managers

strategies

the actions taken by a business to met its objectives in the mid-term, put into place by managers

tactics

the day-to-day actions taken to put strategies into place, carried out by employees

corporate social responsibility (csr)

a business approach which involves a commitment to benefiting society and the environment, which is achieved through setting ethical goals and implementing ethical values - it goes beyond legal obligations to take social and environmental concerns into business operations

stakeholders

a group or people or an individual who is affected by a business or affects a business

internal stakeholders

stakeholders which are directly involved inside a business, such as managers, employees and shareholders

external stakeholders

stakeholders which are not directly involved inside a business, such as customers, suppliers, governments and the local community

economies of scale

The cost advantages which a business achieves due to expanding its scale of production. while the average costs decrease, production grows. this can be due to specializations of labour, use of capital equipment and spreading fixed costs.

diseconomies of scale

the cost disadvantages a business faces as it grows beyond its optimal size. this can be due to communication problems, loss of control and coordination difficulties.

internal economies of scale

cost advantages which arise from the growth of the business itself, all of which are within the control of the company, such as managerial economies and financial economies.

external economies of scale

cost advantages which arise from factors outside the business but within their industry or geographic area, such as specialized suppliers and infrastructure developments.

internal diseconomies of scale

cost disadvantages faced due to the growth of the business itself, such as communication issues or loss of control.

external diseconomies of scale

cost disadvantages which arise from factors outside the business but in its industry or geographic location, such as increased competiion and higher input costs.

internal (organic) growth

when a business grows at a slow and steady pace, from its already existing operations from within the business

external (inorganic) growth

when a business grows at a quicker, but riskier pace, by entering an arrangement to work with other businesses, this could be through mergers and acquisitions or franchises

mergers & acquisitions

when two firms come together to form a new company with its own legal identity - merger

when a company buys a controlling interest/share in another firm - acquisition

takeover

an acquisition without permission - buying a controlling share or interest in a business without its permission, taking over control. it is considered hostile

joint venture (jv)

when two businesses split costs, risks, control and profits of a business project with its own legal identity

strategic alliances (sa)

when two or more businesses cooperate on a business venture, while remaining independent

franchises

when a person or business buys a license to use a firms assets, such as their brand, logo, product etc.

franchisor

a person or company which grants a lisense for the right to use its assets

franchisee

an individual or business that purchases the right to use an existing businesses assets

multinational companies (mncs)

an organization which operates in two or more countries, while its hq is located in its home country

globalization

the process of integrating local economies into one global economy