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IGCSE BUSINESS Chapter 1-26 definitions 2024 MAY/JUNE
Economic Problem
Unlimited wants cannot be met because there are limited factors of production.This creates scarcity.
Consumer Goods
products which are sold to the final consumer
Consumer Services
non- tangible products such as; insurance services, and transport etc.
Mixed Economy
An economy where resources are owned and controlled by both Private and Public Sector
Capital Goods
Physical goods, such as Machinery & delivery vehicles, used by other businesses to help produce other goods & services.
Added value
It is the difference between the selling price of a product & the cost of materials bought
Increase Added valve
Increase selling price but keep the cost of materials same
Adding Value
Selling product or service at higher price based on the image of the product
Public Sector
The part of economy owned and controlled by government
Entrepreneur
a person who organizes, operates and takes the risk for a new business venture
Capital employed
is the total value of capital used in the business
Business Activity
The process of producing or supplying goods & service to satisfy consumer demand.
Need
A good or service essential for living.
Want
A good or service which people would like, but is not essential for living.
Factors Of Productions
The resources needed to produce goods & service i.e., land, labour, capital and enterprise and they are in limited supply.
Land
All natural resources available under, on, and over the surface of the earth, such as minerals, water, and sunlight.
Labour
is the number of people available to work.
Capital
is machinery, equipment & finance needed for production of goods & service
Enterprise
is people prepared to take risks of setting up the business - they are also known as entrepreneurs.
Scarcity .
There are not enough goods and Services to meet the wants of population
Opportunity cost
The next best alternative given up by choosing another
Specialization
People and businesses concentrate best at on what they are best at
Division of labour
Production is divided into separate tasks and each employee does just one of those tasks.
Primary Sector
Industrial sector which involves in the extraction and supplying natural resources
Secondary Sector
Industrial sector which involves in converting natural resources into finished goods.
Tertiary Sector
Industrial sector which involves in providing services.
Chain of production
The production, and supply of goods and services through primary,secondary, and tertiary sectors to the final consumer.
Private Sector
The part of economy owned and controlled by private individuals and companies for profit
Capital
is the money invested into the business by the owners
De -industrialization
when there is a decline in the importance of the secondary sector.
Industrialization
the growing importance of secondary sector
Business Plan
is a detailed document that includes the business objectives,aims & important details about the operations.
Revenue
It is the amount a business receive from the sales of it's products
Internal Growth
occurs when a business expands its existing operations
External Growth
is when a business takes over with another business.
Horizontal Integration
is when one business merges with another one in the same industry at the same stage of production
Vertical integration
is when one business merges with another one in the same industry but at a different stage of production. …….. integration can be forward or backward.
Conglomerate integration
is when one business merges with another one with completely different industries
Chapter 4
Types of business organization.
Sole trader
is a business owned by one person
Limited liability
the liability of shareholders in a company is limited to only the amount they invested
Unlimited liability
means that the owners of a business can be held responsible for the debts of the business they own. Their liability is not limited to the investment they made in the business
Partnership
is a form of business in which two or more people agree to jointly own a business
Unincorporated business
a business that does not have a separate legal identity.
incorporated businesses
are companies that have separate legal status fromm their owners
Shareholders
a person who owns shares in a limited company
Private limited companies
are businesses owned by shareholders but they cannot sell shares to the public.
public limited companies
are businesses owned by shareholders but they can sell shares to the public and their shares are tradable on the Stock Exchange
Dividends
are payments made to shareholders from the profits of a company. They are the returns to shareholders for investing in the company.
A Franchise
is a business based upon the use of the brand names,logos and trading methods of an existing successful business.
A Joint Venture
where two or more businesses start a new project together,sharing capital, risks and profits
A Public Corporation
a business in the public sector that is owned and controlled by the government
Start-up capital
The finance needed when first setting up a business
Collaterals
are non-current assets offered as security against borrowing
Chapter 5
Business Objectives and Stakeholders objectives
Business objectives
the aims that a business works towards
Profit
is total income of a business minus total costs
Market share
is the percentage of total market sales held by one brand or business
Social Enterprise
a business with social objectives that reinvests most of its profit back into the business
Stakeholder
a person or group with direct interest in the performance and activities of a business
Corporate Social Responsibility (CSR)
Business taking responsibility for the Impact their activities might have on the society
Pressure Groups
A group of like-minded people that puts pressure on businesses and governments to change their policies
Piece rate
A payment to employees for the amounts of output theu produce
commission
A payment to sales staff for the amount they sell
the theory of economic man
The view that humans are only motivated by money
Non financial rewards
Methods used to motivate employees that do not involve giving financial rewards
Motivation
The reason why employees want to work hard and effectively for the business
Wage
A payment for work usually paid weekly
Time rate
The amount paid to employees for how many hours worked
Salary
A payment for work, usually paid monthly
bonus
An additional payment above basic pay as a reward for the good work
Profit sharing
an additional payment to workers based on the profits of the business
job satisfaction
An enjoyment deprived from feeling that you have done a good job
Job rotation
Workers swapping jobs and doing a specific task for a limited time and switching to another job again
Job enrichment
Involves adding tasks in the existing job that require more responsibility
Job enlargement
Adding tasks of different nature to increase variety on job
Team working
Involves working in groups and allocating specific tasks and responsibilities to them
Training
The process of improving workers skills
Job promotion
The advancement of an employee in an organisation
Delegation
Giving subordinate the authority to perform a particular task
Labour productivity
The measure of the efficiency of employees by calculating the output per employee
Absenteeism
When the employee skips work without a good reason
Labour turnover
The rate at which employees start leaving the business
Hyngeine factors
The factors that must be present in a work place to prevent job disatisfaction
Motivators
The factors that influence employees to increase their efforts for the business
Fringe benefits
Non cash rewards used to retain and recruit employees
Quality circles
Groups of employees who regularly meet to discuss work related problems
Chain of command
the structure in an organization which allows instructions to be passed down from senior management to lower levels of management
The span of control
the number of subordinates working directly under a manager
Line managers
have direct responsibility for people below them in the organisational hierarchy
Staff managers
are specialists who provide support, information and assistance to line manager
Recruitment
the process of identifying that the business needs to employ someone up to the point at which applications have arrived at the business
Job Analysis
identifies and records the responsibilities and tasks relating to a job
Job description
outlines the responsibilities and duties to be carried out by someone employed to do a specific job
Workforce planning
establishing the workforce needed by the business for the expected future in terms of the number and skills of employees required
Functional department
deals with the main activities of business meaning Finance, Marketing, Operations, HR, and R&D.
Decentralized Organization
Organization where the decision-making powers are passed down the organization to lower levels
A message
the information or instructions being passed by the sender to the receiver
the transamitter
The transmitter of the message is the person starting off the process by sending the message
The medium of communication
the method used to send a message for example verbal,oral,electronic and visual communication
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