Studied by 23 people
What are the four business departments?
HR
Finance and accounts
Marketing
Operations management or production
Primary sector
A section of an economy that extracts materials (minerals, oil, etc.) or harvests raw materials (farming, fishing, forestry, etc.) from the Earth.
Secondary sector
The area of economic activity that produces finished goods through manufacturing.
Tertiary sector
The area of economic activity that provides services.
E.g. banking, healthcare and restaurants
Quaternary sector
The area of economic activity that involves knowledge and the movement of information.
E.g. information technology services, consultancy, research and development
Production chain/chain of production
The steps through the different sectors that have to occur to turn raw materials into a consumer good that is marketed.
Private sector
The portion of an economy not owned or directed by the government.
Public sector
The portion of the economy controlled or owned by the government.
E.g. government services, schools, and state-owned businesses.
Goods
The products of a business that are tangible, meaning they have physical characteristics and can be measured.
Services
The products of a business that are intangible, meaning that they do not have physical characteristics; can be a service or a solution.
Sole trader
A business owned and run by one person; there is no legal separation between the owner and the business.
Partnership
A business owned and run by two or more people who share the responsibility for the business and the profits; there is no legal separation between the business and the owners.
Privately held company
A company that is privately owned and often has family or friends as the shareholders; the shares are not sold to the wider public and are not traded on a stock exchange.
Publicly held company
A company that is publicly owned and and has many shareholders who can buy and sell their shares through a stock exchange.
Social enterprise
Any organisation that has a social and/or environmental purpose at its core; it describes the primary purpose of a business, not its legal form.
For-profit social enterprise
A type of social enterprise that earns revenue and profits, but integrates social and/or environmental impact directly into its business model.
Cooperative
A business owned and operated by its members, who share the profits.
Non-profit social enterprise
A type of social enterprise that produces goods and services to meet human needs, but where any surpluses earned must, by law, be reinvested back into the business.
Non-governmental organization (NGO)
A type of non-profit social enterprise that often operates on a large scale, nationally or internationally. NGOs are not operated by governments, but may receive some funding from governments or cooperate with governments.
Vison statement
A philosophy, vision or set of principles which steers the direction and behaviour of an organization.
Mission statement
A statement that defines why the organization exists and includes the aims and its most important values. It may also share what they are currently doing to achieve their vision.
Business objectives
The specific, measurable targets that a business must meet to achieve the aims or long-term goals of the business.
Strategic objectives
The long-terms goals of a business that indicate how the business intends to fulfil its mission.
This usually includes performance goals. E.g. increasing market share or improving profitability.
Tactical objectives
Short to medium-term target that, if consistently met, will help a business reach its strategic goals.
SMART Objectives
'Specific', 'measureable', 'attainable', 'relevant' and 'time-sensitive' objectives for a business; these can be applied in all the business management functions.
Corporate social responsibility (CSR)
The view that businesses, rather than focusing solely on the increasing shareholder vale, should contribute to the economic, social and environmental wellbeing of society.
Stakeholder
Any individual or group that affects, or is affected by, an organization.
Internal stakeholder
An individual or group that affects, or is affected by, an organization and is directly involved inside the organization.
E.g. employees, managers or shareholders
External stakeholder
An individual or group that affects, or is affected by, an organization but who is not directly involved inside the organisation.
E.g. suppliers, customers, government, media or community.
Economy of scale
The decrease in per unit production cost as output on activity increases.
Diseconomy of scale
The increase in per unit production cost as output on activity increases.
Fixed costs
Costs that don’t change according to the amount of goods or services produced by the business.
Variable costs
Costs that increase or decrease according to the amount of goods or services produced.
Internal/organic growth
Expansion of a business with its own resources.
E.g. investment in new products or new sales channels or more stores to increase sales.
External growth
Expansion of a business by relying on external resources, typically with another organisation.
E.g. A joint venture with another company.
Merger
When two companies that are theoretically “equal” legally become one company.
Acquisition
When one company purchases the majority or all the shares of another company.
Takeover
It's the same thing as an acquisition, but the company being acquired doesn’t welcome it.
Joint venture
An organization created, owned and operated by two or more other organizations. It is legally distinct from the other organizations that created it.
Strategic alliance
A form of external growth where two or more businesses work together to achieve common objectives but do not create a new enterprise.
Franchising
A form of external growth where a franchisee buys the rights to use the name and business model of a franchisor. In return, the franchisee pays a fee and some percentage of revenue or profits to the franchisor.
Multinational corporation (MNC)
A company that operates in at least two countries, one of which is not the company's home country. They are generally very large.
Note 
Flashcard (27)