Unit 1A: Introduction to Business Management Key Terms

A comprehensive set of vocabulary flashcards covering key terms from Unit 1A, including basic business concepts, types of organizations, and business objectives.

added value

when an input is transformed and the output is worth more than the input

business

any entity engaged in commercial activities (or “organized toward an objective”)

business plan

a written document that outlines key aspects of a business idea

economy

the activities involved in producing, distributing, and consuming products

entrepreneur

someone who owns, operates, and takes the risk of a business venture

factors of production

inputs in the transformation process (land, labor, capital, enterprise)

good

a physical product (not a service), which can be consumed at purchase or later

intrapreneur

someone who thinks and works like an entrepreneur in an existing business

opportunity cost

the loss of potential gain from an alternative choice

product

the output of a business; it can be a good, service, or both

PESTLE

political, economic, social, technological, legal, environmental factors

service

an intangible product (not a good), which is often consumed at purchase

STEEPLE

social, technological, economic, environmental, political, legal, ethical factors

transformation process

when a business takes inputs, adds value, and makes output

charity

registered nonprofit that exists solely to support a specific cause

company

an incorporated business with its own legal identity, separate from its owners

franchise

a business sells the right to operate the same business, under the same name

incorporate

to formally, legally establish a business as its own legal entity

liability

can mean a debt owed to another party or responsibility for a financial risk

limited liability

owners are protected and only risk losing their original investment

multinational corporation

a company with operations (e.g. factories) in multiple countries

nonprofit organization

tax-exempt; exists to further a social cause or for public benefit

partnership

two or more set up a business together; have unlimited liability

primary sector

involves growing and/or extracting raw materials (e.g. mining)

private sector

business is owned and controlled by “private” individuals (e.g. Nike)

private limited company

owners can restrict who buys shares and advertise privately

public limited company

the sale of shares is not restricted and can advertise publicly

public sector

business is owned and controlled by the government (e.g. school district)

quaternary sector

economic area represents based on knowledge and skills (e.g. IT)

secondary sector

involves manufacturing products using raw materials (e.g. automaker)

share

one unit of ownership in a company

social enterprise

any business that does not take profit as its primary objective

sole trader

person who owns a business and is solely responsible for it (aka: sole prop)

tertiary sector

consists of businesses that provide services (e.g. restaurants)

unlimited liability

owner is personally responsible for business’s losses and debts

business ethics

what is typically considered “right” or “wrong” in business

corporate social responsibility

a business accepts additional obligations to society

mission

a business’s fundamental reason to exist, aka: its purpose

mission statement

summary of the mission used to communicate to stakeholders

objective

the stated result a business wants to achieve

SMART

goals that are specific, measurable, agreed, realistic, and time-bound

strategy

a business’s long-term plan to achieve its objectives

SWOT

a strategic tool to analyze strengths/weaknesses and opportunities/threats

tactics

shorter-term, specific actions that comprise a strategy

triple bottom line

business performance measured by profit, people, planet