1.1 Introduction To Business Management - Key Terms

Adding Value

Increasing the worth of a product by improving it or enhancing its appeal.

Business

An organization that produces goods or services to satisfy customer needs or wants.

Consumers

People who use or consume the goods and services.

Customers

People or businesses that buy goods or services.

Goods

Physical items that are produced and sold.

Services

Non-physical products like banking, cleaning, or education.

Needs

Basic things necessary for survival (food, water, shelter).

Wants

Things people desire but don't need to survive (phones, cars, vacations).

Production

The process of making goods and services.

Primary Sector

Businesses involved in natural resources (farming, mining).

Secondary Sector

Businesses that manufacture or process products.

Tertiary Sector

Businesses that provide services (retail, transport).

Quaternary Sector

Knowledge-based services (IT, research, consultancy).

Entrepreneurs

People who start and run businesses, taking risks.

Entrepreneurship

The process of starting a new business.

Sole Trader

A business owned and run by one person.

Sole Traders

(Same as above

Partnerships

Businesses owned by 2 or more people sharing profits and responsibilities.

Deed of Partnership

Legal agreement outlining roles, profits, and responsibilities in a partnership.

Company (Corporation)

A legal business entity owned by shareholders.

Privately Held Companies

Companies owned by private individuals, shares not sold publicly.

Publicly Held Companies

Companies whose shares are sold on the stock exchange.

Private Sector Companies

Businesses owned by individuals, not the government.

Public Sector Companies

Businesses owned and run by the government.

Cooperatives

Businesses owned and run by their members (workers, customers).

Social Enterprises

Businesses aiming to make a profit while benefiting society.

Non-Governmental Organizations (NGOs)

Non-profit organizations that operate independently of governments.

Incorporation

The legal process of forming a company as a separate entity.

Limited Liability

Shareholders are only responsible for the money they invest.

Unlimited Liability

The owner is personally responsible for all business debts.

Initial Public Offering (IPO)

When a company sells shares to the public for the first time.

Stock Exchange

A marketplace where shares of public companies are bought and sold.

Corporate Social Responsibility (CSR)

A business’s duty to act in the best interests of society and the environment.

Ethics

Moral principles guiding business behavior.

Ethical Code of Practice

Guidelines for good and moral behavior in a company.

Ethical Objectives

Goals related to doing the right thing ethically or morally.

Mission Statement

A short statement of a business’s purpose or core aim.

Vision Statement

A future-focused statement of what the business wants to achieve.

Objectives

Specific, measurable goals a business wants to achieve.

Strategic Objectives

Long-term, big-picture goals (e.g., market dominance).

Tactical Objectives

Short-term goals to help reach strategic ones.

Strategies

Plans to achieve strategic objectives.

Tactics

Short-term actions to achieve tactical objectives.

Stakeholders

Individuals or groups affected by or affecting a business.

Internal Stakeholders

People inside the business (employees, managers, owners).

External Stakeholders

People outside the business (customers, suppliers, community).

Customers

(Repeated; see above.)

Employees

People who work for the business.

Managers

People responsible for decision-making in a business.

Directors

Senior members of the company who make strategic decisions.

Shareholders (Stockholders)

People who own shares in a company.

Financiers

Individuals or institutions that provide funding to businesses.

Government

Regulates and taxes businesses, also provides services.

Local Community

People living near a business, affected by its actions.

Suppliers

Businesses that provide goods or materials to another business.

Pressure Groups

Organizations that try to influence businesses to behave ethically.

Stakeholder Conflict

Disagreements between stakeholders with different interests.

Stakeholder Mapping

A tool to prioritize stakeholders based on influence and interest.

Conflict

A clash of interests or ideas between individuals or groups.