Master Set - All Business Mgmt Vocab

Economic systems

A nation's system for allocating its resources among its citizens, both individuals and organizations

Command/Planned Economy

Economics resources are owned, planned, and controlled by the states

Free market economy

Economic resources are owned largely by the private sector, with very little state intervention

Mixed economy

Economics resources are owned and controlled by both private and public sectors

Public Sector

Comprises organizations accountable to and controlled by central or local government (the state)

Private sector

Comprises businesses owned and controlled by individuals or groups of individuals

Privatization

The sale of public sector organizations to the private sector

Sole trader/proprietor

A business that is exclusively owned by one person who has full control of it and is entitled to all the profit (after tax)

Partnerships

Business formed by two or more people to carry on a business together with shared capital investment and, usually, shared responsibilities

Limited Liability

The only liability, or potential loss, a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder

Private (LTD)

privately held company, A small to medium-sized business that is owned by shareholders who are often members of the same family

Public (PLC)

publicly held company, A limited company, often a large business, with the legal right to sell shares to the general public, its share price is quoted on the national stock exchange

Cooperatives

Group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically

Legal personality

separate from owners

Continuity

exists after death of owners

Share

A certificate confirming part ownership of a company. Most types of shares entitle shareholders to dividends paid from profits

Initial public offering (IPO)

The process of offering for sale the shares of a privately held company to financial institutions and the general public

Shareholders

Individuals or institutions that buy/own shares in a limited company

Social Enterprises

Business with mainly social and/or environmental objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners. NOT A LEGAL STRUCTURE. NOT A CHARITY.

Social entrepreneur

A person who establishes an enterprise with the aim of solving social problems or achieving social change

Triple bottom line

the three objectives of social enterprises

Charity

an organization set up to raise money to help people in need or to support causes that require funding

Non-Profit Organization (Non-Profit Social Enterprises)

Any organization that has aims other than making and distributing profit which is usually governed by a voluntary board

Non-governmental organization (NGOs)

A legally constituted body that functions independently of any government and that has a specific aim and purpose

Business

Any organization that uses resources to meet the needs of customers by providing a product or service they demand to earn profits

Entrepreneur

Someone who takes the financial risk of starting and managing a new venture

Innovation

Providing either a different type of product or service that is different from those of competitors, which is delivered in a distinct way

Land

Land, (non)renewable resources (ex: coal, crude oil, timber)

Labour

Manual/skilled labor; important to a company depending on what product is being produced (ex: cleaning company)

Capital

Money needed to set up the business + keep it going; includes human-made resources

Enterprise

Driving force of business; combines other factors into something capable of producing goods/services

Outputs of Business

The goods and services that satisfy a consumer’s needs usually with the aim of making profit

Consumer goods

The physical and tangible goods sold to final users; these include cars, food, and clothing

Consumer services

Non-tangible products that are sold to final users: these include hotel accommodation, insurance services and train journeys

Capital goods

Physical goods that are used by industry to aid in the production of other goods and services such as machines and commercial vehicles

Primary sector

Firms engaged in farming, fishing, oil extraction, and all other industries that extract natural resources so that they can be used and proceed by other firms

Secondary sector

Firms that manufacture and process products from natural resources, including furniture, brewing, baking, clothing, and construction

Tertiary sector

Firms that provide services to consumers and other businesses such as retailing, transport, insurance, banking, hotels, tourism and telecommunications

Quaternary sector

Information Technology (IT) businesses and information service providers such as research and development, business consulting and information gathering

Industrialization

primary sectors → secondary sector

Deindustrialization

secondary secretary → tertiary sector

Entrepreneurship

The process of setting up a new business

Mission statements

a statement of the business’s core aims, phrased in a way to motivate employees and to stimulate interest from outside groups

Vision statement

a statement of what the organization would like to achieve or accomplish in the long term

Corporate aims

the long-term goals which a business hoeps to achieve

business objectives

short - or medium-term goals or targets - usually specific in nature - which must be achieved in order for an organization to attain its overall corporate aim

Market share

sales of the business as a proportion of total market size, in a give period

Shareholder value

the financial gains received by the owners of a company’s shares

Ethics

moral guidelines that determine decision-making

Ethical code

a document detailing a company’s rules and guidelines on staff behavior that must be followed by all employees

Strategic objectives

a long-term target for the whole organization, designed to achieve the corporate aim

Tactical objectives

a short-term target aimed at resolving a particular problem or meeting a specific part of a longer-term strategic objective

Stakeholders

people or groups of people who can be affected by and therefore have an interest in, any action taken by an organisation

Corporate social responsibility (CSR)

this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment

Social audits

an independent report on the impact a business has on society. This can cover pollution levels, hleath and safety record, sources of supplies, customer satisfaction and contribution to the community

Strategy

a plan of action designed to help achieve an objective

Strategic analysis

conducting research into the business environment and into the business itself to help identify future strategies

SWOT analysis

a form of strategic analysis that identifies and analyzes the main internal strategies and weaknesses and external opportunities and threats that will influence the future direction and success of a business

STEEPLE analysis

the strategic analysis of the macro-environment in which a business operates, including social, technological, economic, environmental, political, legal, and ethical factors

Ansoff Matrix

a model used to show the degree of risk associated with the four growth strategies of market penetrations, market development, product development, and diversification

Market penetration

achieving higher market shares in existing markets with existing products

Product development

the development and sale of new products or new developments of existing products in existing markets

Market development

the strategy of selling existing products in new markets

Diversification

the process of selling different, unrelated goods or servies in new markets

Stakeholder concept

the view that business and their managers have responsibilities to a wide range of groups, not just shareholders

Arbitration

resolve industrial disputes btwn workers and managers

List examples of Internal Stakeholders

Employees

Managers

Shareholders

List examples of External Stakeholders

Customers

Suppliers

Banks and Other Creditors

Competitors

worker participation

improve communication, decision making, and reduce potential conflicts btwn workers and managers, e.g. works councils, employee directors

Profit Sharing Schemes

Reduce conflict btwn workers and stakeholders over the allocation of profits and share the benefits of the company success

Share-ownership schemes

Reduce conflict btwn workers, managers, and shareholders, including share options - right to buy shares at specified price in the future

Acquisition

when a company buys at least 50% of the shares of another company and becomes the controlling owner - with the agreement of the existing owner(s)/managers

Synergies

the concept that, following a merger of acquisition, the combined value and performance of two businesses will be greater than the sum of the separate individual businesses

Takeover

when a business wishes to acquire another company but this is opposed by that company’s managers - often referred to as a ‘hostile takeover’

Merger

an agreement by shareholders and managers of two businesses to bring both businesses together under a common board of directores with shareholders in both businesses owning shares in the newly merged business

Internal growth

expansion of a business by means of opening new branches, shops or factories (aka organic growth)

Scale of operations

the maximum output that can be achieved using the available inputs (resources) - this scale can only be increased in the long term by employing more of all inputs

Internal economies of scale

reduction in unit (average) costs of production that result from an increase in the scale of operations of a business

External economies of scale

reduction in unit (average) cost or production of a business that result from growth of the industry, often in one particular region

Internal diseconomies of scale

factors that cause unit (average) costs of production to rise when the scale of operation of a business is increased

External diseconomies of scale

factors causing unit costs for a business to rise as an industry expands, especially in a given region

External growth

business expansion achieved by means of merging with or taking over another business, frome ither the same or a different industry

Horizontal integration

integration with a business that is in the same industry and at the same stage of production

Forward vertical integration

integration with a business that is in the same industry but a customer of the existing business

Backward vertical integration

integration with a business that is in the same industry but a supplier of the existing business

Conglomerate integration

merger with or takeover of a business that is in a different industry

Joint venture

two or more businesses agree to work closely together on a particular project and create a separate business division to do so

Strategic alliances

an arrangement between businesses in which each agrees to commit resources to achieve an agreed set of objectives

Franchise

a business that uses the name, logo, and trading systems of an existing successful business

Multinational companies

business organization that has its headquarters in one country, but with operating branches, factories, and assembly plants in other countries

Emerging market economies

a country with an economic system which results in low to middle income per head of population

Globalization

the growing interactions and integration between markets, businesses, people and government worldwide

Franchise

Arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser). Business uses the same name, logo, and trading systems of an existing successful business

Human resource management (HRM)

the strategic approach to the effective management of an organiztion’s workers so that they help the business achieve its objects and gain a competitive advantage

Human resource planning

also known as workforce planning - analyzing and forecasting the numbers of works and the skills of those workers that will be required by the organization to achieve its objectives

Workforce plan

numbers of workers and skills of those workers required over a future time period

Workforce audit

a check on the skills and qualifications of all existing employees

Labor turnover

measures the rate at which employees are leaving an organization

Occupational mobility of labor

extent to which workers are willing and able to move to different jobs requiring different skills