1.1/1.2 Test Review IB Business

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Factors of Production

The resources used to produce goods and services: land, labor, capital, and entrepreneurship.

Land

All natural resources used to produce goods and services, such as water, minerals, and physical territory.

Labor

The physical and mental effort people use to produce goods and services.

Capital

Man-made resources used to produce goods and services, such as buildings, machines, and equipment.

Entrepreneurship

The ability to organize resources, take risks, and start or manage a business.

Four Functional Areas of Business

The main operational departments of an organization: marketing, finance, human resources, and operations.

Marketing

The business function responsible for promoting, advertising, pricing, and selling products or services.

Finance

The business function responsible for managing money, including budgeting, investments, and financial records.

Human Resources (HR)

The business function responsible for hiring, training, managing, and supporting employees.

Operations

The business function responsible for producing goods or providing services and managing the resources needed to do so.

Integration of Business Functions

Marketing identifies customer needs, operations produces the output, finance manages money, and HR manages personnel to achieve organizational goals.

Entrepreneur

A person who starts and operates a business, taking financial risks in hopes of making a profit.

Intrapreneur

An employee who acts with entrepreneurial initiative by developing new ideas or products within an existing company.

Public Sector

The part of the economy controlled by the government that provides services for the general public.

Private Sector

The part of the economy made up of businesses and organizations owned by individuals or groups rather than the government.

Publicly Held Company

A business whose shares are available for the public to buy and sell on a stock exchange.

Public Limited Company (PLC)

A business structure common in the UK and other countries where ownership is divided into shares traded on a public exchange.

Cooperative

An enterprise owned and controlled by its members, who share its benefits and operational responsibilities.

Community Impact of Cooperatives

Supports local areas by keeping money local, creating jobs, and providing essential local goods or services.

Customer Impact of Cooperatives

Provides member-customers with a direct voice in governance and a share in the generated profits.

Worker Impact of Cooperatives

Grants employee-members greater influence over decision-making and direct participation in business benefits.