Business Management Key Terms

Flashcards covering main economic systems, factors of production, the role of business, needs satisfaction, and business management principles.

Market Economy

An economic system in which decisions regarding investment, production, and distribution are guided by price signals created by supply and demand; also known as a 'free market economy'.

Profit Driven

Most products and services demanded are supplied by private organizations seeking profit.

Private Ownership of Means of Production

Individuals have the right to possess property and earn income from it, stimulating the acquisition of more assets and profit-making utilization of capital.

Formal Sector

Large businesses listed on the JSE, responsible for a country's significant economic activity (e.g., Standard Bank, Vodacom).

Informal Sector

Many micro-enterprises contributing to the economy.

Socialism

Compromise between market and command economy where the state owns principal industries and resources while private ownership exists in less important industries.

Command Economy

An economic system where a central government makes all economic decisions, owning and controlling the community’s resources.

Communism

Characterized by state ownership and control of resources, limited job choices, and a low standard of living, with no freedom of decision.

Natural Resources

All resources that nature puts at mankind’s disposal - 'gifts of nature' (e.g., land, water, sun, coal, gold, oil).

Human Resources

Skills, talents, education, and abilities that human workers possess and bring to the marketplace.

Capital Resources

Goods produced in a country and used to make other goods and services (e.g., money, assets, tools, equipment, factories, technology).

Entrepreneurship

People who start and operate businesses, risking their own money and time, combining resources to make a profit.

Tangible Products

Products that can be seen, touched, and tasted.

Intangible Products

Services that cannot be physically touched (e.g., healthcare).

Need

Something you can't live without.

Business Organizations

Exist in a market economy, seeking profit by satisfying consumer needs, which culminate in the demand for consumer products and services.

Government Organizations

Provide collective services to citizens (healthcare, education, etc.) in exchange for rates and taxes, without a profit motive.

Non-Profit Seeking Organizations

Offer services and products not provided by private enterprises or government organizations, seeking no profit (e.g., sports clubs, welfare organizations).

Economics

Social science studying how humans choose different ways of using resources to produce products and services.

Business Management

Applied science concerned with the study of institutions that satisfy the needs of a community.

Sustainability

The ability of a business to survive and prosper over long periods, encompassing social responsibility, employment equity, consumerism, business ethics, and environmental sustainability.