Untitled Flashcard Set

1.1.1 Adding value The process of transforming inputs into a good or service that customers value more than the cost of the inputs used. 1.1.2 Business An organization that makes decisions and uses resources to produce goods and/or provide services. 1.1.3 Consumers The individuals or organizations that use a good or service. 1.1.4 Customers The individuals or organizations that buy a good or service. 1.1.5 Entrepreneurs People who organize resources, make business decisions, and accept the risks of starting or running a business venture. 1.1.6 Entrepreneurship The process of identifying a business opportunity and organizing resources while accepting risk in order to create and run a venture. 1.1.7 Factors of production The resources used to produce goods and services: land, labour, capital, and entrepreneurship. 1.1.8 Finance and accounts The business function that manages money, records financial transactions, and ensures that the organization has enough funds to operate. 1.1.9 Goods Physical, tangible products, such as food, furniture, clothing, and smartphones. 1.1.10 Human resources (HR) The business function responsible for managing the workforce, including recruitment, training, pay, performance, and employee relations. 1.1.11 Marketing The business function that identifies and satisfies customer needs and wants, usually in a profitable way. 1.1.12 Needs Basic necessities required for survival and well-being, such as food, water, shelter, and clothing. 1.1.13 Operations (operations management) The business function that organizes resources and processes to produce goods and provide services. 1.1.14 Primary sector Business activity involving the extraction or collection of natural resources, such as farming, fishing, forestry, and mining. 1.1.15 Production The process of using factors of production to create goods and/or services. 1.1.16 Quaternary sector Business activity based on creating, processing, or sharing knowledge and information, such as research and information technology. 1.1.17 Secondary sector Business activity that manufactures or constructs finished and semi-finished products from raw materials. 1.1.18 Services Intangible products, such as education, healthcare, transport, tourism, banking, and haircuts. 1.1.19 Tertiary sector Business activity that provides services to consumers or other organizations. 1.1.20 Value added The selling price of a product minus the cost of the bought-in materials and components used to make it. 1.1.21 Wants Goods and services people would like to have but do not require for basic survival. IB DP BUSINESS MANAGEMENT Unit 1.2 | Types of business entities Unit 1 Vocabulary Reference Page 2 1.2.1 Companies (corporations) Incorporated businesses owned by shareholders, who normally have limited liability. Companies may be privately or publicly held. 1.2.2 Cooperatives Member-owned and democratically controlled enterprises that operate primarily to benefit their member-owners, such as employees, producers, or customers. 1.2.3 Deed of partnership A legally binding agreement that states the partners' rights and responsibilities, the purpose of the business, and how profits and losses will be shared. 1.2.4 For-profit social enterprise A revenue-generating business that uses commercial methods to pursue social or environmental objectives while also allowing profit to be earned. 1.2.5 Incorporation (incorporated) The legal process that makes a company a separate legal entity from its owners, normally giving shareholders limited liability. 1.2.6 Initial public offering (IPO) The first sale of a company's shares to the general public on a stock exchange, changing it into a publicly held company. 1.2.7 Limited liability A legal protection that limits an owner's potential loss to the amount invested in the business. 1.2.8 Limited partnership A partnership with at least one general partner who has unlimited liability and one or more limited partners who invest but do not manage the business. 1.2.9 Microfinance providers Organizations that offer small loans and other financial services to people or businesses with limited access to conventional banking. 1.2.10 Non-governmental organizations (NGOs) Private-sector, non-profit organizations that work for social, humanitarian, or environmental purposes rather than for shareholders. 1.2.11 Non-profit organizations (NPOs) Organizations that operate for collective or social benefit and reinvest any financial surplus rather than distributing it to owners or shareholders. 1.2.12 Non-profit social enterprises Social enterprises that trade to achieve social objectives and reinvest any surplus instead of distributing profit to owners or shareholders. 1.2.13 Partnership A business owned by two or more people who share responsibility, decision-making, profits, and - depending on the legal form - liability. 1.2.14 Private sector The part of the economy made up of organizations owned by private individuals or groups rather than by government. 1.2.15 Private sector companies For-profit companies owned by private individuals or groups and operating in the private sector. 1.2.16 Privately held company A company owned by shareholders with limited liability whose shares cannot be offered for sale to the general public on a stock exchange. 1.2.17 Public sector The part of the economy owned or controlled by government and used to provide goods and services for society. 1.2.18 Public sector companies Commercial organizations wholly or partly owned or controlled by government authorities. 1.2.19 Publicly held company A company whose shares can be bought and sold by the general public on a stock exchange. 1.2.20 Shareholders (stockholders) Individuals or organizations that own shares in a company and may receive dividends, capital gains, and voting rights. 1.2.21 Sleeping partner A partner who invests in the business and may share its profits but does not take part in its day-to-day management; also called a silent partner. 1.2.22 Social enterprises Revenue-generating organizations with social or environmental objectives at the core of their operations. 1.2.23 Sole trader (sole proprietor) A business owned and controlled by one person, who usually has unlimited liability for its debts. 1.2.24 Stock exchange A regulated marketplace where shares and other securities are bought and sold. 1.2.25 Surplus The excess of an NPO's or non-profit social enterprise's income over its costs; it is reinvested in the organization rather than distributed as profit. 1.2.26 Unlimited liability A legal position in which business owners are personally responsible for business debts, potentially putting their personal assets at risk. IB DP BUSINESS MANAGEMENT Unit 1.3 | Business objectives Unit 1 Vocabulary Reference Page 3 1.3.1 Corporate social responsibility (CSR) A business's responsibility for the social and environmental effects of its decisions and actions, beyond simply meeting legal requirements. 1.3.2 Ethical code of practice A written statement of the principles and standards of behaviour expected within an organization. 1.3.3 Ethical objectives Business goals based on moral principles, such as fair treatment, responsible sourcing, or reduced environmental harm. 1.3.4 Ethics Moral principles that guide judgments about acceptable and unacceptable business behaviour. 1.3.5 Growth An increase in the size or scale of a business, measured through indicators such as sales revenue, market share, output, or number of employees. 1.3.6 Mission statement A concise statement explaining an organization's present purpose, what it does, and whom it serves. 1.3.7 Objectives (business objectives) Specific targets an organization sets in order to achieve its broader aims. 1.3.8 Profit The positive difference between a business's total sales revenue and its total costs over a stated period. 1.3.9 Shareholder value The financial return created for company owners through dividends and increases in the market value of their shares. 1.3.10 SMART objectives Objectives that are specific, measurable, agreed or achievable, realistic or relevant, and time-bound. 1.3.11 Strategic objectives Long-term goals that guide the overall direction of a business, such as growth, profit maximization, or increased market share. 1.3.12 Strategies Long-term plans and approaches used to achieve an organization's objectives. 1.3.13 Tactic A short-term action or method used to put a business strategy into practice. 1.3.14 Tactical objectives Short-term, specific targets that support strategic objectives and guide day-to-day operations. 1.3.15 Vision statement An aspirational statement describing what an organization ultimately hopes to become or achieve in the future. IB DP BUSINESS MANAGEMENT Unit 1.4 | Stakeholders Unit 1 Vocabulary Reference Page 4 1.4.1 Advocacy group An organized group that seeks to influence business decisions, government policy, or public opinion in support of a social, ethical, or environmental cause. 1.4.2 Arbitration A conflict-resolution process in which the parties agree to accept the decision of an independent arbitrator. 1.4.3 Board of directors (BOD) A group elected by shareholders to oversee the company, set broad strategy, appoint and monitor senior executives, and protect shareholders' interests. 1.4.4 Chief executive officer (CEO) The most senior executive, responsible for the organization's overall performance, strategic direction, and major decisions. 1.4.5 Compromise A way of resolving conflict in which each party makes concessions in order to reach an acceptable agreement. 1.4.6 Conciliation A conflict-resolution process in which an independent third party helps the parties understand each other's interests and reach their own agreement. 1.4.7 Conflict A situation in which stakeholder groups have incompatible interests, objectives, priorities, or expectations. 1.4.8 Customer satisfaction The degree to which a product or service meets or exceeds customer needs and expectations. 1.4.9 Customers Individuals or organizations that purchase a firm's goods or services and typically seek value, quality, safety, and reliable service. 1.4.10 Decision-making power The authority or ability of a stakeholder to influence or make choices about an organization's activities. 1.4.11 Directors People legally responsible for directing a company and making decisions on behalf of its shareholders. 1.4.12 Dividend A payment made from a company's distributable profits to shareholders; the amount and timing are decided by the company and are not guaranteed. 1.4.13 Employees People hired by a business to provide labour; they commonly seek fair pay, job security, safe conditions, and career development. 1.4.14 External stakeholders Individuals or groups outside the organization who affect, or are affected by, its decisions and performance. 1.4.15 Financiers Banks, investors, or other institutions that provide finance and expect repayment and/or a financial return. 1.4.16 Functional roles Responsibilities carried out by business departments, such as marketing, human resources, finance and accounts, and operations. 1.4.17 Industrial democracy A system of employee participation in organizational decision-making, intended to give workers greater influence and help reduce workplace conflict. 1.4.18 Internal stakeholders Individuals or groups within the organization, such as employees, managers, directors, and shareholders. 1.4.19 Job security The extent to which an employee can expect to keep their job for the foreseeable future. IB DP BUSINESS MANAGEMENT Unit 1.4 | Stakeholders (continued) Unit 1 Vocabulary Reference Page 5 1.4.20 Junior management First-line or supervisory managers who oversee frontline employees and day-to-day operations. 1.4.21 Labour union (trade union) An organization that represents employees and protects their interests, especially in relation to pay, working conditions, and employment rights. 1.4.22 Local community People and organizations in the surrounding area who may be affected by a business's jobs, spending, decisions, and environmental impact. 1.4.23 Managers Employees responsible for planning, organizing, leading, and controlling resources to achieve organizational objectives. 1.4.24 Middle management Managers who lead departments or divisions and implement strategies set by senior management or the board. 1.4.25 Mutual benefits Outcomes that benefit two or more stakeholder groups at the same time, helping to reduce potential conflict. 1.4.26 Non-executive director A board member who is not involved in daily management and provides independent oversight, advice, and challenge. 1.4.27 Pressure group(s) Organizations of people with a shared concern that seek to influence business behaviour or government policy. 1.4.28 Profit-related pay A financial incentive that links part of an employee's pay to the organization's profit. 1.4.29 Public relations (PR) Planned communication used to build and maintain a positive reputation and constructive relationships with the public and media. 1.4.30 Senior management Top-level managers who set long-term objectives, make major decisions, and guide corporate strategy. 1.4.31 Share ownership schemes Arrangements that allow employees to acquire company shares, often at a discount, aligning employee rewards with company performance. 1.4.32 Shareholders (stockholders) The owners of a company, who invest capital and may seek dividends, capital growth, and voting rights. 1.4.33 Stakeholder mapping An analytical tool used to classify stakeholders, commonly according to their level of power and interest. 1.4.34 Stakeholders Individuals or groups that affect, or are affected by, a business's activities, decisions, and performance. 1.4.35 Suppliers Businesses that provide inputs to other organizations and generally seek regular orders, fair terms, and prompt payment. 1.4.36 Voting rights Shareholders' ability to vote on company matters, usually in proportion to the number and class of shares they own. 1.4.37 Worker participation (industrial democracy) Employee involvement in workplace decision-making, giving workers some influence over how the organization operates.