Unit 1: Business and it's environment

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ENTERPRISE
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Consumer goods
physical/tangible goods sold to the general public- they include durable consumer goods such as cars and non durable consumer goods such as food
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Consumer services
non tangible products sold to the general public- eg hotel accommodations
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Capital goods
physical goods used by industry to aid in the production of other goods/services- eg machines
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Creating value
Increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for
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Added value
the difference between the cost of purchasing bought-in materials and the price of the finished goods are sold for
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Opportunity cost
the benefit of the next most desired option which is given up
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Entrepreneur
an individual who takes the financial risk of starting and managing a new venture
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Social enterprise
a business with mainly social objectives that reinvests most of its profits into benefitiing society rather than maximising returns to owners
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Tripple bottom line
The three objectives of social enterprises: economic, social and environmental
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STRUCTURE
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Primary sector business activity
Firms engaged in farming, fishing, forestry and mining. Extraction of natural resources so that they can be used and processed by other firms.
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Secondary sector business activity
firms that manufacture and process products from natural resources- eg computers, baking or clothes making
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Tertiary sector business activity
firms that provide services to consumers and other businesses such as retailing, insurance or banking
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Public sector
comprises organisations accountable to and controlled by central or local government
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Private sector
comprises businesses owned and controlled by individuals or a group of them
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Mixed economy
economic resources owned and controlled by both private and public sector
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Free-market economy
economic resources are owned largely by the private sector with very little state internvention
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Command economy
economic resources are owned, planned and controlled by the state
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Sole trader
a business in which one person provides the permanent finance and in return has full control of the business and is able to keep all of the profits
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Partnership
a business formed by two or more people to carry on a business together, with shared capital investment and shared responsibilities
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Limited liability
the only potential loss a shareholer has if the company fails is the amount invested in the company, not the total wealth of the shareholder
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Private limited company
Small-medium sized business that is owned by shareholders who are often family, this company can not sell shares to the general public
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Share
Certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain rights
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Shareholders
a person or institution owning shares in a limited company
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Public limited company
Limited company often large with the legal right to sell shares to the general public- share prices quoted on the national stock exchange
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Memorandum of Association
Document which states the name of the company, the address of the head office, the maximum share capital for which the company seeks authorisation and the aims of the business
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Articles of Association
document which covers the internal workinngs and control of the business- eg: the names of the directors and procedures followed at meetings
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Franchise
a business that uses the name, logo and trading systems of an existing successful business
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Joint Venture
two or more businesses agree to work together on a particular project and create a separate business division to do so
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Holding company
business organisation that owns and controls a number of a separate businesses but doesn't unite them into one unified company
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Public corporation
A business enterprise owned and controlled by the state- aka nationalised industry
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SIZE
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Revenue
total value of sales made by a business in a given time period
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Capital employed
total value of all long-term finance invested in the business
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Market capitalisation
total value of a company's issued shares formula= current share price X total number of issued shares
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Market Share
sales of the business as a proportion of the total market sales Formula=( total sales of business / total sales of the industry) X100
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Internal growth
expasion of the business by means of opening new branches, shops or factories AKA organic growth
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OBJECTIVES
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Mission statement
statement of the business's core aims, phrased in a way to motivate employees and to stimulate interest by outside groups
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Management by objectives
method of coordinating and motivating all staff in an organisation by dividing its overall aims into specific targets for each department, manager and employee
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Ethical code (code of conduct)
a document detailing a company's rules and guidelines on staff behaviour that must be followed by all employees
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STAKEHOLDERS
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Stakeholders
People or groups who can be affected and therefore interested in the activity of an organisation
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Stakeholder concept
the view that businesses and their managers have responsibilities to a wide range of groups not just shareholders
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Corporate Social Responsibility CSR
Concept applied to 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 beyond the legal obligations they have
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Other cards in this set

Card 2

Front

physical/tangible goods sold to the general public- they include durable consumer goods such as cars and non durable consumer goods such as food

Back

Consumer goods

Card 3

Front

non tangible products sold to the general public- eg hotel accommodations

Back

Preview of the back of card 3

Card 4

Front

physical goods used by industry to aid in the production of other goods/services- eg machines

Back

Preview of the back of card 4

Card 5

Front

Increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for

Back

Preview of the back of card 5
View more cards

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