Introduction to Business
The four main sectors of business activity
What are the primary (raw materials), secondary (production), tertiary (service) and quaternary (knowledge service)?
When a business sells all or part of its business to shareholders on a stock exchange for the first time.
What is an initial public offering (IPO)?
They provide a business with stock or raw materials, component parts and finished goods. They can also provide commercial services, such as technical support.
What are suppliers?
The value of a country's currency in terms of other currencies
What is an exchange rate?
A method of external growth that involves one company buying a controlling interest in another company
What is an acquisition or takeover?
The four resources needed in the production process
What are land, labor, capital and entrepreneurship (factors of production)?
A restriction on the amount of money that owners can lose if their business goes bankrupt, i.e. shareholders cannot lose more than they invested in the company.
What is limited liabilty?
Owners of a limited liability company, stock in a company can be held by individuals and other organizations.
What are shareholders?
When the general price level in an economy continuously rises. It is measured by changes in the cost off living for the average household in a country.
What is inflation?
A business that provides a diversified range of products and operates in an array of different industries
What is a conglomerate?
The act of behaving as an entrepreneur but as an employee within a large business organization.
What is intrapreneurship?
A type of private sector business owned by 2-20 people. They share the responsibilities and burdens of running and owning a business.
What is a partnership?
The inability of an organization to meet all of its stakeholder objectives simultaneously, due to differences in the varying needs of stakeholders.
What is stakeholder conflict?
In a STEEPLE analysis the influence on a business related to people including their lifestyles and their values.
What are social factors?
The cost disadvantages of growth. Unit costs rise as a firm grows due to a lack of control, coordination and communication.
What are diseconomies of scale?
The business document that sets out business idea, goals and objectives an details of how the business will operate. It is often a crucial part of an attempt to raise external sources of finance.
What is a business plan?
An incorporated business that allows the public to buy and sell shares in the company via a stock exchange. All shareholders enjoy limited liability.
What is a public limited company?
Individuals and organizations not part of the business but have a direct interest in its activities and performance
What are external stakeholders?
In a STEEPLE analysis the influence government plays in business operations, e.g. restrictions on trade and new trade initiatives (like China Silk Road project)
What are political factors?
A growth strategy that occurs with the amalgamation of a firm operating at a lager stage on the production process, e.g. a book publisher opens book stores
What is forward vertical integration?
Owners of an organization who manage, organize and plan the other three factors of production. They take risks for profit.
What are entrepreneurs?
The part of the economy that is controlled by the government. Examples include state health, education services and army.
What is the public sector?
Members of the business organization, e.g. employees, directors and shareholders.
What are internal stakeholders?
In a STEEPLE analysis, government legislation that affects businesses such as employee protection (minimum wage) and environmental protection (giving factories limits on waste or gases emitted to cut down on pollution)
What are legal factors?
A form of external growth whereby two (or more) firms agree to form a new organization, thereby losing their original identities.
What is a merger?