IB Business and Management
Vocabulary Exam Questions and
Answers (Latest 2026).
Primary Sector - CORRECT ANSWERS Businesses involved in the extraction of natural
resources, such as farming, mining, fishing, etc.
Secondary Sector - CORRECT ANSWERS Business activity is concerned with the construction
and manufacturing of physical products.
Tertiary Sector - CORRECT ANSWERS Business activity is concerned with the provision of
services to customers
Private Sector - CORRECT ANSWERS Part of the economy under the control of private
individuals and businesses, rather than the government. (sole traders, partnerships, corporations)
Public Sector - CORRECT ANSWERS Part of the economy under the control of the government
Incorporation - CORRECT ANSWERS There is a legal difference between the owners of a
company and the business itself. Ensures that the owners are safeguarded against any losses made by
the companies.
Limited Liability - CORRECT ANSWERS Restriction on the amount of money that can be lost
from the owners of a business if it goes into bankrupcy
Unlimited Liability - CORRECT ANSWERS No limit to how much debt a sole trader is legally
responsible to pay if failure
,Non - governmental organization (NGO) - CORRECT ANSWERS Any private sector organization
that does not primarily aim to make profit. Instead, they operate for the benefit of others in society
Private Limited company - CORRECT ANSWERS Business organization owned by shareholders
with limited lability but whose shares cannot be bought or sold to the general public (stock exchange)
Public Limited company - CORRECT ANSWERS Incorporated business organization that allows
the general public to buy and sell shares in the company via stock exchange
Partnership - CORRECT ANSWERS Form of private sector business owned by 1 - 20 people.
They share the responsibilities and burdens of running and owning the business.
Sole trader - CORRECT ANSWERS Self - employed person. He or she runs the business on their
own and has sole responsibility for its success or failure.
Unincorporated - CORRECT ANSWERS The owner is legally the same as the business (he or
she is treated as a single entity) Owner is personally responsible for all debts
Vision statement - CORRECT ANSWERS Outlines a business's aspirations (where it wants to
be) in the distant future
Mission statement - CORRECT ANSWERS A simple declaration that broadly states the
underlying purpose of an organization's existence
Aims - CORRECT ANSWERS General long - term goals of an organization.
Objectives - CORRECT ANSWERS Short term and more specific goals of an organization based
on its aims.
, Tactical Objectives - CORRECT ANSWERS Short - term objectives that affect a segment of the
organization. Specific goals that guide the daily functioning of certain operations that are in line with the
primary objectives of the business
Strategic Objectives - CORRECT ANSWERS Long term aims of a business organization. For
example: profit maximization, growth, image and reputation, and market standing.
SMART Objectives - CORRECT ANSWERS Specific, measurable, agreed, realistic and times
Corporate Social Responsibility - CORRECT ANSWERS Businesses that act morally towards
their stakeholders such as their employees and the local community.
Social Audit - CORRECT ANSWERS Independent assessment of how a firm's actions affect
society
Stakeholder - CORRECT ANSWERS Any person or organization that has a direct interest in and
is affected by the performance of a business
Internal Stakeholders - CORRECT ANSWERS Employees, shareholders, managers and directors
of the organization
External Stakeholders - CORRECT ANSWERS Suppliers, customers, special interest groups,
competitors and the government
Stakeholder mapping - CORRECT ANSWERS Allows managers to assess how to deal with
conflicting stakeholder objectives
PEST Analysis - CORRECT ANSWERS A framework used to analyse the opportunities and
threats of the political, economical, social and technological environments on business activity
Vocabulary Exam Questions and
Answers (Latest 2026).
Primary Sector - CORRECT ANSWERS Businesses involved in the extraction of natural
resources, such as farming, mining, fishing, etc.
Secondary Sector - CORRECT ANSWERS Business activity is concerned with the construction
and manufacturing of physical products.
Tertiary Sector - CORRECT ANSWERS Business activity is concerned with the provision of
services to customers
Private Sector - CORRECT ANSWERS Part of the economy under the control of private
individuals and businesses, rather than the government. (sole traders, partnerships, corporations)
Public Sector - CORRECT ANSWERS Part of the economy under the control of the government
Incorporation - CORRECT ANSWERS There is a legal difference between the owners of a
company and the business itself. Ensures that the owners are safeguarded against any losses made by
the companies.
Limited Liability - CORRECT ANSWERS Restriction on the amount of money that can be lost
from the owners of a business if it goes into bankrupcy
Unlimited Liability - CORRECT ANSWERS No limit to how much debt a sole trader is legally
responsible to pay if failure
,Non - governmental organization (NGO) - CORRECT ANSWERS Any private sector organization
that does not primarily aim to make profit. Instead, they operate for the benefit of others in society
Private Limited company - CORRECT ANSWERS Business organization owned by shareholders
with limited lability but whose shares cannot be bought or sold to the general public (stock exchange)
Public Limited company - CORRECT ANSWERS Incorporated business organization that allows
the general public to buy and sell shares in the company via stock exchange
Partnership - CORRECT ANSWERS Form of private sector business owned by 1 - 20 people.
They share the responsibilities and burdens of running and owning the business.
Sole trader - CORRECT ANSWERS Self - employed person. He or she runs the business on their
own and has sole responsibility for its success or failure.
Unincorporated - CORRECT ANSWERS The owner is legally the same as the business (he or
she is treated as a single entity) Owner is personally responsible for all debts
Vision statement - CORRECT ANSWERS Outlines a business's aspirations (where it wants to
be) in the distant future
Mission statement - CORRECT ANSWERS A simple declaration that broadly states the
underlying purpose of an organization's existence
Aims - CORRECT ANSWERS General long - term goals of an organization.
Objectives - CORRECT ANSWERS Short term and more specific goals of an organization based
on its aims.
, Tactical Objectives - CORRECT ANSWERS Short - term objectives that affect a segment of the
organization. Specific goals that guide the daily functioning of certain operations that are in line with the
primary objectives of the business
Strategic Objectives - CORRECT ANSWERS Long term aims of a business organization. For
example: profit maximization, growth, image and reputation, and market standing.
SMART Objectives - CORRECT ANSWERS Specific, measurable, agreed, realistic and times
Corporate Social Responsibility - CORRECT ANSWERS Businesses that act morally towards
their stakeholders such as their employees and the local community.
Social Audit - CORRECT ANSWERS Independent assessment of how a firm's actions affect
society
Stakeholder - CORRECT ANSWERS Any person or organization that has a direct interest in and
is affected by the performance of a business
Internal Stakeholders - CORRECT ANSWERS Employees, shareholders, managers and directors
of the organization
External Stakeholders - CORRECT ANSWERS Suppliers, customers, special interest groups,
competitors and the government
Stakeholder mapping - CORRECT ANSWERS Allows managers to assess how to deal with
conflicting stakeholder objectives
PEST Analysis - CORRECT ANSWERS A framework used to analyse the opportunities and
threats of the political, economical, social and technological environments on business activity
