BUSINESS MANAGEMENT CHAPTER 1 QUESTIONS AND ASWERS A+
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Business Plan
The document that sets out the business idea, its goals and objectives, and other
details of how the business will operate (such as its marketing, operations, and finance).
It is often a crucial part of an attempt to raise external sources of finance.
Businesses
Organizations involved in the production of goods and/or the provision of services.
Consumers
The people or organizations who actually use a product.
Customers
The people or organizations that buy the product.
Entrepreneurs
Owners or operators of an organization who manage, organize, and plan the other three
factors of production. They are risk takers who exploit business opportunities in return
for profits.
Intrapreneurship
The act of behaving as an entrepreneur but as an employee within a large business
organization. They work in an entrepreneurial capacity, with authority to create
innovative products or new processes for the organization.
Needs
The basic necessities that a person must have to survive, e.g. food, water, warmth,
shelter, and clothing.
Primary Sector
Businesses involved in the cultivation or extraction of natural resources, e.g. farming,
mining, quarrying, fishing, oil exploration, and forestry.
Products
Both goods and services. Goods are physical __________, e.g. cars, books, and food.
Services are intangible __________, e.g. haircuts, bus rides, education, and health
care.
Quaternary Sector
A subcategory of the tertiary sector, where businesses are involved in intellectual,
knowledge-based activities that generate and share information, e.g. information
communities technology and research organizations.
Secondary Sector
The section of the economy where business activity is concerned with the construction
and manufacturing of products.
Sectoral Change
A shift in the relative share of gross domestic product (or national output) and
employment that is attributed to each business sector.
Tertiary Sector
The section of the economy where business activity is concerned with the provision of
services to customers.
Wants
, People's desires, i.e. the things they would like to have, e.g. a larger home, a new
smartphone, or to go on an overseas holiday.
Charities
Non-profit social enterprises that provide voluntary support for good causes (from
society's point of view), such as protection of children, animals, and the natural
environment.
Cooperatives
For-profit social enterprises set up, owned, and run by their members, who might be
employees and/or customers.
Company (or Corporation)
A business that is owned by shareholders. It has been issued a certificate of
incorporation, giving it a separate legal identity from its owners.
Deed of Partnership
The legal contract signed by the owners of a partnership. The formal deeds specify the
name and responsibilities of each partner and their share of any profits or losses.
Incorporation
There is a legal difference between the owners of a company and the business itself.
This ensures that the owners are protected by limited liability.
Initial Public Offering (IPO)
It occurs when a business sells all or part of its business to shareholders on a stock
exchange for the first time.
Limited Liability
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.
Microfinance
A type of financial service aimed at entrepreneurs of small businesses, especially
females and those on low incomes.
Non-Governmental Organizations (NGO)
Private sector not-for-profit social enterprises that operate for the benefit of others rather
than primarily aiming to make a profit, e.g. Oxfam and Friends of the Earth.
Partnerships
A type of private sector business owned by 2-20 people (known as partners). They
share the responsibilities and burdens of running and owning the business.
Private Limited Company
A business owned by shareholders with limited liability but whose shares cannot be
bought by or sold the general public.
Aims
The long-term goals of a business, often expressed in the firm's mission statement.
They are a general statement of a firm's purpose or intentions and tend to be qualitative
in nature.
Ansoff Matrix
An analytical tool to devise various product and market growth strategies, depending on
whether businesses want to market new or existing products in either new or existing
markets.
Corporate Social Responsibility (CSR)
GRADED. Buy Quality Materials!
Business Plan
The document that sets out the business idea, its goals and objectives, and other
details of how the business will operate (such as its marketing, operations, and finance).
It is often a crucial part of an attempt to raise external sources of finance.
Businesses
Organizations involved in the production of goods and/or the provision of services.
Consumers
The people or organizations who actually use a product.
Customers
The people or organizations that buy the product.
Entrepreneurs
Owners or operators of an organization who manage, organize, and plan the other three
factors of production. They are risk takers who exploit business opportunities in return
for profits.
Intrapreneurship
The act of behaving as an entrepreneur but as an employee within a large business
organization. They work in an entrepreneurial capacity, with authority to create
innovative products or new processes for the organization.
Needs
The basic necessities that a person must have to survive, e.g. food, water, warmth,
shelter, and clothing.
Primary Sector
Businesses involved in the cultivation or extraction of natural resources, e.g. farming,
mining, quarrying, fishing, oil exploration, and forestry.
Products
Both goods and services. Goods are physical __________, e.g. cars, books, and food.
Services are intangible __________, e.g. haircuts, bus rides, education, and health
care.
Quaternary Sector
A subcategory of the tertiary sector, where businesses are involved in intellectual,
knowledge-based activities that generate and share information, e.g. information
communities technology and research organizations.
Secondary Sector
The section of the economy where business activity is concerned with the construction
and manufacturing of products.
Sectoral Change
A shift in the relative share of gross domestic product (or national output) and
employment that is attributed to each business sector.
Tertiary Sector
The section of the economy where business activity is concerned with the provision of
services to customers.
Wants
, People's desires, i.e. the things they would like to have, e.g. a larger home, a new
smartphone, or to go on an overseas holiday.
Charities
Non-profit social enterprises that provide voluntary support for good causes (from
society's point of view), such as protection of children, animals, and the natural
environment.
Cooperatives
For-profit social enterprises set up, owned, and run by their members, who might be
employees and/or customers.
Company (or Corporation)
A business that is owned by shareholders. It has been issued a certificate of
incorporation, giving it a separate legal identity from its owners.
Deed of Partnership
The legal contract signed by the owners of a partnership. The formal deeds specify the
name and responsibilities of each partner and their share of any profits or losses.
Incorporation
There is a legal difference between the owners of a company and the business itself.
This ensures that the owners are protected by limited liability.
Initial Public Offering (IPO)
It occurs when a business sells all or part of its business to shareholders on a stock
exchange for the first time.
Limited Liability
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.
Microfinance
A type of financial service aimed at entrepreneurs of small businesses, especially
females and those on low incomes.
Non-Governmental Organizations (NGO)
Private sector not-for-profit social enterprises that operate for the benefit of others rather
than primarily aiming to make a profit, e.g. Oxfam and Friends of the Earth.
Partnerships
A type of private sector business owned by 2-20 people (known as partners). They
share the responsibilities and burdens of running and owning the business.
Private Limited Company
A business owned by shareholders with limited liability but whose shares cannot be
bought by or sold the general public.
Aims
The long-term goals of a business, often expressed in the firm's mission statement.
They are a general statement of a firm's purpose or intentions and tend to be qualitative
in nature.
Ansoff Matrix
An analytical tool to devise various product and market growth strategies, depending on
whether businesses want to market new or existing products in either new or existing
markets.
Corporate Social Responsibility (CSR)
