IB Business Management: 1.1 Test

Deindustrialization

A general decline of secondary sector activity and an increase in tertiary sector

Quaternary Sector

A subset of the tertiary sector and involves service jobs concerned with research and development, management and administration, and processing and disseminating information.

Business Plan

A written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts

Intrapreneur

An individual who behaves like an entrepreneur while working within a large organization which enables them to create new products, services, systems, etc.

Primary Sector

Firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed by other firms

Secondary Sector

Firms that manufacture and process products from natural resources, including computers, brewing, baking, clothing and construction

Tertiary Sector

Firms that provide services or products to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications

Land

Natural resources that can be found on the planet. This includes renewable and non-renewable natural resources such as water, wood, fish and physical land itself

Consumer Services

Non-tangible products that are sold to the general public and include hotel accommodation, insurance services and train journeys

Businesses

Organizations that are involved in the production of goods and/or the provision of services

Entrepreneurs

People who manage, organise and plan the other three factors of production. They are risk takers who exploit business opportunities in return for profit

Capital Goods

Physical goods that are used by an industry to aid in the production of other goods and services, such as machines and commercial vehicles

Factors of Production

Resources needed by businesses to produce goods or services

Enterprise

Risk taking individuals who combine the other factors of production into a unit that is capable of producing goods and services. It provides a managing, decision-making and coordinating role

Business Activity

Uses the scarce resources of our planet to produce goods and services that allow us to enjoy a much higher standard of living

What are the 5 problems in start ups?

-Competition -Lack of record keeping -Lack of finance and working capital -Poor Management skills -Changes in business environment

What is the impact of enterprise on business activity?

-Creat Jobs - Economic growth -Firms' survival and growth -Innovation and Technological change -Increase in Gross Domestic Product (GDP)

What are the 4 steps of starting a business?

-Identifying a market opportunity -Sourcing capital -Location -Buildding a customer base

What are the roles of entrepreneurs?

-Innovative -Commitment and self-motivation -Multi-skilled -Leadership skills -Belief in oneself -Risk taker

Who uses business plans?

-Investors -Internal stakeholders -Employees -Suppliers

What is the importance of business plans?

-Obtain finance for start-up from investors -Planning process is important -Helps forecasts: can be used as target to aim for

The 4 Factors of Production

Land, Labour, Capital and Enterprise

Business Functions

Marketing, Finance, Human Resource Management, Operations Management

Marketing

The commercial processes involved in creating and designing, promoting and selling and distributing a product or service

Capital

The finance needed to set up a business and pay for its continued operations or expansion. Also includes the man-made goods used in the production process (capital goods)

Finance

The management of money and credit and banking and investments

Operations Management

The management of processes used to design, supply, produce, and deliver goods and services to customers

Labor

The physical and mental human effort used in the production process

Consumer Goods

The physical and tangible goods sold to the general public. They include cars and washing machines, which are referred to as durable consumer goods. Non-durable consumer goods include food, drinks and sweets that can only be used once

Industrialization

The process experienced by a country that moves away from primary production towards manufacturing as its principal sector for national output and employment

Human Resource Management

The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational objectives