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