Ib Business Management Business Organisation And Environment: – Flashcards
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Capital Goods
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Physical goods that are used by an industry to aid in the production of other goods and services, such as machines and commercial vehicles
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Factors of Production
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Resources needed by businesses to produce goods or services
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The Factors of Production
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Land, Labour, Capital and Enterprise
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Land
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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
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Labour
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The physical and mental human effort used in the production process
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Capital
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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)
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Enterprise
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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
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Business Functions
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Marketing, Finance, Human Resource Management and Operations Management
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Marketing
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The commercial processes involved in creating and designing, promoting and selling and distributing a product or service
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Finance
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The management of money and credit and banking and investments
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Human Resource Management
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The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational objectives
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Operations Management
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The management of processes used to design, supply, produce, and deliver goods and services to customers
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Primary Sector Business Activity
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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
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Secondary Sector Business Activity
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Firms that manufacture and process products from natural resources, including computers, brewing, baking, clothing and construction
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Tertiary Sector Business Activity
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Firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications
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Businesses
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Organisations that are involved in the production of goods and/or the provision of services
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Division of Labour
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The specialisation of workers in the provision of goods and/or services by breaking a job down into particular roles or components that are repeated by the same workers
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Entrepreneurs
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People who manage, organise and plan the other three factors of production. They are risk takers who exploit business opportunities in return for profit
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Industrialisation
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The process experienced by a country that moves away from primary production towards manufacturing as its principal sector for national output and employment
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Opportunity Cost
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Cost measured in terms of the next best alternative forgone when a choice is being made
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Private Sector
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The part of the economy under the control of private individuals and businesses, rather than the government. Examples may include sole traders, partnerships and companies
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Public Sector
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The part of the economy that is under control of the government. examples may include state health and education services, the emergency services and roading infrastructure
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Structural Change
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A shift in the relative share of national output and employment that is attributed to each business sector; i.e. primary, secondary and tertiary sectors
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Value Added
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Is the difference between a product's price and the total cost of the inputs that went into making it. It is the extra worth created in the production process
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Intrapreneur
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An individual who behaves like an entrepreneur while working within a large organisation which enables them to create new products, services, systems, etc.
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