10/27/2015 1 IB Business Management BUSINESS ORGANIZATION AND ENVIRONMENT: 1.

1 Introduction to Business Management - SEK EL CASTILLO fl

1 IB Business Management BUSINESS

ORGANIZATION AND ENVIRONMENT:
1.1 Introduction to Business
Management - SEK EL CASTILLO
29 terms by Andres_Arenas_SEK

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

Business Functions
Marketing, Finance, Human Resource
Management and Operations
Management

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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)
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
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
Consumer Services
Non-tangible products that are sold to
the general public and include hotel
accommodation, insurance services
and train journeys
Division of Labour
The specialization 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
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

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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
Factors of Production
Resources needed by businesses to
produce goods or services
The Factors of Production
Land, Labour, Capital and Enterprise

Finance
The management of money and credit
and banking and investments

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
Industrialization
The process experienced by a country
that moves away from primary
production towards manufacturing as
its principal sector for national output
and employment
Intrapreneur
An individual who behaves like an
entrepreneur while working within a
large organization which enables
them to create new products,
services, systems, etc.

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Intrapreneurship
The act of behaving like an
entrepreneur while working within a
large organization where freedom
and financial support is given to
create new products, services,
systems, etc.
Labour
The physical and mental human effort
used in the production process

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
Marketing
The commercial processes involved in
creating and designing, promoting
and selling and distributing a product
or service
Operations Management
The management of processes used
to design, supply, produce, and
deliver goods and services to
customers
Opportunity Cost
Cost measured in terms of the next
best alternative forgone when a
choice is being made
Primary Sector Business Activity
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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Private Sector
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
Public Sector
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
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.
Secondary Sector Business Activity
Firms that manufacture and process
products from natural resources,
including computers, brewing, baking,
clothing and construction
Structural Change
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
Tertiary Sector Business Activity
Firms that provide services or
products to consumers and other
businesses, such as retailing,
transport, insurance, banking, hotels,
tourism and telecommunications

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Value Added
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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