IB Business and Management
Vocabulary 2023 Update
Primary Sector - Answer-Businesses involved in the extraction of natural resources,
such as
... [Show More] farming, mining, fishing, etc.
Secondary Sector - Answer-Business activity is concerned with the construction and
manufacturing of physical products.
Tertiary Sector - Answer-Business activity is concerned with the provision of services to
customers
Private Sector - Answer-Part of the economy under the control of private individuals and
businesses, rather than the government. (sole traders, partnerships, corporations)
Public Sector - Answer-Part of the economy under the control of the government
Incorporation - Answer-There is a legal difference between the owners of a company
and the business itself. Ensures that the owners are safeguarded against any losses
made by the companies.
Limited Liability - Answer-Restriction on the amount of money that can be lost from the
owners of a business if it goes into bankrupcy
Unlimited Liability - Answer-No limit to how much debt a sole trader is legally
responsible to pay if failure
Non - governmental organization (NGO) - Answer-Any private sector organization that
does not primarily aim to make profit. Instead, they operate for the benefit of others in
society
Private Limited company - Answer-Business organization owned by shareholders with
limited lability but whose shares cannot be bought or sold to the general public (stock
exchange)
Public Limited company - Answer-Incorporated business organization that allows the
general public to buy and sell shares in the company via stock exchange
Partnership - Answer-Form of private sector business owned by 1 - 20 people. They
share the responsibilities and burdens of running and owning the business.
Sole trader - Answer-Self - employed person. He or she runs the business on their own
and has sole responsibility for its success or failure.
Unincorporated - Answer-The owner is legally the same as the business (he or she is
treated as a single entity) Owner is personally responsible for all debts
Vision statement - Answer-Outlines a business's aspirations (where it wants to be) in
the distant future
Mission statement - Answer-A simple declaration that broadly states the underlying
purpose of an organization's existence
Aims - Answer-General long - term goals of an organization.
Objectives - Answer-Short term and more specific goals of an organization based on its
aims.
Tactical Objectives - Answer-Short - term objectives that affect a segment of the
organization. Specific goals that guide the daily functioning of certain operations that are
in line with the primary objectives of the business
Strategic Objectives - Answer-Long term aims of a business organization. For example:
profit maximization, growth, image and reputation, and market standing.
SMART Objectives - Answer-Specific, measurable, agreed, realistic and times
Corporate Social Responsibility - Answer-Businesses that act morally towards their
stakeholders such as their employees and the local community.
Social Audit - Answer-Independent assessment of how a firm's actions affect society
Stakeholder - Answer-Any person or organization that has a direct interest in and is
affected by the performance of a business
Internal Stakeholders - Answer-Employees, shareholders, managers and directors of
the organization
External Stakeholders - Answer-Suppliers, customers, special interest groups,
competitors and the government
Stakeholder mapping - Answer-Allows managers to assess how to deal with conflicting
stakeholder objectives
PEST Analysis - Answer-A framework used to analyse the opportunities and threats of
the political, economical, social and technological environments on business activity
SWOT Analysis - Answer-Analytical tool used to assess the internal strengths and
weaknesses and the external opportunities and threats of an organization or a decision
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