IB Business Management BUSINESS ORGANISATION AND ENVIRONMENT: 1.1 Introduction to Business Management

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.
Intrapreneurship
The act of behaving like an entrepreneur while working within a large organisation where freedom and financial support is given to create new products, services, systems, etc.
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
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
The Factors of Production
Land, Labour, Capital and Enterprise
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
Labour
The physical and mental human effort used in the production process
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)
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 Functions
Marketing, Finance, Human Resource Management and Operations Management
Marketing
The commercial processes involved in creating and designing, promoting and selling and distributing a product or service
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
Operations Management
The management of processes used to design, supply, produce, and deliver goods and services to customers
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
Secondary Sector Business Activity
Firms that manufacture and process products from natural resources, including computers, brewing, baking, clothing and construction
Tertiary Sector Business Activity
Firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications
Businesses
Organisations that are involved in the production of goods and/or the provision of services
Division of Labour
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
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
Industrialisation
The process experienced by a country that moves away from primary production towards manufacturing as its principal sector for national output and employment
Opportunity Cost
Cost measured in terms of the next best alternative forgone when a choice is being made
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
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
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
Intrapreneur
An individual who behaves like an entrepreneur while working within a large organisation which enables them to create new products, services, systems, etc.