IB Business Management HL key terms

A business owned by shareholders whose shares can be sold to the general public on a stock exchange; it must publish accounts and has separate legal identity.

A business whose shares are sold only with the agreement of existing owners and are not traded publicly; ownership is restricted but the firm still enjoys limited liability.

A legal protection meaning owners can lose only the money they invested, not their personal assets, if the business fails to pay its debts.

Money raised by a company through issuing shares to investors, who in return become part-owners and may receive dividends.

Any individual or group affected by, or with an interest in, the decisions and activities of a business, such as employees, customers, suppliers, or local residents.

A person or institution that owns shares in a company, giving them a claim on profits and usually voting rights at general meetings.

A business's voluntary commitment to act ethically toward society and the environment beyond what the law requires, often reported alongside financial results.

A planning tool that classifies growth strategies by whether products and markets are existing or new, producing four options: market penetration, product development, market development, and diversification.

A growth strategy in which a business enters a new market with a new product, spreading risk but usually requiring the most new capability and investment.

A growth strategy of selling existing products to new customers or in new geographical areas, for example by exporting or targeting a new segment.

The shared values, beliefs, and customary ways of behaving that shape how people in a business treat each other and make decisions.

The number of subordinates who report directly to one manager; a wide span means fewer management layers and less close supervision.

An organisation with several layers of management and a narrow span of control, giving clear lines of authority but slower communication.

Removing one or more levels of management to flatten an organisation, cutting costs and speeding decisions but increasing each manager's span of control.

Passing authority for a specific task to a subordinate while the manager keeps overall accountability for the outcome.

The internal and external forces that drive an employee to work hard and persist toward organisational goals.

Payment or benefit given to employees for their work, such as salary, commission, bonus, or profit-related pay, used to attract and motivate staff.

The proportion of a workforce that leaves and is replaced over a period, usually expressed as a percentage of average staff numbers.

A formal review of an employee's performance against agreed targets, often used to identify training needs and support pay or promotion decisions.

Planned activity to develop an employee's skills and knowledge, either on the job or off the job, to improve performance and prepare for future roles.

A projection of the cash expected to come in and go out over future periods, showing the opening and closing cash balance for each period.

The money available for day-to-day operations, calculated as current assets minus current liabilities; a shortage can cause insolvency even when a business is profitable.

The ease with which an asset can be turned into cash without losing value, and more broadly a business's ability to meet short-term debts as they fall due.

A liquidity measure found by dividing current assets by current liabilities; a value near 2 is often considered comfortable, though norms vary by industry.

The output level at which total revenue equals total costs, so the business makes neither profit nor loss; calculated as fixed costs divided by contribution per unit.

The amount each unit sold leaves toward covering fixed costs, calculated as selling price minus variable cost per unit.

The gap between current output and break-even output, showing how far sales can fall before the business makes a loss.

A share of profits paid to shareholders, usually per share, decided by the directors and not a guaranteed return.

Dividing a market into groups of buyers with similar characteristics or needs so that marketing can be tailored to each group.

The specific group of customers a business aims to serve with a product and its marketing activity.

The set of controllable elements a business combines to influence demand, commonly summarised as product, price, place, and promotion.

The pattern of sales a product passes through over time: development, introduction, growth, maturity, and decline, each needing different marketing decisions.

An action taken during maturity or decline to lengthen a product's life, such as finding new uses, new markets, or relaunching with a changed design.

The systematic gathering and analysis of information about customers, competitors, and markets to support marketing decisions.

Selecting a smaller group from a population to represent it in research; the method chosen affects how far findings can be generalised.

Falls in average cost per unit as output rises, arising from factors such as bulk buying, specialisation, and spreading fixed costs.

The percentage of a firm's maximum possible output that is actually being produced, indicating spare capacity or strain on resources.

Inspecting finished output against standards and rejecting defective items, so problems are found after production rather than prevented.

Designing processes and involving workers so that quality is built in at every stage, aiming to prevent defects rather than detect them at the end.

A Japanese approach of continuous, incremental improvement involving all employees in small regular changes to processes and working methods.

Managing the quantity of raw materials, work in progress, and finished goods held, balancing holding costs against the risk of running out.

A stock system where materials arrive only as needed for production, cutting storage costs but leaving little buffer against supply disruption.