NSSCO Business Studies (6144) key terms

The process of combining inputs such as labour, capital, land and enterprise to produce goods or services that satisfy people's wants, usually in exchange for payment in a market.

The four resources used to make goods and provide services: land (natural resources), labour (human effort), capital (money and equipment) and enterprise (the willingness to take risks and organise the other three).

The difference between the selling price of a product and the cost of the bought-in materials and components used to make it. It pays wages, covers overheads and provides profit.

The value of the next best alternative given up when a choice is made. Because resources are scarce, every business decision to use resources one way means forgoing another use.

A business owned and controlled by one person, who keeps all profits but has unlimited liability for the debts of the business and usually raises finance from personal savings or loans.

A business owned by two or more people who share capital, profits and decision-making under a partnership agreement. In an ordinary partnership, partners generally have unlimited liability for business debts.

A company whose shares are sold privately, often to family and friends, and cannot be offered to the general public. It is a separate legal entity, so shareholders have limited liability.

A company whose shares may be offered to the general public and traded on a stock exchange, such as the Namibian Stock Exchange. It must publish accounts and is subject to stricter regulation.

A legal protection meaning owners or shareholders can lose only the money they invested in the business, not their personal assets, if the business cannot pay its debts.

A legal position in which the owner of a business is personally responsible for all business debts and may have to sell personal property to pay them.

A business owned and democratically controlled by its members, who share the benefits. In Namibia, agricultural marketing and savings co-operatives help members buy inputs, sell produce or access credit.

A business owned by government and run as a separate organisation to provide an essential service, often where private firms would not invest or where a natural monopoly exists.

The transfer of ownership of a private business or industry to the government, usually by purchase or legislation, so that the state controls the activity and its revenue.

The sale of government-owned assets or public corporations to private investors, intended to raise revenue, improve efficiency through competition and widen share ownership.

A measurable target that a business sets to guide decisions, such as a profit level, market share, growth rate or sales figure, usually derived from its overall aims or mission.

Any person or group with an interest in a business and affected by its activities, including owners, employees, customers, suppliers, lenders, the local community and government.

The proportion of total sales in a market that one business or product holds, usually expressed as a percentage of total market sales value or volume.

Expansion achieved by a business itself, for example by increasing sales, opening new branches or launching new products, rather than by merging with or buying another business.

Expansion achieved by joining with another business, through a merger of two willing firms or a takeover of one firm by another, giving faster access to new markets or capacity.

The purchase of a controlling interest in one company by another, often without the agreement of the target company's management, giving the buyer control of its assets and operations.

The systematic collection, recording and analysis of information about customers, competitors and markets to support marketing decisions. It may use primary data collected first-hand or secondary data already published.

Dividing a market into groups of buyers with similar characteristics or needs, such as by age, income or location, so that products and marketing can be aimed at each group.

The combination of four controllable elements used to market a product: product, price, place and promotion. A business adjusts the mix to suit its target market and objectives.

The level of output at which total revenue equals total costs, so the business makes neither profit nor loss. It can be calculated by dividing fixed costs by contribution per unit.

A cost that does not change with the level of output in the short term, such as rent, insurance or salaries of permanent staff. It must be paid even when production is zero.

A cost that changes directly with the quantity produced or sold, such as raw materials, packaging or piece-rate wages. Total variable cost rises as output rises.

A projection of the cash expected to flow into and out of a business over a period, showing opening balance, receipts, payments and closing balance to predict cash shortages.

The money available for the day-to-day running of a business, calculated as current assets minus current liabilities. Shortages can stop a profitable firm from paying its bills.

A provider or method of raising money for a business, such as retained profit, bank loan, overdraft, trade credit, share issue or leasing. Each has different cost, risk and repayment terms.

Money raised by a company through issuing shares to investors, who then own part of the business and may receive dividends. It is permanent capital that need not be repaid.

The process of identifying a vacancy, attracting suitable applicants and selecting the best person for the job, often through a job description, person specification, advertising and interviews.

The internal and external factors that encourage an employee to work hard and stay with a business, such as pay, recognition, job security and opportunities for promotion.

An organisation of employees formed to protect members' interests, for example by negotiating pay and conditions with employers through collective bargaining and representing members in disputes.

Steps taken by employees or a union to put pressure on an employer during a dispute, such as a strike, work-to-rule or go-slow, which can disrupt output and customer service.

Checking finished products or output against standards, often by inspection at the end of production, so that faulty items are detected and rejected before reaching customers.

Building quality into every stage of production by setting procedures and standards that prevent errors, rather than relying only on inspecting finished goods at the end.

A measure of output per unit of input, such as output per worker per hour. Rising productivity lowers average costs and can improve competitiveness if quality is maintained.

The fall in average cost per unit as a business grows larger, arising from bulk buying, specialisation, better machinery or spreading fixed costs over more output.

The idea that a business should act in ways that benefit society, not only shareholders, for example by reducing pollution, treating workers fairly and supporting local communities.

Moral principles that guide business behaviour, such as honesty in advertising, fair treatment of employees and refusal to bribe officials, even where the law does not require it.

A good or service bought from another country and brought into the home market. Imports may be limited by tariffs, quotas or exchange-rate movements.

A good or service produced in one country and sold to buyers in another. Namibia exports minerals, fish and beef, earning foreign currency needed to pay for imports.

A tax charged on imported goods, which raises their price in the home market, protects domestic producers from cheaper foreign competition and generates government revenue.