Business Key Terms

• What is centrilisation?

  Centrilisation is an organisational structure in which a single leader or small group of people makes all decisions
• What is a charity?

  A non-profit or not-for-profit organisation that aims to provide a contribution to the social well-being of individuals or groups of people
• What is a co-operative business?

  A business owned and operated by its members, who share the profits and have a say in decision-making.
• What is decentrilisation?

  Distribution of power or authority away from a central authority or governing body.
• What is delegation?

  Delegation is when managers give authority to make decisions and perform tasks to someone lower in the organisational hierarchy
• What is enterprise?

  A person with enterprise has determination, ideas and vision and is willing to take risks in order to make the business happen
• What is limited liability?

  Limited liability is a legal concept that protects the personal assets of shareholders in a company from being used to pay off the company's debts or liabilities.
• What is a non-profit organisation?

  An organization that operates for a social or public benefit rather than for profit.
• What is opportunity cost?

  The value of the next best alternative that is forgone when making a decision.
• What is organisational design?

  The framework of a business indicating the lines of authority and communication, and responsibilities for decision-making
• What is a primary sector business?

  A primary sector business is one that extracts or harvests raw materials from the natural environment, such as agriculture, mining, or fishing.
• What is a private limited company?

  An incorporated business in the private sector where share ownership is limited to specified people or businesses.
• What is a private sector business?

  A business owned and operated by individuals or non-governmental organizations for profit.
• What is a public limited company?

  A private sector incorporated business with the right to sell shares to the general public
• What is a public sector business?

  A business owned and operated by the government.
• What is a secondary sector business?

  A secondary sector business is involved in the manufacturing or construction of goods.
• What is a small and medium sized enterprise (SME)?

  A small and medium-sized enterprise (SME) is a business that has a limited number of employees and generates a moderate amount of revenue.
• What is social enterprise?

  A business that aims to solve social or environmental problems while also generating profit.
• What is span of control?

  The number of subordinates a manager directly supervises.
• What is a tactic?

  A short-term course of action or the day-to-day management of a business or for trying to meet part of an overall strategy
• What is a tertiary sector business?

  A service-based business.
• What is an unincorporated business?

  A private sector business that has not been registered as a company. Sole traders and partnerships are unincorporated.
• What is unlimited liability?

  Unlimited liability is a legal concept where the owner of a business is personally responsible for all debts and liabilities of the business.