Glossary

BTEC Level 3 Business. Unit 1: Exploring Business

Annual reports - A detailed account of business activity over a year produced by limited companies to communicate with shareholders

Business ownership - The structure of a business in terms of who is responsible for investment, liability, and profits.

Business purpose - The reason why a business was created which drives strategy.

Business vision - A statement in a strategic plan that identifies an idealised picture of the future state that a company hopes to achieve.

Charitable trust - An organisation funded by donors to distribute assets in a way that benefits others.

Committees - A group of stakeholders who meet on a regular basis to discuss a specific topic. Internal and external stakeholders may be included.

Competitors - Their objectives are to gain market share from rival businesses so will be interested in products and practices of competition to devise strategies to outperform them.

Cooperative - A business that is owned and managed by its members.

Corporate social responsibility - An organisation's plan to improve their impact on society.

Customer loyalty - The customer's preference for a business; usually expressed in regular purchases from them.

Customers - Their objectives are to have high-quality products and reasonable prices.

Email - A method of communicating with a large number of stakeholders by quickly sending electronic letters via the internet.

Employees - Their objectives are job security, good pay and good working conditions.

External stakeholders - Suppliers, lenders, competitors, government, trade payables, trade receivables etc

Government agencies - Organisations supported by the government but operate independently, e.g. British Film Institute

Government department - A division of the government that is responsible for meeting an area of their objectives. E.g. infrastructure.

Government departments - Parts of the government staffed by government employees with the aim of achieving government objectives, e.g. department for education

Innovative processes - Changes in how a company's production and other activities are carried out. Frequently to improve efficiency.

Innovative products - Products that are new or have been modified to meet changing customer demands.

Interest groups - Groups of people who work together for similar interests or goals

Internal stakeholders - managers, owners and employees

International business - An organisation involved in cross-border purchasing, selling, and trading of goods and services.

International communities - Residents around the world that may be affected by the activities of a business

Large business - Organisations with more than 250 members of staff

Leaflets - Visual communication combining images and text, typically printed on a single sheet of paper. This can be used to advertise special offers to customers.

Lenders - Their objectives are for businesses to borrow money and make regular repayments with interest.

Letters - Written communication from a company and delivered by mail.

Limited liability - A legal status in which a person can only lose the amount invested in a business if the business fails to cover its expenses. The investor will not have to give up any personal assets to repay business debts.

Local business - A business that provides goods or services to a small community, such as a town or city.

Local communities - The residents of the area in close proximity to a business

Managers - Their objective is to meet departmental targets and have opportunities for career progression.

Medium business - Organisations with between 50 and 249 members of staff.

Meetings - A group of people meeting in person to discuss issues. Limited companies are required to hold an AGM (Annual General Meeting) once a year, to which all shareholders are invited.

Micro business - Organisations with up to nine members of staff.

National business - A company that sells goods or services to customers all over the country, either through multiple branches or online.

National communities - Residents of the country that a business operates in

Newsletters - A bulletin distributed on a regular basis to inform stakeholders about events taking place in an organisation.

Not-for-profit sector - The sector of the economy made up of organisations formed for reasons other than profit, such as providing a service to society.

Owners - Their objective is for the business to be successful, increase in value and return a profit to be distributed.

Partnership - A business owned by two or more people who share its risks and rewards.

Pressure groups - A type of special interest group which consist of individuals with a common concern who seek to place demands on organisations to act in a particular way or to influence change in their behaviour (e.g. Greenpeace and PETA)

Primary sector - The sector of the economy concerned with the extraction of natural resources. For example, farming, fishing, and mining.

Private limited company - A business that is owned by shareholders who cannot trade their shares on a stock market.

Private sector - The part of the economy that owned and controlled by individuals and companies rather than the government.

Public limited company - A business owned by its shareholders who can trade shares on the stock market.

Public sector - Organisations and departments owned and controlled by the government. This includes schools, hospitals and the military in most countries.

Quaternary sector - The sector of the economy concerned with intellectual pursuits and activities. Examples include research and development, information technology, and education.

Scope of business - The variety of activities that a business engages in.

Secondary sector - The sector of the economy concerned with the transformation of raw materials into finished and semi-finished goods. For example, housing construction, automobile manufacturing, and a restaurant kitchen.

Shareholder value - Returns that shareholders earn from purchasing shares in a company

Shareholders - The owners of a corporation. Their share represents the amount of the company they own. They have limited liability.

Small business - Organisations with between 10 and 49 members of staff.

SME - Small and medium enterprise. Organisations with between 10 and 249 members of staff.

Sole trader - A business owned and operated by one person who takes all the risks and keeps all of the profits.

Stakeholders - Individuals and groups who are impacted by a business and have a vested interest in its operation.

Success factors - A set of indicators that can be used to evaluate a company's performance and determine its success.

Suppliers - Their objective is to receive regular orders and payments on time.

Technology in communication - Use of email, websites, social media, Zoom and other video conferencing to communicate with stakeholders.

Tertiary sector - The sector of the economy concerned with service provision. Examples include hairdressing, retail, transportation, financial services, and real estate.

Trade payables - Their objectives are for the business to pay their invoices within the agreed payment terms.

Trade receivables - Their objective is to be given good payment terms to give them time to arrange payments in a way that does not negatively affect their cash flow.

Unlimited liability - The legal obligation of a company's owners to repay its debts, even if it means using personal assets such as their home or savings.

Voluntary organisation - Organizations established to provide services to benefit others in which workers are not compensated for their efforts.

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A2 Methods of Communicating With Stakeholders