Chapter 1 Definitions

Question	Answer
Shareholders	are the owners of a company.
Revenue	the income that a business earns from the sale of goods and services to customers.
Market share	the proportion of total sales in a given market or industry that is controlled or held by a business, calculated for a specific period of time.
Sole trader	a business owned and operated by one person.
Unlimited liability	the business owner is personally responsible for all the debts of his or her business.
Partnership	a business owned by a minimum of two and a maximum of 20 people.
Incorporation	the process that businesses go through to become a registered company and a separate legal entity.
Limited liability	the shareholders in a company cannot be held personally responsible for the debts of that business.
Private limited company	an incorporated business with a minimum of two, and a maximum of 50 private shareholders, and whose shares are offered only to those people whom the business wishes to have as part owners.
Public listed company	an incorporated business with a minimum of five shareholders, and whose shares are freely traded on the Australian Securities Exchange.
Social enterprise	a business with the objective of fulfilling a social need.
Government business enterprise	a type of business that is government owned and operated.
Objective	a desired goal, outcome or specific result that a business intends to achieve.
Vision statement	states what the business aspires to become.
Mission statement	expresses why the business exists, its purpose and how it will operate.
Strategies	the actions that a business takes to achieve specific objectives.
Effectiveness	the degree to which a business has achieved its stated objectives.
Efficiency	refers to how well a business uses resources to achieve objectives.
Key performance indicators	specific criteria used to measure the efficiency and effectiveness of the business’s performance.
Stakeholders	groups and individuals who interact with the business and have an interest in its activities.
Management	the people who have the responsibility for successfully achieving the objectives of the business.
Employees	the people who work for the business and who expect to be paid fairly, trained properly and treated ethically in return for their contribution to production.
Government	the group of people with the authority to govern a community. In Australia, this exists at three levels (federal, state and local).
Competitors	other businesses or individuals who offer rival, or competing, goods or services to the ones offered by the business.
Competitive advantage	the ability of a business to develop strategies that ensure it has an ‘edge’ over competitors.
Interest groups	organisations who attempt to directly influence or persuade a business to adopt or change particular activities, processes or policies.
Customers	the people who purchase goods and services from the business, expecting high quality at competitive prices.
Suppliers	businesses or individuals who supply materials and other resources to a business so that it can conduct its operations.
Corporate social responsibility	the obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment.
Triple bottom line	economic, social and environmental performance of a business.
Stakeholder engagement	when businesses share information and seek input from stakeholders to discover the social and environmental issues that are important to them as part of the business’s corporate social responsibility.

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Chapter 1 Definitions

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	Created by Katelyn Gorman about 7 years ago