All definitions Flashcards
learn as business definitions for exam help
What are consumer goods?
The physical and tangible goods sold to the general public, including durable and non-durable goods.
What is the difference between durable and non-durable consumer goods?
Durable goods can be used multiple times (e.g., cars, washing machines), while non-durable goods can be used only once (e.g., food, drinks).
What are consumer services?
Non-tangible products sold to the general public, such as hotel accommodation, insurance services, and train journeys.
What are capital goods?
Physical goods used by the industry to aid in the production of other goods and services, such as machines and commercial vehicles.
Define creating value in a business context.
Increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for.
What is added value?
The difference between the costs of purchasing bought-in materials and the price the finished goods are sold for.
What is opportunity cost?
The benefit of the next most desired option which is given up.
Who is an entrepreneur?
Someone who takes the financial risk of starting and managing a new venture.
What is a social enterprise?
A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners.
What are the three objectives of a social enterprise known as the triple bottom line?
- Economic
- Social
- Environmental
What is primary sector business activity?
Firms engaged in farming, fishing, oil extraction, and all other industries that extract natural resources.
What does secondary sector business activity entail?
Firms that manufacture and process products from natural resources, including industries like computers, brewing, and construction.
What is tertiary sector business activity?
Firms that provide services to consumers and other businesses, such as retailing, transport, and banking.
Define the public sector.
Comprises organizations accountable to and controlled by the central or local government.
What is the private sector?
Comprises businesses owned and controlled by individuals or groups of individuals.
What is a mixed economy?
An economy where resources are owned and controlled by both private and public sectors.
What characterizes a free-market economy?
Economic resources are owned largely by the private sector with little state intervention.
What is a command economy?
An economy where resources are owned, planned, and controlled by the state.
What is a sole trader?
A business in which one person provides the permanent finance and has full control of the business.
Define partnership in a business context.
A business formed by two or more people to carry on a business together, with shared capital investment and responsibilities.
What does limited liability mean?
The only liability a shareholder has if the company fails is the amount invested in the company.
What is a private limited company?
A small to medium-sized business owned by shareholders who cannot sell shares to the general public.
What is a share?
A certificate confirming part ownership of a company and entitling the shareholder to dividends.
Who is a shareholder?
A person or institution owning shares in a limited company.
What is a public limited company?
A limited company with the legal right to sell shares to the general public, often large businesses.
What is the memorandum of association?
A document stating the name of the company, address, maximum share capital, and declared aims of the business.
What do articles of association cover?
The internal working and control of the business, such as names of directors and meeting procedures.
What is a franchise?
A business that uses the name, logo, and trading systems of an existing successful business.
What is a joint venture?
An agreement between two or more businesses to work closely on a specific project and create a separate business division.
Define a holding company.
A business organization that owns and controls a number of separate businesses.
What is a public corporation?
A business enterprise owned and controlled by the state, also known as nationalized industry.
What is revenue in a business context?
Total value of sales made by a business in a given time period.
What is capital employed?
The total value of all the long-term finance invested in the business.
Define market capitalization.
The total value of a company’s issued shares.
What is market share?
Sales of the business as a proportion of total market sales.
What is internal growth?
Expansion of a business by means of opening new branches, shops, or factories.
What is a mission statement?
A statement of the business’s core aims, phrased to motivate employees and stimulate interest by outside groups.
What is corporate social responsibility?
The concept of businesses considering the interests of society by taking responsibility for their impact on customers, employees, and the environment.
What is Management by Objectives?
A method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department, manager, and employee.
Define ethical code.
A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees.
Who are stakeholders?
People or groups of people who can be affected by – and therefore have an interest in – any action by an organisation.
What is the shareholder concept?
The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders.
Define corporate social responsibility.
The concept that businesses should consider the interests of society in their activities and decisions, beyond the legal obligations that they have.
What is the role of a manager?
Responsible for setting objectives, organising resources, and motivating staff so that the organisation’s aims are met.
Define leadership.
The art of motivating a group of people towards achieving common objectives.
What characterizes autocratic leadership?
A style of leadership that keeps all decision-making at the centre of the organisation.
Define democratic leadership.
A leadership style that promotes the active participation of workers in taking decisions.
What is paternalistic leadership?
A leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organisation.
What defines laissez-faire leadership?
A leadership style that leaves much of the business decision-making to the workforce; a ‘hands off’ style approach.
Who is an informal leader?
A person who has no formal authority but has the respect of colleagues and some power over them.
Define emotional intelligence (EI).
The ability of managers to understand their own emotions, and those of the people they work with, to achieve better business performance.
What is motivation?
The internal and external factors that stimulate people to take actions that lead to achieving a goal.
What is self-actualisation?
A sense of fulfilment reached by feeling enriched and developed by what one has learned and achieved.
What are motivating factors?
Aspects of a worker’s job that can lead to positive job satisfaction, such as:
* Achievement
* Recognition
* Meaningful and interesting work
* Advancement at work
Define hygiene factor.
Aspects of a worker’s job that have the potential to cause dissatisfaction, such as:
* Pay
* Working conditions
* Status
* Over-supervision by managers
What is job enrichment?
Aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work.
Fill in the blank: A _______ is payment to a worker made for each period of time worked, e.g., one hour.
time based wage rate
What is piece rate?
A payment to a worker for each unit produced.
Define salary.
Annual income that is usually paid on a monthly basis.
What is commission?
A payment to a salesperson for each sale made.
Define bonus.
A payment made in addition to the contracted wage or salary.
What is profit sharing?
A bonus for staff based on the profits of the business, usually paid as a proportion of basic salary.
Define performance related pay.
A bonus scheme to reward staff for above-average work performance.
What are fringe benefits?
Benefits given, separate from pay, by an employer to some or all employees.
What is job rotation?
Increasing the flexibility of employees by varying the work they do by switching from one job to another.
Define job enlargement.
Attempting to increase the scope of a job by broadening to deepening the tasks undertaken.
What is job redesign?
Involves the restructuring of a job, usually with employees’ involvement and agreement, to make work more interesting, satisfying, and challenging.
What are quality circles?
Voluntary groups of workers who meet regularly to discuss work-related problems and issues.
Define worker participation.
Workers are actively encouraged to become involved in decision-making within the organisation.
What is team working?
Production is organised so that groups of workers undertake complete units of work.
Define human resource management (HRM).
The strategic approach to the effective management of an organisation’s workers so that they help the business gain a competitive advantage.
What is recruitment?
The process of identifying the need for a new employee, defining the job to be filled, and attracting suitable candidates for the job.
What does selection involve?
A series of steps by which the candidates are interviewed, tested, and screened for choosing the most suitable person for the vacant post.
Define job description.
A detailed list of the key points about the job to be filled, stating all of its key tasks and responsibilities.
What is a person specification?
A detailed list of the qualities, skills, and qualifications that a successful applicant will need to have.
What is an employment contract?
A legal document that sets out the terms and conditions governing a worker’s job.
Define labour turnover.
Measures the rate at which employees are leaving an organisation, calculated as: Number of employees leaving in 1 year / average number of people employed * 100.
What is training?
Work-related education to increase workforce skill and efficiency.
What is induction training?
An introductory training programme to familiarise new recruits with the systems used in the business and the layout of the business site.
What is on-the-job training?
Instruction at the place of work on how a job should be carried out.
What is off-the-job training?
All training undertaken away from the business, e.g. work-related college courses.
What is employee appraisal?
The process of assessing the effectiveness of an employee judged against pre-set objectives.
What does dismissal mean?
Being dismissed or sacked from a job due to incompetence or breach of discipline.
What is unfair dismissal?
Ending a worker’s employment contract for a reason that the law regards as being unfair.
Define redundancy.
When a job is no longer required, the employee doing this job becomes unnecessary through no fault of their own.
What is work-life balance?
A situation in which employees can give the right amount of time and effort to work and to their personal life.
What is an equality policy?
Practices and processes aimed at achieving a fair organization where everyone is treated equally.
What is a diversity policy?
Practices and processes aimed at creating a mixed workforce and placing positive value on diversity.
What is marketing?
The management task that links the business to the customer by identifying and meeting customer needs.
What are marketing objectives?
The goals set for the marketing department to help the business achieve its overall objectives.
What is a marketing strategy?
A long-term plan established for achieving marketing objectives.
Define market orientation.
An outward-looking approach basing product decisions on consumer demand as established by market research.
What is asset-led marketing?
An approach that bases strategy on the firm’s existing strengths and assets.
What is product orientation?
An inward-looking approach that focuses on making products that can be made or have been made for a long time.
Define social marketing.
An approach that considers both consumer demands and the effects on all members of society.
What is demand?
The quantity of a product that consumers are willing and able to buy at a given price in a time period.
What is supply?
The quantity of a product that firms are prepared to supply at a given price in a time period.
What is equilibrium price?
The market price that equates supply and demand for a product.
Define market size.
The total level of sales of all producers within a market.
What is market growth?
The percentage change in the total size of a market over a period of time.
What is market share?
The percentage of total sales in the total market sold by one business.
Define direct competitor.
A business that provides the same or very similar goods or services.
What is a USP?
Unique selling point (or proposition) - the special feature of a product that differentiates it from competitors.
What is product differentiation?
Making a product distinctive so that it stands out from competitors’ products.
Define niche marketing.
Identifying and exploiting a small segment of a larger market by developing products to suit it.
What is mass marketing?
Selling the same products to the whole market with no attempt to target groups within it.
What is a consumer profile?
A quantifiable picture of consumers of a firm’s products, showing proportions of age groups, income levels, etc.
Define market segment.
A sub-group of a whole market in which consumers have similar characteristics.
What is market segmentation?
Identifying different segments within a market and targeting different products or services to them.
What is market research?
The process of collecting, recording and analysing data about customers, competitors, and the market.
Define primary research.
The collection of first-hand data that is directly related to a firm’s needs.
What is secondary research?
Collection of data from second-hand sources.
What is qualitative research?
Research into the in-depth motivations behind consumer buying behavior or opinions.
Define quantitative research.
Research that leads to numerical results that can be statistically analyzed.
What are focus groups?
A group of people asked about their attitude towards a product, service, advertisement, or packaging.
What is a sample in market research?
The group of people taking part in the market research survey selected to be representative of the overall target market.
What is random sampling?
Every member of the target population has an equal chance of being selected.
Define systematic sampling.
Every nth item in the target population is selected.
What is stratified sampling?
Drawing a sample from a specified sub-group and using random sampling to select an appropriate number.
What is quota sampling?
When the population has been stratified and the interviewer selects an appropriate number from each stratum.
What is cluster sampling?
Using one or a number of specific groups to draw samples from and not selecting from the whole population.
