As Business Flashcards
Opportunity cost
Benefit of second best option given up
Mixed economy
Economic resources owned by Public+private
Free market economy
Economic resources owned by private with little state intervention
Command economy
Economic resources owned by state
Sole trader
1 person puts permanent finance in business+has full control
Cooperatives
All members contribute to workload/responasibilities+have 1 vote in meetings+profits are equally shared
Share
Certificate that confirms part ownership of company+confirms dividends/shareholder rights to shareholder
Franchise
Business that uses name/logo/trading system of successful business
Holding companies
Business organisation that owns/controls a number of different businesses, but does not unite them into 1
Public corporations
Owned by state+managed with sociale objectives
Corporate aims
Long term goals that give sense of direction+allow success to be measured
Corporate objectives
Ways to acieve aim
market share/CSR/Profit maximisation/growth
Mission statement
Statement of businesses core purpose, phrased in a way to motivate employees+stimulate interest of outside groups
Vision statement
Statement on what the business wants to achieve in the long run
MBO
Method of coordinating staff by dividing overall aim into specific targets for each department
Stakeholder
Person affected/has interest
CSR
Considers society interests beyond legal requirement
Manager
Sets objectives
Organises resources
Motivates staff
Mintzberg (management roles)
- Interpersonal roles (dealing/motivating staff (leader))
- Informational roles (acts as a source/transmitter of information (spokesperson))
- decisional roles (take decisions/allocates resources (negotiator))
Theory X
Managers believe that staff are workers dont like work
Informal leader
No formal authority but has some power over workers
Motivation
stimulates workers towards achieving a goal
McClelland
achievement motivation
affiliation motivation
authority motivation
Vroom
Valence-depth of want
expectancy-degree to which people expect that putting in the work will lead to a given level of performance
instrumentality-confidence that they will get what they want
Mayo-Hawthorne effect
Changing working conditions will have little effect in motivation
teamwork/participation/control over work/decisions=higher motivation
Empowerment
Workers are given more control/freedom over their own work
HRM
workforce planning
Employee moral/welfare
Recruitment/selection
Induction training
Introductory program to familiarise new employees
Employee appraisal
Process of assesing the effectivenes of workers by pre set objectives
Employee moral/welfare
satisfaction
Market orientated
Product orientated
Outward looking approach that bases product decisions on demand
Inward looking approach based on what business has been doing for a long time
Asset led marketing
Approach based on firms strengths instead of what customer wants
Societal marketing
Approach based on demand+effects on society
Primary research
Obtaining first hand resources specifically for businesses need Qualitative: -focus groups-asked about attitude towards product -surveys Quantitative: -observatioons/recordings -test marketing -surveys
Probability sampling
Non probability sampling
- simple random (every member has equal chances)
- stratified (target population is divided + random in each stratum)
- quota (target population is already divided into different stratum. Every nth person)
- convinience
- judgemental
- snowball
Product
End result of production process sold to satisfy customer needs
Full cost pricing
Contribution cost pricing
f. c.+v.c
v. c
Above the line
Paying for communication with customers
Advertisement
Below the line
Not directly paying, but based on short term incentives to purchase Sales promotion Personal selling Trade fairs Sponshorships
Operations manager
Efficiency
Innovation
Quality
Production
Converting inputs to outputs
Productivity
Ratio of outputs:inputs
less but more skilled workers/less but more advanced tech
Efficiency
Prodcuing output at the highest ratio of output:input
Effectiveness
Meeting obejectives by using resources productively to meet customer needs
CAD
CAM
- using computer programs to create 2D/3D representations of graphical objects
- Use of computer software to control machinery
operations flexibility
ability to vary range of products/level of production following changes in customer demand
Innovation
new/improved ways of doing things
offshoring
relocation of a business process done in 1 country to the same/another company in another country
buffer
minimum inventory that should be held to ensure that prodcution still takes place if theres a delay
Capital expenditure
purchase of assets expected to last for more than 1 year
buildings
Revenue expenditure
Spending on all costs/assets other than fixed assets
wages/materials
Short term external sources of finance
Overdraft
Debt factoring
Medium term
Leasing
Hire purchase
Long term
Loan bonds/debentures shares grants venture capital
Debentures
Bonds issued by companies to raise debt finance with a fixed rate of interest
Margin of safety
Amount by which output exceeds BE
output-BE
Income statement
Records profit/loss/revenue/cost
Balance sheet
Accounting statement that records value of assets/liabilities/shareholders equity at 1 point in time
asset
item of monetary value owned by business
liability
financial obligation that business has to pay in future
liability
financial obligation that business has to pay in future
