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IB Business Management > Buisness glosarry 1 > Flashcards

Buisness glosarry 1 Flashcards

1
Q

Above the line promotion

A

Promotion that is carried out through independent media that enable a firm to reach a wide audience easily. These might include newspapers and television.

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2
Q

Abraham Maslow

A

A theorist who classified the needs of employees of a firm into a series of levels - a hierarchy of needs.

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3
Q

Absorption cost pricing

A

A good is priced according to the proportion of direct and indirect costs used in the production of the good. The production of the good is costed using absorption costing and then priced accordingly. For example, labour expenses may be split according to the number of people working on the production of each good.

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4
Q

Absorption costing

A

A method of costing where all the fixed costs (overheads) generated by the production of the good are ‘absorbed’ into an individual cost centre. For example, labour expenses may be split according to the number of people working on the production of each good.

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5
Q

Acid test ratio

A

Current assets less stock divided by current liabilities.

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6
Q

Activity ratios

A

Ratios that measure how efficiently a business is using the resources that it has. The most common are stock turnover and the debtor days ratio.

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7
Q

Added value

A

The difference between the price of the good or service and the total cost of the inputs that went into making it.

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8
Q

Advertising

A

A way of trying to increase the level of demand for a good or service, by making its availability known to consumers. It can be either informative or persuasive and the aim is to shift the demand curve to the right.

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9
Q

Alienation

A

The process where workers become dissatisfied with the work they are doing. This is particularly likely where the tasks are monotonous in nature.

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10
Q

Amortisation

A

The process of writing off the value of an intangible asset in the balance sheet of the firm.

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11
Q

Ancillary firms

A

Ancillary firms are firms which provide goods and services for other firms. In other words suppliers to other firms.

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12
Q

Annual General Meeting

A

The annual meeting for the shareholders to have their say in the running of the company and their opportunity to vote for the Board of Directors.

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13
Q

Ansoff matrix

A

A Matrix looking at growth potential of a firms products. It classifies strategies into market penetration, new product development, market development and diversification and measures the degree of risk associated with each strategy.

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14
Q

Appreciation

A

An increase in the value of an asset.

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15
Q

Appropriation account

A

The final part of the profit and loss account. The section of the profit and loss account that shows how the profit is distributed between the firm and shareholders.

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16
Q

Arbitration

A

The process of settling disputes by each side in the dispute putting their case to an agreed arbitrator.

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17
Q

Asset stripping

A

The process of buying a firm with the intention of splitting all the assets up and selling them. It is most likely where the value of the assets is greater than the market value of the firm.

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18
Q

Assets

A

Something which a person or firm owns that is of value. Split into fixed and current.

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19
Q

Auditing

A

The process of checking the financial statements of a firm to see that they give a ‘true and fair’ view of the state of the company’s finances.

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20
Q

Autocratic leadership

A

A form of leadership where the leader makes decisions and sets objectives independently of the others in the firm without involving them in the decision making process.

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21
Q

Average cost

A

The amount spent on producing each unit of output. Calculated by dividing the total cost by the level of output.

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22
Q

Average cost pricing

A

A method of pricing where the firm finds the unit cost of the product and then sets their price by adding a mark-up.

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23
Q

Average earnings

A

Total earnings divided by those in employment. Usually expressed as an index.

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24
Q

Average rate of return

A

A technique used for looking at the viability of an investment project. The average annual profit less the capital cost divided by the capital cost expressed as a percentage.

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25
Q

Average revenue

A

Total revenue divided by the level of output.

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26
Q

Backward integration

A

A situation when a company merges with or takes over a firm at an earlier stage of the chain of production.

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27
Q

Balance of payments

A

A record of transactions between a country and their overseas trading partners.

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28
Q

Balance sheet

A

A financial snapshot of the firm’s financial situation at a given moment in time (usually the firm’s year-end).

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29
Q

Bankruptcy

A

A situation where a firms is unable to meet its liabilities, The process can be started by a creditor who can get a court petition.

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30
Q

Barriers to entry

A

Barriers that prevent new firms joining into a market. They may be technical, legal, cost (or investment) barriers or barriers that arise from strong branding of the product.

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31
Q

Batch production

A

A method of production where a limited number of identical goods are produced, often for a specific order.

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32
Q

Below the line promotion

A

Promotion over which the firm has direct control. It includes methods like direct mailing, exhibitions and trade fairs and sales promotions.

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33
Q

Benchmarking

A

A technique used by businesses to try to identify the best practice for production being used in the industry so that they can adopt this method as standard practice for themselves within their own firm.

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34
Q

Book value

A

The value of assets on the balance sheet. It is the value of assets (generally fixed assets) that the firm has after any depreciation of those assets has been deducted.

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35
Q

Book-keeping

A

A technique that is used by firms to help them analyse their overall product portfolio and product mix. A grid with market growth and market share on the two axes.

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36
Q

Boston matrix

A

A technique that is used by firms to help them analyse their overall product portfolio and product mix. A grid with market growth and market share on the two axes.

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37
Q

Bottom line

A

The actual profit or return that a firm makes on the goods and services it produces.

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38
Q

Brand

A

The name given by the firm to its product or service.

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39
Q

Brand building

A

The process of strengthening and developing the brand name of the good or service that the firm is producing to boost demand for it.

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40
Q

Brand image

A

The impression that consumers have about a particular brand of a good or service.

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41
Q

Brand loyalty

A

A situation where consumers stick with the purchase of their favourite brand of a particular good or service through choice as they prefer that particular variety.

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42
Q

Branding

A

The process of developing brand names for a good or service.

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43
Q

Break-even

A

The level of output where the firm’s revenues are equal to their costs. Below this point the firm will be making a loss and above it revenue will be greater than costs and they will be making a profit.

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44
Q

Break-even charts

A

A diagram showing the total revenue and the total cost curves for a business and the level of output where the firm is making neither a profit nor a loss. Below this level of output the firm will be making a loss and above it revenue will be greater than costs and they will be making a profit.

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45
Q

Break-even pricing

A

A situation where the firm will make neither a loss nor a profit. The price will be set equal to the unit cost of production of the good or service.

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46
Q

Budget

A

A plan which the firm aims to achieve.

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47
Q

Budget deficit

A

A situation where the level of spending by the government (public expenditure) is greater than the level of revenue they receive from taxation.

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48
Q

Budget surplus

A

A situation where the level of spending by the government (public expenditure) is less than the level of revenue they receive from taxation.

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49
Q

Business cycle

A

Shows the movement of the economy over time, through periods of boom and slump. The fluctuations in the rate of economic growth that take place.

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50
Q

Buying economies of scale

A

A situation where a firm is able to gain from lower average costs at higher levels of output because of the market power they have. An example would be the buying power that supermarkets have over their suppliers.

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51
Q

Capacity

A

A measure of the maximum amount a firm can produce with the inputs they have.

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52
Q

Capital

A

One of the four factors of production (an input into the production process) and refers to man made resources.

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53
Q

Capital employed

A

The total amount of capital that the firm has and is using to produce their goods and services. It is the total figure on the balance sheet.

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54
Q

Capital expenditure

A

Expenditure by firms on machinery, equipment and buildings. This type of spending is also known as investment.

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55
Q

Capital intensive

A

A production technique is one that uses a high proportion of capital to labour.

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56
Q

Cartel

A

A situation where a group of firms act together to fix price, output or conditions of sale.

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57
Q

Cash

A

One of the current assets of the firm. When added to stocks and debtors, it gives total current assets.

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58
Q

Cash cow

A

A term given to a product that produces significant revenue because it has a large share of an existing market which is only expanding slowly. One of the four product types in the Boston Matrix.

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59
Q

Cash flow forecast

A

A projection of what a company expects its cash inflows (revenue from sales) and cash outflows (payments for wages and other expenses) to be over a period of time.

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60
Q

Cell production

A

A form of production where a team of employees take responsibility for a major part of the total production process. They carry out a range of different tasks and this can help to ensure that quality is maintained.

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61
Q

Chain of command

A

The way in which orders are passed down through the business. In other words it is the way in which the authority in the business is organised.

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62
Q

Chain of distribution

A

The method used by a firm to get the good or service they have produced to the consumer. It is the route the good or service takes to get to the consumer.

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63
Q

Chain of production

A

The different stages of making, distributing and selling a good or service from the initial production of parts, through to the final product through to distribution and sale of the product.

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64
Q

Chairman

A

The head of the board of directors of the firm. They chair the meetings of the board and are responsible (along with the other directors) to shareholders for running the business in the interests of the shareholders.

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65
Q

Channels of communication

A

The methods or routes used to convey information from one person or area of the firm to others. May be downward to pass information to employees about decisions that have been made, or upwards to pass information up through the chain of command to help decision makers.

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66
Q

Channels of distribution

A

The routes used by the firm to get the good or service they have produced to the consumer. This may involve physical distribution of the good or service to retailers or perhaps distribution through the Internet.

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67
Q

Closed shop

A

A situation where anyone employed in a particular firm or plant has to belong to a union.

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68
Q

Co-operative

A

A form of business organisation where all the members of the firm have equal voting rights and a say in how it is managed. The members may be the workers, the producers or the customers.

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69
Q

Collective bargaining

A

The process of negotiation between trade unions (or other groups representing employees) and employers on wages and working conditions.

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70
Q

Collusion

A

Where firms co-operate to try to influence the outcome in a market for their benefit. e.g. agreements between firms to restrict competition.

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71
Q

Common market

A

A customs union which allows the free movement of capital, labour and other factors of production between member states e.g. The European Union

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72
Q

Competition based pricing

A

A pricing method where the price charged by competitors is the main determinant of an individual firm’s own decision on price. They will price to ensure they are competitive against the other firms.

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73
Q

Competitive advantage

A

A situation where a firm has lower costs than their competitors and so can sell at a lower price or make a bigger profit at the same price. The firm may have developed a new product or feature for a product that gives the firm an edge over their rivals.

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74
Q

Competitive markets

A

Markets where there is a high level of competition and therefore where there are few barriers to entry and exit, making it easy for firms to set up and join the market.

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75
Q

Complementary goods

A

Two goods consumed at the same time e.g. strawberries and cream, or CD and CD players.

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76
Q

Computer aided design

A

The process where computer hardware and software is used to help with the design process.

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77
Q

Concentration ratios

A

A measure of the proportion of a market accounted for by, say, the five largest firms (in other words the market share of the firms). A measure of the competitive conditions in the market.

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78
Q

Conglomerate merger

A

A merger between two firms who are in a different line of business. The main motive is likely to be growth through diversification.

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79
Q

Consumer expenditure

A

Spending by consumers on goods and services.

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80
Q

Consumer goods

A

Goods purchased and used by households.

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81
Q

Consumer loyalty

A

Attachment by consumers to particular goods and services (also known as brand loyalty).

82
Q

Consumption

A

Expenditure by households on the goods and services they want to satisfy their wants.

83
Q

Contract of employment

A

A written legal document setting out the terms and conditions of employment. Agreed between an employee and an employer.

84
Q

Contribution

A

The difference between the price charged and the variable costs of production of the good.

85
Q

Contribution pricing

A

A method of pricing where the price charged is based on the variable costs of production.

86
Q

Copyright

A

The legal protection of a piece of literary, musical or artistic work.

87
Q

Core values

A

The values that are central to the ethos of the company. These values form the basis of the decision-making process of the firm.

88
Q

Corporate culture

A

The attitudes, beliefs and values which are a part of the business and the way in which they operate.

89
Q

Corporate tax

A

Business taxation that is generally charged as a percentage of their profits.

90
Q

Cost based pricing

A

A method of pricing where the firm adds a percentage mark-up to its costs to determine the price they are going to charge for their products.

91
Q

Cost centre

A

An area or division of a firm to which specific costs can be allocated. They help firms to monitor costs and ensure they are minimised. They may be geographically determined (different factories or plants), or based around individual people or teams.

92
Q

Cost curve

A

A curve plotting costs against output.

93
Q

Cost plus pricing

A

A method of pricing where the firm adds a percentage mark-up to its costs to determine the price they are going to charge for their products. They set prices by adding the profit margin they want (or feel the market can bear) to average cost.

94
Q

Costs of production

A

The total costs that arise from producing a good or service. They are made up of fixed costs and variable costs (or direct and indirect costs) and the sum of these is the total cost.

95
Q

Credit control

A

The process of control over payments coming into and going out of the firm. It is mainly concerned with the firm’s creditors (people who the firm owes money to) and the firm’s debtors (people who owe money to the firm).

96
Q

Credit note

A

A document given to a customer when they have returned goods, or reduced the quantity of an order or overpaid for the goods they have received.

97
Q

Critical mass

A

The minimum size that a market or industry needs to be in order to be efficient and to minimise the unit cost of production.

98
Q

Critical path analysis

A

A technique used by firms to identify the most efficient method of carrying out production or a part of production. The process involves identifying all the operations required, how long they will take and which operations are dependent on each other.

99
Q

Current assets

A

Short-term assets that can be converted into cash within a year. The main types shown on a firm’s balance sheet are stock, debtors and cash.

100
Q

Current liabilities

A

Short-term debts of a firm that must be repaid within a year. They will include creditors (people who the firm owe money to) and short-term loans or perhaps overdrafts.

101
Q

Current ratio

A

A ratio that shows how easily a business can meet its short-term financial commitments. It is calculated by dividing the level of current assets by the level of current liabilities.

102
Q

Customer focus

A

The process of making certain that you aim to discover exactly what it is that your customers want from your products or services and then deliver these. Ensuring that the businesses aims and objectives revolve around the needs of the customer.

103
Q

Cutting edge

A

Being at the leading edge of innovation in the markets you operate in. Spending on research and development (R&D) may be required to stay in this situation.

104
Q

David McClelland

A

A theorist who argued that there are three basic needs that need to be satisfied and these are based on behaviours that are learned at an early age. The three needs are the need for achievement, affiliation and the need for power.

105
Q

De-layering

A

The process of flattening out an organisational hierarchy. This means reducing the number of layers of management.

106
Q

Debentures

A

A form of long-term finance. They are long term fixed interest loans that will be repaid by the firm at a fixed date in the future and in the meantime will pay interest.

107
Q

Debt collection period

A

An activity ratio that measures the number of days that it takes a firm on average to collect their debts.

108
Q

Debt factoring

A

The process of raising finance by ‘selling’ some of your debts. The debt is sold to a specialist company who collect the debt and take a proportion as their fee for providing the money.

109
Q

Debtor days ratio

A

An activity ratio that measures the number of days that it takes a firm on average to collect their debts.

110
Q

Debtors

A

The current amount of money that the firm is owed by customers who have bought goods and services. It is an asset because it is money that the firm is owed.

111
Q

Decision tree

A

A method of analysis that can help firms to make complex decisions. Alternative possible outcomes of a number of decisions with the likely outcomes (or probability of those outcomes) are mapped out for each possible route.

112
Q

Deed of Partnership

A

The official agreement drawn up by partners in a partnership. A legal document that sets out the rights and obligations of each partner in the partnership.

113
Q

Deflate

A

To deliberately reduce the level of economic activity. This is needed when there is an excess level of demand that may be leading to demand-pull inflation.

114
Q

Deflationary policies

A

Policies designed to reduce the level of demand in the economy.

115
Q

Delegation

A

The passing of authority to perform a role or set of tasks to someone lower down in the hierarchy of the company. The responsibility remains with the person passing authority, but the work is carried out by the person further down the chain of command.

116
Q

Demand based pricing

A

A method of pricing where an organisation decides the price to charge based as far as possible on what consumers are prepared to pay. This has become more common with the use of such techniques by many low cost airlines for selling fares over the Internet.

117
Q

Demand curve

A

A curve showing the amount of a good or service that consumers are willing and able to buy at each and every price level. The curve is downward sloping because as price increases, demand falls.

118
Q

Demand pull inflation

A

Inflation that occurs when the level of demand exceeds the supply available.

119
Q

Demarcation

A

A situation where a particular task or job can only be carried out by a particular person.

120
Q

Demerger

A

A situation when a firm divides into two or more firms or sells off some of its subsidiaries.

121
Q

Democratic leadership

A

A style of leadership where a leader encourages others to be involved in the decision making process. It is felt that this style of leadership will help to motivate employees as they will feel more involved in the decision-making process, though this style does require leaders who are skilled at communication.

122
Q

Demography

A

The study of population.

123
Q

Depreciation

A

The fall in value of an asset. It applies to fixed assets as they are used over and over again as part of the production process and so over time will lose value.

124
Q

Depreciation of sterling

A

A situation when market forces in the foreign exchange market lower the value of one currency against another. Exports will appear cheaper overseas and therefore make us more competitive, but the price of imports will rise and may therefore add to inflation.

125
Q

Deregulation

A

The removal of regulations or the removal of controls on a particular market e.g. the removal of certain health and safety regulations.

126
Q

Desk research

A

A form of secondary market research. It means using data that already exists (secondary data) as part of the market research process. This may include data from government, industry surveys or perhaps data bought from a specialist data provider.

127
Q

Developed countries

A

Countries at an advanced stage of economic development with high levels of real GDP per head and a relatively large service sector.

128
Q

Developing countries

A

Countries with low levels of real GDP per head and relatively large primary sectors producing predominantly basic commodities.

129
Q

Differentiated products

A

Goods or services which are made distinctive from rival products. This may be done through the packaging, the branding of the good / service or perhaps through the features that the good or service has.

130
Q

Differentiation

A

A strategy where products are made distinctive from rival products. This may be done through the packaging, the branding of the good / service or perhaps through the features that the good or service has.

131
Q

Direct costs

A

Costs that can be directly attributed to the production of the firms’ good or service. They may include the labour to make the product, the raw materials or the packaging - any costs that can be directly identified as part of the production process.

132
Q

Direct mail

A

A form of marketing where promotional material is posted directly to a consumer’s home address to try to persuade them to buy the good or service the firm is offering.

133
Q

Direct marketing

A

The process of a firm trying to sell a good or service to a consumer directly without any intermediary involved in the selling process. Forms include direct mail, telephone selling, personal selling and catalogues.

134
Q

Direct taxes

A

Taxation on income and wealth. The main ones in the UK are income tax (on individuals) and corporation tax (tax on corporate profits).

135
Q

Directors

A

The people elected by the shareholders to manage the running of the business.

136
Q

Discounted cash flow

A

An investment appraisal technique that helps firms assess whether a particular investment is worthwhile. Future revenues will have a lower current value and so are ‘discounted’ using a ‘discount rate’ to see what they are worth now and therefore whether the investment project is worthwhile.

137
Q

Discounting

A

A process where future revenues are ‘discounted’ using a ‘discount rate’ to see what they are worth now and therefore whether the investment project is worthwhile.

138
Q

Discrimination

A

The unequal treatment of individuals, usually on the basis of gender, race, age, religion or disability. There is a wide range of Acts of Parliament aimed at protecting people against discrimination.

139
Q

Diseconomies of scale

A

A situation where average costs increase as production increases. This often happens where there are communication problems in larger organisations.

140
Q

Dismissal

A

A situation where an employee has been asked to leave their job. It may be fair in a situation where the employee is unable to do the job or where there has been major misconduct or various other reasons but it could also be unfair.

141
Q

Disposable income

A

The amount of income left after such deductions as income tax, pension contributions and national insurance. Often known as ‘take home pay’ - the actual pay a worker receives.

142
Q

Distribution of income

A

The way in which income is shared out between households and income earners.

143
Q

Diversification

A

Where a firm produces new products or services to expand the range of goods and services they offer. The firm may be aiming to reduce risk by being overly exposed in one particular market.

144
Q

Dividend

A

Payment of a share of a firm’s profits to the shareholders. The shareholders are the owners of the business and so are entitled to a share of the profits.

145
Q

Dividend cover

A

A ratio that measures the potential for future capital growth of the firm. It measures how easily the dividend can be paid (or ‘covered’) out of the current profits of the firm. It is calculated by dividing the profit accruing to shareholders by the level of dividends.

146
Q

Dividend yield ratio

A

A ratio that shows the amount an investor in shares receives as a percentage of the market price of the share. The ratio is calculated by dividing the dividend per share by the market price of the share and multiplying it by 100 to get it as a percentage.

147
Q

Division of labour

A

The allocation of tasks or jobs to particular people. For instance, instead of one worker undertaking all aspects of the production of a good, the task is broken down into small, separate operations each performed by just one person.

148
Q

Dog

A

A type of product in the Boston Matrix. It indicates a product that has a low or declining share of its market in a market that is growing slowly.

149
Q

Douglas McGregor

A

A theorist who looked at the reasons why people work and tried to develop applications of the work of theorists like Maslow to a business. He suggested the categories theory X and theory Y to explain the different reasons why people work.

150
Q

Drucker

A

A management theorist who is credited with introducing the idea of management by objectives (MBO). This groups the role of management into five different operations including the setting of objectives for the organisation, the organisation of the work, the motivation of employees, the measurement of the job being done and the development of people.

151
Q

Dumping

A

A practice in international trade where a firm sells goods in a foreign country at a price below that charged in the home market or even below cost. This is regarded as an unfair trading practice and is generally used to dispose of surpluses of goods where a firm or country have over-produced.

152
Q

Duopoly

A

A market structure where the market is dominated by two firms.

153
Q

Earliest starting time

A

This is identified when using critical path analysis (or network path analysis) to see the most efficient way to carry out a series of tasks. It is the earliest time (in hours or days) that a task can be started, and will depend on how many tasks have to be completed before it can be done.

154
Q

Earnings per share

A

A shareholders ratio that measures the amount that each share is earning an investor. It is calculated by dividing the profit attributable to shareholders by the number of ordinary shares.

155
Q

Economic growth

A

An increase in a country’s total output of goods and services. It is measured by changes in real GDP (i.e. the increase in GDP after inflation has been removed).

156
Q

Economic order quantity

A

An attempt to calculate the optimum stock order level by comparing the delivery costs compared with the costs of holding stock.

157
Q

Economies of scale

A

A situation where average cost falls as production increases. A larger firm may be able to buy in bulk, it may be able to produce relatively more efficiently, it may be able to raise finance cheaper and it may have access to more efficient marketing methods.

158
Q

Elastic

A

A good that is responsive to a change in price. The percentage change in demand for the good will be greater than the percentage change in price that caused it.

159
Q

Elasticity

A

A measure of how much one variable responds to a change in another variable.

160
Q

Elasticity of demand

A

The responsiveness of demand to a given change in price or income or the price of other goods.

161
Q

Elasticity of supply

A

The responsiveness of supply to a change in price.

162
Q

Employers’ organisations

A

Groups of representatives of firms’ owners or managers, either within one industry or across several industries. One example is the Confederation of British Industry (CBI).

163
Q

Empowerment

A

The process of involving employees in the decision-making process by transferring authority to act to those workers actually performing the relevant tasks. It is generally thought to help improve the motivation of workers by involving them more in the company.

164
Q

Entrepreneurs

A

Businessmen - people who take risks and invest to produce goods and services in order to make a profit.

165
Q

Entrepreneurship

A

The skill of taking risks and organising the factors of production to generate a product and therefore hopefully profit.

166
Q

Environmental audit

A

A method used to assess the company’s corporate responsibility by evaluating the environmental impact of the policies and processes they use to produce and distribute their goods and services.

167
Q

Equilibrium

A

A state of balance that occurs in a market when supply is equal to demand.

168
Q

Equilibrium price

A

The price at which supply equals demand in a market.

169
Q

Equities

A

Another word for shares - the ordinary shares of a company.

170
Q

Ethics

A

A set of values and principles that determine behaviour. The values that firms use to decide whether actions are right or wrong.

171
Q

Euro

A

The single European Currency which was originally adopted by 11 countries in the European Union.

172
Q

European Union

A

A common market in Europe in which goods, services, labour and capital can circulate freely.

173
Q

Excess demand

A

A situation where consumers want to buy more than producers are prepared to sell. In other words demand is greater than supply.

174
Q

Excess supply

A

A situation where producers are prepared to sell more than consumers are willing to buy. In other words supply is greater than demand.

175
Q

Exchange rate

A

The price of one currency in terms of another currency.

176
Q

Excise duties

A

A form of indirect taxation. Taxes on fuel, tobacco, alcohol and gambling that are levied by HM Customs and Excise.

177
Q

Exports

A

Goods, services and capital assets sold abroad. The sale of them results in an inflow of currency.

178
Q

Extension strategies

A

Techniques to prolong the product life cycle of a product and delay the decline stage of the product life cycle. It may mean upgrading or updating the product, changing the packaging or presentation, adding new features or new design elements to the basic product and so on.

179
Q

External diseconomies of scale

A

A situation where unit costs (average costs) increase as the firm grows larger. They may arise because of a deterioration in communication or because of organisational problems.

180
Q

External growth

A

When a firm grows by taking over or merging with another firm (integration). Often also known as inorganic growth.

181
Q

External recruitment

A

The process of filling vacant posts with applicants from outside the company.

182
Q

External shock

A

An unexpected change in an economic variable which takes place outside the economy. An example might be an increase in the price of oil having an impact on firm’s costs of production.

183
Q

Factoring

A

The process of raising finance by ‘selling’ some of your debts. The firm will receive the bulk of the debt immediately, and the specialist firm will then collect the debt and take a proportion as their fee for providing the money.

184
Q

Factors of production

A

The resources that are necessary for production. They are usually classified into 4 different groups: land, labour, capital and enterprise (or entrepreneurship).

185
Q

Fayol

A

A French management theorist working at the start of the last century. He looked at management from the point of view of the functions (or ‘elements’) of management. He is very much associated with ‘command and control’ methods of management.

186
Q

Field research

A

A type of market research using primary data. This is data that is collected by the researcher and therefore does not exist prior to the research.

187
Q

Field trials

A

Where a product or a marketing approach is tested on a small number of consumers to gauge the effectiveness of the product or the marketing policy and the reactions of consumers to it.

188
Q

Financial economies of scale

A

A situation where large firms are able to borrow money on better terms than smaller firms which makes the cost of financing investment and therefore unit costs lower.

189
Q

Financial institutions

A

Institutions which provide a range of services including lending, accepting deposits and providing advice for both consumers and businesses.

190
Q

Fiscal policy

A

Changes in the levels of taxation and government expenditure to try to influence the level of economic activity.

191
Q

Fixed assets

A

Assets which have a lifespan of more than a year. They include things like plant, equipment, buildings and machinery.

192
Q

Fixed costs

A

Production costs that do not depend on the level of output.

193
Q

Fixed exchange rates

A

A system where the value of the currency against other currencies remains the same and is maintained by governments by intervening in the foreign exchange market using foreign exchange reserves to buy and sell the currency to maintain the rate.

194
Q

Flat organisations

A

Firms who have fewer levels in their organisational hierarchy. This will usually mean that they have a higher span of control.

195
Q

Flexibility

A

The ability of an employee to be able to carry out various tasks or functions.

196
Q

Floating exchange rates

A

A system where the exchange rate is determined by demand and supply in the foreign exchange market without any government intervention.

197
Q

Flow production

A

A form of production where all the different operations required for production are carried out in sequence one after the other. Usually used where mass production is required and the product being produced is reasonably standardised.

198
Q

Focus groups

A

Small groups of people who are got together to discuss a product, service or marketing policy. The aim is to provide an insight into consumers behaviours and attitudes.

199
Q

Footloose industry

A

Industries which do not gain any cost advantage from any particular location and so can be set up in any location.

200
Q

Forecasting

A

An attempt to predict the future performance of a business in terms of sales, cash flow or perhaps costs.

IB Business Management (3 decks)

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