BUSS4 definitions Flashcards
Bureaucracy
The formal structure of processes, procedures, methods of communication and hierarchy in an organisation. Can be informal or formal. The nature of bureaucracy is closely linked to the issue of decision making.
Aim
A long term goal or purpose. A corporate aim is something that the business is striving to achieve in the long-term.
Business cycle
The observed pattern of increases and decreases in economic growth, measured by % changes in GDP, over the long-term.
Business ethics
The system of acceptable business behaviours and principles that are applied in the commercial world.
Conglomerate
A business with several significant business activities in diverse markets.
Consumer protection
Legislation designed to protect consumers in their dealings with businesses.
Consumer spending
The value of spending by individuals and householders on goods and services.
Contingency planning
Planning for specific situations or risks which will threaten a business if things go wrong.
Corporate objectives
Objectives set which support the achievement of corporate aims. Typically set at a strategic level.
Corporate social responsibility
Where businesses address social and environmental considerations as part of their normal business activities.
Corporate strategies
Actions and plans which are designed to achieve corporate objectives.
Credit crunch
The financial crisis of 2007-9 which resulted in lower bank lending as a result of declining confidence amongst financial institutions.
Deflation
A period where prices, on average, are falling.
Delayering
The reduction of layers in the organisational hierarchy in order to improve decision making and reduce costs.
Demerger
Where two or more businesses are split into separate organisations with new ownership. A conglomerate may opt to split parts of its business up through demerger if it believes shareholders will benefit.
Depression
A prolonged period of negative economic growth. Usually between 1-3 years.
Disposal
The sale of a business unit by a firm.
Diversification
A strategy of expanding into different markets with different products. Often seen as the most risky of the generic business strategies suggested by Ansoff.
Economic growth
An increase in the value of economic activity over a specific period. Usually measured in terms of the change in GDP.
Emerging market
A developing economy experiencing faster economic growth than developed economies but with less-developed infrastructure.
Employment law
Legislation concerned with the rights and responsibilities of employers and employees in the workplace.
Euro zone
The group of countries in the European Union which share the same currency (the Euro).
European Union
The economic and political union of most European States aimed at reducing trade barriers and harmonising economic policy.
Exchange rate
The price of one currency expressed in terms of another.
External growth
Growth of revenues and profits arising when a firm buys another business (takeover).
Fiscal policy
The use of taxation and government spending to influence aggregate demand and supply in the economy.
Freedom of trade
International trade which is not discouraged through the use of trade barriers such as tariffs and import quotas.
GDP
Acronym for Gross Domestic Product. The total value of all goods and services produced by an economy over a given period. GDP is the main measure of economic growth.
Globalisation
An ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and business activities.
Government intervention
Actions taken by the government to intervene in the workings of markets, for example the imposition of taxes, legislation, or providing services that the market under-supplies.
Government spending
The provision of goods and services by the public sector; includes “transfer payments”, i.e. social security benefits.
Health and safety
Legislation designed to protect the physical welfare of everyone who comes into contact with a business.
Horizontal integration
Expansion by a business which acquires other businesses operating at the same stage of the supply chain. E.g. a fashion retailer buys another retailer.
Hunch
The use of intuition as a key part of decision-making, rather than rely on more detailed, scientific decision-making processes.
Inflation
A rise in the average level of prices in an economy.
Interest rate
The cost of borrowing money and the return made on savings.
Intuition
An approach to decision-making based on the hunch or intuitive feelings of the decision maker. This contrasts with scientific decision-making.
Leadership
The process and methods of influencing others to take desired actions.
Manager
Someone who sets objectives, and directs and controls resources in a business.
Merger
The coming together of two businesses of equal size into a new, merged business. In reality true mergers are rare. The deal is much more likely to be a takeover.
Mission statement
A formal statement which explains the overriding purpose and values of a business.
Monetary policy
The use of interest rates and other techniques by financial authorities to support their economic objectives, including economic growth and the control of inflation.
Multinational
A business that has activities and operations in more than one country.
Objective
A specific target that the firm wishes to achieve. Objectives are set at the corporate level and also for each business function.
Organic growth
Growth of revenues and profits that arises when a firm expands its existing operations and product range, rather than acquiring another business.
Organisational culture
The set of shared beliefs and actions that are built into the way that people in an organisation behave.
Person culture
An organisational culture in which all individuals believe themselves superior to the organisation. Such a business can be hard to manage, since individuals are likely to pursue their own goals in the medium to long-term.
Power culture
Where the organisation is dependent on a main power source. Usually the owner or founder.
Project champion
The main sponsor or supporter of a project. Usually someone with senior executive responsibility in a business.
Project group
The team of individuals, often from different departments or locations, who work to achieve specific project goals.
Recession
A period of two consecutive quarters where economic growth is negative. I.e. The value of economic activity falls.
Retrenchment
A reduction in the scale and diversity of a firm’s operations. Usually results in the disposal or closure of business units and brands and lower staff numbers.
Role culture
An organisational culture which is highly bureaucratic and structured. Typical of long-established, larger businesses.
Scientific decision-making
Strategic decision-making taken after analysing and evaluating relevant evidence.
Stakeholder
A person, group or organisation with an interest in the activities of a business. External stakeholders are outside of the business.
Strategic decision
A long-term decision which affects the overall strategic goals and objectives of the business, for example, a decision to go ahead with a significant takeover.
Subsidies
Financial assistance provided by the government to support economic activities that it wishes to encourage.
Supply-side policies
Specific government policies aimed at increasing the production potential of an economy.
Sustainability
In a business context, this is the use of resources and supplies which does not lead to environmental damage.
Synergies
Cost savings or increased revenue opportunities that arise when two or more businesses are brought together. In a takeover or merger, cost savings tend to be emphasised.
Tactical decision
A decision which is designed to help a business achieve its short-term objectives. Tactical decisions tend to be taken at a functional level.
Takeover
The acquisition of one business by another.
Task culture
An organisational culture which places emphasis on individual projects and small teams. This culture rewards effective teamwork and expertise.
Technological change
Change that arises as result of developments and innovation in technology.
Unemployment
The extent to which people who are able and willing to work are not able to find employment. Often expressed as a percentage of the labour force.
Vertical integration
Expansion by a business of firms operating at different stages of the supply chain. For example a retailer buys a wholesaler, or a distributor buys a manufacturer.
