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Business Studies A Level > Definitions > Flashcards

Definitions Flashcards

1
Q

Mission Statement

A

a short statement defining the underlying aimsand objectives of the organisation

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2
Q

Business Objectives

A

the goals or targets that must be achieved in order to realise the stated aims of an organisation, department or individual team

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3
Q

Corporate Aim

A

the long term intentions of a business

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4
Q

Corporate Objectives

A

targets that must be achieved in order to meet the stated aims of th business

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5
Q

Culture

A

the culture of an organisation is the code that affects the attitdues, decision-making and managment style of its staff

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6
Q

Groupthink

A

is a process of thought in relation to decision-making, adopted by members of a group aimed at reaching consensus with minimal conflict between them, with no reference to a detailed analysis or evaluation of alternative ideas

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7
Q

Stakeholders

A

they are all those people who have a share in a particular issue or system. Stakeholders can be groups of people, organisations, insitutions and sometimes even individuals

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8
Q

Stakeholder Concept

A

the view that firms benefit from cooperation with their stakeholder groups and from incorporating their needs into the decision-making process

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9
Q

Conflict

A

the ptential contradiction of ideas or objectives between various graoups or stakeholders

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10
Q

Communication

A

the transmission of infromation from a source to reicevers. it is not complete until the reciever confirms the message is understood through feedback. examples verbal, written and non-werbal

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11
Q

Medium

A

which a message is communicated via email, phone or letter

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12
Q

Economies of Scale

A

as output increases unit cost decreases, the advanatges gained from growing in size e.g bulk buying

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13
Q

Diseconomies of Scale

A

as output increases unit costs increase, the disadvantage of growing in size e.g. poor communication and control

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14
Q

Productivity

A

the amount of output per unit of input used e.g. output per worker or per machine

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15
Q

Business Plan

A

a usiness plan summaries the key objectives of a bsuiness and the main plans which are likely to be followed in order to achieve the stated objectives

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16
Q

SWOT Analysis

A

a technique that allows an organisation to assess its overall position or the position of one of its division, products or activities. it uses an internal audit to assess its strengths and weaknesses and an external audit to assess its opportunities and threats

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17
Q

Pestel

A

a framework for assessing the likely impact of the political, economies, social, technological, legal and environment factors in the external environment of a business

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18
Q

Internal/ Organic Growth

A

when a firm expands its existing capacity or range of activities by extending its premises or building new factories from its own resources, rather than integration with another firm

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19
Q

Boston Matrix

A

a tool of product portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market in which the product is sold

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20
Q

Product Portfolio

A

the range of products or brands provided by a business

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21
Q

Ansoff Matrix

A

is a decision-making tool used by management to analyse a firm’s potential for growth

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22
Q

Porter’s Generic Strategy

A

four generic business strategies that could be adopted in order for business to gain competitive advantage. the strategies relate to the extent to which the scope of a business activities are narrow versus broad and the extent to which a business seeks to differentiate its products

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23
Q

Bowmans Strategic Clock

A

a model that explores the option for strategic positioning e.g. how a product should be positioned to give it the most competitive position in market

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24
Q

Kaplan and Norton’s Balanced Scoreboard

A

a tool provides management with the instrumentation they need to navigate to future competitive success

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25
Q

Elkington’s Triple Bottom Line

A

a concept that encourages the assessment of overall business performance based on three important areas - People Profit Planet

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26
Q

Decision Tree

A

is a graphical presentation of a decision-making process within a business which aims to highlight the most cost-effective decision

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27
Q

Management of Risk

A

the identification and acceptance or offsetting of the risks threatening a business

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28
Q

Contingency Planning

A

preparing for unexpected and usually unwelcome events that are reasonably predictable and quantifiable

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29
Q

Crisis Managament

A

responding to a sudden event that poses a significant threat to a firm, can be predictable or unexpected

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30
Q

Statement of Financial Position

A

financial account that states a business assets and liabilities of a business on a particular date

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31
Q

Income Statement

A

An account showing the income and expenditure of a firm over a period of time

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32
Q

Assets

A

items owned by a organisation

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33
Q

Tangible Assets

A

assets that have a physical existence e.g. land or property

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34
Q

Intangible Assets

A

these don’t have physical form e.g. patents and rights

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35
Q

Non-Current Assets

A

resources that can be used repeatedly in the production process e.g. land, buildings, machinery and vehicles

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36
Q

Current Assets

A

short term items that circulate in a business on a daily basis and can be expected to turn into cash within 1 year

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37
Q

Liabilities

A

debts owned by an organisation to its suppliers, shareholder, investors or customer who have paid in advance

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38
Q

Gross Profits=

A

revenue - costs of goods sold

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39
Q

Net Profits=

A

gross profit - expenses

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40
Q

Working Capital

A

the day to day finance used in business

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41
Q

Liquidity

A

the ability to covert an asset into cash without loss or delay

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42
Q

Profit Quality

A

a measure in which a business is sustainable in the long run

43
Q

Profit Utilisation

A

the way in which a business uses its profits or surplus

44
Q

Ratio Analysis

A

a method of assessing a firms financial situation by comparing two sets of linked data

45
Q

Solvency

A

a measure of a firms ability to pay its debts on time. a firm that can meet its financial commitments is solvent. a firm that cannot is insolvent

46
Q

Investment Appraisal

A

the process of deciding whether or not to undertake capital investment or major business projects

47
Q

Investment Appraisal

A

the process of deciding whether or not to undertake capital investment or major business projects

48
Q

Payback Period

A

the length of time it take for an investment to pay for itself from the net returns provided by the particular investment

49
Q

NPV

A

Net Present Value- is the net return of an investment when all revenues and costs have been converted to their current worth

50
Q

Backward Vertical Integration

A

buying out a supplier e.g. chocolate manufacturer buying sugar producer

51
Q

Balance of Payments

A

the sum of the nations income and expenditure om foreign trade

52
Q

Boom

A

a period when the economy is growing rapidly due to consumers, business and investors spending and borrow too much. it may lead to demand-pull inflation

53
Q

Business Cycle

A

the regular pattern of upturns and downturns in demand and output within the economy that tend to repeat themselves every 5 years or so

54
Q

Change

A

is a constant feature of business activity. the key issues are whether it has been forseen by the company, therefore planned for and whether it is within the company’s control

55
Q

Conglomerate Merger

A

occurs between firms which have no clear connection with each other’s business, either horizontally or vertically. the advanatge to the firm of such a move is that it spread risk and may increase overall profit potential

56
Q

Contingency Plan

A

preparing for unwanted or unlikely possibilites.

plans might also be prepared in case of:

  • a severe recession
  • bankruptcy of a major customer
  • a sudden surge in demand
57
Q

Corporate Social Responsibility

A

the ways in which companies address issues beyond their bottom line e.g. profits. In many firms CSR may be important, positive aspect, in others it may be cynical way to prevent unfavourable publicity

58
Q

Cost Benefit Analysis

A

weighing up the financial and soxccial costs of an action or decision against the fincial and social benefits

59
Q

Groupthink

A

is a process of thought in relation to decision-making, adopted by members of a group aimed at reaching consensus with minimal conflict between them, with no reference to a detailed analysis or evaluation of alternative ideas

60
Q

Hortizontal Intergration

A

occurs where a firm takes over or merges with another firm at the same stage of production. the production process starts with raw materials being processed and then moves through manufacturer and assembly to be sold to wholesalers.

61
Q

Hostile Takeover

A

this is when a predator company wishes to acquire a target company and its actions are unwelcome. the predator offers a price for the shares of the target as soon as it has aquired majority, it has managment control

62
Q

Import

A

the purchase of a product or service from overseas

63
Q

Income Tax

A

is a paid promotion of an individual’s gross pay after certain allowances hav been deducted. it is levied in aseries of steps designed to ensure that no one can become worse off by moving into higher tax band

64
Q

Inflation

A

is a sustained rise in average price goods within an economy. it is alos useful to understand it as a fall in the purchasesing power of money, since it is usualy for wages to move ahead at least as fast as the price level

65
Q

Infrustructure

A

name given to the road, rail and air links that provide a network that benefits business and the community

66
Q

Lateral Integration

A

two business invloved with related product lines which do not complete with each other, join together

67
Q

Macro-economic

A

a term indicating the study of a whole economy and the way it interacts. macro-economy depends on the circular flow of national income, it is also the sum or aggregate of all the elements within it

68
Q

Managment Buyout (MB)

A

when the managers of a business buy out the shareholders, therefore buying ownership and control of the firm. it is hope it will give managment the incentive it needs to maximise the productivness of the organisation

69
Q

Merger

A

an agreement between the managments and shareholders of two companies of approximately equal size to bring both forms toegther under a common board of directors

70
Q

Micro- economics

A

the study of how market works. it provides a theoretical framework for the way firms and factors of production operate

71
Q

Mixed Economy

A

it is generally known as the conomies of most countries are a combination to the two extermes with some degree of state interventio in the managment of the economy

72
Q

Multinational

A

a firm which has its headquarters in one country, but with basis manufacturing or assembly plants in others.

73
Q

Privatisation

A

the process of returning firms or industries to the private sector after being run by the state

74
Q

Public Realtions (PR)

A

is the process of obtaining favourable publicity via the editorial columns of press media, TV or radio.

75
Q

Recession

A

part of the trade cycle characterised by slowly rising levels of demand some, investment, patchy business confidence and falling levels of unemployent

76
Q

Regulation

A

is one way in which companies are constrained by law that may cause excessive overhead costs e.g. maximum level of pollution

77
Q

Resource Management

A

ensuring the efficient use of a firm’s key resources staff, finance and capital assets

78
Q

Slump

A

a period of low demand ,
investment and high unemployment. it indicates the way an economy tends to fluctuate between these two extremes

79
Q

Supply Side Policies

A

designed to encourage the free working of markets, including that for labour, capital and land

80
Q

Takeover

A

obtaining full managment control over another firm as a result of purchasing over 50% share capital. this process is also known as aquisition

81
Q

Takeover

A

obtaining full managment control over another firm as a result of purchasing over 50% share capital. this process is also known as aquisition

82
Q

Trade Off

A

the way one option may need to be traded off aganist another e.g. a
firm entertainment budget

83
Q

Value Addesd Tax

A

is a percentage tax added on to the price of goods and services. since each production stage adds value, the tac=x is added at each stage and can be claimed back, until it reaches final consumer, who cannot reclaim

84
Q

Command Economy

A

where the state is in complete control of the economy

85
Q

Free Market Economy

A

where the state plays no part in the control of the economy

86
Q

Economic Systems

A

the extent to which a national government intervenes in the managmnet of an economy varies throughout different coutries in the world

87
Q

Social Enterprises

A

is a business that trades for a social or evironmental purposes. Instaed of maximising shareholder value their goal is to generate profits to further their social/environmental goals

88
Q

Economic Growth

A

measured in an annual basis by comparing the total value of goods and services produced with the economy with the equivalent value in the previous year

89
Q

Sustainable Development

A

Can be thought of as social, economic and enviornmental activites undertaken which meet the current needs of the popualtion in ways that do not hinder the ability of the future deneeration to meet its needs

90
Q

Price Elasticity

A

the responsiveness of demand toc hange in price. when demand is elastic, a price rise leads to a more than prodortionate fall in quantity demanded.

91
Q

Employment

A

is a measure of the number of people in full time jobs within the eonomy, whereas inemployment is a measure of the number ofpeople not in full time jobs

92
Q

Fiscal Policy

A

refers to the use of taxation and government expenditure to influence the economy

93
Q

Balance of Payments

A

is a record of one countries financial dealings with countries in the rest of the world- summaries the net effects of inflows and outflows on an annual basis

94
Q

Monetary Policy

A

it is concerned with controllig the supply of money in the economy and controlling the costs and availability of credit

95
Q

Falling Exchange Rates

A

depreciation is a fall in the external value of one currency aganist another, e.g. pound might depreciate

96
Q

Tariffs

A

is a tax levied on goods imported- this has an effect of raising the cost of the goods imported

97
Q

Import Quotas

A

is a direct restriction on the quantity of some product/good/service that may be imported to a specific country- usually enforced by import liscences to a group of individuals or firm

98
Q

Voluntary Export Resrtictions (VER)

A

these are limits placed on the quantities of products/services qich can be exported to a foreign market- agreed on a voluntary basis between business in domestic market abd government in foreign country to which products will be exported

99
Q

Administrative Restrictions

A

these are rules placed on a business engaged in exporting products to a foreign country. it implies that a product must comply only around the world- once approved by Government- usually under liscence

100
Q

Foreign Direct Investment

A

investing in a country other than the one where the head office is

101
Q

Decentralisation

A

this is the process where the decision-making authority is distributed throughout a larger group

102
Q

Joint Venture

A

occurs when two or more business join together to pursue a common project. firms benefit from collaborative work that reach a mutually agreed strategic target- seek to share costs of major business research

103
Q
A

Business Studies A Level (8 decks)

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