Definitions 1.3

Question 1

Quality circles

Answer 1

discussion groups in which staff discuss an operational problem with a view to recommending a solution to management

Question 2

Remuneration

Answer 2

all of the financial rewards received by an employee: pay, pension contributions, bonuses and any ‘fringe benefits’, such as a company car

Question 3

Autocratic manager

Answer 3

autocratic managers keep most of the authority to themselves; they do not delegate much or share information with employees. Autocratic, or authoritarian, managers tend to tell employees what to do

Question 4

Democratic manager

Answer 4

democratic managers take the views of their subordinates into account when making decisions . Managers discuses what needs to be done and employees are involved in the decision

Question 5

Hubris

Answer 5

Overweening arrogance leading to excessive self-confidence and therefore blindness to the risks taken

Question 6

Nemesis

Answer 6

divine punishment for wrongdoing or presumption; in other words, the fall that comes after pride

Question 7

Paternalistic manger

Answer 7

a paternalistic manager believes he or she knows what is best for their employees. Paternalistic managers tend to tell employees what to do, but will often explain their decisions. They are also concerned with the social needs of the employees

Question 8

Shareholder value

Answer 8

the mix of shareholder dividends and a rising share price that stem from high and rising profitss

Question 9

Geographical mapping

Answer 9

plotting on a map the locations of all the existing businesses in your market, in order to show where all your competitors are

Question 10

Innovations

Answer 10

New ideas brought to the market

Question 11

Line manager

Answer 11

a manager responsible for meeting specific business targets and responsible for specific staff

Question 12

Market map

Answer 12

a grid plotting where each existing brands sits on scales based on two important features of a market - for example, in the car market; luxury/economy and green/gas guzzling

Question 13

Market niche

Answer 13

a gap in the market, that is, no one else is offering what you want to offer

Question 14

Cooperate objectives

Answer 14

targets for the whole business, such as profits to rise by 20% a year for the next three years

Question 15

Delegation

Answer 15

passing authority down the hierarchy, to allow more junior employees some decision-making power

Question 16

Mission

Answer 16

a business aim expressed to make it seem especially purposeful and motivating

Question 17

Mission statement

Answer 17

a short, powerfully expressed sentence or two that explains the business aims clearly yet motivationally

Question 18

Objectives

Answer 18

targets precise enough to allow praise or blame for the person in charge

Question 19

Strategy

Answer 19

a medium-to-long term plan for meeting your objectives

Question 20

Bankrupt

Answer 20

when an individual is unable to meet personal liabilities, some or all of which can be as a consequence of business activities

Question 21

Creditors

Answer 21

these owed money by a business - for example, suppliers and bankers

Question 22

Franchisee

Answer 22

an independent business that has bought the rights to use a better-known firm’s logos and trading practices with a specified area

Question 23

Incorporation

Answer 23

establishing a business as a separate legal entity from its owners, and therefore giving the owners limited liability

Question 24

Limited liability

Answer 24

owners are not liable for the debts of the business; they can lose no more then the sum they invested

Question 25

Sole trader

Answer 25

a one-person business with unlimited liability

Question 26

Unlimited liability

Answer 26

owners are liable for any debts incurred by the business, even if this requires them to sell their assets and possessions and become personally bankrupt

Question 27

Opportunity cost

Answer 27

the cost of missing out on the next best alternative when making a decision

Question 28

Trade-off

Answer 28

accepting less of one thing to achieve more of another - for example, slightly lower quantity in exchange for cheapness

Question 29

Delegation

Answer 29

passing authority down the hierarchy, to allow more junior employees some decision making power

Question 30

Liquidity

Answer 30

the ability of a business to pay its bills on time, which all depends upon having enough cash in the bank