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Definitions for Business paper 1 exam > Definitions > Flashcards

Definitions Flashcards

1
Q

Above-the-line promotion

A

a paid form of promotion that is undertaken by a business by paying for communication with consumers, e.g. advertising

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2
Q

Acquisition

A

A takeover (or acquisition) occurs when a company buys a controlling interest in another firm, i.e.. it buys enough shares in the target business to hold a majority stake. (usually more than 50%) Acquisitions are hostile.

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3
Q

Aquifer

A

Natural, underground water storages

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4
Q

Below-the-line promotion

A

promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase, e.g. sales promotion techniques

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5
Q

Below-the-line promotion

A

promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase, e.g. sales promotion techniques

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6
Q

Board of Directors

A

elected by shareholders to make strategic future-focused decisions on their behalf. Directors are elected because of their skills and expertise and because shareholders do not necessarily want to get involved in the daily running/decision making of the company.

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7
Q

Brand Leader

A

To become the brand with the highest recognition and largest market share in the market. A brand leader is a product or brand that is recognized as the most popular or dominant within a specific market or industry. It is often the first brand that comes to mind when consumers think of a particular product category and has a strong reputation and customer loyalty. A brand leader typically has a large market share and is often imitated by competitors.

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8
Q

Business

A

An idea made to satisfy the wants and needs of customers. The 4 main types of businesses are sole traders, partnerships, private and public limited companies.

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9
Q

Business Sectors

A

Businesses can be classified according to the stage of production that they are engaged in

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10
Q

Primary Sector

A

Resource Extraction (Mining, Forging etc.) Gaining raw materials

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11
Q

Secondary Sector

A

Manufacturing products

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12
Q

Tertiary Sector

A

Service

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13
Q

Quaternary Sector

A

information technology, research, and development, as well as consulting services and education.”

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14
Q

Capital Productivity/Productivity Rate

A

This measures how efficiently an organisation’s fixed assets are used to generate output for the business.

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15
Q

Change

A

Refers to the modification or transformation in the way business is conducted as a response to internal factors or external influences. It arises when internal and/or external factors that influence the operations of a business do not stay the same.

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16
Q

Charities

A

A charity is a non-profit organisation that uses donations and funding to support a specific cause or mission. Charities can take various forms, including foundations, religious organisations, and community organisations. The main purpose of a charity is to serve the public good and provide assistance to those in need, rather than to make a profit for shareholders or owners.

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17
Q

Public limited company

A

It is an incorporated business with limited liability and is owned by shareholders, where shares are traded on the stock exchange.

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18
Q

Consumer

A

The end-users of a product. This contrasts with customers who are the buyers of the product.

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19
Q

Corporate Social Responsibility

A

It’s the conscientious consideration of ethical and environmental practices related to business activity. A business that adopts CSR acts morally towards its various stakeholder groups and the well-being of society as a whole.

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20
Q

Demand

A

refers to the total amount of a good or service purchased at a particular price, in a given time period.

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21
Q

Director

A

A person responsible for managing and leading a division or department.

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22
Q

Distribution Channel

A

The channel of distribution refers to the means used to get a product to the consumer.

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23
Q

Dividends

A

The distribution of a company’s profit, to its shareholders, who get a certain percentage of the profit of the company, if the company allows this, according to their percentage ownership

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24
Q

Division

A

A part of a company that operates as a separate unit with its own management and employees.

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25
Q

Economies of scale

A

refer to lower average costs of production as a firm operates on a larger scale due to gains in productive efficiency. Essentially, the spreading of fixed costs across a large number of units.

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26
Q

Internal EOS

A

purchasing, operational, marketing, transportation, managerial, finance. Internal measures measure a company’s efficiency of production and occur because of factors controlled by its management team.

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27
Q

External EOS

A

pool of skilled labour, good infrastructure, growing market no. of buyers), technological advancements. External happen because of larger changes within the industry, so when the industry grows, the average costs of business drop

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28
Q

Employmen

A

Refers to the number of people of the working age who are in the workforce.

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29
Q

External Growth

A

External growth (or inorganic growth) occurs when a business grows by collaborating with, buying up or merging with another firm. Main types include
Mergers and Acquisition
Joint ventures
Strategic alliances
Franchises

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30
Q

Flexible-Working Contract

A

A flexible working contract is an employment agreement that allows for a more flexible arrangement of working hours and/or location, as opposed to a traditional 9-to-5, in-office setup.

31
Q

Horizontal Integration

A

a business acquires another business in the same step in the chain of production (i.e. they have the same business activity). It increases market share

32
Q

Human Resources Department

A

Department focused on dealing with issues regarding employees such as hiring and organisation. Their task is to work out business’s needs for employees, given goals for strategic development.

33
Q

Incentive Payment

A

A payment to the employees to stimulate greater output

34
Q

Income Stream

A

A source of revenue for a company.

35
Q

Induction training

A

Induction is training done to new recruits to familiarise them with the firm’s policies as to decrease the time needed to be familiar, which impacts productivity

36
Q

Internal growth

A

Internal growth (also known as organic growth) occurs when a business grows using its own capabilities and resources to increase the scale of its operations and sales revenue.

37
Q

Labour Turnover

A

Labour turnover measures the number of workers who leave a firm as a percentage of the workforce, per year. It is often used to gauge the level of motivation in an organisation.\

38
Q

Leadership

A

Leadership is the process of influencing and inspiring others to achieve organisational goals.

39
Q

Situational Leadership

A

Situational leadership is a leadership style that is not based on any single dominant approach. In essence, it is about using the right leadership style for the right situation.

40
Q

Autocratic Leadership

A

An autocratic leader is one who makes all the decisions and prefers not to delegate any responsibility. Instead, the autocratic leader (or the authoritarian) simply tells subordinates what to do.”

41
Q

Lean Production

A

Producing goods in a manner that reduces waste output and time

42
Q

Less-economically developed countries

A

are countries with low levels of economic development and a low standard of living for their citizens. These countries typically have a weak industrial base, low per capita income, high levels of poverty, and a lack of basic infrastructure and social services. LEDCs are often located in less developed regions of the world, such as Africa, Asia, and Latin America.

43
Q

Manufactures

A

This refers to the process of combining and transforming raw materials and/or components into final goods, ready for sale to customers. SVT’s Engineering Division produces water treatment equipment and power turbines.

44
Q

Market Research

A

Market Research is designed to discover and gather the opinions, beliefs and preferences of the thinking pattern and buying habits of customers. Market research can either be primary or secondary.

45
Q

Market Share

A

measures the value of a firm’s sales revenues as a percentage of the total sales revenue in the industry. Market share can be calculated in volume (quantity) or value (monetary value).

46
Q

Market

A

A place or system where goods and services are bought and sold.

47
Q

Marketing Budget

A

How much money a business allocates to spend on marketing purposes.

48
Q

Mission Statement

A

A declaration of the underlying purpose of an organisation’s existence and its core values. This statement is updated more frequently than a vision statement.

49
Q

Monopoly

A

A market structure characterised by a single seller of a product that faces no competition from other firms and it has substantial market power and is the price maker of the product in that region.

50
Q

Motivation

A

The managerial process/aspect where intrinsic and extrinsic factors are used to increase employees’ satisfaction as to reflect on improving their productivity.

51
Q

Financial methods of Motivation

A

Salaries
Wages
Commissions - Getting a certain percentage of what YOU as the employee sold
Performance related pay - depending on how you perform you get paid
Profit-related pay
Fringe payments - bonus payments
One time incentive payments
Employee Share-ownership schemes

52
Q

Non-financial methods of Motivation

A

Job Enrichment: Employees have full control over their jobs with little supervision
Job Empowerment - when an employee performs well they get recognition and can have more say in decisions etc, may also get promotions
Job Rotations: Employers work in different divisions of the business
Job Enlargement: Employees have more tasks to do
Teamwork - everyone working together allows for encouragement

53
Q

Narrow Span of Control

A

A narrow span of control means that there are fewer subordinates who are accountable to a manager. It is therefore easier to communicate and the decision making process doesn’t take time.

54
Q

Non-governmental organisations (NGOs)

A

type of non-profit organisation that operates independently from any government. NGOs are established to serve a specific social cause or address a particular issue, and they may focus on areas such as human rights, poverty alleviation, environmental protection, or disaster relief. They are funded through donations, grants, and other forms of support, rather than by government agencies.

55
Q

One-Time Incentive Pay

A

A bonus or a form of compensation for employees in exchange for going above and beyond their normal duties

56
Q

Operational Authority

A

refers to the power given to an individual or a group within an organisation to make decisions and take action related to the day-to-day operations of the business. This authority allows the individuals or group to manage and direct the resources of the organisation to achieve the desired goals and Objectives.

57
Q

Order Book

A

An order book shows the buy and sell prices in real-time (constantly being updated)

58
Q

Organization by product

A

refers to structuring a workforce according to the goods or services produced or sold. Each department focuses on a different product within the organisation’s overall product portfolio

59
Q

Outreach program

A

An outreach program is an initiative or effort by an organisation to reach out to and engage with a specific target audience or community.

60
Q

Pricing Strategy

A

Pricing strategies are the methods and procedures companies employ to determine the rates they charge for their goods and services.
Pricing strategies include:
Cost-plus pricing
Price discrimination
Skimming pricing
Penetration pricing
Loss leading pricing
Predatory pricing (illegal do not use)
Psychological pricing

61
Q

Product

A

A broad term that refers to any physical or non physical item that is purchased by either commercial or private customers.

62
Q

Product Portfolio

A

all products produced by the firm with different product lines and ranges.

63
Q

Product Line

A

Group of connected products marketed under a single brand name by the same company.

64
Q

Product Range

A

: Refers to the different models of the product line.”

65
Q

Productivity

A

Refers to the level of efficiency in the production process. The more productive resources are, the more output they generate.

66
Q

Recruitment

A

is the process by which the HR department identifies its needs and vacancies to be filled, and begins the processes of finding most suitable candidates until the contract has been signed.

67
Q

Redundancy

A

when a job is no longer required so the employee doing this job becomes redundant through no fault of their own.

68
Q

Secondary data

A

Involves the collection of second hand data and information that already exists. Secondary research is a cheaper and faster method of data collection.

69
Q

Friendly takeover

A

occurs with the consent of the target company’s management and board of directors. The acquiring company and the target company work together to negotiate a deal that is mutually beneficial to both parties.

70
Q

Hostile takeover

A

Occurs when the acquiring company attempts to take over the target company without the consent of its management and board of directors. The acquiring company may make a public offer to the target company’s shareholders to purchase their shares, or may attempt to gain control of the target company through other means, such as a proxy fight.”

71
Q

Transport

A

To move a product or resource from one place to another.

72
Q

Vertical Integration

A

occurs when a business grows by acquiring other businesses in earlier or later stages in the chain of production. It is divided into backwards vertical integration and forward vertical integration.

73
Q

Vision Statement

A

A statement that defines an organisation’s goals and aspirations. Outlines the long term aspirations of a business and what it aims to achieve, usually vague , qualitative and inspiring; forms the foundation for the objectives of a business, including its core values and sense of direction, essentially guiding decision-making and setting the tone of how managers and employees behave

Definitions for Business paper 1 exam (1 decks)

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