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OCR Business Studies > F291 > Flashcards

F291 Flashcards

1
Q

What are the four inputs into a business?

A

Capital, enterprise, land and labour

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2
Q

Define entrepreneur.

A

Someone who makes a business idea happen, either through their own effort, or by organising others to do the work

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3
Q

Define opportunity cost.

A

The cost of the next best alternative foregone

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4
Q

Define stakeholder.

A

Any person or group of people who have a direct interest in the business

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5
Q

Define strategic decisions.

A

Decisions that concern the long-term objectives and overall plans of a business, and are taken by senior management and directors

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6
Q

Define tactical decisions.

A

Short- or medium-term decisions made on a day-to-day basis, such as ordering stock and planning production schedules

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7
Q

Define cash flow forecast.

A

Estimating future monthly cash inflows and outflows, to find out the net cash flow

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8
Q

Define collateral.

A

An asset used as security for a loan. It can be sold by a lender if the borrower fails to pay back a loan

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9
Q

Define negative cash flow.

A

When cash outflows are greater than inflows

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10
Q

Define overtrading.

A

When a firm expands without adequate and appropriate funding

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11
Q

Define public limited company.

A

A company with limited liability, and shares that are available to the public. Its shares can be quoted on the stock market

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12
Q

Define share capital.

A

Business finance that has no guarantee of repayment or of annual income, but gains a share of the control of the business and its potential profit

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13
Q

Define stock market.

A

A market for buying and selling company shares. It supervises the issuing of shares by companies. It is also a secondhand market for stocks and shares

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14
Q

Define venture capital.

A

High-risk capital invested in a combination of loans and shares, usually in a small, dynamic business

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15
Q

Define employment tribunal.

A

An informal courtroom where legal disputes between employees and employers are settled

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16
Q

Define external recruitment.

A

Where a job vacancy is filled by appointing a candidate from outside the business

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17
Q

Define induction training.

A

Familiarises newly appointed workers with key aspects of their jobs and their employer, such as health and safety policies, holiday entitlement and payment arrangements. The aim is to make employees productive as soon as possible

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18
Q

Define internal recruitment.

A

Where a job vacancy is filled by appointing someone from the existing workforce

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19
Q

Define job description.

A

A document that outlines the duties and responsibilities associated with a particular job role

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20
Q

Define labour market failure.

A

The reluctance of employers to invest in training for fear that staff, once trained, will be poached by other firms attempting to avoid training costs. If sufficient firms are discouraged from training employees, overall skill levels within the workforce will fall, leading to a loss of competitiveness for the economy as a whole

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21
Q

Define National Minimum Wage.

A

The lowest hourly wage rate than an employer can legally pay to an employee

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22
Q

Define off-the-job training.

A

Where employees leave their normal place of work in order to receive instruction, either within the firm or by using an external organisation such as a college or university

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23
Q

Define on-the-job training.

A

Where employees acquire or develop skills without leaving their usual workplace, perhaps by being guided through an activity by a more experienced member of staff

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24
Q

Define person specification.

A

A document that outlines the qualifications, skills and other qualities needed to carry out a particular job successfully

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25
Q

Define selection techniques.

A

The processes used by an organisation to choose the most appropriate candidate for a job, such as interviewing or testing

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26
Q

Define zero training.

A

The opposite of customer service, in that it implies that staff need neither skills nor positive attitudes to work for the business

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27
Q

Define backdata.

A

Keeping records of the results from past research to provide a comparison with the latest results

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28
Q

Define bias.

A

A factor that causes research findings to be unrepresentative of the whole population

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29
Q

Define primary research.

A

Finding out information first-hand

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30
Q

Define secondary research.

A

Finding out information that has already been gathered

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31
Q

Define sample size.

A

The number of people interviewed; this should be large enough to be confident that the findings are representative of the whole population

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32
Q

Define sampling method.

A

The approach chosen to select the right people to be part of the research sample

33
Q

Define diseconomies of scale.

A

The increase in average costs as a business expands beyond its ability to control and manage itself

34
Q

Define economies of scale.

A

The reduction in average costs as a result of savings brought about by an increase in the scale of production

35
Q

Define primary sector.

A

Companies and people working to extract raw materials from the earth or sea

36
Q

Define secondary sector.

A

Businesses that transform raw materials into finished goods

37
Q

Define tertiary sector.

A

Companies and people who provide services, either to the public or to businesses

38
Q

Define bankrupt.

A

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

39
Q

Define creditors.

A

Those owed money by a business

40
Q

Define incorporation.

A

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

41
Q

Define limited liability.

A

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

42
Q

Define Registrar of Companies.

A

The government department that can allow firms to become incorporated; located at Companies House, where Articles of Association, Memorandums of Association and the annual accounts of limited companies are available for public scrutiny

43
Q

Define sole trader.

A

A one-person business with unlimited liability

44
Q

Define unlimited liability.

A

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

45
Q

Define accountable.

A

The idea that a business and its owners are responsible and answerable to the stakeholders for their activities

46
Q

Define corporate objectives.

A

Long- or medium-term objectives that reflect the overall aims of the business

47
Q

Define hierarchy of objectives.

A

A model of how the different objectives relate to each other in a hierarchical manner

48
Q

Define mission statement.

A

A statement that expresses the goals of the business and the image that the organisation stands for

49
Q

Define public sector.

A

In this sector organisations are owned and run on behalf of the public by central or local government

50
Q

Define social responsibility.

A

The responsibility of an organisation to maximise positive impact on society and mini,one negative impact on society

51
Q

Define equilibrium price.

A

The price at which producers are prepared to supply and consumers are prepared to buy

52
Q

Define European Union.

A

A union of countries in Europe with close economic, social and political ties

53
Q

Define excess demand.

A

Where prices are set at a low level and consumers are prepared to buy more than suppliers are prepared to supply

54
Q

Define excess supply.

A

Where prices are set at a high level and producers are prepared to supply more than consumers are prepared to buy

55
Q

Define inferior goods.

A

Products that people turn to when they are hard up, and turn away from when they are better off

56
Q

Define luxury goods.

A

Products that people buy much more of hen they feel better off

57
Q

Define normal goods.

A

Products or services for which sales change broadly in line with the economy

58
Q

Define supply.

A

The quantity of a product that a producer is prepared to sell at a particular price

59
Q

Define monopolistic competition.

A

Occurs when the firms competing within a marketplace have sufficient product differentiation to achieve a degree of monopoly power. This usually results from the development of brand names strong enough to prevent competition being purely on the basis of price

60
Q

Define monopoly.

A

When one seller controls more than 25% of the market. Monopolies are price makers

61
Q

Define non-price competition.

A

Rivalry based on factors other than price

62
Q

Define oligopolistic.

A

A market in which a few large companies have a dominant share

63
Q

Define predatory pricing.

A

When a large company sets prices low with the deliberate intention of driving a weaker rival out of business

64
Q

Define USP.

A

A point of genuine difference that makes one product stand out from the crowd

65
Q

Define ethics.

A

Set of morals and beliefs that a company may lay down for its employees. These values often form the culture and objectives of the business

66
Q

Define business ethics.

A

The interface between decision making and morals

67
Q

Why might internal recruitment motivate a workforce?

A

It shows staff there are opportunities for promotion

68
Q

Why would a business recruit externally?

A

New staff bring new ideas and skills into the business

69
Q

How can businesses advertise job vacancies to external candidates?

A

Through media advertising such as specialist magazines, job centres, commercial recruitment agencies or executive search consultants who are paid to directly approach individuals

70
Q

What are the advantages and disadvantages of interviews?

A

They are cheap and allow a variety of information to be obtained, however they are susceptible to bias and don’t show how competent a candidate will be at their job

71
Q

What does testing and profiling involve?

A

Aptitude tests in areas such as maths, English and IT and psychometric profiling which examines the personality and attitudes

72
Q

What is a disadvantage of profiling?

A

A business may have a specific personality in mind when recruiting, however a wider variety of personalities may lead to a more creative working environment

73
Q

What do candidates do at assessment centres?

A

They take part in role plays and simulations to do with the job they are applying for

74
Q

What methods of research can be useful when researching a new market or on a low budget?

A

Observation and retailer research

75
Q

Which research methods can be used to gain qualitative research?

A

Group discussions/focus groups, depth interviews, questionnaires

76
Q

Define random sampling.

A

Everyone in a population has an equal chance of being selected, names may be picked from a register of some sort and a random number generator used

77
Q

Define quota sampling.

A

Selecting a sample in proportion to consumer profiles, cheaper and more effective than random as can be done in interviewers own convenience

78
Q

Define stratified sampling.

A

Interviewing only people with a certain characteristic and then randomly sampling or quota sampling

OCR Business Studies (2 decks)

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