Key Terms Flashcards
Economies of Scale
Cost advantages gained when a size of a business increases
Retail customers
Customers who buy finished products
Business customers
Businesses that purchase products or services from other businesses
Business activity
Tasks completed by a business to achieve its objectives
Business aims
A summary of what the business wants to achieve in the future
Recessions
A period of economic decline where demand and output fall
Diseconomies of scale
Business becomes too large, the cost per unit may increase, business may become more inefficient
USP
A specific factor that stands out from its competition
Functional area
A division of business where employees have similar roles, skills and expertise
Income statement
Financial statement that shows the revenue, expenses the business has paid and received over a period of time
Statement of financial postion
A summary statement on a particular date that shows the business’ assets, liabilities and owners equity
Cash flow forecasting
Estimating the expected cash inflows and outflows for a period of time in the future
Pricing strategy
The method used to determine the price of a product/service- taking into consideration the competitors prices
Grievance procedures
A specific process for dealing with complaints made by an employee about their treatment at work
Disciplinary procedures
A procedure for dealing with alleged employee misconduct
Centralised structure
Where decision making is kept at the top of the hierarchy
Flat structure
A company structure containing 3 or less levels
Tall structure
A pyramid structure with 4 or more levels
Span of control
Number of subordinates a supervisor manages
Matrix structure
Employees are grouped by a function and product/project
Decentralised structure
Decision making is spread out among the hierarchy
Accountability
The responsibility that someone has for the actions that are carried out even if they, themselves haven’t done it
Opportunity cost
A benefit, profit or other advantage that must be given up to acquire or achieve something else
Depreciation
The cost of an asset consumed over its useful life
Chain of command
How many levels it takes to have information passed up the hierarchy
Insolvent
Unable to pay its debts
Assets
Resources owned by the business thats worth money
Current assets
Assets that are going to paid out within a year ie cash in hand or trade payables
Fixed/Non-current assets
Assets that are worth money but wont be paid out within a year ie table or computer
Conflict resolution
Methods maybe implemented to resolve any issues involving stakeholders
Net cash flow
The total difference between money coming in and out
Retained profit
The money remaining after costs, taxes and dividends have been deducted
