KEY TERMS Flashcards
Chain of command
Route through which orders are passed down in the hierarchy
Delegation
Authority to pass down work from superior to subordinate.
Span of control
Number of people a person is directly responsible for in a business
Formal organisation
Internal structure of a business as shown by an organisation chart
Organisational chart
Diagram that shows the different job roles in a business and how they relate to each other.
Hierarchy
Order or levels of responsibility in an organisation from the lowest to the highest
Authority
Right to command and make decisions
Payroll officer
Someone who is responsible for the administration of workers’ pay in an organisation
Accounts clerk
Someone who keeps records or accounts in an office
Subordinates
People in the hierarchy who work under the control of a more senior worker
Centralised
Type of organisation system where most decision are made at the top of the organisation and then passed down the chain of commands
Decentralised
Type of organisation system where decision making is pushed down the chain of command and away from the top
Limited liability
Shareholders are legally responsible for the debts of a company according to how many shares they own.
Memorandum of association
Document that describes what the company has been formed to do, gives details about the company, including: name, address, objectives, number of shares issued and amount of capital raised.
Private limited company
Private company limited by shares were the shareholder’s properties are kept securily
Franchisee
The entrepreneur who wishes to open a new branch of a franchised chain( who pays the franchisor to do so)
Franchsior
The owner of a brand. E.g. McDonalds, the body shop
Public Limited Company ( PLC )
A limited company whose shares are freely sold and traded, with a minimum share capital of £50 000 and the letters PLC after its name
Stakeholder
Anyone with an interest in the company
Partnership
It is when a company is owned and controlled by 2 to 20 people.
Public Sector Organisation
Their aim is not to make a profit, it is to provide a service. They are run by the government. E.g. firemen, police
Entrepreneur
Person who takes risks and sets up businesses; individual who organices the other factors of production and risks their own money in a business venture
Sole trader
An individual that owns and controls a business and may or may not employ other people.
Unincorporated
Business where there is no legal difference between the owner and the business
Incorporated
Business that has a separate legal identity from that of its owners. E.g. PLCs
Flotation
The process of a company ‘going public’
Stock market
A market for shares in PLCs
Joint Venture
Where two or more companies share the cost responsibility and profits from a business venture
Ventures
New business activity that involves taking risks
Venture capitalists
Specialist investors ( individuals or companies ) who provide money for business purposes, often to new businesses
Privatisation
Transfer of public sector resources to the private sector business
Subsidise
Paying part of the costs ( often by the government in business)
Natural monopoly
Market where it is more efficient to have just one organisation meeting total market demand
Public corporations
Business organizations owned and controlled by the state/ government .
Infrastructure
Basic systems and structures that a country or organisation needs in order to work properly E.g. Basic power lines for new housing development
Primary sector
Production involving the extraction of raw materials from the earth
Secondary sector
Production involving the conversion of raw materials into finished and semi-finished goods.
Assembly plant
Factory where parts are put together to make a finished product
Tertiary sector
Production of services in the economy
Brownfield sites
Areas of land that were once use for urban development.
Monetary policy
Using changes in interest rates and the money supply to manage the economy
Repatriation of profit
Where a multinational returns its profits from an overseas venture to the country where it is based, typically from a developing country to a developed country
Currency reserves
Money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign debts
Trade bloc
Group of countries situated in the same region that join together and enjoy trade free of barriers
Overtrading
Taking on more work than a business can afford to fund effectively.
Undercapitalised
Starting a business with insufficient capital
Job description
Document that shows clearly the tasks, duties and responsibilities expected of a worker for a particular job
Inventory
Stocks of goods. There are 3 types of inventory:
- raw materials inventory
- work-on-process inventory
- finished goods inventory
Communication barriers
Obstacles that prevent effective communication between a sender and a receiver
Application form
Standard document used to collect information from a job seeker
Fixed assets
Resources that are used repeatedly for a period of time by a business such as properties, tools, vehicles and machinery
Informal communication
Using non-approved channels when communicating
Capital employed
Amount of money invested in a business
Person specification
Personal profile of the type of person needed to do a particular job
Curriculum vitae
Document used by a job seeker that lists personal details, qualifications , work experience, referees and other details
