KEY TERMS

Question 1

Chain of command

Answer 1

Route through which orders are passed down in the hierarchy

Question 2

Delegation

Answer 2

Authority to pass down work from superior to subordinate.

Question 3

Span of control

Answer 3

Number of people a person is directly responsible for in a business

Question 4

Formal organisation

Answer 4

Internal structure of a business as shown by an organisation chart

Question 5

Organisational chart

Answer 5

Diagram that shows the different job roles in a business and how they relate to each other.

Question 6

Hierarchy

Answer 6

Order or levels of responsibility in an organisation from the lowest to the highest

Question 7

Authority

Answer 7

Right to command and make decisions

Question 8

Payroll officer

Answer 8

Someone who is responsible for the administration of workers’ pay in an organisation

Question 9

Accounts clerk

Answer 9

Someone who keeps records or accounts in an office

Question 10

Subordinates

Answer 10

People in the hierarchy who work under the control of a more senior worker

Question 11

Centralised

Answer 11

Type of organisation system where most decision are made at the top of the organisation and then passed down the chain of commands

Question 12

Decentralised

Answer 12

Type of organisation system where decision making is pushed down the chain of command and away from the top

Question 13

Limited liability

Answer 13

Shareholders are legally responsible for the debts of a company according to how many shares they own.

Question 14

Memorandum of association

Answer 14

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.

Question 15

Private limited company

Answer 15

Private company limited by shares were the shareholder’s properties are kept securily

Question 16

Franchisee

Answer 16

The entrepreneur who wishes to open a new branch of a franchised chain( who pays the franchisor to do so)

Question 17

Franchsior

Answer 17

The owner of a brand. E.g. McDonalds, the body shop

Question 18

Public Limited Company ( PLC )

Answer 18

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

Question 19

Stakeholder

Answer 19

Anyone with an interest in the company

Question 20

Partnership

Answer 20

It is when a company is owned and controlled by 2 to 20 people.

Question 21

Public Sector Organisation

Answer 21

Their aim is not to make a profit, it is to provide a service. They are run by the government. E.g. firemen, police

Question 22

Entrepreneur

Answer 22

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

Question 23

Sole trader

Answer 23

An individual that owns and controls a business and may or may not employ other people.

Question 24

Unincorporated

Answer 24

Business where there is no legal difference between the owner and the business

Question 25

Incorporated

Answer 25

Business that has a separate legal identity from that of its owners. E.g. PLCs

Question 26

Flotation

Answer 26

The process of a company 'going public'

Question 27

Stock market

Answer 27

A market for shares in PLCs

Question 28

Joint Venture

Answer 28

Where two or more companies share the cost responsibility and profits from a business venture

Question 29

Ventures

Answer 29

New business activity that involves taking risks

Question 30

Venture capitalists

Answer 30

Specialist investors ( individuals or companies ) who provide money for business purposes, often to new businesses

Question 31

Privatisation

Answer 31

Transfer of public sector resources to the private sector business

Question 32

Subsidise

Answer 32

Paying part of the costs ( often by the government in business)

Question 33

Natural monopoly

Answer 33

Market where it is more efficient to have just one organisation meeting total market demand

Question 34

Public corporations

Answer 34

Business organizations owned and controlled by the state/ government .

Question 35

Infrastructure

Answer 35

Basic systems and structures that a country or organisation needs in order to work properly E.g. Basic power lines for new housing development

Question 36

Primary sector

Answer 36

Production involving the extraction of raw materials from the earth

Question 37

Secondary sector

Answer 37

Production involving the conversion of raw materials into finished and semi-finished goods.

Question 38

Assembly plant

Answer 38

Factory where parts are put together to make a finished product

Question 39

Tertiary sector

Answer 39

Production of services in the economy

Question 40

Brownfield sites

Answer 40

Areas of land that were once use for urban development.

Question 41

Monetary policy

Answer 41

Using changes in interest rates and the money supply to manage the economy

Question 42

Repatriation of profit

Answer 42

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

Question 43

Currency reserves

Answer 43

Money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign debts

Question 44

Trade bloc

Answer 44

Group of countries situated in the same region that join together and enjoy trade free of barriers

Question 45

Overtrading

Answer 45

Taking on more work than a business can afford to fund effectively.

Question 46

Undercapitalised

Answer 46

Starting a business with insufficient capital

Question 47

Job description

Answer 47

Document that shows clearly the tasks, duties and responsibilities expected of a worker for a particular job

Question 48

Inventory

Answer 48

Stocks of goods. There are 3 types of inventory: - raw materials inventory - work-on-process inventory - finished goods inventory

Question 49

Communication barriers

Answer 49

Obstacles that prevent effective communication between a sender and a receiver

Question 50

Application form

Answer 50

Standard document used to collect information from a job seeker

Question 51

Fixed assets

Answer 51

Resources that are used repeatedly for a period of time by a business such as properties, tools, vehicles and machinery

Question 52

Informal communication

Answer 52

Using non-approved channels when communicating

Question 53

Capital employed

Answer 53

Amount of money invested in a business

Question 54

Person specification

Answer 54

Personal profile of the type of person needed to do a particular job

Question 55

Curriculum vitae

Answer 55

Document used by a job seeker that lists personal details, qualifications , work experience, referees and other details