Theme 3 - Business Objectives Flashcards
Backward integration
Where a firm joins with another (through merger or acquisition) that is involved in an earlier part of the production chain.
Conglomerate merger
A merger between two firms operating in different markets.
Corporate social responsibility
Actions that a firm takes to demonstrate its commitment to behaving in the public interest.
Demerger
Where a company separates into two or more independent companies.
Firm
An organisation that brings together factors of production to produce output
Forward integration
Where a firm joins with another (through merger or acquisition) that is involved in a later stage of the production chain.
Horizontal integration
Two firms joining who are at the same stage of production in the same industry.
Multinational corporation
A firm that conducts its operations is in a number of countries.
Revenue maximisation:
Where the revenue from sales is maximised.
Sales maximisation
Where the level of sales is maximised so that the firm operates where TR=TC and AR =AC.
Satisficing
Where managers aim to produce satisfaction any results for the firm, e.g.: in terms of profits, rather than trying to maximise them.
Vertical integration
Two firms joining who are at different stages of production but in the same industry.
