Business (9609) AS Level - All Important Definitions Flashcards

They are measurable targets set by the business, such as sales or profits that have to be achieved within a given time period.

They are the inputs used to produce goods and services; namely land, labour, capital and enterprise.

It involves converting inputs into outputs, which means converting the raw materials into goods and services. E.g. Taking wood from the trees and converting it to furniture.

It is the first stage of production and includes extracting or growing natural resources which are then used by other firms. Farming, mining and fishing are all part of it.

Firms that manufacture goods by processing the natural resources. This includes factories manufacturing computers, brewing beverages, baking, clothes-making and construction.

Firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications. It also includes selling the goods to the final consumer such as shops.

It is a subset of the tertiary sector which includes firms that are involved in the research and development process and are knowledge based. Universities, School and Technology based companies are a part of it.

It is the difference between the selling price of the product and cost of producing the product.

It is the process of increasing the difference between the selling price of the product and the cost of producing the product. This is done either by increasing the selling price or decreasing the cost of production.

It is a name, design, logo, symbol that makes a product recognisable and distinguishes it from the competitors in the eyes of the customer.

They are the forces of supply and demand which determine the price of a product and the quantity bought and sold in a market.

It refers to the limited resources available in comparison to the unlimited wants of consumers.

It measures the benefit lost (forgone) by not consuming or producing the next best alternative. Next best alternative sacrificed (forgone).

It is the risk taking ability to start a new business and take important decisions. It is also the skill needed to make a new idea work.

They are individuals who take the risk to create or start a new business or project.

They are people within an established business who think and act like entrepreneurs. They have all the skills and knowledge of an entrepreneur but they don’t have the ability to take risks.

It is a written document that provides the details of the business objectives that a firm is expecting to achieve in the near future. This document also includes product details, marketing plan, industrial research, financial forecast and other important budgeted information.

occurs when a government takes ownership of a business from the private sector into the public sector.

occurs when a government transfers ownership of a business from the public sector to the private sector.

are goods or services, such as education and health, whose benefits individuals may not fully appreciate. These are goods and services that benefit the society hence it has substantial external benefits.

are goods or services such as cigarettes and alcohol, which harms the society and the individuals do not understand the harm fully. These are goods and services that harm the society hence it has substantial external costs.

occurs when an individual or groups of individuals are not personally responsible for all the actions of their business. Limited companies have limited liability where shareholders are not personally liable for the company’s loans and their liability is limited to their investment in the company.

occurs when an individual or groups of individuals are personally responsible for all the actions of their business. With sole traders, there is no distinction in law between the individuals and the business, and so they could lose their personal assets if the business has financial problems.

is a business organisation which has its own legal identity and which has limited liability.

are persons or organisations that own a part of a company.

occurs when a franchisor sells the rights to use or sell their products to a franchisee.

is a small segment of a market.

is a target that is measurable and has a given timescale.

measures the output per time period of an employee.

is a target set for the business as a whole.

of a business measures its sales as a percentage of the total market sales.

is the movement of cash into and out of a business over a time period.

are moral principles that can shape the way a business behaves.

is a philosophy under which businesses consider the interests of all groups in society as a central part of their decision-making.

sets out the overall purpose of a business.

is a long-term goal that determines the objectives that an organisation sets itself.

is the long-term plan to achieve the objective of a business.

are the short-term actions needed to implement the strategy.

is a goal pursued by a business, such as achieving a particular market share or rate of growth of sales.

are financial plans setting out a business’ future revenues and expenditure.

is behaviour that is thought to be morally correct and not necessarily the most profitable.

are groups or individuals who have an interest in a business.

is the power or ability to carry through a task or action.

are individuals and groups within a business; for example, employees.

are groups outside a business; for example, people who live near to the business’ premises.

are money that is paid out of profits to shareholders. It is a reward to the owners of the business.

is the process of making the most efficient use of an organisation’s employees.

is a reduction in the number of levels of hierarchy within an organisational structure.

is the process of breaking down production into large units and using groups of employees to complete these tasks.

assesses the current workforce and actions necessary to meet the business’ future labour needs.

is the percentage of a business’ workforce that leaves a business over a given period of time (usually one year).

is the process of filling an organisation’s job vacancies by appointing new staff.

list the duties and responsibilities associated with a particular job.

outline the skills, knowledge and experience necessary to fill a given position successfully.

is a legal agreement between an employer and an employee setting forth the terms and conditions of the employment arrangement.

is the attitudes, values and beliefs that normally exist within an organisation.

occurs when an employer terminates the employee’s contract.

take place when an employee is dismissed because a job no longer exists.

is a broad term covering a wide range of facilities that are essential for the well-being of a business’ employees.

is the satisfaction felt by employees within the workplace.

refers to the obligations placed on employees by employers that determine the amount of time that employees spend on work-related activities.

refers to recognising the differences between individual employees and also the differences that may exist between groups of employees.

is the circumstance in which all people are equal, particularly in relation to rights and opportunities in the workplace.

is a process whereby an individual acquires jobrelated skills and knowledge.

refers to activities designed to increase employees’ skills, education, knowledge and abilities in the workplace.

means passing authority down the organisational hierarchy. This is only genuine if the manager relinquishes some control to the subordinate.

occurs when individuals within organisations are being entrepreneurial – taking risks and generating new ideas.

exists when employees have the skills to carry out several roles within an organisation.

is an organisation of workers established to protect and improve the economic position and working conditions of its members.

is negotiation between employers and representatives of employees, normally trade union officials.

describes the factors that arouse, maintain and channel behaviour towards a goal.

describes a situation in which an employee is absent from work without a good reason.

can be defined as the elements required for survival and good mental and physical health.

are individuals and groups who hold similar views on a particular matter – in this case on what motivates employees.

is a system whereby employees are paid according to the quantity of a product they produce.

is the breaking down of production into a series of small tasks, carried out repetitively by relatively unskilled employees.

is a theory that employees have successive requirements that can be fulfilled through work.

are a group of influences that may result in employee dissatisfaction at work.

are a series of factors, such as promotion, that may have positive influences on employee performance at work.

exists where some part of an employee’s pay is linked to the achievement of targets at work. These targets might include sales figures or achieving certain grades in an annual appraisal.

is a reward for working that is based on employee performance or results judged against some targets.

are those extras an employee receives as part of their reward package.

means changing the group of tasks or duties which make up a specific job.

occurs when employees’ jobs are redesigned to provide them with more challenging and complex tasks. Also called vertical loading.

is giving employees more duties of a similar level of complexity. Also called horizontal loading.

is the regular switching of employees between tasks of a similar degree of complexity.

is a series of actions designed to give employees greater control over their working lives.

is the process of grouping together individual tasks to form complete jobs.

is the involvement of employees in the process of decision-making within a business.

includes the functions of ruling, guiding and inspiring other people within an organisation in pursuit of agreed objectives.

is planning, organising, directing and controlling all or part of a business enterprise.

exists when managers keep control of information and make major decisions alone. Sometimes known as authoritarian management.

is a style in which managers take decisions in what they believe are the best interests of their subordinates.

occurs when information is shared and team members participate in decision-making. Sometimes known as participative management.

takes place when managers allow subordinates freedom to make their own decisions.

is the process of identifying, anticipating and satisfying the needs of customers in a mutually beneficial exchange process.

is a marketing target for the business, setting out what it wants to achieve and when.

is a target set for the business as a whole.

is a marketing plan to achieve the marketing objective.

occurs when one business is marketing its products to the final consumers.

occurs when one business is marketing its products to other businesses.

is the total number of items sold (this is measuring volume) or the total value of sales.

measures the rate at which the market as a whole is growing over a given time period.

is something about your product which is perceived by your customers as unique.

occurs when a business focuses on a particular (usually small) segment of the market.

exists when there is a group of clearly identifiable customer needs and wants.

occurs when a business targets the majority of the market.

involves gathering and analysing data about customers to understand their behaviours and take appropriate actions to move them towards a purchase.

measures the proportion of customers who continue to buy from the business over a period of time.

is the process of gathering, analysing and producing data relevant to the marketing process.

gathers data for the first time for a specific purpose.

is a small number of people gathered together to talk about a particular issue in open discussion.

uses data that already exists.

is a group of people selected to represent the population as a whole.

refers to how accurate the findings of market research are.

refers to the extent to which the same results would be received if the research was conducted again.

is the combination of elements that influence a customer’s decision on whether or not to buy a product.

of a business refer to what it offers to sell to its customers. These may be goods, which are tangible items, or services, which are intangible.

of a product refer to its physical aspects, such as how it looks and feels.

of a product refer to aspects that cannot be touched but can still be important to customers, such as the brand and its key values.

occurs when the benefits of your product are perceived as clearly different from competitors’ products.

occurs when a business examines the position of all of its products in terms of their relative market share and market growth.

shows the stages of a product over its lifetime.

occurs when marketing activities are changed to prevent sales from falling.

examines the market position of a firm’s products.

is a method of product portfolio analysis that examines the products of a business in terms of their market share and the market growth.

is when companies set their prices at the same level as, or slightly below, their rivals.

is a pricing strategy aimed at gaining market share via a low entry price.

occurs when a high initial price is set for a product and this is reduced over time.

occurs when different prices are charged for the same product.

occurs when different prices are changed at different times to reflect demand conditions.

occurs when a business considers the costs of an item and adds on an amount or a percentage to ensure it makes a profit.

takes account of the psychological effect of a price on customers.

refers to the combination of ways in which the business communicates about its products.

involves promoting a brand, product or service on digital channels such as search engines, social media, email and mobile apps.

measures the number of visits to a website as a percentage of the number of impressions of a digital advert.

is the amount of money a business allocates to spend on marketing activities such as promotion.

describes how the ownership of a product moves from the producer to the customer.

is where the product is actually sold; for example, the shop.

of a business is the total amount produced in a given time period.

refers to the stocks held in a business, such as materials and semi-finished goods.

oversees the planning, coordination and control of the transformation process, turning resources (inputs) into outputs.

measures the output per hour, per person or per machine.

activities are those that meet the needs of the business or of society without compromising on the ability to meet future needs.

production means there is a high proportion of capital (for example, machinery) used relative to other factors of production.

production means there is a relatively high proportion of labour (employees) used relative to other factors of production.

refers to all the different stages involved in making, distributing and selling a good or service, beginning with the material through to the production of parts, through to the distribution and sale of the product.

involves managing the flow of goods and services, and includes the different processes that transform raw materials into final products.

is an approach that continually seeks to reduce any form of wastage in the production process.

measures the maximum amount of output a firm can produce at a given moment with its existing resources.

are inputs into the transformational process of business, such as land, labour, capital and enterprise.

measures the existing output relative to the maximum possible output.

occurs when a business is producing less than the maximum amount it can produce, given its existing resources.

occurs when a business reduces the scale of its operations and reduces its capacity level.

occurs when one business employs another business to undertake some of the work.

occurs when the business uses other producers to undertake some of its operations.

is any item owned by a business that can generate an income for the enterprise.

is the money invested into a business either by its owners or by organisations such as banks.

are assets that a business expects to hold for one year or more. Examples include property and vehicles.

are needed for a limited period of time, normally less than one year.

are those that are needed over a longer period of time, usually over a year.

exists when a business’ debts (or liabilities) exceed the assets available to pay them.

refers to the money owed by a business to individuals, suppliers, banks and others.

occurs when an individual, a sole trader or a partnership is judged unable to pay its debts by a court of law.

is the dissolution of a company by selling its assets to settle its liabilities.

is a process available to a company to protect itself while it attempts to pay its debts and to escape insolvency.

is the cash a business has for its day-to-day spending. Current Assets - Current Liabilities.

are items owned by a business that can be readily turned into cash. Examples include cash, money owed by customers (trade receivables) and inventories (stocks).

is the amount of money owed by a business to its suppliers for goods and services that have been received but which have not been paid for.

is the amount owed by a business’ customers for products that have been supplied but for which payment has not yet been made.

refers to the purchase of items such as fuel and raw materials that will be used up within a short space of time.

is the spending by a business on noncurrent assets such as premises, production equipment and vehicles.

is a financial statement that records the assets (possessions) and liabilities (debts) of a business on a particular day at the end of an accounting period. It was previously called a balance sheet.

is a financial statement showing a business’ sales revenue over a trading period and all the relevant costs incurred to generate that revenue.

is one that exists within the business.

is an injection of funds into the business from individuals, other businesses or financial institutions.

is a period of time offered by suppliers of goods and services before payment is to be made.

is an amount of money provided to a business for a stated purpose in return for a payment in the form of interest charges.

is funds (in the form of a mix of share and loan capital) that is advanced to businesses which are thought to be relatively high-risk.

takes place when banks provide up to 80 per cent of the value of a business’ debts immediately to provide an instant inflow of cash.

is the provision of financial services for poor and low-income clients.

is a source of finance that entails collecting relatively small amounts of money from a large number of supporters (the ‘crowd’).

is a sum of money given to entrepreneurs or businesses for a specific purpose.

is a business’ most liquid asset – it is notes and coins as well as funds held in the business’ bank accounts.

is a document that records a business’ anticipated inflows and outflows of cash over some future period, frequently one year.

are expenses that a business has to pay to engage in its trading activities.

is the income a business receives from selling its goods or services.

can be related to the production of a particular product and vary directly with the level of output.

are overheads that cannot be allocated to the production of a particular product and relate to the business as a whole.

allocates all the costs of production for the whole business. Therefore, these costs are absorbed into each output unit. This is also known as absorption costing.

can be defined as the difference between sales revenue and variable costs of production.

is the level of production or output at which a business’ sales or total revenue is exactly equal to its total costs of production.

are the amount by which revenue exceeds total costs, although there are several different measures of profit.

calculates the cost of a product solely on the basis of variable costs, thus avoiding the need to allocate fixed costs.

are the total cost of production divided by the number of units produced.

is the extra cost resulting from producing one additional unit of output. In most situations the marginal cost of an additional unit of a product is the variable cost of its production.

is the process of establishing the price of a product by calculating its cost of production and then adding an amount which is profit.

is based on the notion that any price set that is higher than the variable cost of producing a product is making a payment towards fixed costs.

occur when a business’ managers have to decide whether or not to accept unusual customer orders.

measures the quantity by which a firm’s current level of sales exceeds the level of output necessary to break even.

is a process where budget figures are minor changes from the preceding period’s budgeted or actual data.

is a budget that is designed to change along with the sales volume or production levels.

is responsible for the use and management of a particular budget.

exist when budgets are automatically set at zero and budget holders have to argue their case to receive any funds.