BIZ HL IB 2024

Demotivation

exists when an employee has no interest in, or enthusiasm for, their work.

Authority

is the power to control situations or the decisions and actions of others.

Economies of scale

occur when unit costs fall as the scale of production increases.

Diseconomies of scale

occur when unit costs increase as the scale of production increases.

Break-even output

occurs at the output at which total revenue equals total costs.

Adding value

occurs in a transformation process when outputs are produced that are worth more than the inputs brought in to provide them.

Capacity under-utilization

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

Diversification

occurs when a business offers new products and services in new markets.

A cultural clash

occurs when an organization has two or more different cultures operating at the same time and these cultures do not work harmoniously together.

Economic collaboration

occurs when countries make trade easier between each other.

Cybercrime

occurs when individuals or businesses undertake illegal online activities.

Democratic leadership

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

Batch production

occurs when items move together from one stage of a process to another.

Benchmarking

occurs when one business decides to measure its performance against the leaders in the field so it can learn how to improve the quality of what it does.

Correlation

occurs when there are apparent links between variables, for example promotional spending and sales.

A capital-intensive process

has a high proportion of capital goods compared to labour and land.

Critical path analysis

(or network analysis) shows the activities involved in a project which have no float time. This means that if these activities are delayed, it will delay the whole project: that is why it is critical they happen within the set time.

Boston Consulting Group (BCG) matrix

, which is also called product portfolio analysis (PPA), examines the market position of a firm's products in terms of their market share and the growth of the market in which it is operating.

Below-the-line (BTL) promotions

are activities that target a specific group through direct contact with them rather than using mass media.

Barriers to communication

are any factors that prevent information being passed successfully between two or more people.

Costs

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

Budgets

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

Assets

are items owned by a business such as cash in the bank, vehicles and property.

Debentures

are long-term loans with fixed rates of interest. Land or property is often used as security for this type of loan capital.

Dividends

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

Centralized organizations

are ones in which managers hold the greatest decision-making power.

Creditors

are organizations such as suppliers to which the business owes money.

Above-the-line promotions

are paid-for marketing communications such as advertising.

Debtors

are people and organizations that owe the business money.

Credit sales

are purchases made by a business's customers for which payment is delayed, normally by between 30 and 60 days.

Cash sales

are purchases where payment is made at the time of the sale.

Cash inflows

are the movement of cash into a business, for example as a result of selling its products.

Cash outflows

are the movement of cash out of a business, for example when it pays for its supplies.

Contribution

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

Direct costs

can be related to the production of a particular product and vary directly with the level of output. Examples include the costs of raw materials and fuel.

Absenteeism

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

Cradle-to-cradle design and manufacturing

describes an approach to developing and producing products in such a way that they can be recycled at the end of their lives.

The Ansoff matrix

examines business strategies in terms of the goods and services offered and the markets a business competes in.

Autocratic leadership

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

A cost-leadership strategy

involves becoming the lowest-cost organization in the industry in which the business is competing.

Brand development

involves building the brand identity and values as well as communicating these to customers.

Data analytics

involves modelling, transforming and creating visualizations of the data with the aim of identifying meaningful and useful information that can help the business make conclusions and decisions.

Contingency planning

involves preparing for unexpected events that might happen and how to respond in this situation.

A company

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

A cooperative

is a business that is owned and run by and for its members, who have one vote each.

Cash

is a business's most liquid asset - it is notes and coins as well as funds held in the business's bank accounts.

A cost centre

is a distinct part (perhaps a division or department) of a business for which costs can be calculated/allocated.

Collateral

is a form of security required by banks and other financial organizations before agreeing a loan. The security is normally assets which can be sold to recoup the loan if it is not repaid.

A decision tree

is a mathematical model which can be used by managers to help them make the right decision: it analyses and estimates the possible outcomes of different courses of action and works out the likelihood of these occurring based on a quantitative understanding of risk.

Conciliation

is a method of resolving individual or collective disputes in which a neutral third party encourages the continuation of negotiations.

A brand

is a name, design, logo, symbol or indeed anything that makes a product recognizable and distinguishes it from the competition in the eyes of the customer.

A business angel

is a person who has a large personal fortune and is willing to use some of this money to support risky ventures.

Corporate social responsibility (CSR)

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

Arbitration

is a procedure for the settling of a dispute, under which the parties agree to be bound by the decision of a third party.

Administration

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

Data mining

is a process used by businesses to identify and summarize patterns within data.

Delayering

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

A crisis

is a significant threat to the operations of a business that can have negative consequences if it is not handled properly.

Crowdfunding

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

A corporate objective

is a target set for the business as a whole.

A business plan

is a written document that sets out key aspects of a business idea and how it will be developed.

360-degree feedback

is an approach to appraisal in which an individual receives information about their performance at work from a range of people with whom they work, such as junior and senior colleagues, customers and suppliers.

Artificial intelligence (AI)

is an overall term for 'smart' technologies that are aware of and can learn from their environments to assist or support human decision-making.

Brand loyalty

is measured by the extent to which customers return to buy a particular brand and the extent to which they prefer this brand over those of rivals.

Collective bargaining

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

A budget holder

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

Break-even quantity (or point)

is that level of output or production at which a business's sales generate just enough revenue to cover all its costs. At this level of output no profit or loss is made.

Business culture

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

Division of labour

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

Communication

is the exchange of information between people.

A chain of command

is the line of communication and authority existing within a business.

Capital employed

is the long-term capital used within the business and is the sum of its non-current liabilities and its equity.

Capital

is the money invested into a business and is used to purchase a range of assets including machinery and stocks.

Cash flow

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

Delegation

is the passing down of authority through an organization.

Closure

is the permanent shutdown of a business as a result of an unresolved conflict between an employer and employees.

Discounting

is the process of adjusting the value of money received at some future date to its present value (its worth today).

Crisis management

is the process of creating and applying strategies to help an organization minimize the damage of an unexpected emergency to the business.

Depreciation

is the reduction in the value of a non-current asset over a period of time.

Appraisal

is the regular process of considering and evaluating the performance of an individual employee.

Capital expenditure

is the spending by a business on non-current assets which will be used for more than one year, such as premises, production equipment and vehicles.

Demography

is the study of human populations.

Commission,

like piece rate, is the payment for the quantity (or value) that is produced by an individual employee.

Capital productivity

measures how effectively a business uses its fixed assets to generate output for the business.

Current ratio

measures the ability of a business to pay its short-term debts by dividing its current assets by its current liabilities.

Capacity utilization

measures the existing output relative to the maximum possible output.

Acid-test ratio (or quick ratio)

measures the extent to which a business's liquid assets will be sufficient to cover its short-term debts.

Brand awareness

measures the extent to which people are aware of and can remember a particular brand.

Capacity

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

Defect rate

measures the proportion of output which is rejected or has failings.

Bankruptcy

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

Decentralization

or decentralized organizations give greater decision-making power to employees further down the organizational structure.

Development

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

Disruptive innovation

refers to an innovation that creates a whole new market and disrupts the leaders in the existing markets.

Big data

refers to large complex data sets whose size or type is beyond the ability of traditional relational databases to capture, manage and process.

Cybersecurity

refers to protecting computer networks from hacks which can either leave viruses to stop the system working or steal data.

Distribution of a good or service

refers to the way in which the ownership of it passes from the producer to the consumer.

Contribution per unit =

revenue per unit (price) - variable cost per unit.

Contribution =

revenue − variable costs of production.

Debt factoring

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