Business AS Level key terms

Job enlargement

Attempting to increase the scope of a job by broadening or deepening the tasks undertaken

Product differentiation

Making a product distinctive so that it stands out from competitors products in consumer's perception.

Market size

The total level of sales of all producers within a market

Off-the-job training

All training undertaken away from the business

Dismissal

Being fired from a job due to incompetence or breach of discipline

Fringe benefits

Benefits given, separate from pay, by an employer to some or all employees

Job redesign

Involves the restructuring of a job - usually with employee's involvement and agreement - to make work more interesting, satisfying and challenging

Stakeholders

People or groups of people who can be affected by- and therefore have an interest in - any action by an organisation

Takeover

When a company buys more than 50% of the shares of another company and becomes the controlling owner of it

Redundancy

When a job is no longer required, the employee doing this job becomes unnecessary through no fault of their own

Profit sharing

A bonus for staff based on the profits of the business - usually paid as a proportion of basic salary

Performance-related pay

A bonus scheme to reward staff for above-average work performance

Public corporation

A business enterprise owned and controlled by the state

Partnership

A business formed by two or more people to carry on a business together, with shared capital investment and usually, shared responsibilities

Sole trader

A business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all the profits

Holding company

A business organization that owns and controls a number of separate businesses, but does not unite them into one unified company

Franchise

A business that uses the name, logo and trading systems of an existing successful business.

Share

A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights

Job description

A detailed list of key points about the job to be filled - stating all its key tasks and resonponsiblities

Person specification

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have

Ethical code

A document detailing a company's rules and guidelines on staff behavior that must be followed by all employees

Paternalistic leadership

A leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organization

Laissez-faire leadership

A leadership style that leaves most of the business decision-making to the workforce - the reverse of autocratic style

Democratic leadership

A leadership style that promotes the active participation of workers in taking decisions

Employment contract

A legal document that sets out the terms and conditions governing a worker's job

Public limited company

A limited company, often a large business, with the legal right to sell shares to the general public

Bonus

A payment made in addition to the contracted wage or salary

Commission

A payment to a sales person for each sales made

Piece rate

A payment to a worker for each unit produced

Shareholder

A person or institution owning shares in a limited company

Consumer profile

A quantified picture of consumers of a firm's products, showing proportions of age groups, income levels, location, gender and social class

Self-actualisation

A sense of self-fulfillment reached by feeling enriched and developed by what one has learned and achieved

Private limited company

A small-medium sized business that is owned by shareholders who are often members of the same family; this company cannot sell shares to the general public

Mission statement

A statement of the business's core aims, phrased in a way to motivate employees and to simulate interests by outside groups

Autocratic leadership

A style of leadership that keeps all decision making at the centre of the organisation

Market Segment

A sub-group of a whole market in which consumers have similar characteristics

Merger

An agreement by shareholders and managers of two businesses to bring both firms together under a common board of directors with shareholders in both businesses owning shares in the newly merged business

Manager

An employee who is responsible for setting objectives, organizing resources and motivating staff so that the organization's aims are met

Product orientation

An inward-looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them

Social enterprise

An organization that applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for shareholders

Market orientation

An outward-looking approach based on consumer demand, as established by market research

Salary

Annual income that is usually paid on a monthly basis

Motivating factors

Aspects of a worker's job that can lead to positive job satisfaction, such as achievement, recognition, meaningful and interesting work and advancement at work

Hygiene factors

Aspects of a worker's job that have the potential to cause dissatisfaction, such as pay, working conditions, status and over-supervision by managers

External growth

Business expansion achieved by means of merging with or taking over another business, from either the same or different industry

Multinational businesses

Business organization that has its headquarters in one country, but with operating branches, factories and assembly plants in other countries

Direct competitor

Businesses that provide the same or very similar goods or services

Private sector

Comprises businesses owned and controlled by individuals or groups of individuals

Public sector

Comprises organizations accountable to and controlled by central or local government

Mixed economy

Economic resources are owned and controlled by both private and public sectors

Free-market economy

Economic resources are owned largely by the private sector with very little state intervention

Command economy

Economic resources are owned, planned and controlled by the state

Internal growth

Expansion of a business by means of opening new branches, shops or franchises

Primary sector business activity

Firms engaged in extracting natural resources so that they can be used and processed by other firms.

Secondary sector business activity

Firms that manufacture and process products from natural resources

Tertiary sector business activity

Firms that provide services to consumers and other businesses.

Niche Marketing

Identifying and exploiting a small segment of a larger market by developing products to suit it

Market Segmentation

Identifying different segments within a market and targeting different products or services to them

Creating value

Increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for

Job rotation

Increasing the flexibility of employees and the variety of work they do by switching from one job to another

On-the-job training

Instruction at the place of work on how a job should be carried out

Induction training

Introductory training program to familiarize new recruits with the systems used in the business and the layout of the business site.

Marketing strategies

Long-term plan established for achieving marketing objectives

Labour turnover

Measures the rate at which employees are leaving an organization. Measured by: (Number of employees leaving in 1 year/ average number of people employed) X 100

Time-based wage rate

Payment to a worker made for each period of time worked

Market share

Sales of the business as a proportion of total market shares. Calculated by: (Firm's sales in time period/total market sales in time period) X 100

Privatisation

Selling state-owned and controlled business organizations to investors in the private sector

Mass Marketing

Selling the same products to the whole market with no attempt to target groups within it

Entrepreneur

Someone who takes the financial risk of starting and managing a new venture

Emotional intelligence

The ability of managers to understand their own emotions, and those of the people they work with, to achieve better business performance

Leadership

The art of motivating a group of people towards achieving a common objective

Opportunity cost

The benefit of the next most desired option which is given up

Added value

The difference between the cost of purchasing bought in materials and the price the finished goods are sold for

Marketing objectives

The goals set for the marketing department to help the business achieve its overall objectives

Motivation

The internal and external factors that stimulate people to take actions that lead to achieving a goal

Marketing

The management task that links the business to the customer by identifying and meeting the needs of customers profitably. Getting the right product at the right price to the right place on the right time.

Equilibrium price

The market price that equates supply and demand for a product

Consumer services

The non-tangible products sold to the general public

Limited liability

The only liability a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder.

Market growth

The percentage change in the total size of a market over a period of time

Consumer goods

The physical and tangible good sold to the general public

Capital goods

The physical goods used by the industry to aid in the production of other goods and services

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it and attracting suitable candidates for the job

Demand

The quantity of a product that consumers are willing and able to buy at a given price in a time period

Supply

The quantity of a product that firms are prepared to supply at a given price in a time period

USP

The special feature of a product that differentiates it from competitors' products

Human resource management

The strategic approach to the effective management of an organization's workers so that they help the business gain a competitive advantage

Market capitalisation

The total value of a company's issued shares

Capital employed

The total value of all long-term finance invested in the business

Stakeholder concept

The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

Societal marketing

This approach considers not only the demands of the consumers but also the effects on all members of the public involved in some way when firms meet these demands

Articles of Association

This document covers the internal workings and control of the business

Memorandum of Association

This states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and the declared aims of the business.

Revenue

Total value of sales made by a business in a given time period

Joint venture

Two or more businesses agree to work closely together on a particular project and create a separate business division to do so

Quality circles

Voluntary groups of workers who meet regularly to discuss work related problems and issues.

Training

Work-related education to increase workforce skills and efficiency

Worker participation

Workers are actively encouraged to become involved in decision making within the organization

Corporate social responsibility

businesses that consider the welfare of society by taking taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment

Triple bottom line

economic, social and environmental