General Vocab

360-degree feedback

• Process whereby an employee receives feedback from all of the people with whom the employee comes into contact.

• Because it is so comprehensive and expensive, it is typically done for senior members.

Above-the-line promotion

• The various forms of mass-media promotion that are aimed at mass or large audiences

• Generally not targeted

Artificial intelligence

• The ability of computers to do things normally associated with intelligent beings

• Such as understanding speech, operating autonomous vehicles, and determining optimal delivery routes.

Autocratic leadership

• A type of leadership where the leader concentrates all decision-making in their own hands

• They neither seek input from subordinates or value input that they might try to provide.

Bankruptcy

• A legal process that insolvent companies enter into when they can no longer pay their debts.

• Usually, a court will oversee the process of the company restructuring and repayment of its debts or liquidation of assets.

Batch production

• A method used to produce similar items in groups.

• Each group (batch) goes through a stage of production together before the whole batch moves onto the next stage together

• This continues until the batch is completed

Below-the-line promotion

• Various types of promotion that are focused on specific segments or groups

• They do not rely on mass promotion techniques

• eg. fliers, banners, SMS, emails, pamphlets, sponsorships and in-store promotions.

Benchmarking

the practice of comparing a company’s performance and processes to the performance and processes of recognised industry leaders.

Big data

• Extremely large, structured or unstructured, data sets.

• Increasing organisation have them as more computer devices are interconnected and more data are collected using devices.

• They are then analysed and used for predictive purposes (see “Data mining”).

Brand awareness

the degree to which consumers recognise a product by its name, logo, product, or special characteristics.

Brand development

• The process of building brand awareness.

• Through careful nurturing of the company’s core values and of customers’ perceptions of the company and brand.

Brand loyalty

• When customers continue to buy from a particular brand and continue to make repeated purchases.

• Even when alternative products or companies exist

Brand value

• An estimation of how much a brand is worth.

• Based on their reputation, potential income, and market value.

• The brand value never appears on the company’s balance sheet.

Bureaucracy

• When referring to any organisation, that have multiple layers of authority and complex approval processes.

• Decision-making in bureaucracies is generally slower.

Capacity utilization

The percentage measure of the extent to which a business is using its productive capacity.

Capital expenditure

The expenditure for assets whose useful life is more than one year (for example, property, plant and equipment).

Centralization

• When an organisation concentrates authority for decision-making in the personnel at the main, or central, office of the business.

• Individuals not in the central office largely focus on implementing the decisions made in the central office.

Chain of command

• The official hierarchy in an organization.

• Specifies who reports to whom, and who has direct authority over specific employees.

Collective bargaining

• Process where the employees of an organisation work together when bargaining with management about wages and work conditions.

• Can occur in non-union organisations

• Typically representatives of the union(s) assist with the collective bargaining, as employees are members of unions.

Commission

• A type of payment to an employee who is responsible for completing a sale or performing a service.

• Typically a set percentage of the monetary value of the transaction.

Competitive pricing

When a company bases the price for its goods or services upon what its competitors are charging for similar goods and services.

Conciliation and arbitration

• Conciliation (informal) is the agreement to rely on a third party, someone with expertise in dispute resolution.

• Arbitration is a formal binding process whereby a third party, the arbitrator, acts like a judge to issue a legally enforced a decision, that is binding for some agreed-upon amount of time.

• (can occur in the collective-bargaining process)

Contribution pricing

• Where the price charged for a good is based upon the variable costs

• The remaining difference between the price charged and the variable costs per unit is a contribution to fixed costs and profit.

Cooperatives

• Businesses owned and operated by their members

• Share the profits

• Usually want to meet a economic, cultural, or social need than generating profit for investors.

Copyright

A form of intellectual property giving the author or creator the exclusive right to reproduce the work for a period time.

Corporate social responsibility (CSR)

• View that businesses should govern themselves and act in a way that enhances society and businesses’ stakeholders.

• And that businesses should be held accountable for their actions that affect individuals, communities or the environment.

Cost centre

A department or unit of a company that has costs but does not contribute to the profits of the business because a cost centre does not generate revenue.

Cost-plus (mark-up) pricing

• Pricing method whereby all total direct costs and some allocation of indirect costs are added together, along with some mark-up.

• This guarantees more profit than contribution pricing (only VC)

Cradle-to-cradle design

• Designing products that looks to natural processes

• By use materials in the products that, when no longer needed, become the basis for future materials — to be able to use raw materials indefinitely

Current assets

Cash and other assets that a business plans to convert into cash in less than one year (debtors and stock/inventory).

Current liabilities

Debts and other payables that are due within one year.

Customer loyalty programmes

• Marketing strategies that reward customers, often with points or discounts, for repeat purchases from a store or of a brand.

Cybercrime

An intentional malicious attack on one or more organization’s networks, computers or other related electronic systems and devices.

Cybersecurity

The process of defending networks, computers or other related electronic systems and devices from any type of malicious attack (cyberattack).

Data analytics

• Working with either primary or secondary data and encompasses statistics, visualisation, and data mining to answer business questions.

• Increasingly, data are captured electronically, and computer systems are used to analyse the data.

Data mining

• Predictive analytics.

• Process of finding broad trends, patterns and correlations within large data sets, and using those findings to predict future situations.

Database

• A systematically constructed set of electronic data files

• Organised in such a fashion that they can be easily opened, administered and updated.

Decentralization

• When an organization delegates authority for some decision-making to offices that are not the main or central offices.

• Authority for making decisions, other than the highest-level strategic decisions, are made by managers in regional or outlying offices, as they have a better sense of local conditions.

Defect rate

The percentage measure of the number or volume of product that fails to meet specified quality guidelines.

Delayering

• When a business removes levels of hierarchy in an organization.

• Shortening the chain of command

Delegation

• Assigning authority/responsibility over specific tasks from one person to someone lower down the organizational chart.

• The senior person remains accountable for the successful completion of the tasks.

Democratic leadership

• A style of leadership whereby the leader actively solicits input from members of the organization

• Encourages their participation in decision-making.

Depreciation

1. The loss of the value of a long-term asset over time.

2. The exact allocation in the financial statements of the cost of a long-term asset over the life of the asset — negative in NCA

Direct cost

• A cost that is precisely traceable to a specific cost object, which may be a product, a service, or a department.

• eg. direct labour, direct material, commissions...

Diseconomy of scale

The increase in per-unit production cost as a business grows.

Disruptive innovation

• When someone or some organization creates something so wholly new that it fundamentally disrupts the marketplace

• Creating a new market

Distribution channel

• The network used to move a product from manufacturer to the end users.

• Can be direct or indirect.

• Producer — agent — wholesaler — retailer — consumer

Dynamic/surge/time-based pricing

• Changing the price of a good or service according to the demand

• Surge: prices go up when a surge in demand occurs

• Time-based: prices change according to the time of day or year.

Economy of scale

The reduction in per-unit production cost as a business grows.

Employees share-ownership schemes

• Types of programmes that award employees shares in the company or allow them to purchase shares in the company at a below-market price.

• Aim: enhance employee compensation and/or to make employees more loyal and more committed to the company, as they have some ownership in the company.

Empowerment

• A management strategy.

• A long-term process whereby employees are developed and given the tools and resources to make decisions.

External growth

• When a business expands by relying on external resources

• Typically by acquiring or forming some kind of relationship with another organisation.

Strategic alliance

• formal, collaborative agreement between two or more organisations to share resources, knowledge and risks to achieve common goals.

• But maintain their autonomy

Fixed costs

Those costs that, during the relevant period, do not vary with output or activity.

Formative appraisal

Continuous appraisal of employees so that they can improve their performance.

Franchising

• A business organisation whereby a business (the franchisor) develops the product or service and brand, and then sells the right to use the brand and its product or service to other businesses (franchisees).

• The franchisee typically pays, in addition to an original fee, some percentage of revenue and agrees to comply with operating and quality specifications set by the franchisor.

Fringe payments

• Any kind of compensation that an employee receives other than their salary.

• Fringe payments might be the use of a company car, life insurance coverage or, in countries without a national health insurance, health insurance coverage.

Incremental innovation

When small and continuous improvements are made to the existing products, services or processes in a business.

Indirect cost/overhead

Costs that are used in multiple areas or activities of the business and, therefore, are not traceable to a specific cost object.

Induction

• The process of welcoming new employees into a company and providing company-specific rules, regulations and training

• Aim: increase the likelihood that they can successfully perform their job according to the expectations of the company.

Industrial democracy

1. The process of allowing workers to have a say in the decision-making of a company.

2. Co-determination (legal right): whereby several workers will sit on the board of directors of the company and assist in making highest-level organisational decisions.

3. More formal than a democratic leadership styles — usually legally mandated system.

Innovation

occurs when someone or some organization creates something new with value.

Insolvency

• When the company cannot pay its debts

• (1) When a company lacks the ability to pay its bills and debts owing to insufficient cash.

• (2) When a company’s liabilities > value of its assets. That is, the company has a negative net worth.

Insourcing

• When a company decides to have its own personnel perform tasks or operations previously performed by an external organisation. (moving from out to in)

Intellectual property

• all types of intangible interests in work or inventions to which a company has proprietary rights.

• The most common types of intellectual property are patents, copyrights and trademarks.

Internal growth

• When a business gets larger by using its own resources.

• Reinvests its profits in new products, new sales channels or more stores, in order to increase sales.

Internet of things (IoT)

The systems of computerized devices transmitting data to one another without human involvement.

Job enlargement

• A technique of job design whereby many tasks associated with a job are officially added to the job description.

• The additional tasks are horizontal in terms of skill and difficulty level.

Job enrichment

• A motivational technique

• When a job is given additional tasks that are challenging and are usually done by managers.

• Make the work more interesting, lead to professional growth, and can eventually lead to higher pay or promotion.

• Aim: increase satisfaction and motivation (Herzberg motivators: achievement, recognition, responsibility, advancement & Maslow: esteem and self-actualisation)

Job production

When each product is produced individually, usually to unique specifications of the customer, and the production process begins when the previous job is completed.

Job rotation

• When employees are regularly rotated into different positions in an organization,

• Allows the employees to gain experience, new skills, and a broader perspective about how the various positions fit into the whole organization.

Joint venture

When two businesses create, own and operate a third organization.

Synergy

Concept that the combined performance of two groups is greater than their sum of their seperate individual parts.

Just-in-time

an inventory management strategy that minimizes the amount of stock (inventory) that a company holds at any time. Raw materials are ordered and delivered immediately before their use. Today, the term is sometimes applied to manufacturing (just-in-time manufacturing), which is very similar to lean production. All stages of the manufacturing and sales process are done just-in-time, from arrival of raw materials and other inputs for manufacturing to shipment of finished goods.

Kaizen

A Japanese term that means “continuous improvement”. Kaizen is a philosophy, an approach where employees are encouraged to always seek better ways to improve processes and to implement those changes, even when they appear to be only minor adjustments. Collectively, continuous small improvements can have a significant impact.

Laissez-faire leadership

A style of leadership whereby the leader “lets go” of decision-making and allows members of the group or team to make decisions.

Lean production

A systematic approach to production that attempts to reduce waste at all stages of the production process. Reducing waste includes all elements of waste, such as materials, space, human effort, and so on. Lean production is the attempt to produce high-quality products that the customers want while using as few resources of any kind in doing so.

Levels of hierarchy

The number of layers of authority available within an organization. It determines the chain of command.

Liquidity

The ability to convert an asset into cash without loss of value. Therefore, cash is a company’s most liquid asset, typically followed by debtors (accounts receivable) and stock (inventory).

Lockouts

in certain respects, the opposite of a strike. Lockouts occur when, as part of the negotiating process with labour, management locks up the company or factories so that the workers cannot enter the premises. With lockouts, even employees who wish to do their jobs or are happy enough with wages and working conditions cannot perform their jobs.

Loss leader

A product that is sold at a loss to attract customers into the store. For example, a company selling scores of products may advertise one popular item at a very low price (loss leader) with the hope that customers, while at the store, will purchase other products, which are priced to make a profit.

Margin of safety

This is the difference between the current or forecasted level of sales and, respectively, the current or forecasted break-even level of sales.

Market growth

The increase in the number of consumers who buy a product or service. It also refers to the increase in the number of products sold.

Market orientation

an approach by companies that seeks to determine what customers need and want, and then make, design and deliver products or services based upon the customers’ needs and wants.

Market share

the percentage of a given market controlled by a particular company or product. Market share can be calculated based upon either total sales value or, with high cost items, like automobiles, by volume (in terms of total units).

Mass customization

a combination of mass production and individualized customization.Because of computer-assisted design and advanced robotics, certain items manufactured today can have features of both mass manufacturing and individualization.

Mass market

A market for goods that are produced in very large quantities. Because of economies of scale, products sold in mass markets are less expensive than goods produced for niche or highly specialized markets.

Mass/flow production

the production of large amounts of standardized products in an assembly line. it is a continuous process whereby a product moves on an assembly line from stage to stage. At each stage, a worker or robot will perform some operation on the semi-completed product, which will then flow to the next stage. Products are continuously being started and completed.

Matrix structure

When individuals in an organization report to more than one person in the fulfillment of the job duties. Matrix structures often exist in work environments where projects and project completion require the “signing off” by managers in different areas of the organization, each manager with a different type of expertise (marketing, operations, human resources, and so on).

Merger and acquisition

A merger occurs when two companies legally consolidate into one company, while an acquisition occurs when one company purchases the shares of another company. Thus, a legal distinction exists between a merger and an acquisition, though, in practice, the two have very similar aims

Niche market

A small part of a larger market. In niche markets, customers have very specialized needs or wants that are different from the larger market. Often, products sold in niche markets are more expensive than in mass markets, precisely because products for niche markets are not suitable for mass production and sale.

Non-governmental organizations (NGOs)

organizations independent of government. They are non-profit and often have a humanitarian or social purpose. Though technically independent, NGOs often receive government funding and cooperate with the government.

No-strike agreement

A provision in the collective bargaining agreement whereby the workers agree that they will not take strike or other industrial action against the company for a specified period of time, typically the life of the collective bargaining agreement.

Offshoring

occurs when a business moves some, or virtually all, of its business operations to another country.

Off-the-job training

process of training employees offsite, and the training is provided by an outside party where employees are replicating tasks that they will eventually do as part of their job.

On-the-job training

process of training employees during their normal working hours and onsite as an employee performs tasks of their jobs.

Organizational chart

A visual presentation (in the form of a chart) that shows the reporting relationships within an organization. At the top of the organizational chart will be the chief executive officer (CEO). Beneath the CEO are the people who directly report to him or her, and beneath that layer, the chart shows who reports to whom, all the way down to the lowest level of the workforce.

Organizational culture

refers to the beliefs, norms, customs and social practices of an organization. Organizational culture will typically reflect some of the cultural practices of the host country, though any two organizations within one host country could have remarkably different organizational cultures.

Outsourcing/subcontracting

occurs when a business takes an internal function and has it performed externally by another person or business.

Partnership

refers to a business owned and run by two or more persons who share the profits, often specified in a partnership agreement. Like a sole trader, no legal distinction exists between the business and the partners, who legally are 100% liable for all debts of the partnership, regardless of any understanding specified in the partnership agreement (unlimited liability).