Definitions

What is globalization?

Globalization refers to the increasing freedom of movement of goods, capital, and people around the world.

What is free trade?

Free trade means no restrictions or trade barriers exist that might prevent or limit trade between countries.

What are tariffs?

Tariffs are taxes imposed on imported goods to make them more expensive than they would otherwise be.

What are quotas?

Quotas are limits on the physical quantity or value of certain goods that may be imported.

What are voluntary export limits?

Voluntary export limits are when an exporting country agrees to limit the quantity of certain goods sold to one country, potentially to discourage tariffs or quotas.

What is protectionism?

Protectionism is the use of trade barriers to protect a country's own domestic industries.

What is a multinational business?

A multinational business is an organization that has its headquarters in one country but operates branches, factories, and assembly plants in other countries.

What is privatization?

Privatization is the process of selling state-owned and controlled business organizations to investors in the private sector.

What is external growth in business?

External growth is business expansion achieved by merging with or taking over another business from either the same or different industry.

What is a merger?

A merger is an agreement by shareholders and managers of two businesses to bring both firms together under a common board of directors.

What is a takeover?

A takeover occurs when a company acquires more than 50% of the shares of another company, becoming the controlling owner, also known as an acquisition.

What does synergy mean in a business context?

Synergy refers to the concept that 'the whole is greater than the sum of its parts', suggesting the new, larger business will be more successful than the two formerly separate businesses.

What is a monopoly?

A monopoly is a situation in which a business controls at least 25% of the market.

What is a social audit?

A social audit is a report on the impact a business has on society, covering aspects like pollution levels, health and safety records, customer satisfaction, and community contributions.

What is information technology?

Information technology refers to the use of electronic technology to gather, store, process, and communicate information.

What is innovation in business?

Innovation involves creating more effective processes, products, or ways of doing things in a business.

What is computer-aided design (CAD)?

CAD is the use of computers and IT when designing products.

What is computer-aided manufacturing (CAM)?

CAM is the use of computers and computer-controlled machinery to speed up the production process and make it more flexible.

What are environmental audits?

Environmental audits assess the impact of a business’s activities on the environment.

What are pressure groups?

Pressure groups are organizations formed by people with common interests who put pressure on businesses and governments to change policies.

What is economic growth?

Economic growth is an increase in a country’s productive potential, measured by an increase in its real GDP.

What is Gross Domestic Product (GDP)?

GDP is the total value of goods and services produced in a country in one year, adjusted for inflation when referred to as real GDP.

What is business investment?

Business investment refers to expenditure by businesses on capital equipment, new technology, and research and development.

What is the business cycle?

The business cycle describes regular swings in economic activity, varying from boom conditions to recession.

What is a recession?

A recession is defined as a period of six months or more of declining real GDP.

What is inflation?

Inflation is an increase in the average price level of goods and services, leading to a fall in the value of money.

What is deflation?

Deflation refers to a fall in the average price level of goods and services.

What is meant by the working population?

The working population comprises all individuals in the working-age population who are willing and able to work.

What is unemployment?

Unemployment occurs when members of the working population are willing and able to work but cannot find a job.

What is cyclical unemployment?

Cyclical unemployment is caused by low demand for goods and services during a period of slow economic growth or recession.

What is structural unemployment?

Structural unemployment results from the decline of important industries, leading to significant job losses in specific sectors.

What is frictional unemployment?

Frictional unemployment occurs when workers lose or leave jobs and take time to find alternative employment.

What is the balance of payments current account?

The current account records the value of trade in goods and services between one country and the rest of the world.

What is an exchange rate?

The exchange rate is the price of one currency in terms of another.

What is exchange rate depreciation?

Exchange rate depreciation refers to a fall in the external value of a currency against other currencies.

What are imports?

Imports are goods and services purchased from other countries.

What are exports?

Exports are goods and services sold to consumers and businesses in other countries.

What is exchange rate appreciation?

Exchange rate appreciation is a rise in the external value of a currency against other currencies.

What is fiscal policy?

Fiscal policy involves decisions about government expenditure, tax rates, and government borrowing.

What is a government budget deficit?

A government budget deficit occurs when spending exceeds revenue from taxation.

What is a government budget surplus?

A government budget surplus happens when taxation revenue exceeds government spending.

What is monetary policy?

Monetary policy concerns decisions about interest rates and the supply of money in the economy.

What is market failure?

Market failure occurs when markets fail to achieve the most efficient allocation of resources.

What are external costs?

External costs are costs of economic activity that are not paid by producers or consumers, but by the rest of society.

What is income elasticity of demand?

Income elasticity of demand measures the responsiveness of demand for a product following a change in consumer incomes.

What is hard HRM?

Hard HRM is an approach to managing staff focused on cutting costs, often involving temporary and part-time contracts.

What is soft HRM?

Soft HRM is an approach focused on developing staff to achieve self-fulfillment and motivation.

What is a part-time employment contract?

A part-time employment contract is for less than the normal full working week, for example, eight hours per week.

What is a temporary employment contract?

A temporary employment contract lasts for a fixed time period, such as six months.

What is a flexi-time contract?

A flexi-time contract allows staff to be called in at times most convenient to employers and employees.

What is outsourcing?

Outsourcing involves using outside agencies to carry out some business functions instead of hiring staff directly.

What is teleworking?

Teleworking refers to staff working from home while maintaining contact with the office through IT.

What is a zero-hours contract?

A zero-hours contract offers no minimum hours of work; workers are only called in and paid when work is available.

What is labour productivity?

Labour productivity is the output per worker in a given time period.

What is absenteeism?

Absenteeism measures the rate of workforce absence as a proportion of the total employees.

What is workforce planning?

Workforce planning involves analyzing and forecasting the number of workers and skills needed to achieve organizational objectives.

What is a workforce audit?

A workforce audit checks the skills and qualifications of all existing workers and managers.

What is a trade union?

A trade union is an organization that aims to improve pay and working conditions for its members.

What is trade union recognition?

Trade union recognition occurs when an employer agrees to negotiate employment terms with a trade union instead of individual workers.

What is collective bargaining?

Collective bargaining is the process of negotiating employment terms between an employer and a group of workers represented by a trade union.

What are terms of employment?

Terms of employment include working conditions, pay, hours, holidays, and health care benefits.

What is a single-union agreement?

A single-union agreement recognizes just one union for collective bargaining.

What is a no-strike agreement?

A no-strike agreement is a contract where unions agree not to strike in exchange for greater involvement in decision-making.

What is industrial action?

Industrial action consists of measures taken by the workforce or trade union to put pressure on management during an industrial dispute.

What is organizational structure?

Organizational structure is the internal framework that shows how management is organized and how authority is passed through the organization.

What is a matrix structure?

A matrix structure creates project teams that cut across traditional functional departments.

What is the level of hierarchy?

The level of hierarchy refers to a stage within the organizational structure where personnel hold equal status and authority.

What is the chain of command?

The chain of command is the route through which authority is passed down in an organization.

What is span of control?

Span of control is the number of subordinates who report directly to a manager.

What is delegation?

Delegation is the act of passing authority down the organizational hierarchy.

What is centralization?

Centralization refers to keeping important decision-making powers within the head office of an organization.

What is decentralization?

Decentralization is when decision-making powers are passed down the organization to empower subordinates and managers.

What is delayering?

Delayering is the removal of one or more levels of hierarchy from an organizational structure.

Who are line managers?

Line managers are managers who have direct authority over people, decisions, and resources within the hierarchy.

Who are staff managers?

Staff managers are specialists who provide support, information, and assistance to line managers.

What is an informal organization?

An informal organization consists of the personal and social relations that develop between people within an organization.

What is effective communication?

Effective communication is the exchange of information between people or groups, often with feedback.

What are communication media?

Communication media are the methods used to communicate messages.

What is information overload?

Information overload occurs when so much information is received that important messages cannot be easily identified.

What are communication barriers?

Communication barriers are reasons why communication fails.

What are formal communication networks?

Formal communication networks are official channels and routes used within an organization.

What is informal communication?

Informal communication refers to unofficial channels that exist between informal groups within an organization.

What is a marketing plan?

A marketing plan is a detailed report on marketing objectives and the strategy to achieve them.

What is income elasticity of demand?

Income elasticity of demand measures demand responsiveness following changes in consumer incomes.

What is promotional elasticity of demand?

Promotional elasticity measures the responsiveness of demand for a product following changes in promotional spending.

What is cross elasticity of demand?

Cross elasticity of demand measures demand responsiveness following a change in the price of another product.

What is new product development (NPD)?

NPD involves the design, creation, and marketing of new goods and services.

What is test marketing?

Test marketing is the launch of a product in a small-scale market to assess consumer reactions.

What is research and development?

Research and development is the scientific research and technical development of new products.

What is sales forecasting?

Sales forecasting predicts future sales levels and trends.

What is a sales-force composite?

A sales-force composite adds together all individual predictions of future sales made by sales representatives.

What is the Delphi method?

The Delphi method is a long-range forecasting technique that gathers forecasts from a panel of experts.

What is the jury of experts?

The jury of experts uses specialists within a business to make forecasts about future performance.

What is a trend in business analysis?

A trend is the underlying movement in a time series.

What are seasonal fluctuations?

Seasonal fluctuations are regular variations that occur in sales data within a 12-month period.

What are cyclical fluctuations?

Cyclical fluctuations are variations in sales occurring over periods longer than a year due to the business cycle.

What are random fluctuations?

Random fluctuations are unpredictable sales changes caused by unusual events.

What is globalization in economics?

Globalization is the growing trend towards worldwide markets in products, capital, and labor, free from barriers.

What are multinational companies?

Multinational companies have operations in more than one country.

What is free international trade?

Free international trade allows trade without restrictions such as tariffs and quotas.