Business Studies Glossary

Vocabulary flashcards covering business, finance, marketing, and operations terms as defined in the lecture glossary.

Promotion (marketing)

The marketing activities of advertising and sales promotion which aim to raise customer awareness of a product or brand, generate sales and help create brand loyalty.

Shareholders

The owners of a limited company. They buy shares which represent part-ownership of the company.

Public limited companies

Businesses owned by shareholders but, unlike private limited companies, they can sell shares to the public. Their shares are traded on stock exchanges.

Short-term finance

Provides the working capital needed by businesses for day-to-day operations and is repaid within $1$ year.

Public sector

Organisations in the economy that are owned and controlled by the government.

Slump

A very serious recession with rapid falls in output and increases in unemployment.

Quality assurance

Setting quality standards throughout the production process and checking these are reached at each stage of the process.

Social enterprise

A business that has social objectives as well as an aim to make a profit to reinvest back into the business.

Quality control

Checking for quality of a good or service at the end of the production process.

Social media

Online platforms and networks that facilitate social interaction and content sharing with other users.

Quality products

Of a standard which meets customer expectations.

Social responsibility

When a business aims to benefit stakeholders other than shareholders such as by protecting the environment by reducing pollution and using the most sustainable production methods.

Questionnaire

A set of questions to be answered as a means of collecting data for primary market research.

Sole trader

A business owned and controlled by $1$ person.

Real income

The spending power of income. It falls when prices rise faster than money income and rises when incomes increase faster than inflation.

Span of control

The number of subordinates working directly under a manager.

Recession

When there is a period of falling GDP.

Stakeholder

Any person or group with a direct interest in the performance and activities of a business.

Recruitment

The process that starts with identifying that the business needs to employ someone up to the point at which applications have arrived at the business.

Start-up capital

The finance needed by a new business to pay for essential non-current assets and current assets before it can begin trading.

Recycling

Takes previously used products and materials and reprocesses them so they can be used again.

Statement of financial position

Shows the value of a business's assets and liabilities at a particular time.

Redundancy

When an employee loses their job because the business closes down or the work done by the employee is no longer needed.

Statement of profit or loss

A financial account that records the income of a business and all costs incurred to earn that income over a period of time, for example, $1$ year.

Redundancy payments

Made to employees by the business when they are made redundant.

Strike

When a trade union tells its members not to work in order to put pressure on employers to meet trade union demands.

Renewable energy

Power obtained from sources that are not used up in energy production, such as solar and wind power.

Sustainable production

Needs businesses to minimise the use of natural resources and dangerous materials and to reduce waste and pollution.

Retailer

A business that sells products to customers in relatively small quantities.

Takeover

When one business buys out the owners of another business, which then becomes part of the 'predator' business.

Reusing

Not throwing items away after $1$ use but using them again or using them for another purpose.

Tertiary sector

The sector of industry that provides services to consumers and the other economic sectors.

Revenue

The income of a business from the sale of goods or services during a period of time.

Time-based rate

The amount paid to an employee for $1$ hour of work.

Salary

Payment for work, usually paid monthly, and is not usually for a specific number of hours worked.

Total assets

Calculated as $\text{Non-current assets} + \text{Current assets}$.

Sales promotions

Incentives such as special offers or reward schemes aimed at consumers to achieve short-term increases in sales.

Total costs

The addition of all fixed and variable costs of a business in a given time period, expressed as $\text{Fixed costs} + \text{Variable costs}$.

Sample

A group of people who are selected to respond to a primary market research exercise, such as a questionnaire.

Total fixed costs

The addition of all of the fixed costs of a business.

Secondary market research

Also called desk research; uses information that has already been collected and is available for use by others.

Total liabilities

Calculated as $\text{Non-current liabilities} + \text{Current liabilities}$.

Secondary sector

The sector of industry that manufactures goods using the raw materials provided by the primary sector.

Total variable costs

The addition of all variable costs at a certain level of output.

Services

Intangible products, such as banking or transport, that are provided by businesses to customers.

Trade credit

When a business is allowed to pay a supplier some time after materials have been purchased.

Trade receivables

Amounts owed to the business by customers who purchased products on credit.

Marketing

Identifying customer wants and satisfying them profitably.

Marketing mix

Used to describe all the activities which go into marketing a product or service, often summarised as the $4$ Ps: product, price, place and promotion.

Market segment

An identifiable sub-group of a whole market in which consumers have similar characteristics or preferences.

Market segmentation

When a business knows that different segments of a market exist and it develops and markets different products to each segment.

Market share

The percentage of total sales revenue for the whole market held by one brand or business.

Market research

The process of gathering, analysing and interpreting information about a market.

Marketing strategy

A plan with a marketing objective and details of the marketing mix that aims to achieve it.

Mass market

Where a business sells to the largest part of the market, often where standardised products are being sold.

Mechanisation

The introduction of machines into production methods.

Opportunity cost

The value of the next best alternative given up when choosing one option over another.

Organisational chart

A diagram that outlines the departmental and management structure.

Organisational structure

The levels of management and division of responsibilities within an organisation.

Packaging

The physical container or wrapping to protect a product and help in promoting it.

Partnership

Formed when $2$ or more people agree to jointly own a business.

Partnership agreement

The written and legal agreement between business partners; while not essential, it is always recommended.

Part-time employee

Someone who works fewer hours than a full-time employee, often less than $35$ hours a week.

Penetration pricing

When the price is set lower than competitors' prices in order to enter a new market and gain market share.

Person specification

A document outlining the requirements, qualifications, expertise and personal characteristics a successful applicant should have.

Piece-rate

An employee payment method that is paid for each unit of output produced.

Merger

When the owners of $2$ businesses agree to join their businesses together to make one business.

Message

The information or instructions being passed by the sender to the receiver.

Pollution

The introduction of harmful materials into the environment.

Motivation

The reason why employees want to work hard and work effectively for the business.

Pressure groups

Groups of people who act together to try to force businesses or governments to adopt certain policies.

Multinational companies (MNCs)

Companies with factories, production or service operations in more than $1$ country.

Price skimming

Where a high price is set for a new product on the market.

Net cash flow

The difference between cash inflows and cash outflows during each period of time, usually $1$ month.

Primary market research

Also called field research; the collection and collation of original data via direct contact with potential or existing consumers.

Niche market

A small, usually specialised, segment of a much larger market.

Primary sector

The sector of industry that extracts and uses natural resources from the Earth to produce raw materials.

Non-current assets

Property, machinery and other assets owned by a business which will not be turned into cash within $1$ year.

Private limited companies

Businesses owned by shareholders who cannot sell shares to the public, only to family, friends or specialist business investors.

Non-current liabilities

Long-term debts owed by the business, repaid over more than $1$ year.

Private sector

The part of the economy owned and operated by individuals and companies, usually for profit, and not state/government controlled.

Observation

A method of market research that collects data about consumer behaviour by watching and recording their actions.

Product life cycle

The stages a product will pass through, from introduction, through growth to maturity and finally decline.

Off-the-job training

Involves being trained away from the workplace, usually by specialist trainers.

Productivity

The output measured against the inputs used to create a product or service; a measure of efficiency.

On-the-job training

Occurs when a trainee observes and practises with an experienced employee at the workplace.

Profit

The surplus after total costs have been subtracted from total revenue, calculated as $\text{Total revenue} - \text{Total costs}$.

Online shopping

The action or activity of buying goods or services over the internet.

Profitability

Measures the profit of a business in comparison to its revenue or capital employed.

Online ticketing

Booking a service online and receiving a digital ticket that can be printed or stored in a device's memory.

Profit sharing

When a proportion of business profits is paid out to employees.

Opening balance

The cash held by the business at the start of each period of time.

Promotion (advancement)

The advancement of an employee in an organisation, for example, to a higher job or managerial level.

3D printing

Producing a physical three-dimensional object from a digital design.

Added value

The difference between the selling price of a product and the cost of bought-in materials and resources used to produce it.

Advertising

A paid-for communication with potential customers about a product to encourage them to buy it.

Agent

An independent person or business appointed to deal with the sales and distribution of a product range.

Annual General Meeting (AGM)

A legal requirement for all public limited companies where shareholders vote on the Board of Directors.

Capital

The money invested into a business by the owners.

Capital employed

The total amount of capital invested in a business for the purpose of generating profits.