GCSE BUSINESS

Aim

Aim

The intention to reach a goal.

Air pollution

The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment

Asset

Something the business owns; it has a value

Average rate of return

The average profit for the year as a percentage of the original investment.

Average rate of return = average return per annum/initial investment × 100

Business plan

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.

Chain of command

The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.

Commission

An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.

Customer engagement

The relationship between the business and the customer that puts the customer’s requirements at the centre of the operation to build brand loyalty.

Customer loyalty

The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.

Customer satisfaction

Whether customers are pleased with the goods/services they receive; whether they would purchase again.

Economies of scale

The cost advantage of producing on a large scale. As output increases the unit cost decreases.

Employees

Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.

Enterprise

The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate

Entrepreneur

A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.

Ethical objectives

A business’ goals that relate to fair business practice or moral guidelines and make a positive contribution to the business’ reputation.

External growth

The growth of a business by joining with another by merger or takeover.

Flat organisational structure

An organisational structure with a wide span of control and few levels of hierarchy (a short chain of command)

Flow production

Using a production line to make goods continuously and in large numbers.

Franchising

The sale of the rights to use/sell a product by a franchisor to a franchisee. A fixed fee and/or a percentage is paid in return. The franchiser specifies the standards and provides training and support.

Growth

A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.

Just in case (JIC)

Organising procurement to ensure that the production process never runs out of stock, reducing the number of sales lost due to insufficient raw materials.

Just in time (JIT)

Organising the ordering of raw materials and components to be delivered just before they will be used, reducing the need for storage

Lean production

Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.

Limited liability

The owners are not responsible for the debts of the business. The limit of their liability for the business’ debts is the amount they invested

Local community

The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.

Management

Organising and coordinating business activities in order to fulfil production and meet the business’ objectives.

Mergers

When two or more businesses agree to join together

Objective

A specific statement that defines a precise goal that can be measured and delivered within a given time

Off-the-job training

Employees are trained away from their job, at a college, training provider or the business’ training centre.

On-the-job training

Employees learn alongside experienced colleagues while they are doing the job.

Organic growth

A business grows by increasing its output, by increasing its customer base or by developing new product(s).

Organisational structures

The way in which the organisation is divided into levels of management, functions and responsibilities.

Outsourcing

Contracting another business to carry out some of the business’ activities, often to reduce costs

Part time

Working only a proportion of the full time hours.

Partnerships

A business that is owned and operated by a group of between 2 or more people

Point of sale

Opportunities to communicate information about the product in the place where it is sold (retail outlet); window displays, hanging signs or shelf signs.

Private limited company (ltd)

A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.

Public limited company (plc)

A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability

Shareholder(s)

Those people who own shares in a limited company; each shareholder is a part owner of the business.

Sole traders

A business that is owned and operated by one person.

Span of control

The number of people for whom a manager is directly responsible.

Stakeholders

Those with an interest in the way that a business operates.

Supply chain

The network of organisations, people, activities, information and resources that take the product/service from supplier to customer

Takeover

One business takes control of another.

Unlimited liability

When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business’ debts if the business’ funds were insufficient.

Zero-hour contract

Zero-hour contract