Business complete flashcards

360-degree feedback

When an employee receives feedback from all of the people around them

360-degree marketing

A marketing campaign that reaches customers at all possible points of contact.

above the line promotion

Promotion aimed at mass audiences, generally not targeted.

absorption costing

Used to allocate indirect costs. Divides indirect costs among products/ departments/ regions based on a predetermined criteria such as output/ sales revenue/ nr of employees etc.

acid test (quick) ratio

A liquidity ratio that measures the value of current assets without stock included, shows business’s ability to pay its short-term debts (cover current liabilities)

McClelland’s acquired needs theory

Motivation theory, humans have 3 dominant needs that drive motivation:

• achievement

• power

• affiliation

acquisition

external growth where one company purchases another one, usually friendly

adverse variance

when actual income and expenditure is worse that expected

agent

person who acts on behalf of another person or group

antitrust laws

Laws that limit the market power of individual companies, encourage competition and lower prices

appraisal

assessment of an employee’s performance

arbitration

method for conflict resolution, management and employees present arguments to a third party who resolves the conflict

artificial neural networks

The connections of computing systems and nodes that are like the neurons of a human brain.

autocratic leadership

leadership style, leader controls all decision making, does not delegate to lower levels

average rate of return (ARR)

investment appraisal technique, expresses the annual predicted returns as a percentage of the initial capital cost

B2C

Direct business to consumer selling

Balance sheet

A statement that records a business's assets, liabilities and equity

Batch production

a production method that involves producing similar items in groups

below the line promotion (BTL)

Promotion aimed at specific segments and do not rely on mass market techniques.

benchmarking

The process of a business comparing itself with industry leaders on certain criteria, to learn from other’s techniques.

biomimicry

The process of mimicking nature’s forms, processes and systems to solve human problems.

Boston Consulting Group (BCG) matrix

A matrix that classifies the products of a business into high and low market share and market growth categories.

brand

A name, symbol or design that is used to identify a product or company.

brand development

Building brand awareness by cultivating the business's values and consumer perceptions of the product.

brand value

How much the brand itself is an asset (form of goodwill)

break-even

The output when total revenue equals total cost.

broker

An intermediary in the process of selling and buying a product.

business cycle

A cycle of economic growth and recession.

C2C

consumers selling to consumers

capacity utilisation

The extent to which a business is using its productive capacity, expressed as a percent.

capital employed

The value of all sources of internal and external finance for a business, calculated from the sum of non‐current liabilities and equity.

capital expenditure

Spending on the non-current (fixed) assets of a business.

capital gains

The increase in the value of an asset.

capital intensive

Production process with more physical capital than human labour.

capital productivity

How efficiently a business uses its capital. Total output/ capital input

Cash flow forecast

predicts future cash flow

Causal model

represents real-world business dynamics

Centralisation

when only one person or a small group makes all the decisions

Circular business model

when output becomes the input, minimal waste

cloud computing

data storage, computer networking, allow information to be stored and accessed anywhere in the world

clustering

when similar businesses are located near each other

collective bargaining

when employees and management negotiate together

competitive pricing

when a company sets the same prices as its its competitors

conciliation

method for conflict resolution when the management and employees present their arguments to a third party who resolves the conflict

contingency planning

an action plan to follow in case a crisis occurs

continuous improvement (kaizen)

when employees are encouraged to always seek and implement improvements.

contribution per unit

price of the product - variable costs per unit

contribution costing

cost accounting method that considers the direct cost of the product/ department and their resulting contribution to covering the businesses overall indirect costs.

conversions

getting customers to respond to the “call to action” of a business

cooperative

a business that is owned and operated by its members who share all profits

copyright

legal protection that gives the creator the exclusive right to reproduce the work for a period of time

corporate social responsibility

business seeking ways to improve the society and environment

cost focus strategy

when a business is the low-cost option in a niche market

cost leadership strategy

when a business is the low-cost option in the whole industry

cost-plus (markup) pricing

a markup is added to the direct and indirect costs of the product

creditor days

the average number of days it takes a business to pay its debts.

(creditors / cost of sales) x 365

critical path analysis (CPA)

shows the minimum time period that a project needs to be completed

current assets

assets that the business plans to convert into cash in less than 1 year

current liabilities

payables that are due within one year

current ratio

measures the value of current assets relative to current liabilities.

current assets / current liabilities

cyclical variations

variations in data due to economic cycles

data centers

buildings that contain servers/ other computer stuff

data mining

process of searching for patterns and trends in data

debt finance

money that is borrowed

debtor

a person or business that has bought something from another business but has not paid for it yet

debtor days

measures the average number of days it takes a business to collect its debts.

(debtors / sales revenue) x 365

decentralisation

when the decision-making powers are passed down to lower levels

decision tree

decision making tool, each branch represents a choice, its cost, probability and result

deflation

a decrease in the general price level

democratic leadership

when the leader actively seeks employee participation in decision-making.

demographic segmentation

dividing consumers into target groups according to characteristics like age, gender, occupation

dependent variable

variable that is being measured

depreciation (2 definitions)

1. the loss of value of an asset over time

2. in a financial statement shows the cost of a long-term asset over its lifetime

differentiation

highlighting differences between a product and its rivals

digital Taylorism

uses digital technology to monitor employee performance

direct cost

can be precisely traced to a specific product/ department

direct distribution

when the producer deals directly with the customers

direct investment

when a company opens operations in another company

direct marketing

communicates directly with the target audience, measures their response

discount rate

rate of return that the business could earn on another comparable investment, reflects today’s value of future cash flow

dismissal

“getting fired” when a business releases an employee, usually because of bad performance

distribution channel

network used to move the product from the manufacturer to the end user

disruptive business

a business that optimises value for multiple stakeholders rather than maximising profits for shareholders

diversification

selling new products in new markets

Doughnut economics model

outlines the social needs and ecological ceiling that economic activity needs to respect to find a “safe and just space for humanity”

dynamic pricing

changing the price of a good according to demand

efficiency ratio

how well a business transforms input into output

embedded economy model

shows the economy embedded in nature, inputs of energy and outputs of waste, distributions from markets, households, the state, and the commons.

employee participation

when employees are actively involved in decision-making

employee share ownership schemes

when employees are allowed to buy shares in the business at below market price

equity

the value of shares issued by a company

equity finance

funding through selling shares (ownership)

equity stake

ownership of a company as a shareholder

equity theory

motivation theory, claims employee satisfaction comes from fairness in the workplace

expectancy theory

motivation theory, employees are motivated if they think their performance will be recognized

extension strategy

extends the product’s “maturity” stage in its lifecycle

extrinsic motivation

when a person does something purely for the reward

favourable variance

when actual income and expenditure figures are better than expected

fixed asset

an item/ property that has value and the business plans on holding for longer than 1 year

fixed costs

costs that do not vary with output