CAIE AS LEVEL Business (9609) - Definitions (VOCABULARY Flashcards)

A comprehensive set of vocabulary flashcards covering key concepts from the notes.

Consumer good

The physical and tangible goods sold to the general public, including durable and non-durable items.

Consumer services

Non-tangible products sold to the general public, such as hotel accommodation, insurance, and train journeys.

Capital goods

Physical goods used by the industry to aid in production, e.g., machines and commercial vehicles.

Creating value

Increasing the difference between the cost of purchased materials and the price the finished goods are sold for.

Added value

Difference between the costs of purchased materials and the price the finished goods are sold for.

Opportunity cost

The benefit of the next most desired option that is given up.

Entrepreneur

Someone who takes the financial risk of starting and managing a new venture.

Social enterprise

A business with mainly social objectives that reinvests profits into benefiting society.

Triple bottom line

The three objectives of social enterprises: economic, social and environmental.

Primary sector

Firms that extract natural resources (farming, fishing, oil, etc.).

Secondary sector

Firms that manufacture and process products from natural resources.

Tertiary sector

Firms that provide services to consumers and other businesses.

Public sector

Organizations accountable to and controlled by the government.

Private sector

Businesses owned and controlled by individuals or groups.

Mixed economy

Economic resources are owned and controlled by both private and public sectors.

Free-market economy

Resources are owned largely by the private sector with little state intervention.

Command economy

Economic resources are owned, planned and controlled by the state.

Sole trader

One person provides the permanent finance and has full control and keeps all profits.

Partnership

Two or more people carry on a business together with shared capital and usually shared responsibilities.

Limited liability

Shareholders’ potential loss is limited to the amount invested, not their personal wealth.

Private limited company

A small to medium-sized business owned by shareholders (often family) that cannot sell shares to the public.

Share

A certificate confirming part ownership of a company and entitling dividends and rights.

Shareholder

An owner of shares in a limited company.

Public limited company

Can sell shares to the general public; share prices quoted on a stock exchange.

Memorandum of association

Document stating company name, registered office, authorised share capital and declared aims.

Articles of association

Document detailing internal rules, directors, and meeting procedures.

Franchise

A business that uses the name, logo and trading systems of an existing successful business.

Joint venture

Two or more businesses collaborate on a project and create a separate business division.

Holding company

Owns and controls a number of separate businesses but does not unite them into one company.

Public corporation

State-owned business enterprise, also known as nationalised industry.

Revenue

Total value of sales made by a business in a given time period.

Capital employed

Total value of all long-term finance invested in the business.

Market capitalisation

Total value of a company’s issued shares.

Market share

Sales of the business as a proportion of total market sales.

Internal growth

Expansion through opening new branches, shops or factories (organic growth).

Mission statement

Statement of the business’s core aims to motivate employees and interest outsiders.

Corporate social responsibility

Business considers society’s interests in decisions beyond legal obligations.

Management by objectives

Coordinating by dividing aims into specific targets for departments and individuals.

Ethical code

A company’s rules and guidelines on staff behaviour to be followed.

Stakeholders

People or groups affected by the organization’s actions and who have an interest.

Shareholder concept

View that managers have responsibilities to a broad range of groups, not just shareholders.

Manager

Person responsible for setting objectives, organizing resources and motivating staff.

Leadership

Art of motivating a group toward achieving common objectives.

Autocratic leadership

Leadership style with centralized decision-making.

Democratic leadership

Leadership style that promotes active participation of workers in decisions.

Paternalistic leadership

Manager acts in the best interest of workers, claiming to know what’s best.

Laissez-faire leadership

Hands-off leadership; workers have significant decision-making power.

Informal leader

A person with influence but no formal authority.

Emotional intelligence

Ability to understand one’s own and others’ emotions to improve performance.

Motivation

Internal and external factors that stimulate actions toward goals.

Self-actualisation

Sense of fulfilment from learning and achieving personal development.

Motivators

Job factors (e.g., achievement, recognition) that increase satisfaction.

Hygiene factor

Job factors (e.g., pay, conditions) that can cause dissatisfaction if absent.

Job enrichment

Increasing the scope of a job by giving more challenging tasks.

Time-based wage rate

Pay for each period of time worked (e.g., hourly).

Piece rate

Pay for each unit produced.

Salary

Annual income, usually paid monthly.

Commission

Pay to a salesperson for each sale made.

Bonus

Additional pay beyond contracted wage or salary.

Profit sharing

Bonus based on profits, typically a proportion of salary.

Performance related pay

Bonus for above-average work performance.

Fringe benefits

Benefits offered in addition to pay (e.g., company car, private health).

Job rotation

Increasing flexibility by switching between jobs.

Job enlargement

Broadening the scope of a job with more tasks.

Job redesign

Altering a job, often with employee input, to make it more engaging.

Quality circles

Volunteer groups of workers who meet to discuss problems and improvements.

Worker participation

Workers are encouraged to take part in decision-making.

Team working

Production organized in teams to complete whole units of work.

HRM

Strategic management of an organization’s workforce for competitive advantage.

Recruitment

Process of identifying a need, defining the job and attracting candidates.

Selection

Steps to interview, test and screen candidates for the job.

Job description

Detailed list of key tasks and responsibilities of the job.

Person specification

Qualities, skills and qualifications needed for the job.

Employment contract

Legal document outlining terms and conditions of employment.

Labour turnover

Rate at which employees leave an organization.

Training

Work-related education to increase workforce skills.

Induction training

Introductory training for new recruits on systems and site layout.

On-the-job training

Training while at work, learning by doing.

Off-the-job training

Training away from work, e.g., college courses.

Employee appraisal

Assessment of an employee’s effectiveness against objectives.

Dismissal

Being dismissed due to incompetence or misconduct.

Unfair dismissal

Ending employment for a reason the law considers unfair.

Redundancy

Job no longer required; employee is displaced through no fault of their own.

Work-life balance

Balancing work demands with personal life and interests.

Equality policy

Practices ensuring fair treatment and equal opportunities.

Diversity policy

Policies to create a mixed workforce and value diversity.

Marketing

Management task linking business to customers to meet needs profitably.

Marketing objectives

Goals set for the marketing department to help overall aims.

Marketing strategy

Long-term plan for achieving marketing objectives.

Market orientation

Outward-looking approach basing decisions on market research.

Asset-led marketing

Strategy based on the firm’s existing strengths and assets.

Product orientation

Inward-looking approach focusing on products that can be produced.

Social marketing

Marketing considering the effects on society and public interests.

Demand

Quantity of a product that consumers are willing and able to buy.

Supply

Quantity of a product firms are prepared to offer at a price.

Equilibrium price

Market price where supply equals demand.

Market size

Total level of sales of all producers in a market.

Market growth

Percentage change in the total size of a market over time.

Market research

Process of collecting, recording and analysing data about customers and the market.

Primary research

Collection of first-hand data directly related to needs.