theme 2 business - operations

competitive environment

concerns the degree to which a business is affected by rivals that operate in the same market

legislation

refers to laws and regulations passed by governments that require businesses and individuals to conduct their behaviour in a particular way

consumer protection laws

aims to ensure that consumers are treated fairly by the companies with which they interact

employee protection legislation

employee protection legislation aims to prevent the exploitation of workers

environmental protection legislation

aims to hold businesses responsible for their environmental impact

competition policy laws

competition legislation aims to protect the interests of both consumers and businesses by restricting anti-competitive practices

health and safety legislation

requires businesses to operate in a way that protects the physical and mental wellbeing of its employees and contractors as well as its customers

inflation

the rise in the price of goods in the UK economy. Deflation would be a fall in the general price level

consumer price index

principle measure of the rate of inflation for the UK. measures average monthly change in the prices of good and services by households. For around 700 items

exchange rates

price of one currency in exchange for another

interest rates

an interest rate is the reward for saving and the cost of borrowing expressed as a percentage of the money saved or borrowed

low interest rates

consumers may borrow more money to buy high priced items such as car or house

high interest rates

if interest rates go up then consumers will not borrow and will choose to save instead of spending

taxation

critical tool for governments to raise revenue and achieve various economic and social objectives

income tax

take off an employees or business owners salary which results in less money spent in shops

VAT

added to goods and services. Raise in VAT increases prices

business rates

taxes paid by businesses on their properties, used to fund local services and infrastructure.

national insurance

contributions are payments made by both the employee and employer. They pay for the cost of a state pension and then NHS.

excise duties

has to be paid by the customer on products which are considered to have negative effects on society e.g. tobacco

government spending

taxes that the government collects goes into a central pot which is then spent on various things for the benefit of UK society

business life cycle

describes the upturns and downturns in the level of a countries economic activity and GDP over time

quality

How well a product or service does what it was designed to do

quality control

concerned with checking and reviewing work that has already been done

quality assurance

an approach that aims to achieve quality by organising every process to get the product “right first time” and prevent mistakes ever happening.

Total quality management

an attitude to quality where the aims are zero defects and total customer satisfaction

quality circles

involves an approach to quality management whereby groups of employees meet regularly to identify potential improvements and resolve quality issues

Kaizen

an approach of constantly introducing small incremental changes in a business in order to improve quality and efficiency

stock control

The control of the flow of stocks in a businessto ensure optimal levels are maintained and to minimize costs.