NCEA Level 2 Business Studies Externals

Organisational structure

How people in the business work together

Budgets

Predicted figures for the business, usually based on estimations

Organisational chart

A diagram that shows the different job roles in a business and how they relate to each other

Income Statement

Reports on a company's income, expenses and profits

Levels of hierarchy

The number of levels from top to bottom of the diagram

Statement of Financial Position

reports on a company's assets, liabilities, and ownership equity.

Span of control

The number of direct reports (subordinates) an individual has

Bureaucracy

A large, complex organization composed of appointed officials

Cash Flow Statement

Details cash that has come into the business and what it has been spent on

Variance

The difference between projected and actual figures, expressed as a percentage

Tall Structure

have more levels of hierarchy and narrow span of control

Variance Analysis

The process of investigating any differences between budgeted figures and actual figures

Flat structure

have a wide span of control and fewer levels of hierarchy

Maintain

When a business is improving it's performance (with a negative variance in expenses or positive variance in sales)

Matrix Structure

An organizational structure that assigns specialists from different functional departments to work on one or more projects

Change

Performance is worsening (negative variance in sales or positive variance in expenses)

Shamrock Structure

A business that has a core group of workers, then a group of contractors and a group of temporary workers who are used when needed

Policies

Business wide guidlines as to how decisions should be made. eg staff dress code, refunds policy and holiday policy

Outsourcing

Hiring outside firms to perform non-core operations to lower operating costs

Procedures

Business wide methods of carrying out day to day activities. eg safe machinery use or ordering procedures

Inputs

the resources—such as labor, money, materials, and energy—that are converted into outputs

programmed decisions

Decisions encountered and made before, having objectively correct answers, and solvable by using simple rules, policies, or numerical computations.

Services

Intangible products

Non-programmed decisions

Decisions where the outcome is not immediately obvious or pre determined

Job production

Each product is produced from start to finish eg an architecturally designed house

Tikanga

The values, guidlines, rules, priorities and ways of doing business that frame the business operations

Batch production

A batch of products is completed in certain stages

Corporate Social Responsibility

When firms take responsibility for the impact their decisions have on then community, environment and stakeholders

Flow production

producing items in a continually moving process

corporate philanthropy

all business donations to nonprofit groups, including money, products, and employee time

Efficiency

The percentage of the input work that is converted to output work

brand awareness

Involvement in the community can increase the public's recognition of the company's brand

Productivity

The quantity of goods and services produced from each unit of labor input

Publicity

Many philanthropic gifts and socially responsible acts are rewarded by recognition from a charity, or publicity in the media, which can enhance the brand in the eyes of the community, and expand the company's reach.

Lean production

an approach to production that emphasizes the elimination of waste in all aspects of production processes

Social sustainability

Maintaining the health and well being of the community and its employees

TIMWOOD

Transportation

Inventory

Motion

Wait

Over-processing

Over-production

Defect

Putake

The origin or reason for being

Capacity

the maximum amount that a plant can produce

Ethical Business Practices

Moral values and principles that determine our conduct in the business world

Under-utilisation of capacity

When a firm's output is below the maximum possible. Known as excess capacity or spare capacity. Represents waste of resources

Over-utilisation of capacity

When a business produces more goods/services than its operation should handle. This can cause stress on overworked staff and minimises the potential for downtime and maintenance of equipment

Economies of scale

a proportionate saving in costs gained by an increased level of production

Hybrid Process

A mixture of one or more production methods, used to get the job done efficiently

Managers

The people responsible for supervising the use of an organization's resources to meet its goals

Organisational culture

The 'way things are done' in the organisation, including the atmosphere, the way people relate to each other, policies and procedures

Contract

An agreement between two or more parties

Subordinates

Workers the managers are responsible for

Corporate objectives

Company-wide goals set by senior managers and owners

Planning

Setting goals and outlining how the goals should be attained, and whose responsibility it is to attain them

Organising

Ensuring there are enough resources in the business to attain business goals

Leading

Motivating staff to achieve their assigned tasks

Controlling

Monitoring progress toward goal achievement and taking corrective action when needed

Levels of Management

Senior managers, Middle managers and Front-line managers

Senior Managers

Oversee the work and departments of a number of middle managers

Middle Managers

Implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first-line managers below them

Front line managers

managers who oversee the day-to-day operations in specific departments

Authoritarian

The manager makes decisions based on the business objectives as the manager sees them. The manager dictates actions, sets goals and closely supervises workers to ensure jobs are done. Good for unskilled workers or time critical situations. Can demotivate able and intelligent workers

Democratic

Manager encourages workers to have a say in decisions about the way the work is done, goals, and strategy. Much of the responsibility is delegated to capable workers, issues or problems are discussed and suggestions are acted on. Democratic leaders must be good communicators. Decisions may take longer to make. Workers feel valued.

Laissez-faire

Managers ensure that workers understand their objectives, and have the necessary resources to complete their jobs. Good for highly skilled and motivated professional workers eg lawyers or researchers.

Leadership

The ability to motivate individuals and groups to accomplish important goals

formal leaders

Those who hold a position of authority and may utilize the power that comes from their position, as well as their personal power to influence others.

Informal leader

A person who has no formal authority but has the respect of colleagues and some power over them

Managers vs Leaders

Managers: make decisions, assign tasks, allocate resources, solve problems

Leaders: motivate and inspire, provide vision, collaborate with others

Kaitiakitanga

guardianship, especially of the natural environment

Rangatiratanga

leadership

Tino Rangitiratanga

Self-determination

Stakeholders

All the different people or groups of people who are affected by an organization's policies, decisions, and activities

Financial Records

financial documents that are used to record and analyze the financial performance of a business.