Cambridge International AS & A Level Business 9609 Revision Glossary

Comprehensive flashcards covering key definitions and formulas from Cambridge International AS & A Level Business 9609 (2026-2028 syllabus).

Business

An organisation that combines resources to produce goods or services.

Added value

The difference between the selling price of a product and the cost of bought-in materials and components.

Opportunity cost

The next best alternative foregone when a decision is made.

Scarcity

A situation where resources are limited in relation to unlimited wants.

Entrepreneur

A person who organises resources and takes risks to start and run a business.

Stakeholder

An individual or group with an interest in, or affected by, a business's activities.

Shareholder

A person or organisation that owns shares in a company.

Private sector

The part of the economy made up of businesses owned by private individuals or organisations.

Public sector

The part of the economy made up of organisations owned or controlled by the government.

Primary sector

Economic activity involving the extraction or harvesting of natural resources.

Secondary sector

Economic activity involving manufacturing and construction.

Tertiary sector

Economic activity involving the provision of services.

Limited liability

Owners' liability for business debts is limited to the amount invested or unpaid on shares.

Unlimited liability

Owners are personally responsible for all business debts.

Business objectives

Specific targets a business aims to achieve.

SMART objectives

Objectives that are Specific, Measurable, Achievable, Relevant and Time-bound.

Corporate social responsibility (CSR)

A business's consideration of its social, ethical and environmental impacts.

Government grants

Funds provided by government to a business, usually subject to conditions and not normally repaid.

Organic growth (internal growth)

Expansion achieved by increasing a business's own operations, rather than merging with or acquiring another business.

External growth

Expansion achieved through a merger, takeover or other combination with another business.

Takeover

When one business gains control of another, typically by acquiring a majority of its shares or ownership.

HRM

The management of people in a business to help achieve its objectives.

Workforce planning

Forecasting and planning the number and types of employees a business will need.

Recruitment

The process of attracting suitable applicants for a job vacancy.

Selection

The process of choosing the most suitable applicant for a job.

Job description

A document stating a job's duties and responsibilities.

Person specification

A document stating the qualifications, skills and personal qualities required for a job.

Internal recruitment

Filling a vacancy with an existing employee of the business.

Induction training

Training that introduces new employees to the business, workplace and job.

On-the-job training

Training carried out while an employee performs their job.

Off-the-job training

Training carried out away from the employee's normal job or workplace.

Motivation

Factors that stimulate or encourage employees to be willing to work towards objectives or perform well.

Labour turnover

The rate at which employees leave a business over a period of time.

Remuneration

Pay and other financial rewards received by an employee.

Delegation

Passing authority to complete tasks to a subordinate while retaining overall accountability.

Leadership

The process of influencing and directing people towards the achievement of objectives.

Autocratic leadership

A leadership style in which the leader makes decisions with little or no employee input.

Democratic leadership

A leadership style in which employees are consulted or involved in decision-making.

Laissez-faire leadership

A leadership style that gives employees considerable freedom to make decisions.

Span of control

The number of subordinates directly reporting to a manager.

Trade union

An organisation that represents workers' interests, including in negotiations with employers.

Commission

A payment calculated as a percentage of sales value or as a set amount for each sale.

Market

A system or situation in which buyers and sellers exchange goods or services.

Market size

The total sales of all businesses in a market over a given period, measured by value or volume.

Market share

A business's sales as a percentage of total market sales over a given period.

Market growth

The percentage change in the size of a market over a period.

Market segmentation

Dividing a market into groups of consumers with similar characteristics or needs.

Niche market

A small, specialised part of a larger market with particular customer needs.

Target market

The specific group of customers a business aims to sell to.

Market research

The collection and analysis of information about customers, competitors and markets.

Primary research

New data collected first-hand for a specific research purpose.

Secondary research

Existing data collected previously by the business or another organisation.

Qualitative data

Non-numerical information about opinions, attitudes or reasons.

Quantitative data

Numerical information that can be measured or counted.

Marketing mix

The combination of product, price, promotion and place decisions.

Market orientation

An approach in which business decisions are guided by identifying and responding to customer needs and market information.

Product orientation

An approach in which a business focuses on developing and improving its products, often with less emphasis on researching customer needs.

Product differentiation

Making a product distinct from competitors' products through features, quality, design, branding or service.

Unique selling point (USP)

A distinctive feature or benefit that gives customers a reason to choose a product over competitors.

Branding

Creating a distinctive identity for a product or business.

Product life cycle

The stages a product typically passes through: introduction, growth, maturity and decline.

Price elasticity of demand

A measure of how responsive quantity demanded is to a change in price.

Promotion

Communication used to inform, persuade or remind customers about a product.

Distribution channel

The route through which a product passes from producer to customer.

Product development

Creating a new or improved product, often for an existing market.

Operations management

Managing the process of transforming inputs into goods and services.

Inputs

Resources used in production, such as labour, materials, land and capital.

Outputs

The goods and services produced by a business.

Transformational process

The activities that convert inputs into outputs.

Productivity

Output produced per unit of input over a given period.

Efficiency

Achieving output while minimising resource use, waste or cost.

Production capacity

The maximum output a business can produce in a given period with its existing resources.

Capacity utilisation

Actual output expressed as a percentage of maximum possible output.

Economies of scale

A reduction in average cost as the scale of production increases.

Diseconomies of scale

An increase in average cost as a business grows beyond an efficient scale.

Lean production

Methods of reducing waste and improving the efficiency of operations.

Just-in-time (JIT)

An inventory system in which materials are ordered to arrive as they are needed.

Quality control

Inspecting or testing output to identify products or services that do not meet standards.

Quality assurance

Systems and procedures designed to prevent defects and maintain quality throughout production.

Job production

Producing one item or a small number of customised items at a time.

Batch production

Producing a group of identical products in one production run.

Flow production

Producing standardised products continuously, often using an assembly line.

Direct cost

A cost that can be specifically traced to a particular product, service or cost unit.

Indirect costs

Costs that cannot be directly traced to one particular product or cost unit and must be allocated or apportioned.

Fixed costs

Costs that do not change with output in the short term.

Variable costs

Costs that change in total as output changes.

Capital-intensive operations

Operations that use a relatively high proportion of capital equipment and machinery compared with labour.

Supply chain management

Managing the flow of materials, information and products between suppliers, the business and customers.

Pattern of demand

The way demand for a product changes over time, including seasonal, weekly or daily fluctuations.

Revenue

Income earned from selling goods or services.

Total costs

The sum of fixed costs and variable costs.

Profit

The amount by which revenue exceeds total costs.

Cash flow

The movement of cash into and out of a business.

Cash-flow forecast

An estimate of expected cash inflows and outflows over a future period.

Working capital

Current assets minus current liabilities.

Liquidity

A business's ability to meet its short-term financial obligations.

Gross profit

Revenue minus the cost of sales.

Net profit

Profit remaining after the relevant expenses have been deducted.

Break-even

The level of output or sales at which total revenue equals total costs.

Margin of safety

The amount by which actual or forecast output exceeds break-even output.