Business Management Year 2: Decision Making, Contract Law, Risk & Insurance, International Business, and Human Resource Management

Comprehensive vocabulary flashcards covering the key terms, legal principles, risk frameworks, international trade concepts, and human resource management functions from the Year 2 Senior High School Business Management curriculum.

Communication

The exchange of information between a sender and a receiver with understanding.

Decision

The conclusion reached from several alternatives, or choosing or selecting one option from a lot of alternatives.

Delegation

The process that permits a manager or leader to assign responsibility and authority for specific tasks or decisions to an employee or team member while retaining overall accountability for the outcome.

Pareto Analysis

A decision-making tool based on the principle that $80\%$ of problems come from $20\%$ of causes, used to rank problems by impact and prioritize the most significant causes for targeted problem-solving.

PEST Analysis

A strategic planning tool used to analyze external macro-environmental factors that impact an organization, specifically Political, Economic, Social, and Technological factors.

SWOT Analysis

A decision-making framework used for strategic planning that assesses internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats) affecting an organisation.

The Delphi Method

A structured communication method developed to gather insights from a panel of experts through multiple rounds of anonymous surveys to achieve consensus on complex issues.

Strategic Decisions

High-level, policy-related decisions made by middle and top managers that establish long-term organizational goals and overall direction.

Programmed Decisions

Routine, repetitive, and well-structured decisions made using established procedures, typically executed by lower-level managers during daily operations.

Non-Programmed Decisions

Complex, ill-defined decisions that lack specific established procedures, requiring creative problem-solving and critical thinking by top-level managers.

Principle of Parity of Authority and Responsibility

A delegation principle stating that when responsibility is assigned to an individual, an equal amount of authority and resources must be granted to successfully perform the task.

Principle of Absoluteness of Responsibility

A delegation principle stating that a manager or leader retains ultimate responsibility and accountability for tasks and activities, even after delegating them to subordinates.

Scalar Principle

A delegation principle dictating that tasks and responsibilities must be assigned through a clear and unbroken chain of command from higher to lower organizational levels.

Contract

A legally binding agreement between two or more parties consisting of mutual promises enforceable by law.

Consensus ad Idem

A mutual assent or 'meeting of the minds' where all contracting parties share a common understanding and agreement regarding the essential terms of a contract.

Consideration

Something of value exchanged between parties, representing the price paid by one party to secure the obligation or promise of another in a contract.

Executory Consideration

A form of contractual consideration where the promised action, payment, or value is scheduled to be performed or delivered at a future date.

Past Consideration

An act or benefit completed before a promise or agreement was made, which is generally invalid and unenforceable in contract law.

Capacity to Contract

The legal competence or ability of an individual or corporation to enter into a valid, legally binding agreement.

Undue Influence

A vitiating factor where one party exerts excessive pressure or takes unfair advantage of a position of trust or power to induce another party into a contract.

Duress

A vitiating factor occurring when a party is forced or coerced into entering an agreement against their free will through threats of violence or physical harm.

Rescission

The cancellation or setting aside of a contract designed to restore both contracting parties to the positions they occupied prior to entering the agreement.

Frustration

The discharge of a contract when an unforeseen, intervening event renders performance completely impossible without the fault of either party.

Novation

The process of discharging an existing contract by replacing it with a new contract with the mutual agreement of all parties involved.

Business Risk

The potential for financial loss, operational interruption, or harm to an organization's assets and reputation resulting from uncertainties and unforeseen events.

Risk Management

The systematic process of identifying, assessing, and taking proactive measures to eliminate, control, or reduce risks to minimize potential losses.

Utmost Good Faith (Uberrima Fides)

An insurance principle requiring both the insurer and the insured to act honestly and disclose all relevant and material facts concerning the risk.

Insurable Interest

An insurance principle establishing that the insured must have a lawful financial interest in the subject matter and would experience direct financial loss upon its damage.

Indemnity

An insurance principle aimed at compensating the insured to return them to their exact financial standing prior to a loss without allowing them to make a profit.

Subrogation

An insurance principle whereby an insurer, after settling a claim, acquires the legal rights of the insured to seek compensation from a third party responsible for the loss.

Causa Proxima (Proximate Cause)

An insurance principle stating that an insurer is only liable to pay compensation if the direct and effective cause of the loss is an insured peril under the policy.

Deductible

The specified out-of-pocket amount a policyholder must pay toward an insured claim before the insurance company covers the remainder.

Franchising

An international business approach where a parent business (the franchisor) sells the legal rights to use its brand name, operating systems, and trademarks to a local operator (the franchisee) in exchange for fees and royalties.

Joint Venture

A business arrangement in which two or more independent companies partner to pool capital, expertise, and resources in a foreign market, sharing ownership, risks, and rewards.

Licensing

A contractual agreement where a company (the licensor) allows a foreign company (the licensee) to manufacture goods, apply proprietary processes, or use trademarks in exchange for royalties.

Wholly Owned Subsidiary (WOS)

A foreign business operation whose total stock is $100\%$ owned and controlled by a parent company, established through greenfield investment or direct acquisition.

Entrepot Trade

The commercial practice of importing foreign goods into a country specifically for re-exporting them to another country.

Comparative Advantage

The economic trade theory developed by David Ricardo stating that countries should specialize in producing and exporting goods that they can manufacture at a lower opportunity cost relative to other nations.

Absolute Cost Advantage

The economic principle introduced by Adam Smith asserting that a country should specialize in producing goods that it can manufacture using fewer resources than any competitor.

Bill of Lading

An international transport document issued by a carrier that acknowledges receipt of goods for shipment, serves as a shipment receipt, and specifies the terms of carriage.

Letter of Credit

A financial document issued by a bank guaranteeing that a buyer's payment to a foreign exporter will be received on schedule and for the exact stated amount.

Tariff

A tax or custom duty imposed by a national government on imported goods to make foreign products more expensive and protect domestic industries.

Quota

A governmental trade restriction that imposes a physical limit on the quantity or value of a specific commodity that may be imported into a country during a set timeframe.

Trade Embargo

An official government-ordered ban on trade and commerce with a designated nation or over specified goods, usually enforced for geopolitical reasons.

Human Resource Planning (HRP)

A strategic human resource management process that forecasts an organization's future talent needs and matches them with labor supply to prevent employee shortages or surpluses.

Job Analysis

The systematic collection, assessment, and documentation of information regarding the specific tasks, responsibilities, working environment, and skills required for a job.

Job Description

A written outline detailing the specific roles, duties, expectations, responsibilities, and required qualifications associated with a specific job position.

Placement

The human resource process of assigning a newly hired worker to a specific job position that best matches their specific qualifications, capabilities, and skills.

Performance Management

An ongoing management process designed to set objectives, assess outcomes, provide feedback, and support employee performance to meet organizational goals.

Collective Bargaining

The negotiation process between trade union representatives of workers and employers to reach a binding collective agreement on wages, hours, and workplace conditions.

Work-to-Rule

An industrial action where staff perform only the strict, bare-minimum obligations defined in their employment contracts, refusing extra duties, overtime, or voluntary work.

Lockout

A form of industrial action where an employer temporarily shuts down the workplace or denies employees entry during a labor dispute.

National Labour Commission (NLC)

An independent statutory body in Ghana established under the Labour Act, 2003 (Act 651) to enforce labor laws, investigate complaints, and settle industrial disputes via mediation and arbitration.