aice business

Administration

when administrators manage a business that is unable to pay its debts with the intention of selling it as a going concern.

Adverse variance

a change from the budget that leads to lower than planned profit.

Advertising

paid-for communication to inform and persuade consumers, using media such as TV, newspapers and cinema.

Annual (company) report

a document that gives details of a company's activities over the year, including its financial accounts

Application form

a set of questions answered by a job applicants to give potential employer information about the applicant, such as educational background and work experience

Arithmetic mean

the value calculated by totalling all the results and dividing by the number of results.

Articles of Association

This document covers the internal workings and control of the business, the names of directors and the procedures to be followed at meetings

Assessment centre

a place where a range of tests is used to judge job applicants on their potential ability to perform a particular role.

Autocratic management

a management style where one manager takes all decisions with very little, if any, input from others.

Average cost

total cost divided by the number of units produced.

Backward Vertical Integration

vertical integration with a supplier business.

Bankruptcy

the legal procedure for liquidating a business (or property owned by a sole trader) which cannot fully pay its debts out of its current assets.

Batch production

the production of a limited number of identical products - each item in the batch passes through one stage of production before passing on to the next stage.

Bonus

a payment made in addition to the contracted wage or salary

Boston Matrix

a method of analyzing the product portfolio of a business in terms and market share and market growth

Brand

an identifying symbol, name, image or trademark that distinguishes a product from its competitors

Brand leader

the brand with the highest share of the market.

Break

even analysis - uses cost and revenue data to determine the break-even point of production.

Break

even point - the level of output at which total costs equal total revenue, when neither a profit nor a loss is made.

Budget

a detailed financial plan for the future

Budget holder

the individual responsible for the initial setting and achievement of a budget.

Budgeting

planning future activities by establishing performance targets, especially financial ones.

Buffer inventory

minimum inventory level that should be held to ensure that continuous production is possible should delivery delays occur or output increase.

Business aim

a long-term goal that a business hopes to achieve

Business mortgages

long-term loans to companies purchasing a property for business premises, with the property of acting as collateral security on the loan.

Business Objective

a stated measurable target that a business plans to achieve

Business process outsourcing (BPO)

a form of outsourcing that uses specialist contractors to take responsibility for certain business functions, such as human resources and finance.

Business strategy

a long-term plan of action for a business, designed to achieve a particular objective

Capacity shortage

when demand for a business's products exceeds production capacity.

Capacity utilization

the proportion of maximum output capacity currently being achieved.

Capital Employed

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

Capital expenditure

the purchase of non-current assets that are expected to last for more than one year, such as buildings and machinery.

Capital intensive

involving a high quantity of capital equipment compared with labor input.

channel of distribution

the chain of intermediaries a product passes through from producer to final consumer.

Coding

the process of labeling and organizing qualitative data to identify the main themes and the links between them.

Collateral security

an asset which a business pledges to a lender and which must be sold off to pay a debt if the loan is not repaid.

Collective bargaining

the process of negotiating terms of employment between an employer and a group of workers who are usually represented by a trade union official.

Command Economy

Economic resources are owned, planned and controlled by the state

Commission

a payment to a salesperson for each sale made

Competitive pricing

making pricing decisions based on the price set by competitors

Conglomerate Integration

integration with a business in a different industry.

Consumer durable

a manufactured product that can be re-used and is expected to have a reasonably long life, such as a car or washing machine

Consumer market

the selling of products by businesses to the final end user, also known as business to consumer or B2C

Consumer products

goods or services sold to end users

Consumer profile

a quantified picture of a business's consumers, showing data about their age groups, income levels, location, gender and social class.

Contribution

cost pricing - setting prices based on the variable costs of making a product, in order to make a contribution towards fixed costs and profit

Contribution costing

costing method that allocates only direct costs to cost centers and profit centers, not overhead costs.

Contribution per unit

the price of a product less the direct (variable costs of producing it.

Cooperative

A jointly owned business operated by members for their own mutual benefit, to produce or distribute goods or services - as in consumers' cooperatives or farmers' cooperatives

Corporate objectives

well-defined and realistic goals that are set for the whole company

Corporate Social Responsibility

when businesses consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment.

Cost

plus pricing - setting a price by calculating a total unit cost for the product and then adding a fixed profit mark-up

Cost center

the section of a business, such as a department or a product, that incurs the cost.

Crowd funding

the use of small amounts of capital from a large number of individuals to finance a new business venture.

Current assets

assets that either are cash or likely to be turned into cash within 12 months (inventory and trade receivables or debtors).

Current liabilities

bents that usually have to be paid within one year,

Curriculum vitae (CV)

a detailed document highlighting all of a person's professional and academic achievements, work experience and awards.

Customer (or market) orientation

an outward-looking approach that bases product decisions on consumer demand, as established by market research

Customer relationship marketing (CRM)

using marketing activities to build and establish good customer relationships so that the loyalty of existing customers can be maintained.

Debentures

long-term bonds issued to companies to raise debt finance, often with a fixed rate of interest.

Delegated budgets

budgets for which junior managers have been given some authority for setting and achieving.

Demand

the quantity of a product that consumers are willing and able to buy at a given price in a specific time period

Democratic management

a management style that encourages the active participation of workers in taking decisions

Development

the gaining of new or advanced skills and knowledge as well as opportunities to apply what is gained

digital distribution

the delivery or distribution of digital media content such as audio, video, TV programmes, films, software and video games.

digital promotion

the promotion of products using digital technologies, mainly on the internet but also including mobile (cell) phones.

Direct costs

these costs can be clearly identified with each unit of production and can be allocated to a cost center.

direct promotion

a range of promotional activities aimed directly at target customers. It is known as direct marketing.

Dismissal

being dismissed or fired from a job due to incompetence or beach of discipline.

Diversity policy

practices and processes aimed at creating a mixed workforce and placing a positive value on diversity in the workplace.

Dynamic pricing

offering products at a price that changes according to the level of demand and the customer's ability to pay

E

commerce - the buying and selling of goods and services by businesses and consumers through an electronic medium.

Economic order quantity

the optimum or least-cost of stock to re-order taking into account delivery costs and stock-holding costs

Effectiveness

meeting the objectives of the business by using inputs productively to meet customers' needs.

Efficiency

producing output at the highest ratio of output to input.

Employee appraisal

the process of assessing the effectiveness of an employee judged against pre-set objectives

Employee morale

overall outlook, attitude, and level of satisfaction of employees when at work.

Employee participation

active encouragement of employees to become involved in decision-making within the organisation

Employee promotion

the advancement of an employee within a business to a higher level of responsibility and status

Employee status

the level of recognition offered by an employer to a worker in terms of pay, level and responsibility and benefits

Employee welfare

employees' health, safety and level or morale when at work

Employment contract

a legal document that sets out the terms and conditions governing a worker's job

Empowerment

the giving of skills, resources, authority and opportunity to employees so that they can take decisions and be accountable for their work.

Equality policy

practices and processes aimed at achieving a fair organisation where everyone is treated in the same way without prejudice and has the opportunity to fulfil their potential

Equilibrium price

the price level at which demand is equal to supply

Ethical code (code of conduct)

a document detailing a company's rules and guidelines on staff behavior that must be followed by all employees.

Excess capacity

this exists when the current levels of output are less than the full-capacity output of a business; also known as spare capacity.

Extension strategy

a marketing plan to extend the maturity stage of the product before a completely new one is launched

External Growth

business expansion achieved by integrating with another business by either merger or takeover.

External recruitment

when a business aims to fill a vacancy with a suitable applicant from outside of the business, such as an employee of another organisation.

External sources

raising finance from sources outside the business, for example banks.

Factoring

selling of claims over trade receivables (debtors) to a specialist organization (debt factor) in exchange for immediate liquidity

Favorable variance

a change from the budget that leads to higher than planned profit.

Fixed costs

costs that do not vary with output in the short run.

Flexible budgeting

cost budgets for each expense are allowed to vary if sales or output vary from budgeting levels.

Flow production

the production of items in a continually moving process.

Forward Vertical Integration

vertical integration with a customer business.

Franchise

The legal right to use the name, logo, and trading systems of an existing successful business

Franchisee

A person or business that buys the right from the franchiser to operate the franchise

Franchiser

A person or business that sells the right to open stores and sell products or services, using the brand name or brand identity