AICE BUSINESS AS VOCABULARY

AICE BUSINESS AS VOCABULARY

Consumer Goods

The physical and tangible goods sold to the general public. They include durable consumer goods, such as cars and washing machines, and non-durable consumer goods such as food, drinks and sweets that can be used only once

Consumer Services

The non-tangible products sold to the general public. They include hotel accommodation, insurance services, and train journeys

Capital Goods

The physical goods used by industry to aid in the production of other goods and services, such as machines and commercial vehicles

Added Value

The difference between the cost of purchasing raw materials and the price the finished goods are sold for

Entrepreneur

Someone who takes the financial risk of starting and managing a new venture

Social Enterprise

A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns returns to owners

Tripple Bottom Line

The three objectives of social enterprises: economic, social, and environmental

Opportunity Cost

The benefit of the next most desired option which is given up

Primary Sector Business Activity

Firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed by other firms

Secondary Sector Business Activity

Firms that manufacture and process products from natural resources, including computers, brewing, baking, clothes making, and construction

Tertiary Sector Business Activity

Firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism, and telecommunications

Private Sector

Comprises of businesses owned and controlled by individuals or groups of individuals

Public Sector

Comprises of organizations accountable to and controlled by central or local government

Mixed Economy

Economic resources are owned and controlled by both private and public sectors

Free-Market Economy

Economic resources owned largely, by the private sector with very little state intervention

Command Economy

Economic resources owned, planned, and controlled by the state

Sole Trader

A business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all of the profits

Partnership

A business formed by two or more people to carry on a business together with shared capital investment and, usually, shared responsibilities

Private Limited Company

A small to medium sized business that is owned by shareholders who are often members of the same family. This company cannot sell shares to the general public

Shareholder

A person or institution owning shares in a limited company

Share

A certificate confirming part ownership of a company and entitling the shareholder owned to dividends and certain shareholder rights

Public Limited Company

A limited company, often a large business, with the legal right to sell shared to the general public-share prices are quoted on the natural stock exchange

Memorandum of Association

This states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and declared aims of the business

Articles of Association

This document covers the internal working and control of the business. For example, the names of directors and the procedures to be followed at meetings will be detailed

Franchise

A business that uses the name, logo, and trading systems of an existing successful business

Joint Venture

Two or more business agree to work closely together on a particular project and create a separate business division to do so

Holding Company

A business organization that owns and controls a number of separate businesses, but does not unite them into one unified company

Public Corporation

A business enterprise owned and controlled by the state. Also known as a nationalized industry

Privatization

Selling state-owned and controlled business organizations to investors in the private sector

Sales Turnover

Total value of sales made by a business in a given period of time

Capital Employed

The total value of all long term finance invested in the business

Market Capitalization

The total value of a company's issued shares

Market Share

Sales of a business as a proportion of total market sales

Internal Growth

Expansion of a business by means of opening new branches, shops, or factories (also known as organic growth)

SMART

A criteria for effective business objectives:

Specific

Measurable

Achievable

Realistic

Time-specific

Mission Statement

A statement of the businesses core aims, phrased in a way to motivate employees and to stimulate interest by outside groups

Corporate Social Responsibility

The concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities, and the environment

Management by Objectives

A method of coordinating and motivating all staff in an organization by dividing its overall aim into specific targets for each department, manager, and employee

Ethics

The moral guidelines that determine decision making

Ethical Code (Code of Conduct)

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

Social Audit

A report on the impact a business has on society. This can cover pollution levels, health and safety record, sources of supplies, customer satisfaction, and contribution to the community

Stakeholders

People or groups of people who can be affected by and therefore have an interest in any action by organization

Stakeholder Concept

The view that businesses and their managers have responsibilities to a wide range of groups, not just stakeholders

Manager

Responsible for setting objectives, organizing resources and motivating staff so that the organization's aims are met

Figurehead

A symbolic leader of the organization undertaking duties of a social or legal nature

Leader

Motivating subordinates; selecting and training other managers/staff

Liaison

Linking with managers and leaders of other divisions of the business and other organizations

Leadership

The art of motivating a group of people towards achieving a common objective

Autocratic Leadership

A style of leadership that keeps all decision making at the center of the organization

Democratic Leadership

A leadership style that promotes the active participation of workers in taking decisions

Paternalistic Leadership

A leadership style based on the approach that the manager is in a better position than the workers to know what is best for the organization

Laissez-Faire Leadership

A leadership style that leaves much of the business decision making to the workforce. A hands-off approach and the reverse of the autocratic style

Informal Leader

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

Emotional Intelligence

The ability of managers to understand their own emotions and those of the people they work with, to achieve better business performance

Motivation

The internal and external factors that stimulate people to take actions that lead to achieving a goal

Self-Actualization

A sense of self-fulfilment reached by feeling enriched and developed by what one has learned and achieved

Job enrichment

Aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work

Hygiene Factors

Aspects of a worker's job that have the potential to cause dissatisfaction, such as pay, working conditions, statues and over-supervision by managers

Motivating Factors

Aspects of a worker's job that can lead to positive job satisfaction, such as achievement, recognition, meaningful and interesting work and advancement at work

Hourly Wage Rate

Payment to a worker made for each hour worked

Piece Rate

A payment to a worker for each unit produced

Salary

Annual income that is usually paid on a monthly basis

Commission

A payment to a sales person for each sale made

Performance Related Pay

A bonus scheme to reward staff for above-average work performance

Profit Sharing

A bonus for staff based on the profits of the business- usually paid as a promotion of basic study

Job Rotation

Increasing the flexibility of the workforce and the variety of work they do by switching from one job to another

Job Enlargement

Attempting to increase the scopes of a job by broadening or deepening the tasks undertaken

Job Redesign

Involves the reconstruction of a job-usually with employees involvement and agreement- to make work more interesting, satisfying, and challenging

Quality Circles

They are voluntary groups of workers who meet regularly to discuss work-related problems and issues

Worker Participation

Workers are actively encouraged to become involved in decision making within the organization

Team Working

Production is organized so that groups of workers undertake complete units of work

Human Resource Management (HRM)

The strategic approach to the effective management of an organization's workers so that they help the business gain a competitive advantage

Workforce Planning

Analyzing and forecasting the numbers or workers and the skills of those workers that will be required by the organization to achieve its objectives

Workforce Audit

A check on the skills and qualifications of all existing workers/managers

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one

Job Description

A detailed list of the key points about the job to be filled, stating all its key tasks and its responsibilities

Person Specification

A detailed list of the qualities, skills, and qualifications that a successful applicant will need to how

Training

Work related education to increase workforce skills and efficiency

On-the-job Training

Instruction at the place of work on how a job should be carried out

Off-the-job Training

All training undertaken away from the business, e.g. work-related college courses

Induction Training

Introductory training programs to familiarize new recruits with the systems used in the business and the layout of the business site

Staff Appraisal

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

Employment Contract

A legal document that sets out the terms and conditions governing a workers job

Dismissal

Being dismissed or sacked from a job due to incompetence or breach

Unfair Dismissal

Ending a worker's employment contract for a reason that the law regards as being unfair

Redundancy

When a job is no longer required, so the employee doing this job becomes redundant, though no fault of his or her own

Temporary Employment Contract

Employment contract that lasts for a fixed time period

Part-Time Employment Contract

Employment contract that is less than the normal full working week of, say, 40 hours

Flexi-Time Contract

Employment contract that allows staff to be called in at times most convenient to employers and employees

Outsourcing

Not employing staff directly, but using an outside agency or organization to carry out some business functions

Teleworking

Staff working from home but keeping contact with the office by means of modern IT communications

Hard HRM

An approach to managing staff the focuses on cutting costs

Soft HRM

An approach to managing staff that focuses on developing staff so that they reach self-fulfilment and are motivated to work hard and stay with the business

Marketing

The management task that links the business to the customers by identifying and meeting the needs of consumers profitably. It does this by getting the right product to the right place at the right time

Consumer Markets

Markets for goods and services bought by the final user of them