Grade 12 Business Studies Complete Vocabulary

Essential vocabulary flashcards covering key concepts across all Grade 12 Business Studies chapters: Business Environments, Performance, Conflict Management, Human Capital, General Management, Ethics, Marketing, Investments, and Insurance.

Competitive advantage

Describes how a business has an edge in the market over competitors (local or international), enabling it to sell more, attract more customers, or reduce expenses to generate more profit.

PE²STLE analysis

A tool used to scan and evaluate the macro environment across seven external factors: Political, Economic, Ethical, Social/Socio-economic, Technological, Legal, and Environmental.

Substitute product

A completely different product that satisfies the exact same customer need (such as butter versus margarine), rather than merely a competing brand of the same product type.

Complementary product

A product whose purchase or use is interrelated with and paired together with the use of another product, such that demand for one impacts the other (e.g., bread and butter).

Supply Chain Management (SCM)

The oversight of sourcing, processing, manufacturing, transporting, storing, and distributing goods and services from raw material extraction until the final product reaches the consumer.

Current capital ratio

A liquidity ratio calculated as $\frac{\text{Current assets}}{\text{Current liabilities}}$ ($\frac{\text{Inventory} + \text{Trade and Receivables} + \text{Cash}}{\text{Trade and Payables} + \text{Bank overdraft}}$), with a standard benchmark norm of $2:1$.

Acid test ratio

A stringent liquidity ratio calculated as $\frac{\text{Current assets} - \text{Inventory}}{\text{Current liabilities}}$, used to evaluate immediate short-term debt repayment ability without relying on stock sales, with a norm of $1:1$.

Solvency

A financial measure that evaluates whether a business's total assets exceed its total liabilities ($\text{Total assets} : \text{Total liabilities}$), where liabilities exceeding assets indicate bankruptcy, with an accepted industry norm of $2:1$.

Value chain analysis

A process of examining every activity in a business chain to assess where value is added and where insufficient value is added, retaining value-generating activities and eliminating or outsourcing the rest.

Resource-based analysis

An internal strategic analysis that identifies the tangible and intangible strategic resources owned by a business that are durable and difficult for competitors to duplicate.

Delphi technique

A creative problem-solving method used to obtain the opinions of an expert panel without face-to-face interaction, keeping individual contributions anonymous across multiple review rounds to eliminate bias and groupthink.

Balanced Score Card (BSC)

A management framework developed by Kaplan and Norton that evaluates organizational performance across four critical perspectives: financial, customer, internal business processes, and learning and growth.

Low cost strategy

A generic business strategy aimed at achieving a competitive advantage by maintaining the lowest manufacturing and operational costs in the industry.

Market penetration

An intensive growth strategy where a business focuses on expanding the sales of existing products within existing markets by attracting competitors' customers or encouraging existing customers to buy more.

Market development

An intensive growth strategy that involves taking an existing product and introducing it into a new geographical or demographic market segment.

Product development

An intensive growth strategy that involves introducing a new product or modifying an existing product to sell to an existing market.

Diversification

A growth strategy where a business enters an entirely new market with a completely new product that it has never previously offered.

Forward integration

An integration strategy where a business takes over or acquires one of its distributors to eliminate intermediaries (the middleman) and lower the end price to consumers.

Backward integration

An integration strategy where a business buys out its suppliers or sets up its own manufacturing plant to secure inputs, lower costs, and eliminate supplier bargaining power.

Horizontal integration

An integration strategy where a business takes over or merges with an existing competitor in the same stage of production or distribution.

Divestiture

A defensive retrenchment strategy in which a company sells off non-core or under-utilized operations or business units that hamper overall financial performance.

Benchmarking

The practice of measuring and comparing an organization's current operations and performance against recognized industry 'best practice' standards to eliminate performance gaps.

Functional conflict

A constructive, healthy conflict where differing parties respect each other's opinions, leading to positive outcomes like innovation, problem awareness, and enhanced productivity.

Dysfunctional conflict

Negative conflict that hinders group cohesiveness, wastes time and resources, lowers morale, and results in a severe decline in productivity.

Workplace Forum (WPF)

A consultative body that can be established in businesses employing 100 or more workers, allowing employee representatives and management to consult and make joint decisions on workplace issues, excluding wages.

Commission for Conciliation, Mediation and Arbitration (CCMA)

An independent, non-political dispute-resolution body funded by NEDLAC that settles labor disputes between employers and employees through conciliation, mediation, and arbitration.

Arbitration

A formal dispute resolution proceeding where an independent commissioner or arbitrator hears both sides and issues an award or ruling that is legally binding on all parties.

Job analysis

The formal human resources process of determining and investigating all the duties, tasks, and responsibilities associated with a specific job in an organization.

Job description

A written document outlining the job title, summary of tasks, working conditions, and level of supervision required for a specific role, derived from a job analysis.

Job specification

A document that translates the job description into the minimum qualifications, skills, knowledge, and experience required by an individual to perform the role.

Cost to Company

A remuneration structuring method in which the employee is offered an all-inclusive salary package, with no separate employer fringe benefit contributions, giving the employee discretion over structuring deductions.

Limitation clause

A constitutional provision stipulating that rights in the Bill of Rights are not absolute and can be restricted to redress past historical inequalities in the workplace (such as via Affirmative Action).

Constructive dismissal

An unfair dismissal situation where an employer makes workplace conditions so intolerable that the employee is effectively coerced or forced into resigning.

Work-to-rule

A form of industrial action where workers strictly perform no more and no less than the absolute minimum required by their employment contract and workplace rules.

Lock-out

A statutory recourse used by employers to physically exclude striking or disputing employees from the workplace to pressure them into accepting the employer's employment terms.

Intrapreneur

An 'inside entrepreneur' who works within an established business, using entrepreneurial traits and the business's resources to transform innovative ideas into profitable business outcomes.

Situational leadership style

A flexible leadership approach where a manager adapts their management style (autocratic, democratic, laissez-faire, transactional, or transformational) depending on the specific circumstance or group dynamics.

Job enlargement

A non-monetary motivational method where additional tasks and duties of a similar level are added to an existing job to make work less repetitive and monotonous.

Job enrichment

A non-monetary motivational technique where an employee is given increased authority, autonomy, and responsibility, allowing them to take pride in higher-level contributions.

Corporate Governance

The set of rules, principles, and processes implemented by top management to direct and control a business, ensuring accountability, transparency, and balance among all stakeholder interests.

Triple Bottom Line reporting

An integrated corporate reporting framework requiring companies to report on financial performance (Profit), social justice and community well-being (People), and environmental sustainability (Planet).

Principle-based theory

An ethical theory asserting that an action's morality is determined solely by adhering to established moral principles, values, and duty (e.g., lying is wrong), regardless of the consequences.

Utilitarian theory

An ethical theory holding that an action or decision is considered ethical if it achieves the greatest good or benefits the largest number of people.

Whistle-blower

An employee or individual who reports or exposes illegal, fraudulent, corrupt, or unethical actions taking place within an organization, protected from dismissal under South African law.

Corporate Social Responsibility (CSR)

An ongoing commitment by businesses to act ethically and contribute to sustainable socio-economic development for employees, their families, and the community at large.

Market mapping

A visual representation tool where competitors are plotted on a two-dimensional grid based on key market variables (such as price and quality) to identify business positioning and market gaps.

Unique Selling Proposition (USP)

The distinctive feature, characteristic, or value proposition of a product or service that differentiates it positively from competing offerings in the minds of consumers.

Leader pricing

A retail pricing strategy where a business significantly lowers the price of selected high-demand items to draw consumers into the store, with the intention that they will purchase other regularly priced goods.

Brand stretching

A branding strategy where an established brand name is used to launch a new product into an entirely unrelated market sector (such as Virgin expanding from music into airlines and gyms).

Franchise Agreement

A binding formal legal contract between a franchisor and a franchisee outlining conditions of sale, operational standards, training provisions, royalty fees, and advertising contributions.

Blue-chip shares

Shares issued by large, well-established, financially stable, and reputable companies listed on the stock exchange that present lower investment risk and consistent dividend histories.

Debenture

An unsecured, long-term loan certificate (IOU) issued by a business to raise borrowed capital from the public or institutional investors, paying a regular fixed or variable interest rate.

Indemnity

A fundamental short-term insurance principle ensuring that the insured is placed in the exact same financial position following an insured loss as they were immediately before the loss occurred, preventing any profit from insurance.

Average clause

An insurance condition applied when property is under-insured, whereby the insurer only pays a proportionate percentage of the claimed loss based on the ratio of the insured value to the true replacement value.

Proximate cause

An insurance rule stipulating that an insurer will only compensate for a loss if the direct, immediate, and dominant cause of the damage was an event specifically covered in the insurance contract.

Subrogation

An insurance principle whereby an insurer, after indemnifying the insured for a loss, legally assumes all rights of the insured to pursue and recover compensation from the third party that caused the damage.

Absolute good faith

A foundational requirement of insurance contracts obligating the applicant to honestly and fully disclose all material facts affecting the risk; failure to do so renders the policy null and void.

COIDA

The Compensation for Occupational Injuries and Diseases Act, a compulsory insurance scheme funded entirely by employers that provides financial relief and medical cost compensation to workers injured or disabled on duty.

Road Accident Fund (RAF)

A compulsory statutory fund funded via a levy on petrol and diesel that compensates victims injured in motor vehicle accidents and indemnifies drivers against civil claims from victims.

Fidelity insurance

A commercial insurance policy taken out by an employer to indemnify the business against direct financial losses or fraud committed by dishonest employees.