Business Terms From Glossary

for the 2025 exams

360-degree feedback

A process where an employee receives feedback from all people they interact with in their job.

Above-the-line promotion

Various forms of promotion aimed at mass audiences, like TV and radio ads.

Acquisition

The process of one company taking over another.

Arbitration

A method of dispute resolution where a third party makes binding decisions.

Artificial intelligence

Computers performing tasks associated with intelligent beings.

Autocratic leadership

Leadership where the leader makes decisions without input from subordinates.

Bankruptcy

Legal process for insolvent companies to restructure or liquidate.

Batch production

Producing similar items in groups.

Below-the-line promotion

Promotion focused on specific segments or groups.

Benchmarking

Comparing a company's performance to industry leaders.

Big data

Extremely large data sets analyzed for insights.

Brand awareness

Degree to which consumers recognize a product.

Brand development

Process of building brand awareness.

Brand loyalty

Continued purchase of a brand despite alternatives.

Brand value

Estimation of a brand's worth.

Bureaucracy

Organizational structure with multiple layers of authority.

Capacity utilization

Percentage measure of how much a business uses its productive capacity.

Capital expenditure

Expenditure for assets with a useful life over one year.

Centralization

Concentrating decision-making authority at the main office.

Chain of command

Official hierarchy in an organization.

Collective bargaining

Employees bargaining with management about wages and conditions.

Commission

Payment to an employee based on completed sales or services.

Competitive pricing

Pricing based on competitors' prices.

Conciliation and arbitration

Dispute resolution methods in collective bargaining.

Contribution pricing

Price based on variable costs plus markup.

Cooperatives

Businesses owned and operated by members who share profits.

Copyright

Exclusive right for the creator to reproduce their work.

Corporate social responsibility (CSR)

Businesses acting in ways that benefit society and stakeholders.

Cost centre

Department in a company that incurs costs but doesn't generate revenue.

Cost-plus (mark-up) pricing

Pricing method adding costs and markup to determine sales price.

Cradle-to-cradle design

Designing products for reuse of materials indefinitely.

Current assets

Assets convertible to cash in less than one year.

Current liabilities

Debts due within one year.

Customer loyalty programmes

Marketing strategies rewarding repeat customers.

Cybercrime

Malicious attacks on electronic systems.

Cybersecurity

Defending electronic systems from cyberattacks.

Data analytics

Analyzing data for business insights.

Data mining

Finding trends and patterns in large data sets for predictive analytics.

Database

Systematic set of electronic data files.

Decentralization

Delegating decision-making authority to regional offices.

Defect rate

Percentage measure of product failing quality guidelines.

Delayering

Removing levels of hierarchy in an organization.

Delegation

Assigning authority or responsibility to someone lower down the organizational chart.

Democratic leadership

Leadership style encouraging input from organization members.

Depreciation

Loss of value of a long-term asset over time.

Economy of scale

Reduction in per-unit production cost with business growth.

Employees share-ownership schemes

Programs granting employees company shares.

Empowerment

Long-term process of developing employees to make decisions.

External growth

Business expansion through external resources like acquisitions.

Fixed costs

Costs that do not vary with output or activity.

Formative appraisal

Continuous employee appraisal for performance improvement.

Franchising

Business model selling rights to use brand and products to others.

Fringe payments

Compensation beyond salary, like insurance or car use.

Incremental innovation

Small continuous improvements to existing products or processes.

Indirect cost/overhead

Costs not directly traceable to a specific cost object.

Induction

Welcoming new employees and providing company-specific training.

Industrial democracy

Allowing workers to have a say in company decision-making.

Innovation

Creating something new with value.

Insolvency

Inability to pay bills or when liabilities exceed assets.

Insourcing

Company's own personnel performing tasks previously outsourced.

Intellectual property

Intangible proprietary rights like patents and trademarks.

Internal growth

Business expansion using its own resources.

Internet of things (IoT)

Interconnected computerized devices transmitting data.

Job enlargement

Adding tasks to a job description horizontally in terms of skill.

Job enrichment

Adding challenging tasks to a job for professional growth.

Job production

Individual production of unique products.

Job rotation

Regularly rotating employees into different positions.

Joint venture

Creation, ownership, and operation of a third organization by two businesses.

Just-in-time

Inventory management strategy minimizing stock on hand.

Kaizen

Continuous improvement philosophy encouraging small changes.

Laissez-faire leadership

Leadership style allowing group decision-making.

Lean production

Systematic approach to reducing waste in production.

Levels of hierarchy

Number of layers of authority in an organization.

Liquidity

Ability to convert assets into cash without loss.

Lockouts

Management action preventing workers from entering premises.

Loss leader

Product sold at a loss to attract customers.

Margin of safety

Difference between current sales and break-even sales.

Market growth

Increase in consumers buying a product or service.

Market orientation

Approach focusing on customer needs and wants.

Market share

Percentage of market controlled by a company or product.

Mass customization

Combining mass production with individualized customization.

Mass market

Market for goods produced in large quantities.

Mass/flow production

Continuous production of standardized products.

Matrix structure

Reporting to more than one person in an organization.

Merger and acquisition

Legal consolidation or purchase of shares between companies.

Niche market

Small specialized part of a larger market.

Non-governmental organizations (NGOs)

Independent non-profit organizations.

No-strike agreement

Provision in collective bargaining agreement prohibiting strikes.

Offshoring

Business moving operations to another country.

Off-the-job training

Training provided offsite by an outside party.

On-the-job training

Training provided onsite during work hours.

Organizational chart

Visual representation showing reporting relationships.

Organizational culture

Beliefs, norms, and customs of an organization.

Outsourcing/subcontracting

Internal function performed externally.

Partnership

Business owned and run by two or more persons sharing profits.

Patent

Exclusive right to make, use, or sell a product for a specific time.

Paternalistic leadership

Leader treats employees like family, expects loyalty.

Penetration pricing

Initially low price to attract customers for a new product.

Performance-related pay

Compensation based on individual or unit performance.

Predatory pricing

Selling at low prices to eliminate competition.