Business Management – Key Vocabulary

Vocabulary flashcards covering major business management, operations, marketing, finance and human resource terms from the lecture notes.

Management

The process of coordinating a business’s resources to achieve its goals.

Manager

A person responsible for planning, organizing, leading and controlling a business’s activities.

Interpersonal (people) skills

Those skills are needed to work and communicate with other people and to understand their needs.

Communication

The exchange of information between people; the sending and receiving of messages.

Strategic thinking

allows a manager to see the business as a whole and to take the broad, long term view

Vision

A clear, shared sense of direction that allows people to attain a common goal.

Leadership

The ability to influence people to set and achieve specific goals.

Problem solving

a broad set of activities involved in searching for, identifying and then implementing a course of action to correct an unworkable situation.

Decision making

the process of identifying the options available and then choosing a specific courses of actions to solve a specific problem

Flexibility

Being responsive to change and able to adjust to changing circumstances.

Business goal

A result a business expects to accomplish over a set period of time.

Market share

The business share of the total industry sales for a particular product

Classical management approach

Focuses on how best to organize and manage workers to improve productivity.

Scientific management approach

an approach that studies a job in great detail to discover the best way to perform it.

Time and motion study

A process of examining each step in a production process and the time taken to perform them.

Bureaucracy

A set of rules and regulations that controls a business.

Planning

The preparation of a predetermined course of action for the business.

Strategic planning

Planning for the next 3–5 years to determine future market position.

Tactical planning

Flexible, adaptable planning (1–2 years) that implements strategic plans.

Operational planning

the process of creating detailed, short term plans to achieve day to day business goals.

Organising

the structuring of the organisation to translate plans and goals into action.

Controlling

establishing standards in the line with the goals of the business, measuring the performance of the business against those standards or benchmarks, and making changes where neccessary to ensure that the goals of the business have been made

Management hierarchy

The arrangement that provides increasing authority at higher levels of the hierarchy.

Specialisation of labour

The degree to which tasks are divided into separate jobs.

Chain of command

An organisational structure that shows how each member of a company reports to one another

Autocratic leadership style

Manager makes all decisions, controls work method, limits workers knowledge, closely monitors performance, and often gives negative feedback.

Behavioural approach

An approach that stresses how people (employees) should be the main focus of the way in which the business is organised.

Leading

occurs when managers attempts to influence or motivate people in the business to work to achieve the business’s objectives.

Teamwork

People who interact regularly and coordinate their work toward a common goal.

Participative (democratic) leadership style

Managers consult employees for suggestions and consider them when making decisions.

Contingency approach

Emphasises flexibility and adapting management practices to changing circumstances.

Operations

Business processes that involve transformation or ‘production.’

Operations management

All activities managers engage in to produce a good or service.

Tangibles

Goods that can be touched.

Intangibles

Services that cannot be touched.

Inputs

Resources used in the transformation (production) process.

Transformed resources

Inputs that are changed or converted in the operations process.

Transforming resources

Inputs that carry out the transformation process.

Facilities

Plant, factories, offices and machinery used in operations.

Transformation

The conversion of inputs into outputs.

Outputs

The goods or services delivered to the customer.

Quality management

Strategies used to ensure products meet customer expectations.

Quality control

Inspections at various production points to check for defects.

Quality assurance

Using a system so a business consistently meets set production standards.

Total Quality Management (TQM)

An ongoing, business-wide commitment to excellence in every aspect of operations.

Marketing

A total system of interacting activities to plan, price, promote and distribute products.

Target market

A group of customers with similar characteristics likely to purchase the product.

Mass markets

Seller mass produces, distributes and promotes one product to all buyers.

Market segmentation

Subdividing the total market into groups sharing common characteristics.

Niche market

A narrowly selected target-market segment.

Marketing mix

Combination of Product, Price, Promotion and Place that forms marketing strategy.

Product

The actual good or service offered, including quality, design, name and warranty.

Packaging

Development of a container and graphic design for a product.

Brand

A name, term, symbol or design that identifies and distinguishes a product.

Price

Cost-based, market-based or competition-based amount charged for a product.

Promotion

Methods used to inform, persuade and remind the market about a product.

Personal selling

Sales representative activities directed at a customer to make a sale.

Relationship marketing

Developing long-term, cost-effective, strong relationships with individual customers.

Sales promotion

Short-term incentives to encourage purchase of a product.

Publicity

Any free news story about a business’s products.

Public relations

Activities aimed at creating and maintaining favourable relations with stakeholders.

Advertising

Paid messages via mass media to attract customers and create demand.

Place

All activities involved in making a product available to customers when and where desired.

Distribution channel

The route taken to get the product to the customer.

Financial statements

Reports that summarise transactions over a period of time.

Cash flow statement

Shows movement of cash receipts and payments during a period.

Liquidity

How much cash a business can access and how quickly assets can be converted to cash.

Cash receipts

Printed acknowledgement of cash received during a transaction.

Cash payments

Bills or coins paid to a provider of goods or services.

Debtor

Person or entity that owes the money.

Creditor

Person or entity that loaned the money.

Income statement

Summary of income earned and expenses incurred over a trading period.

Cost of goods sold (COGS)

Total direct costs related to the sale of products.

Opening stock

Value of inventory at the start of the financial year.

Closing stock

Value of inventory on hand at the end of the financial year.

Expenses

Costs incurred in acquiring or making goods and managing sales.

Gross profit

Revenue minus COGS.

Net profit

Gross profit minus expenses.

Asset

Item of value owned by a business that can be given monetary value.

Accounts receivable

Money owed to the business by customers for goods or services received.

Accounts payable

Money the business owes suppliers for goods or services purchased on credit.

Liabilities

Debts or obligations owed to others.

Balance sheet

Statement of a business’s assets and liabilities at a particular point in time.

Owner’s equity

The owner’s financial investment in the business (net worth).

COGS equation

COGS = Opening Stock + Purchases – Closing Stock.

Gross profit equation

Gross Profit = Revenue – COGS.

Net profit equation

Net Profit = Gross Profit – Expenses.

Human Resource Management (HRM)

Effective management of the formal relationship between employer and employees.

Acquisition

Process of attracting and recruiting the right staff for roles.

Job analysis

Systematic study of each employee’s duties, tasks and work environment.

Recruitment

Finding and attracting the right quantity and quality of applicants.

External recruitment

Filling job vacancies from outside the business.

Internal recruitment

Filling job vacancies with current employees.

Training

Teaching staff to perform their jobs more efficiently and effectively.

Development

Activities preparing staff to take greater future responsibility.

Employment contract

Legally binding agreement between employer and employee.

Common law

Law developed by courts and tribunals.

National Employment Standards (NES)

Ten minimum employment standards applying to all national-system employees.

Award

Legally binding document setting minimum wages and conditions for a group of employees.

Enterprise agreement

Collective workplace agreement between employer and employees or union.