VCE Business Management Unit 3, AOS1, Key Terms

assets

items of value owned by a business

autocratic management style

one where the manager tells staff what decisions have been made

business

any activity conducted by an individual or individuals to produce and sell goods and services that satisfy the needs of society, as well as making profit

communicating

the ability to transfer information from a sender to a receiver, and to listen to feedback

competitive advantage

occurs when a firm, industry or economy has a lower cost price structure than its rivals. In this situation, goods and services can be sold more cheaply, undercutting competitors, and expanding domestic and foreign sales. The concept can also be extended to product quality range and flexibility in adapting to new trends in the market.

competitors

other businesses or individuals who offer rival, or competing, goods or services to the ones offered by the business

consultative management style

one where the manager consults employees before making decisions

contingency management theory

stresses the need for flexibility and the adaptation of management styles to suit the situation

corporate culture

the values, ideas, expectations and beliefs shared by members of the business

corporate social responsibility

the obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community, as well as the environment

customers

the people who purchase goods and services from the business, expecting high quality at competitive prices

decision-making

the ability to identify the options available and then choose a specific course of action from the alternatives

delegating

the ability to transfer authority and responsibility from a manager to an employee to carry out specific activities

directors

the people who have overall responsibility for managing the company's business activities

effectiveness

the degree to which a business has achieved its stated objectives

efficiency

how well a business uses resources to achieve objectives

employees

the people who work for the business and who expect to be paid fairly, trained properly and treated ethically in return for their contribution to production

government

the group of people with the authority to govern a community. In Australia, this exists at three levels (federal, state and local).

government business enterprise (GBE)

a type of business that is government owned and operated

incorporation

the process that businesses go through to become a registered company and a separate legal entity from the owner/shareholder

industry

the classification of groups of businesses related to the particular good or service they produce

interest groups

organisations who attempt to directly influence or persuade a business to adopt or change particular activities, processes or policies

interpersonal skills

the ability to deal or liaise with people and build positive relationships with staff

key performance indicators (KPIs)

specific criteria used to measure the efficiency and/or effectiveness of the business's performance

laissez-faire management style

one where the employees assume total responsibility for, and control of, workplace operations

leading

the ability to influence or motivate people to work towards the achievement of business objectives

limited liability

refers to when the shareholders in a company will not be held personally responsible for the debts of that business

liquidation

the process of selling off the assets of a business in order to repay creditors, with any assets remaining to be distributed amongst shareholders

management

the people who have the responsibility for successfully achieving the objectives of the business

management skills

the abilities or competencies that managers use to achieve business objectives

management style

the behaviour and attitude of the manager when making decisions, when directing and motivating staff, and when implementing plans to achieve business objectives

market share

the proportion of total sales in a given market or industry that is controlled or held by a business, calculated for a specific period of time

mission statement

expresses why the business exists, its purpose and how it will operate

objective

a desired outcome or specific result that a business intends to achieve

operational planning

specific details about the way in which the business will operate in the short term

participative management style

one where the manager unites with staff to make decisions together

partnership

a business owned by two or more people (generally a maximum of 20)

persuasive management style

one where the manager attempts to 'sell' decisions made

planning

the ability to define business objectives and decide on the methods or strategies to achieve them

private limited company

an incorporated business that has a minimum of one shareholder and a maximum of 50 non-employee shareholders, and whose shares are offered only to those people whom the business wishes to have as part owners

profit

what is left after business expenses have been deducted from money earned from sales (revenue)

public listed company

an incorporated business with a minimum of one shareholder (and no maximum), and whose shares are openly traded on the Australian Securities Exchange

revenue

the income that a business earns from the sale of goods and services to customers

shareholders

the owners of a company

social enterprise

a business with the objective of fulfilling a social need

sole trader

a business owned and operated by one person

stakeholders

groups and individuals who interact with the business and have a vested interest in its activities

strategic planning

long-term planning, usually over two to five years

strategies

the actions that a business takes to achieve specific objectives

suppliers

businesses or individuals who supply materials and other resources to a business so that it can conduct its operations

SWOT analysis

the identification and analysis of the internal strengths and weaknesses of the business, and the opportunities in, and threats from, the external environment

tactical planning

flexible, adaptable, medium-term planning, usually over one to two years, which assists in implementing the strategic plan

unlimited liability

refers to when the business owner is personally responsible for all the debts their business

vision statement

states what the business aspires to become