Business Year 11 Prelims

accountability

when a business acts in the best and highest interests of its owners

accounting

a managerial and administrative tool for recording financial transactions, so that a summary of what has happened to business money can be traced

acquisition

when one business takes control of another business by purchasing a controlling interest in it

assets

items of value to the business that can be given a monetary value

audit

an independent check of the accuracy of financial records and accounting procedures

Australian Business Number (ABN)

A single identifying number that a business uses when dealing with government departments and agencies.

autocratic leadership style

manager tends to make all the decisions, dictates work methods, limits worker knowledge about what needs to be done to the next step to be performed, frequently checks employee performance and sometimes gives feedback that is punitive.

award

an employee's minimum pay and conditions

balance of payments (BOP)

a record of a country's trade and financial transactions with the rest of the world over time, usually one year

balance sheet

a statement of the business' assets and liabilities (financial position) at a particular time using the heading 'as at' to pinpoint when it was created

bank overdraft

the bank allows a business to overdraw their account up to an agreed limit for a specified time, to overcome a temporary cash shortfall

bankruptcy

a declaration that a business or person is unable to pay his or her debts

behavioural approach

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

benchmark

a standard by which something can be measured or judged

best practice

business practices that are regarded as the best or of the highest standard in the industry

body language

the use of gestures, facial expressions and posture to communicate

brand

a name, term, symbol or design that identifies a specific product and distinguishes it from its competitors

brand logo

a graphic representation that identifies a business or product

break-even analysis

used to determine the level of sales that needs to be generated to cover the total cost of production

budget

the business' financial plan for the future

bureaucracy

the set of rules and regulations that control a business

business

can be defined as the organised effort of individuals to produce and sell, for a profit, the products that satisfy individuals' needs and wants

business activity statement (BAS)

records a business's claims for input tax credits and accounts for GST payable

business (corporate) culture

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

business environment

The surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.

business ethics

the application of moral standards to business behaviour

business information system (BIS)

(also referred to as a management information system (MIS)) gathers data, organises and summarises them, and then converts them into practical information

business life cycle

the stages of growth and development a business can experience

business opportunity

can be described as something an entrepreneur can see as an avenue to success.

business plan

the 'road map' for future growth and development within a business. It sets out the desired goals and direction of the business

cash flow

the money coming into the business in the form of cash receipts, and the money leaving the business as cash payments

cash flow projection

the changes to the cash position brought about by the operating, investing and financial activities of the business

cash flow statement

shows the movement of cash receipts (inflows, such as money from sales) and cash payments

chain of command

a system that determines responsibility, supervision and accountability of members of the organisation

change

any alteration in the business and work environment

change agent

a person or group of people who act as catalysts, assuming responsibility for managing the change process

change management

A methodical approach to dealing with change, both from the perspective of a business and on the individual level

channels of distribution

the ways of getting the product to the customer

choice

the act of selecting among alternatives

classical approach

stresses how best to manage and organise workers so as to improve productivity (output)

closing stock

the value of stock on hand at the end of the financial year

common law (employment) contract

when employers and employees have the right to sue for compensation if either party does not fulfil their part of the contract

communication

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

compensation

the payment or benefits (or both) an employee receives in exchange for their labour

competition

rivalry among businesses that seek to satisfy a market

competitive advantage

the strategies used by a business to gain an 'edge' over its competitors

complementary business

a business that sells a similar range of goods and services

computer-aided design (CAD)

a computerised design tool that allows a business to create product possibilities from a series of input data

computer-aided manufacture (CAM)

software that controls the manufacturing process

conflict of interest

when a person takes advantage of a situation or piece of information for his or her own gain rather than for the employer's interest

consumer buying behaviour

the decisions and actions of consumers when they purchase goods and services for personal or household use

contingencies

unanticipated events that can lead to financial difficulty and for a business to be well managed, it needs to have saved money for such events

contingency approach

the need for flexibility and adaptation of management practices and ideas to suit changing circumstances

continuous improvement

an ongoing commitment to achieving perfection

control process

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

controlling

compares what was intended to happen with what has actually occured

Corporate Code of Conduct

a set of ethical standards for managers and employees to abide by

cost of goods sold (COGS)

the value of stock that a business has sold to its customers

creditors

those people or businesses who are owed money

curriculum vitae, resume

a summary of a person's previous employment experience

data

unprocessed facts and figures such as sales figures and customer complaints

debt finance

money obtained through loans

decision making

the process of identifying the options available and then choosing a specific course of action to solve a specific problem

delegation

the handing over of certain tasks or responsibilities to an employee who is suitably capable and qualified to carry them out

deregulation

the removal of government regulation from industry, with the aim of increasing efficiency and improving competition

development

activities that prepare staff to take greater responsibility in the future

dismissal

when the behaviour of an employee is unacceptable and it then becomes necessary for a business to terminate the employee's employment contract

diversification

when a business acquires or merges with a business in a completely unrelated industry

dividend

part of a business' profit that is divided among shareholders

division

the separation of key business functions into specialised units or departments. The business is divided into functional areas

driving forces

forces that support the change

e-business

using the Internet to conduct business

ecological sustainability

when economic growth meets the needs of the present population without endangering the ability of future generations to meet their needs

e-commerce

the buying and selling of goods and services over the internet

economic cycles

the periods of growth ('boom') and recession ('bust') that occur as a result of fluctuations in the general level of economic activity

economic growth

when a nation increases the real value of goods and services over a period of time

economy

a system used to determine what to produce, how to produce and to whom production will be distributed

effectiveness

measure the degree to which a goal has been achieved

efficiency

compares the resources needed to achieve a goal (the costs) against what was actually achieved (the benefits)

elaborately transformed manufactures (ETMs)

manufactured goods that are highly processed and valued. They are complex because of the amount of processing they have undergone

employee selection

gathering information about each applicant for a position, then using that information to choose the most appropriate applicant

employee training

the process of teaching staff how to perform their job more efficiently and effectively by boosting their knowledge and skills

employment contract

a legally binding, formal agreement between an employer and an employee

enterprise agreement

a negotiated agreement between an employer and a union or a group of employees

entrepreneur

someone who starts, operates and assumes the risk of a business venture in the hope of making a profit

equity finance

the funds contributed by the business owner(s) to start and then expand the business

establishment costs

costs involved in setting up the business

e-tailer

an electronic retailer

evaluation

the process of assessing whether the business has achieved stated objectives

expenses

specifically, expenses are the costs incurred in the process of acquiring or manufacturing a good or service to sell and the costs (direct and indirect) associated with managing all aspects of the sales of that good or service

external environment

factors over which the business has very little control

external recruitment

filling job vacancies with people from outside the business

Fairtrade

a trading partnership that seeks greater equity (fairness) in international trade. It promotes the rights of marginalised workers, especially in low-income countries

finance

how a business funds its activities- for instance, where it gets its money to trade, why it choose to use certain lenders- as well as the costs, risks and benefits of different types of borrowings

financial resources

the funds the business uses to meet its obligations to various creditors

financial statements

reports that summarise transactions over a period of time

finished product

product that is ready for customers to buy and use

fixed costs (FC)

costs that do not vary regardless of how many units of a good or service are produced

flatter organisational struture

evolved due to a 'de-layering' of management structures resulting in the elimination of one or more management levels

flexible manufacturing

production by computer controlled machines that can adapt to various versions of the same operation