Business Studies 2.1: Internal Operations Vocabulary

Vocabulary terms and definitions based on the Business Studies 2.1 lecture notes covering internal operations, governance, production, leadership, and financial management.

Large Business (NZ Context)

Any business operating in New Zealand with more than twenty employees and/or having regional or national significance.

Internal Operations

Refers to business formation, functions, people, management, and environment within an organization.

Policies

Business-wide guidelines regarding how decisions should be made, along with statements of expectations and rules.

Programmed Decisions

Decisions that are made quickly and regularly with a pre-defined outcome.

Non-programmed Decisions

Decisions where outcomes are not immediately obvious or pre-determined.

Procedures

Business-wide methods and step-by-step instructions for carrying out day-to-day business activities.

Tikanga

The values, guidelines, rules, priorities, and ways of doing business that frame an organization's operations.

Corporate Social Responsibility (CSR)

An awareness of a business's impact on its community, where the business minimizes negative impacts, takes responsibility for harm caused, and contributes positively and ethically.

Pūtake

A business's 'reason for being', which can involve social, cultural, environmental, spiritual, and economic goals alongside profit.

Social Sustainability

The concept concerned with maintaining the health and well-being of the community, employees, and their families through fair treatment and safe products.

Organisational Structure

A framework shown on a chart that displays how people in a business work together and who reports to whom.

Span of Control

The number of direct reports (subordinates) an individual manager has.

Levels of Hierarchy

The number of authority levels from the top to the bottom of an organisational structure diagram.

Chain of Command

The official path along which orders and communication are passed down from people at the top of the hierarchy to those at the bottom.

Tall Structure

An organisational structure characterized by a narrow span of control and many levels of hierarchy.

Flat Structure

An organisational structure characterized by a wide span of control and few levels of hierarchy.

Matrix Structure

An organisational structure used for cross-departmental teams working together temporarily to accomplish a pre-defined project.

Shamrock Structure

An organisational model comprising three worker groups: a permanent core workforce, freelance contractors, and flexible temporary workers.

Decentralised Decision-Making

A management practice where authority to make certain decisions is given to managers or workers lower down the hierarchy.

Production Process

The process of obtaining inputs (human, natural, capital, enterprise) and transforming them into output goods or services.

Job Production

A method of production where each product is a unique, one-off item completed from start to finish.

Batch Production

A method of production where items are produced in specified groups, moving through the production steps one stage at a time.

Flow Production

A continuous, linear method of production typically coming from an assembly line.

Production

The total volume or quantity of units produced by a business over a given timeframe.

Productivity

A measure of business efficiency calculated as the ratio of outputs to inputs.

Labour-intensive Production

A production approach where human input is utilized more heavily relative to capital goods.

Capital-intensive Production

A production approach where capital equipment and machinery are utilized more heavily relative to human labor.

Lean Production

A production methodology focusing on maximizing output while eliminating waste across seven key areas (TIMWOOD).

Economies of Scale

A reduction in average cost per unit output resulting from increased production scale as fixed costs are spread over more units.

Capacity Utilisation

A metric measuring how efficiently goods or services are being produced relative to the maximum possible output level.

Functions of Management

The four key roles performed by managers: planning, organising, leading, and controlling.

Authoritarian Leadership

A leadership style where the manager makes decisions unilaterally based strictly on business objectives.

Democratic Leadership

A leadership style where the manager encourages staff participation in decision-making, goals, and operational strategies.

Laissez-faire Leadership

A hands-off leadership style where the manager rarely interferes in workers' day-to-day operations.

Kaitiakitanga

The Māori concept of guardianship of natural resources to protect them for future generations.

Rangatiratanga

The exercise of leadership, authority, guardianship, and ownership rights in managing resources and people.

Tino Rangatiratanga

Self-determination, ownership, or active control by individuals or groups over business areas and outcomes.

Profit and Loss Statement

A financial report detailing revenues and expenses over a period to state whether a net profit or loss was made.

Statement of Financial Position

A financial summary listing a business's assets, liabilities, and equity at a specific point in time.

Statement of Cash Flows

A financial report tracking all cash inflows coming into the business and cash outflows spent over a period.

Budget

A planned financial document containing predicted income, expenses, and asset/liability projections used for goal-setting and performance monitoring.

Variance Analysis

The process of investigating percentage differences between budgeted financial projections and actual financial performance.

Break-even Point

The exact level of output where total sales revenue equals total costs, resulting in zero profit and zero loss.