Unit 2 Key Terms Business A-Level

Leadership

An ability to achieve effective performance in others

Management

The process of planning, organising, directing, and controlling the activities of a business or organisation to achieve its goals and objectives

Authority

The ability / power / right to give orders, make decisions and enforce compliance with those decisions and laws

Delegation

The transfer of authority or responsibility for specific activities and tasks within a business from one individual to another

Empowerment

It is a management practice of sharing information, rewards, and power with employees

Decentralisation

It is where a business allows decisions to be made by managers and subordinate

Programmed decisions

Those that are repeated over time and for which an existing set of rules can be developed to guide the process

Non- Programmed decisions

It is a decision that does not follow a set procedure, and the criteria for such decisions is not well-defined

Risk

The probability or chance that hoped for outcomes will not occur

Uncertainty

Being unsure of the factors influencing sales and therefore being unable to predict what will happen to the business in terms of its profits or growth

Opportunity Cost

The cost of missing out on the next best alternative

Scientific decision making

The scientific process of making decisions based on evidence and data by adopting a systematic approach, instead of decisions based on intuition or trial-and-error

Decision trees

They are a mathematical model used to help managers make decisions

Probability

A mathematical way of describing how likely an outcome or event is to occur

Expected value

It shows the weighted average of a given choice

Net gains

The Expected Value minus the initial cost of a given choice

Ethics

They are moral guidelines which govern good behaviour

The external environment

The outside influences and factors that affect business operations

Social responsibility

It is a concept within businesses whereby companies ensure the integration of social and environmental activities within their business operations for the good of society

Communication Stakeholder engagement

The process by which companies communicate and get to know their stakeholders

Consultation

Asking for and considering employees' views when making decisions