key terms

Management: The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.

Manager: An individual who is in charge of a certain group off tasks, or a certain area or department of a business.

Chief Executive Officer: The most senior manager responsible for the overall performance and success of a company.

Planning: A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.

Organizing: A management function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization’s goals and objectives.

Leading: Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals and objectives.

Controlling: A management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not.

Motivation: factors that influence the behavior of workers towards achieving business goals.

Motivation can be increased by:

-        monetary rewards

-        non-monetary rewards introducing ways to give job satisfaction.

Job satisfaction: The enjoyment a worker gets from feeling that they have done a good job.

Job rotation (swapping workers round and only doing a specific task for a limited time  before swapping round again).

Job enlargement (extra tasks are added to the job to make it more interesting)

Job enrichment (adding tasks that require more skill and/or responsibility)

Theory X: The average person does not like work. Workers must be constantly supervised so they will work. Motivation is from external factors, e.g. pay schemes where the workers are paid more for increased output.

Theory Y: The average person is motivated by internal factors. To motivate workers, you need to find ways to help workers take an interest in their work, e.g. give rewards, incentives.

Maslow's hierarchy of needs: A theory of motivation which states that five categories of human needs dictate an individual's behavior. Those needs are physiological needs, safety needs, love and belonging needs, esteem needs, and self-actualization needs.

Frederick Herzberg’s motivation theory: Humans have two sets of needs: one is for the basic needs, which he called hygiene factors or needs, and the second is for a human being to be able to grow psychologically, which he called motivational needs or motivators.

Hygiene factors: The factors that must be present in the workplace to prevent job  dissatisfaction.

Organizational structure: The levels of management and division of responsibilities within an organization.

Hierarchy: The levels of management in any organization, from the highest to the lowest. A level of hierarchy refers to managers/ supervisors, other employees who are given a similar level of responsibility in an organization.

Chain of Command: The structure in an organization which allows instructions to be passed down from senior management to lower levels of management.

Span of Control: The number of subordinates working directly under a manager.

Directors: Senior managers who lead a particular department or division of a business. Line managers: People who have responsibility for people below them in the hierarchy of an organization.

Supervisors: Junior managers who have direct control over the employees below them in the organizational structure.

Staff managers: Specialists who provide support, information and assistance to line managers.

Delegation: Giving a subordinate the authority to perform a particular task.

Decentralization: Taking decision away from the centre of an organization- way from the Head Office.

Globalization is a combination of the words "globalization" and "localization." The term is used to describe a product or service that is developed and distributed globally but is also adjusted to accommodate the user or consumer in a local market.

Culture is defined as the complex system of values, traits, morals, and customs shared by a society.

Context refers to the stimuli, environment, or ambience surrounding an event.

The Lewis Model was developed by linguist and leading cross-cultural specialist Richard D. Lewis. The model divides humans into 3 clear categories, based not on nationality or religion but on BEHAVIOUR, namely, Linear-active, Multi-active and Reactive.

High-context culture is a culture by which the rules of communication are primarily and dominantly transmitted through the use of contextual elements. These include specific forms of body language, the social or familial status of an individual, and the tone of voice employed during speech. High-context cultures usually do not have rules that are explicitly written or stated.

Low-context culture refers to a culture whereby most communications take place through verbal language and rules are directly written out or stated for all to view.

Power distance is the distribution of power among individuals within a culture and how well unequal levels of power are accepted by those with less power.

Recruitment - the process from identifying that the business needs to employ someone up to the point at which applications have arrived at the business.

Employee selection - the process of evaluating candidates for a specific job and selecting an individual for employment based on the needs of the organisation.

A job analysis - identifies and records the responsibilities and tasks relating to a job.

A job description - outlines the responsibilities and duties to be carried out by someone employed to do a specific job.

A job specification - a document which outlines the requirements, qualifications, expertise, physical characteristics, etc., for a specified job.

Internal recruitment - when a vacancy is filled by someone who is an existing employee of the business.

External recruitment - when a vacancy is filled by someone who is not an existing employee and will be new to the business.

Induction training - an introduction given to a new employee, explaining the business’s activities, customs and procedures and introducing them to their fellow workers.

On-the-job training - occurs by watching a more experienced worker doing the job.

Off-the-job training - involves being trained away from the workplace, usually by specialist trainers.

The primary sector of industry extracts and uses the natural resources of Earth to produce raw materials used by other businesses.

The secondary sector of industry manufactures goods using the raw materials provided by the primary sector.

The tertiary sector of industry provides services to consumers and the other sectors of industry. A mixed economy has both a private sector and a public (state) sector.

Public sector: the sector of the economy in which organisations are owned and controlled by the state (government)

Private sector: The sector of the economy in which organisations are owned and controlled by individuals.

Privatisation: The sale of state-owned assets such as public corporations to the private sector.

Sole trader: a business owned and operated by one person.

Limited liability: the liability of shareholders in a company is limited to only the amount they invested.

Unlimited liability: the owners of a business can be held responsible for the debts of the business they own. Their liability is not limited to the investment they made in the business.

Partnership: a form of business in which two or more people agree to jointly own a business.

Shareholders: the owners of a limited company. They buy shares which represent part-ownership of the company.

Private limited companies: businesses owned by shareholders but they cannot sell shares to the public.

Public limited companies: businesses owned by shareholders but they can sell shares to the public and their shares are tradeable on the Stock Exchange

Production: the process of converting inputs such as land, labour and capital into saleable goods, for example shoes and cell phones.

Inventories: the stock of raw materials, work-in-progress and finished goods held by a business.

Lean production: the production of goods and services with the minimum waste of resources.

Job production: the production of items one at a time.

Batch production: the production of goods in batches. Each batch passes through one stage of production before moving onto the next stage.

Flow production: the production of very large quantities of identical goods using a continuously moving process.

Just-in-time (JIT) is a production method that involves reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the finished product.

Logistics:the marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption  to meet customer requirements at a profit.  

Inbound logistics ‐ the area of logistics that involves bringing raw materials, packaging, other goods  and services, and information from suppliers to producers.  

Materials handling ‐ the movement of goods within a warehouse, from warehouses to the factory  floor, and from the factory floor to various workstations.  

Outbound logistics ‐ the area of logistics that involves managing the flow of finished products and  information to business buyers and ultimate consumers (people like you and me). 

Reverse logistics - the area of logistics that involves bringing goods back to the manufacturer because  of defects or for recycling.

Quality: to produce a good or a service which meets customer expectations.

Quality control: the checking for quality at the end of the production process, whether it is the production of a product or service.

Quality assurance: the checking for quality standards throughout the production process, whether it is the production of a product or service.

Total Quality Management (TQM): the continuous improvement of products and processes by focusing on quality at each stage of production.

Market: the set of all actual and potential buyers of a good or service; the place where people buy and sell; the people who trade in a particular good; to make goods available to buyers and to encourage them to buy them

· market leader: the company with the largest market share

· market nicher: a small company that concentrates on one or more particular niches or small market segments

· market research (GB) or marketing research (US): the collection, analysis and reporting of data relevant to a specific marketing situation (e.g. a proposed new product)

· market segment: part of a market; a group of customers with specific needs, defined in terms of geography, age, sex, income, occupation, life-style, etc.

· market segmentation: the act of dividing a market into distinct groups of buyers who have different requirements or buying habits

· market share: the sales of a company (or brand or product) expressed as a percentage of total sales in marketing - the process of identifying and satisfying consumers' needs and desires

· marketing channel: the set of intermediaries a company uses to get its goods to their end users

· marketing mix: the set of all the various elements in a marketing programme, and the way a company integrates them

· marketing strategy: a plan or principle designed to achieve marketing objectives

· product life cycle: the standard pattern of sales of a product over the period that it is marketed

Advertorial: A paid-for advertisement which includes editorial content; normally identified in a print magazine with the word "Advertisement" printed as a head across the top of the page to distinguish it from genuine (in theory unbiased) editorial content · Advertising agency: The organization that takes care of advertising for clients.

· Advertising campaign: A time-limited set of ads - campaigns may run across different media, and for one month or ten years, but can be categorized together as they are the execution of a central idea

· Demographics: Describing an audience by age, gender, ethnicity, or location – i.e the facts about them

· Focus Groups: Small, select groups representing a target audience who are paid to answer questions at the behest of a market research organization

· Product Placement: The practice of paying for a branded product to be used by a character in a movie – e.g James Bond driving a BMW Z3

· Product Positioning: Establishing the market niche of a product - which may not be as the brand leader - and advertising to the appropriate segment of the audience

· USP: Unique Selling Proposition/Point - a highlighted benefit of a product which makes it stand out from all rival brands.

Deposit - to place money in a bank; or money placed in a bank

· liquidity - available cash, and how easily other assets can be turned into cash

· collateral- anything that acts as a security or guarantee for a loan

· A mortgage - a type of loan used to purchase or maintain a home, land, or other types of real estate. The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest. The property then serves as collateral to secure the loan.

· Overdraft- Something that occurs when you make a purchase with your debit card or write a check for an amount that exceeds your checking account’s available balance. Many bank accounts offer overdraft protection to help avoid overdraft fees. Some banks don’t charge overdraft fees at all.

· A current account - an account at a bank against which checks can be drawn by the account depositor; a checking account.

· A savings account - a deposit account that generally earns higher interest than an interest-bearing checking account. Savings accounts limit the number of certain types of transfers or withdrawals you can make from the account each monthly statement cycle.

· A deposit account - a bank account maintained by a financial institution in which a customer can deposit and withdraw money.

· Solvency- When banks have enough money to cover potential losses. Banks are expected to maintain a sufficient level of capital to remain solvent and avoid failure. The FDIC and other federal regulators work with banks to maintain standards for solvency.

· Maturity date: This is the date of expiration for the contractual obligation of a financial instrument. For example, certificates of deposit have a maturity date that depends on the length of the CD term. When the CD matures, you have the option to withdraw the money. Some banks and credit unions also allow you to roll it into a new CD or enable the CD to renew automatically.

Cost accounting - calculating all the expenses involved in producing something, including materials, labour, and all other expenses

· Tax accounting - calculating how much an individual or a company will have to pay to the local and national governments (and trying to reduce this to a minimum)

· Auditing - inspecting and reporting on accounts and financial records

· Accounting - preparing financial statements showing income and expenditure, assets and liabilities

· Managerial or management accounting - providing information that will allow a business to make decisions, plan future operations and develop business strategies

· “creative accounting” - using all available accounting procedures and tricks to disguise the true financial position of a company

· Bookkeeping - writing down the details of transactions (debits and credits)

· Cash flow statement - a statement giving details of money coming into and leaving the business, divided into day-to-day operations, investing and financing

· Income statement (or Statement of income, Profit and loss statement, or Profit and loss account) - a statement showing the difference between the revenues and expenses of a period

· Balance sheet (or Statement of financial position) - a statement showing the value of a business's assets, its liabilities, and its capital or shareholders' equity (money the business has that belongs to its owners)

Business cycle model: a model showing the increases and decreases in a nation’s real GDP over time; this model typically demonstrates an increase in real GDP over the long run, combined with short-run fluctuations in output.

· Expansion: the phase of the business cycle during which output is increasing

· Recession: the phase of the business cycle during which output is falling

· Depression: a deep and prolonged recession

· Peak: the turning point in the business cycle between an expansion and a contraction; during a peak in the business cycle, output has stopped increasing and begins to decrease.

· Trough: the turning point in the business cycle between a recession and an expansion; during a trough in the business cycle, output that had been falling during the recession stage of the business cycle bottoms out and begins to increase again.

· Recovery: when GDP begins to increase following a contraction and a trough in the business cycle; an economy is considered in recovery until real GDP returns to its long-run potential level.

· Potential output: the level of output an economy can achieve when it is producing at full employment; when an economy is producing at its potential output, it experiences only its natural rate of unemployment, no more and no less.

· Growth trend: the straight line in the business cycle model, which is usually upward-sloping and shows the long-run pattern of change in real GDP over time

· Positive output gap: the difference between actual output and potential output when an economy is producing more than full employment output; when there is a positive output gap, the rate of unemployment is less than the natural rate of unemployment and an economy is operating outside of its PPC.

· Negative output gap: the difference between actual output and potential output when an economy is producing less than full employment output; when there is a negative output gap, the rate of unemployment is greater than the natural rate of unemployment and an economy is operating inside its PPC.

Ethical standard: a rule for moral behaviour in a particular area

· Ethical behaviour: doing things that are morally right · Ethical lapse: temporary failure to act in the correct way

· Ethical dilemma: a choice between two actions that might both be morally wrong

· Ethical stance: a stated opinion about the right thing to do in a particular situation

· Ethical issue: an area where moral behaviour is important

· Business Ethics: Standards of business behaviour that promote human welfare and “the good.”

· Corporate Social Responsibility (CSR): A company’s commitment to improving or enhancing community well-being through discretionary contributions of corporate resources. There are five dimensions of CSR: Environment, Social, Economic, Stakeholder, and Volunteerism.

Job insecurity: The fear that you might lose your job

· Employability: The extent to which a person has skills that employers want

· Downsizing: Decreasing the number of permanent employees

· Core: The central part of something (e.g. a company's workforce)

· Efficiency: a situation in which a person, company, factory, etc. uses resources such as time, materials, or labour well, without wasting any

· Rationalization: to make a company, way of working, etc. more effective, usually by combining or stopping particular activities, or by employing fewer people

· redundancy package: all the payments and advantages that a company gives to workers who have lost their jobs because they are no longer needed

· restructuring: to organize a company, business, or system in a new way to make it operate more effectively (noun)

· delocalization: to move the location of an enterprise (noun)

International trade: Purchase, sale, or exchange of goods and services across national borders.

· Free trade: a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade.

· Protectionism: the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies.

· Trade barriers: Government laws, regulations, policies or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products.

· Tariff: A duty (or tax) levied upon goods transported from one Customs area to another, for either protective or revenue purposes. Tariffs raise the prices of imported goods, thus making them generally less competitive within the market of the importing country, unless that country does not produce the items so tariffed.

· Quota: Restriction on the amount (measured in units or weight) of a good that can enter or leave a country during a certain period of time.

· Absolute advantage: Ability of a nation to produce a good more efficiently than any other nation.

· Comparative advantage: Inability of a nation to produce a good more efficiently than other nations, but an ability to produce that good more efficiently than it does any other good.

· An infant industry: a new industry, which in its early stages experiences relative difficulty or is absolutely incapable of competing with established competitors abroad.

· A strategic industry: an industry which is essential for the promotion or stabilization of the growth of the locality in which that industry is situated.