BUSS4 Key Words

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BUSS4 Key Terms
Corporate Aims
Long term targets that will enable the business to fulfil its mission
Corporate Strategy
A plan based on the corporate aims and objectives which defines the overall scope and
direction of the business by identifying its choice of business, makes and activities
Mission Statement
A declaration of the organisation's purpose, principle business aims identity, policies and
Balance of Payments
The account that records the UK's value of imports of goods and services and the value of
its exports
A deficit exists when exports values and a surplus exists when exports values exceed
import values
Business Cycle
Fluctuations in the level of economy activity, measured by real GDP, over time
Firms working together ­ called a cartel ­ to fix prices or agree on output levels to reduce
Competition Policy
Aims to prevent the abuse of monopoly power so that competition in markets is not
Competitive Structure
The number and strength of competing firms in an industry and the ease of entry for new
Consumer Price Index

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A measure of inflation based on the RPI but excluding housing costs
It is used by the government and the Bank of England
Target UK inflation target is 2% annual CPI inflation
Contractionary Fiscal Policy
Increases in taxes greater than increases in government spending
E.g.…read more

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The use by the government of changes in tax rates or government spending to manage the
Free Trade
International trade that is allowed to take place without restrictions such as protectionist
tariffs and quotas
Frictional Unemployment
Occurs when people take some time to find another losing or leaving their previous one
The growing trend towards worldwide markets in products, capital and labour,
unrestricted by barriers
Government Intervention
Aims to achieve the government's objectives by controlling and supporting business,
passing legislation and taking action…read more

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In theory, an industry with just one supplier but the UK and EU definition of a firm with at
least 25% market share or a legal monopoly
Industry with competition amongst a relatively few businesses
Policies used by governments, such as tariffs and quotas, to limit imports and restrict free
A physical limit placed on the quantity of imports of certain products
Retail Prices Index
The monthly record of inflation started from a base period = 100, calculated by recording…read more

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Autocratic Leadership
Leaders take decisions on their own with no discussion
Backward Vertical Integration
Merger with a supplier business
Bureaucratic Leadership
Leaders use rigid and complex rules and procedures to direct and lead the organisation
Business Process Re-Engineering
Fundamentally rethinking and redesigning the processes of a business to achieve a
dramatic improvement in performance
Business Strategy
A long term plan of action to achieve the objectives of the business
Change Management
Planning, implementing, controlling and reviewing the movement of an organisation from
its current state…read more

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Merger with a customer business
Horizontal Integration
Merging with a taking over another business in the same industry at the same stage of
Information Management
The collection and assessment of information from one or more sources and the
distribution of that information to the appropriate managers
Internal Growth
Expansion of a business be means of opening new branches, shops or factories
Laissez-Faire Leadership
Leaders leave their colleagues to get on with their work so there is no supervision or
Influencing and directing…read more

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When individuals are given freedom to express themselves fully and make decisions for
PEST Analysis
The assessment of the external political, economic, social and technological factors that
may present constraints on strategic decisions made by a business
Power Culture
Concentrating power among just a few people
Private Equity Ownership
When wealthy investors buy out a business which is usually underperforming and take it
over with the intention of transforming its management and performance
Project Champion
A person assigned to support and drive a project…read more

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When a company buys over 50% of the shares of another company and becomes the
controlling owner of it
It is often referred to as an `acquisition'
Task Culture
Based on cooperation and teamwork
Vertical Integration
Merging with or taking over another business in the same industry but at a different stage
of production.…read more


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