Business Studies Key Terms

B.S

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Key Terms

  • Chain of command -  A structure within a firm allowing instructions to be passed downwards through the organisation. 
  • Chain of production -  The stages through which a product will pass during production. 
  • Delayering -  The removal of a layer of management in an organisation.
  • Hierarchy -  An organisation in which power and responsibility are built up in layers with the most powerful at the top.
  • Value added The difference between the value paid for the inputs used in production and the value of a firms output. 
  • Span of control The number of people or departments that a person has under their command.
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Key Terms Continued...

  • Specialisation - This is division of labour, meaning that their workers are divided up and assigned a specific job.
  • There are also problems, such as the workers can get bored of the saem job everyday
  • This can lead to poor quality products.
  • Interdependance - This is where firms relie on each other on providing their goods.
  • Added Value -  The work done at each stage in a production chain makes the product more valuable than it was before. This is called Adding value. It allows businesses to make a profit.
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