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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