Business studies - theme 3 - definitions

  • Created by: s2000
  • Created on: 28-05-18 16:48
Corporate objectives
Targets set for the whole firm to reach in a given time period.
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Mission
The underpinning purpose behind the existence of a business.
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A mission statement
A catchy summary of the reason why a business exists.
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Corporate strategy
A medium - to long - term plan for achieving the corporate objectives.
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Product differentiation
Describes a business's attempts to make its product stand out from those of rivals, perhaps through marketing, design or quality.
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Diversification
Selling new products to new markets.
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SWOT analysis
Identifies a business's strengths and weaknesses along with the opportunities and threats it faces.
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Key Performance Indicators (KPIs)
Quantifiable measures of aspects of a business's performance that the business considers to be the main determinants of its commercial success.
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Barriers to entry
Factors in a market that can make it hard for new companies to break into the market.
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Economies of scale
Reductions in unit cost caused by the growth of a business.
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Diseconomies of scale
The inefficiencies related to growing as a business that can lead to upward pressure on unit costs.
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Overtrading
Occurs when a business experiences cash flow problems as a result of expanding too quickly without sufficient cash in the bank.
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Inorganic growth
Growth that occurs as a result of taking over or merging with another business.
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Organic growth
Growth which takes place without any merger or takeover activity.
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Organisational culture
Describes acceptable norms of behaviour within a business.
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Synergies
The benefits of two things coming together that could not exist when they are separate - such as economies of scale resulting from a merger of two businesses
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Moving average
A quantitative method used to identify underlying trends in a set of raw data.
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Extrapolation
Predicting by projecting past trends into the future.
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Time series data
A series of figures covering an extended period of time.
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Correlation
Expresses a relationship between two variables.
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Investment appraisal
The process of using forecast cash flows to assess the financial attractiveness of an investment decision, linked with a consideration of non-financial factors.
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Short termism
The tendency to focus on achieving short-term objectives by taking decisions that may preclude better, longer-term options.
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Decision tree
A diagram showing the options and possible outcomes involved in making a decision along with the probabilities of outcomes occurring.
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Expected value
The average outcome expected following a chance event.
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Critical path analysis
A technique used in planning the most time-efficient way to complete complex projects.
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Earliest start time (EST)
The earliest possible date on which it is possible to begin an activity.
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Latest finish time (LFT)
The last possible date by which an activity must be complete to avoid delaying the overall project.
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Float time
Any slack time available attached to an activity.
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Critical path
The sequence of activities in a project on which any delay will delay the whole project: the activities with zero float time.
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Short-termism
When the actions of managers show total prioritisation of immediate issues, ignoring long-term ones.
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Corporate culture
Sums up the spirit, attitudes, behaviours and the ethos of an organisation.
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A bureaucratic organisation initiative
An initiative stifled by paperwork and checking and re-checking of actions.
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Stakeholders
Groups that are influenced by and influence the operations of a business.
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Business ethics
The moral principles that underpin decision-making.
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Corporate Social Responsibility (CSR)
The desire to run a business in a morally correct way, attempting to balance the needs of all stakeholder groups.
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A balance sheet
A financial document showing a business's assets and liabilities at a point in time.
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A profit and loss account
Shows a firm's revenue for a time period along with all the costs associated with generating that revenue.
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An asset
Any item owned by a business.
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Liquidity
Describes a firm's ability to pay its bills and finance short-term spending.
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Cost of sales
The cost of buying or making the the products sold to generate the revenue for the year.
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Overheads / expenses
Payments for something that is of immediate use to the business, other than the actual products they sell.
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Capital employed
Adds shareholders' capital (total equity) to loan capital (long-term liabilities) to work out the total long-term finance in the business.
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Consultation
Seeking and listening to the views of employees as part of a decision-making process.
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Empowerment
Giving staff the authority not just to decide how to do a task, but to decide what tasks need doing in the first place.
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Automation
Replacing people with machines, switching from a labour intensive to a capital intensive approach to a task.
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Incremental change
Occurs when change is slow and happens in small steps.
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Disruptive change
Occurs suddenly, unpredictably, and has major effects on entire markets.
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Scenario planning
Visualising possible future situations for a business and then devising plans for how to exploit likely opportunities and minimise the effects of likely threats.
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A risk assessment
A process used to identify, quantify and decide on the likelihood of negative future events occurring.
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Contingency planning
Preparing plans in advance that can be implemented if a company is hit by a major crisis.
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Succession planning
Preparing replacements for key personnel in advance of their departure.
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Business continuity
Getting a crisis-hit business back to functioning normally as quickly as possible after a major disruption.
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Other cards in this set

Card 2

Front

The underpinning purpose behind the existence of a business.

Back

Mission

Card 3

Front

A catchy summary of the reason why a business exists.

Back

Preview of the back of card 3

Card 4

Front

A medium - to long - term plan for achieving the corporate objectives.

Back

Preview of the back of card 4

Card 5

Front

Describes a business's attempts to make its product stand out from those of rivals, perhaps through marketing, design or quality.

Back

Preview of the back of card 5
View more cards

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