business studies termnology

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Standardised goods
goods are those that are mass produced and uniform in quality. They meet a predetermined level of quality and are generally produced with a production focus.
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lean production
production that aims to eliminate waste.
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operations
The business processes that involve transformation or, more generally, ‘production’.
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product differentiation
a way of distinguishing a product (good or service) in some way from its competitors
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customised goods
goods that are that are varied according to the needs of customers. These goods are produced with a market focus rather than a production focus.
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interdependence
This refers to the mutual dependence that key business functions have on one another.
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value adding
The creation of extra or added value as inputs are transformed into outputs
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cost leadership
This involves aiming to have the lowest costs or to be the most price-competitive in the market.
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transformation
The conversion of inputs (resources) into outputs (goods and services).
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self-service
This type of service means encouraging the customers to take the initiative to help themselves.
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economies of scale
a cost advantage that can be created as a result of an increase in scale of business operations.
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technology
The design, construction and/or application of innovative devices, methods and machinery upon operations processes.
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variable cost
These types of costs vary in direct relationship to the level of business activity (level of production).
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cost based competition
competition is derived from determining a breakeven point of a product or service and then applying strategies to create cost advantages over competitors.
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Carbon footprint
This refers to the amount of carbon produced and entering the environment from operations processes.
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innovation
This occurs when a business creates novel (new) products, and in doing so leads the market.
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environmental sustainability
that business operations should be shaped around practices that consume resources today without compromising access to those resources for future generations.
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fiduciary
A person in a position of financial trust with respect to others’ money.
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supply chain
range of suppliers a business has and the nature of its relationship with those suppliers
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globalisation
the breakdown of tradebarriers between countries
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global web
A reference to the network of suppliers a business has, chosen on the basis of lowest overall cost, lowest risk and maximum certainty in quality and timing of supplies.
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outsourcing
This involves the use of outside specialists to undertake one or more key business functions.
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corporate social responsibility
open and accountable business actions based on respect for people, community/society and the broader environment.
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quality
how well designed, made and functional goods are, and the degree of competence with which services are organised and delivered.
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compliance costs
These types of costs are associated with meeting the requirements of legal regulations.
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reverse engineering
a business analysing a competitor’s product and using different materials to make their own version at a lower cost
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fixed costs
costs that do not change regardless of the level of business activity.
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customer satisfaction
a measure how goods and services supplied by a business meet or exceed customer expectation.
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profit maximisation
occurs when there is maximum difference between the total revenue (that is, the number of sales made multiplied by the price) coming into the business and total costs being paid out.
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mass markets
seller mass-produces, mass-distributes and mass-promotes one product to all buyers
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consumer markets
consist of individuals — that is, members of a household who plan to use or consume the products they buy.
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niche market
known as a concentrated or micro market, is created when the mass market is finely divided into smaller markets consisting of buyers who have specific needs or lifestyles.
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corporate social responsibility
known as a concentrated or micro market, is created when the mass market is finely divided into smaller markets consisting of buyers who have specific needs or lifestyles.
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customer orientation
refers to the process of collecting information from customers and basing marketing decisions and practices on customers’ wants and interests.
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resource market
consists of those individuals or groups that are engaged in all forms of primary production, including mining, agriculture, forestry and fishing.
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strategies
The actions that a business takes to achieve specific goals.
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intermediate market
consists of wholesalers and retailers who purchase finished products and resell them to make a profit.
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industrial market
includes industries and businesses that purchase products to use in the production of other products or in their daily operations.
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discretionary income
disposable income that is available for spending and saving after an individual has purchased the basic necessities of food, clothing and shelter.
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marketing
A total system of interacting activities designed to plan, price, promote and distribute products to present and potential customers.
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motive
An individual’s reason for doing something
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perception
The process through which people select, organise and interpret information to create meaning.
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psychological factors
influences within an individual that affect his or her buying behaviour.
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desire
An individual’s desire to constantly acquire possessions.
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dishonest advertising
when an advertisement uses words that are deceptive or claim that a product has some specific quality when it does not.
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peer group
a group of people with whom a person closely identifies, adopting their attitudes, values and beliefs.
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advertising
A paid non-personal message.
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acceptable quality
product is fit for the purpose for which it is being sold, acceptable in appearance and finish, free from defects, safe, and durable
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brand loyalty
favourable attitude towards a single brand results in repeat sales over time.
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self-regulation
a system by which a business or industry controls its own activities rather than being publicly regulated by an outside organisation such as the government.
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implied conditions
unspoken and unwritten terms of a contract.
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sugging
A sales technique disguised as market research, e.g. selling under the guise of a survey.
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learning
This refers to changes in an individual’s behaviour caused by information and experiences.
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viral marketing
a method of promotion that involves the spreading of messages from person to person without the involvement of the originator.
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bait and switch advertising
involves advertising a few products at reduced and, therefore, enticing prices to attract customers.
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unconscionable conduct
any practice by a business that is not reasonable and is often illegal.
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sociocultural influences
forces exerted by other people and groups that affect an individual’s buying behaviour.
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product placement
inclusion of advertising in entertainment.
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puffery
Exaggerated praise or flattery, especially when used for promotional purposes that no reasonable person would take as factual.
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self-image
how a person views himself or herself
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personality
collection of all the behaviours and characteristics that make up that person.
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customer choice
decisions and actions of customers when they purchase products for personal or household use.
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socio-economic status
a person’s relative rank in society, based on his or her education, income or occupation.
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price discrimination
setting of different prices for a product in separate markets.
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warranty
A promise by the business to repair or replace faulty products.
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greenwashing
The practice of making a misleading or deceptive claim about the environmental benefits of a product, business practice or technology in order to present a positive public image.
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consumer exploitation
when the rights of consumers are ignored.
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market research
the process of systematically collecting, recording and analysing information concerning a specific marketing problem.
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customer service
responding to the needs and problems of the customer.
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monitoring
Checking and observing the actual progress of the marketing plan.
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target market
a group of present and potential customers to which a business intends to sell its product.
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survey
gathering data by asking or interviewing people.
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niche market
a narrowly selected target market segment.
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implementation
The process of putting the marketing strategies into operation.
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marketing objectives
the realistic and measurable goals to be achieved through the marketing plan.
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marketing profitability analysis
a method in which the business breaks down the total marketing costs into specific marketing activities.
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product life cycle
consists of the stages a product passes through: introduction, growth, maturity and decline
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market share
refers to the business’s share of the total industry sales for a particular product.
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primary data
the facts and figures collected from original sources for the purpose of the specific research problem.
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statistical interpretation analysis
the process of focusing on the data that represents average, typical or deviations from typical patterns.
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Market Segmentation
when the total market is subdivided into groups of people who share one or more common characteristics.
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SWOT
involves the identification and analysis of the internal strengths and weaknesses of the business, and the opportunities in, and threats from, the external environment.
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product placement
the inclusion of advertising in entertainment.
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secondary data
information that has already been collected by some other person or organisation.
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product deletion
the elimination of some lines of products.
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sales analysis
comparing of actual sales with forecast sales to determine the effectiveness of the marketing strategy.
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product mix
total range of products offered by a business.
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packaging
The development of a container and the graphic design for a product
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promotion
The methods used by a business to inform, persuade and remind a target market about its products.
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premium
A gift that a business offers the customer in return for using the product.
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prestige pricing
a pricing strategy where a high price is charged to give the product an aura of quality and status.
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trademark
signifies that a name or symbol is registered and the business has exclusive right of use.
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behavioural segmentation
the process of dividing the total market according to the customers’ relationship to the product.
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psychographic segmentation
the process of dividing the total market according to personality characteristics, motives, opinions, socioeconomic group and lifestyles.
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price skimming
occurs when a business charges the highest possible price for the product during the introduction stage of its life cycle.
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frequency of advertisement
measures the average number of times someone is exposed to the message.
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noise
Interference or distraction that affects any or all stages in the communication process.
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reach
an advertisement measures the number of people exposed to the message.
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price leader
a major business in an industry whose pricing decisions heavily influence the pricing decisions of its competitors.
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segmentation variable
the characteristics of individuals or groups that are used by marketing managers to divide a total market into segments.
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market based pricing
is a method of setting prices according to the interaction between the levels of supply and demand.
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physical distribution
activities concerned with the efficient movement of the products from the producer to the customer.
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product/service positioning
activities concerned with the efficient movement of the products from the producer to the customer.
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inventory control
a system that maintains quantities and varieties of products appropriate for the target market.
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tariff
A tax on an imported product.
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supply
The quantity of a product businesses are willing to offer for sale at a particular price.
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loss leader
a product sold at or below cost price.
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ethical consumerism
involves buying products that are not harmful to the environment, animals and society.
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bundle pricing
where customers gain a ‘package’ of goods and services in addition to the tangible good they purchased.
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geographic segmentation
is the process of dividing the total market according to geographic locations.
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relationship marketing
the development of long-term, cost effective and strong relationships with individual customers.
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competition based pricing
where the price covers costs and is comparable to the competitor’s price.
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transnational corporation
any business that has production facilities in two or more countries and that operates on a worldwide scale.
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channel
Any method used for carrying a message.
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demographic segmentation
the process of dividing the total market according to particular features of a population, including the size of the population, age, sex, income, cultural background and family size.
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price penetration
occurs when a business charges the lowest price possible for a product or service so as to achieve a large market share.
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publicity
Any free news story about a business’s products.
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market coverage
refers to the number of outlets a firm chooses for its product.
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product/service differentiation
the process of developing and promoting differences between the business’s products or services and those of its competitors.
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advertising
A paid, non-personal message communicated through a mass medium.
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brand
A name, term, symbol, design or any combination of these that identifies a specific product and distinguishes it from its competition.
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labelling
The presentation of information on a product or its package.
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strategy
The major tool adopted by a business to achieve its goals.
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liquidity
The extent to which a business can meet its financial commitments in the short term.The extent to which a business can meet its financial commitments in the short term.
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effeciency
The ability of a business to use its resources effectively in ensuring financial stability and profitability.
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growth
The ability of the business to increase its size in the longer term.
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solvency
The extent to which the business can meet its financial commitments in the longer term.
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business objectives
break the business operations into achievable and manageable outcomes that can be measured and evaluated.
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bank overdraft
allows a business or individual to overdraw their account up to an agreed limit and for a specified time.
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global economic outlook
refers specifically to the projected changes to the level of economic growth throughout the world.
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leasing
A long-term source of borrowing for businesses. It involves the payment of money for the use of equipment that is owned by another party.
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dividends
A distribution of a company’s profits (either yearly or half-yearly) to shareholders and is calculated as a number of cents per share.
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bill of exchange
a document ordering the payment of a certain amount of money at some fixed future date.
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factoring
The selling of accounts receivable for a discounted price.
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secondary markets
deal with the purchase and sale of existing securities.
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interest rates
the cost of borrowing money.
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debentures
issued by a company for a fixed rate of interest and for a fixed period of time
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primary markets
deal with the new issue of debt instruments by the borrower of funds
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unsecured notes
is a loan for a set period of time but is not backed by any collateral or assets
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equity
The finance (cash) raised by a company by issuing shares.
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mortgage
A loan secured by the property of the borrower (business).
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australian securities exchange
primary stock exchange group in Australia.
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working capital
the funds available for the short-term financial commitments of a business
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cash flow
the movement of cash in and out of a business over a period of time.
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cost centres
particular areas, departments or sections of a business to which costs can be directly attributed.
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payment in advance
allows the exporter to receive payment and then arrange for the goods to be sent.
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fixed costs
costs that are not dependent on the level of operating activity in a business
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depreciation
a downward movement of the Australian dollar (or any other currency) against another currency.
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option
gives the buyer (option holder) the right, but not the obligation, to buy or sell foreign currency at some time in the future.
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variable costs
costs that change proportionately with the level of operating activity in a business.
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currency swap
an agreement to exchange currency in the spot market with an agreement to reverse the transaction in the future
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derivatives
Simple financial instruments that may be used to lessen the exporting risks associated with currency fluctuations.
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recievables
Sums of money owed by the business to other businesses from whom it has purchased goods and services.
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clean payment
occurs when the payment is sent to, but not received by, the exporter before the goods are transported.
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foreign exchange market
determines the price of one currency relative to another.
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forward exchange contract
a contract to exchange one currency for another currency at an agreed exchange rate on a future date, usually after a period of 30, 90 or 180 days.
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payables
Sums of money due to a business from customers to whom it has supplied goods or services.
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hedging
The process of minimising the risk of currency fluctuations.
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current assets
assets that a business can expect to convert into cash within the current accounting period.
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outsourcing
The use of human resources outside the business to supply services or functions previously carried out by the business such as maintenance and recruitments.
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line managers
responsible for the management of staff contributing to the prime function of the business, for example a production manager, service manager or sales manager.
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contracter
An external provider of services to a business.
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human resource management
refers to the management of the total relationship between an employer and employee.
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log of claims
a list of demands made by workers against their employers.
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social justice in the workforce
involves businesses being responsible or behaving in a fair and ethical manner towards their employees, customers and the broader community.
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code of practice
a statement of the principles used by a business in its operations
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employment contract
a legally binding, formal agreement between employer and employee.
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discrimination
Occurs when a policy or a practice disadvantages a person or a group of people because of a personal characteristic that is irrelevant to the performance of the work.
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female participation rate
refers to the proportion of women aged 15–69 employed or actively looking for work.
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enterprise agreements
collective agreements made at a workplace level between an employer and a group of employees about terms and conditions of employment.
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trade organisations
organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members.
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affirmative action
refers to measures taken to eliminate direct and indirect discrimination, and for implementing positive steps to overcome the current and historical causes of lack of equal employment opportunity for women.
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casual employees
in employment that is short term, irregular and uncertain; they are not entitled to paid holiday or sick leave.
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employer asscioations
organisations that represent and assist employer groups.
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code of conduct
a statement of acceptable and unacceptable behaviours in a business
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statutes
Laws made by federal and state parliaments; for example, laws relating to employment conditions, wage and salary determinations and dispute resolution.
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modern award
an industry or occupation-based award, which covers all private sector employers and employees who perform work that falls within their scope.
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awards
Legally enforceable, formal agreements made collectively between employers and employees and their representatives at the industry level.
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centralised industrial relations system
is a collectivist approach in which disputes are referred to industrial tribunals, such as Fair Work Australia, for conciliation and arbitration.
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common law
developed by courts and tribunals.
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constitutional corporation
identified as foreign corporations, and trading or financial corporations, formed within the limits of the Commonwealth
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workers compensation
provides a range of benefits to an employee suffering from an injury or disease related to their work.
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equity in the workplace
the provision of equal opportunities for all employees to gain access to jobs, training and career paths in the workplace
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structural change
a change in the nature and pattern of production of goods and services within an economy.
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judicial power
the power of courts to interpret and apply laws.
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ethical business practices
practices that are socially responsible, morally right, honourable and fair.
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redundancy
refers to employees losing their jobs, where the employees? job or work no longer needs to be done.
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unfair dismissal
occurs where an employee is dismissed by their employer and they believe the action is harsh, unreasonable or unjust.
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maintenance
The process of managing the needs of staff for health and safety, industrial relations and legal responsibilities, including compensation and benefits, of all staff.
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placements
locating the employee in a position that best utilises the skills of the individual to meet the needs of the business.
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seperation
The process of employees leaving voluntarily or through dismissal or retrenchment processes.
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performance appraisal
a process of assessing the performance of an employee, generally against a set of criteria or standards.
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fringe benefits tax
a tax employers must pay on certain benefits they provide to their employees or their employees’ associates, such as a family member.
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aquisition
The process of locating and attracting the right quantity and quality of staff to apply for employment vacancies or anticipated vacancies at the right cost.
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orders
Decisions that require employees or employers to carry out a direction from the tribunal.
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negioation
A method of resolving disputes when discussions between the parties result in a compromise and a formal or informal agreement.
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polycentric approach
uses parent-country staff in its organisation.
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ethnocentric staffing approach
approach uses host country staffing with parent country staff in corporate management at its headquarters.
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insourcing
refers to delegating a job to someone within the organisation, as opposed to someone outside the organisation.
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geocentric staffing approach
uses the staff with the most appropriate skill set for a particular role and location, and builds a pool of managers with global experience.
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recruitment
The process of locating and attracting the right quantity and quality of staff to apply for employment vacancies or anticipated vacancies at the right cost.
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grievance procedures
formal procedures, generally written into an award or agreement, that state agreed processes to resolve disputes in the workplace.
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strikes
situations in which workers withdraw their labour.
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industrial dispute
a disagreement over an issue or group of issues between an employer and its employees, which results in employees ceasing work.
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arbitration
The process where a third party hears both sides of a dispute and makes a legally binding decision to resolve the dispute.
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diverse workforce
include employees from different cultural and ethnic backgrounds, who were able to demonstrate the ability to speak in more than one language, and to demonstrate cultural awareness and sensitivity in their interactions with people from other cultures
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lockouts
occur when employers close the entrance to a workplace and refuse admission to the workers
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conciliation
A process where a third party is involved in helping two other parties reach an agreement.
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extrinsic rewards
given or provided outside the job itself.
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pickets
protests that take place outside the workplace, generally associated with a strike.
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mediation
The confidential discussion of issues in a nonthreatening environment, in the presence of a neutral, objective third party.
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intrinsic rewards
those that the individual derives from the task or job itself, such as a sense of achievement.
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monetary rewards
those reflected in pay or having financial value
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gain sharing plan
involves the benefits of improvements and success, such as productivity improvements, cost savings and sales and profit increases, being reflected in rewards for teams, such as shares, cash bonuses or annual bonuses.
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indicators
Performance measures for individuals, teams or organisations that are used to evaluate organisational or individual effectiveness.
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benchmarking
A process in which indicators are used to compare business performance between internal sections of a business or between businesses.
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staff turnover
separation of employees from an employer, both voluntary and involuntary, through dismissal or retrenchment. It is often shown as a percentage of total staff numbers.
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human resource audit
a diagnostic tool used to evaluate HR policies and practices in order to identify problems and develop solutions in an attempt to rectify problems.
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production that aims to eliminate waste.

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operations

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Card 4

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product differentiation

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Card 5

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customised goods

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