Business studies unit 2 keywords

?
Dividend
Payment made to shareholder from company profits - usually made annually.
1 of 81
Divorce between ownership and control
When directors control a public limited company and thousands of shareholders own it but the two groups may have different objectives.
2 of 81
Limited company
A business recognised as a legal unit that offers investors limited liability.
3 of 81
Private Limited Company (Ltd)
A company that cannot sell shares on the stock market.
4 of 81
Public Limited Company (PLC)
A company able to sell shares to the general public by being listed on the stock exchange..
5 of 81
Limited Liability
Shareholders in a limited company can only lose their investment in the business if it fails. They are not forced to sell assets to pay off the business' debts.
6 of 81
Monopoly
Any business with more than 25% market share.
7 of 81
Market share
The proportion of total market sales sold by one business.
8 of 81
Franchisee
The firm that buys the franchise rights from the existing business.
9 of 81
Franchisor
The existing firm that sells the franchise rights to another business.
10 of 81
Ethical objective
A business aim to 'do the right thing' according to the values and beliefs of the managers, even if this is not the profitable way. (e.g pay workers in low-wage countries above average rates.)
11 of 81
Environmental Objective
A business aim to protect the environment during its operations. This will reduce social costs.
12 of 81
Social Costs
The costs of business activity, including both financial costs paid by the firm and the costs on society (e.g pollution)
13 of 81
Social Benefits
The benefits of a business activity, not just to the firm but to society (e.g jobs).
14 of 81
Globalisation
Increasing trend for goods to be traded internationally and for companies to locate abroad.
15 of 81
Off-shoring
Making products or parts of products in other countries. Services can be off shored too, as with telephone call centres in India.
16 of 81
Multinational
A business with operations in more than one country.
17 of 81
Product portfolio/ product mix
The range of products sold by a business.
18 of 81
Target Market
The group of consumers aimed at by the business.
19 of 81
Diversify
Spreading risk by selling in different markets.
20 of 81
Product life cycle
The lifespan of a product, recorded in sales from launch to being taken off the market.
21 of 81
Extension strategies
Steps taken to extend the life cycle of the product.
22 of 81
Competitive pricing
Setting a price for a product based on what competitors are charging.
23 of 81
Price Skimming
Setting a price at a high level to create a high quality and exclusive image.
24 of 81
Penetration pricing
Setting a price at a low level to gain greater market share
25 of 81
Cost-plus pricing
Setting a price by adding a profit mark-up to the total cost of producing a product.
26 of 81
Loss-leader pricing
Setting a price below cost hoping to gain other profitable sales.
27 of 81
Promotion
All the ways the business communicates to consumers with the aim of selling products.
28 of 81
Advertising
Communication to consumers, using television and other media, to encourage them to buy a product.
29 of 81
Sales promotion
Activities to attract consumer attention to a product to increase sales.
30 of 81
Direct Marketing
Using direct means to contact consumers to increase sales (e.g e-mail, telemarketing and direct mail).
31 of 81
Sponsorship
A business pays or an activity or event to gain publicity.
32 of 81
Promotional mix
The different ways a business promotes itself.
33 of 81
Wholesaler
Middleman or distributor that buys in bulk, holds stocks and sells mainly to retailers not consumers.
34 of 81
Telesales
Selling to the consumer through telephone contact alone.
35 of 81
Retained profit
Profit kept in the business after tax and dividends have been paid.
36 of 81
Sale and leaseback
Selling an asset to a leasing company and paying an annual leasing charge so that the asset can still be used.
37 of 81
Profit and loss account
This shows whether the business has made profit or loss over the last period. It is also known as the income statement.
38 of 81
Sales Revenue
The value of goods sold. Sales Revenue = number of goods sold * price
39 of 81
Gross profit
The difference between sales revenue and and cost of making the products sold.
40 of 81
Overheads
Expenses of the business that are not directly part of the production process e.g rent and management salaries.
41 of 81
Gross profit Margin
The percentage of sales revenue that is gross profit. Gross Profit Margin % = (gross profit/sales revenue) x 100
42 of 81
Net profit Margin
The percentage of sales revenue that is net profit. Net Profit Margin % = (net profit/ sales revenue) x 100
43 of 81
Balance sheet
This lists the value of a company's assets and liabilities.
44 of 81
Assets
Items of value owned by the business.
45 of 81
Liabilites
Debts owed by the business
46 of 81
Liquidity
How easy it is for a business to pay its short term debts.
47 of 81
Creditors
The value of products supplied by other businesses that have not been paid for yet.
48 of 81
Debtors
The value of goods sold to customers that have not been paid for yet.
49 of 81
Organisational structure
The internal links between managers and workers showing lines of authority
50 of 81
Layers of management
The number of different levels of management and responsibility in a structure.
51 of 81
Span of control
The number of junior employees each manager is directly responsible for.
52 of 81
Centralisation
Senior managers take all the important decisions
53 of 81
Decentrilisation
Decision making power is spread to managers in branches and divisions of the business.
54 of 81
Recruitment
Attracting people to apply for a job
55 of 81
Job analysis
Identifying the tasks and skills needed to perform a job well.
56 of 81
Job description
A detailed statement of the nature of the job and tasks involved.
57 of 81
Person specification
A profile of the type of person likely to make a good applicant.
58 of 81
Internal recruitment
Recruiting within the business
59 of 81
External recruitment
Recruiting outside of the business.
60 of 81
Induction training
Initial training to familiarise new recruits with the systems of the business.
61 of 81
On-the-job training
Takes place when employees receive training as they are working at the place of work
62 of 81
Off-the-job training
Takes place away from the business at another business' place e.g College
63 of 81
Appraisal
Assessing how effectively an employee is working.
64 of 81
Motivated
The will to work due to the employment of the work itself
65 of 81
Retaining staff
Keeping existing staff in the business, which cuts down the cost of recruitment, selection and training.
66 of 81
Autocratic Management
Managers who believe in taking all decisions and just passing instructions to workers
67 of 81
Democratic management
Managers who involve workers and less senior managers in decision making
68 of 81
Flow production
Large scale production where each stage of production is carried out one after the other continuously, on a production line.
69 of 81
Specialisation
Work is divided into separate tasks or jobs that allows workers to become skilled at one of them.
70 of 81
Division of labour
Breaking a job down into small repetitive tasks that can be done quickly by workers or machines specialised in this one task.
71 of 81
Lean production
A production approach that aims to use fewer resources by using them more effectively.
72 of 81
Kaizen
Continuous improvement.
73 of 81
Just-in-time manufacturing
Ordering supplies so that they arrive just when they are needed and making goods only when ordered by customers.
74 of 81
Lean design
Producing new designs as quickly as possible.
75 of 81
Diseconomies
The reasons why production costs of each item rises as a firm expands.
76 of 81
Quality product
Goods or services that meet the needs of its customer.
77 of 81
Outsourcing
Using the businesses to make all or part of a product or provide an aspect of the customer care.
78 of 81
Quality Standards
The expectations of customers expressed in terms of the minimum acceptable production or service standards.
79 of 81
Quality assurance
Setting and trying to meet quality standards throughout the business.
80 of 81
Total Quality Management (TQM)
An approach to quality that aims to involve all employees in the quality improvement process.
81 of 81

Other cards in this set

Card 2

Front

Divorce between ownership and control

Back

When directors control a public limited company and thousands of shareholders own it but the two groups may have different objectives.

Card 3

Front

Limited company

Back

Preview of the front of card 3

Card 4

Front

Private Limited Company (Ltd)

Back

Preview of the front of card 4

Card 5

Front

Public Limited Company (PLC)

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »