Business Unit 2.txt

  1. Variance
    The difference between the budgeted and the actual amount
  2. Favourable variance
    A variance beneficial to the business e.g. costs lower than budgeted
  3. Adverse variance
    A variance not in favour of the business e.g. revenue lower than budgeted
  4. Factoring
    A firm that buys up the credit for another business
  5. Sale and leaseback of assets
    When a firm buys an asset of the business and leases it back to them so they can use it but not own it.
  6. Net profit margin
    (Operating Profit/Sales Turnover)*100
  7. Return on capital
    (Net Profit/Capital employed)*100
  8. The distinction between Cash and profit
    Cash is the money that can be moved around while profit is the total revenue minus the total cost
  9. Levels of hierarchy
    The different levels of authority within an organisation
  10. Spans of control
    The number of staff a manager is responsible for.
  11. Work Load
    Work that a person is expected to do in a specified time.
  12. Delegation
    The process of passing responsibilities down the hierarchy form a manager to a subordinate
  13. Communication
    The passing of information and instructions which enable a company to function efficiently and employees to be properly informed
  14. Supervisor
    Somone who is responsible for allocating jobs to subordinates (at different levels of the heirarchy)
  15. Team leader
    Tasked with ensuring the teams of employees work well together
  16. Manager
    Responsible for specific departments and for their functional areas and budgets and may delegate tasks to subordinates.
  17. Directors
    The people that run the business who are appointed by shareholders.
  18. Labour productivity
    The amount of goods and services a worker produces in a given amount of time
  19. Labour turnover
    The number employees leaving the business divided by the number of staff over a period of time.
  20. Recruitment
    The process of attracting applicants for a job vacancy
  21. Selection
    The process of deciding which applicant for a job that a business should accept.
  22. Internal recruitment
    Where candidates for a job vacancy come from within the organisation
  23. External recruitment
    Where candidates for a job vacancy come from outside the organisation
  24. Person specification
    A description which identifies the skills and experience that are likely to be held by a successful applicant for a job vacancy.
  25. Job descriptions
    The summary of the main duties and responsibilities of a job.
  26. On-the-job training
    Training delivered at the place of work
  27. Off-the-job training
    Training delivered away from the place of work.
  28. Induction training
    The initial training that ALL staff must get on the first day of work.
  29. Financial methods of motivation
    Methods used to motivate staff or workers using money, e.g. piece rate, time rate, salary, wages
  30. Job rotation
    The practice of moving employees between different tasks to promote experience and variety
  31. Job enrichment
    Gives workers more challenging work and the training they need to do it. Depth.
  32. Job enlargement
    Increasing the scope of a job through extending the range of its job duties and responsibilities but at the same level. Width.
  33. Empowerment
    Giving workers more control over their work and a greater role in decision making
  34. Team work
    Dividing a task between a group of people allocating each person's strengths to the most suited job.
  35. Mayo's method of motivation
    People are more motivated by social factors and can achieve more when get positive attention.
  36. Maslow's method of motivation
    • Has a hierarchy of needs. Here is the order form top to bottom:
    • - Self Actualisation (meeting potential, done through responsibility and developing new skills)
    • - Self Esteem (giving recognition)
    • - Social needs (Friendship and teamwork)
    • - Safety (Ensuring job security and safe work environment)
    • - Basic Physical needs (payment, warmth, shelter etc)
  37. Taylor's method of motivation
    Man is motivatied by money as they don't like to work. The workers would do the minimum amount of work if left alone.
  38. Herzberg's method of motivation
    • Motivated through Hygiene and Motivating factors:
    • - Hygiene factors are factors which don't necessarily motivate but it won't demotivate them e.g. working conditions, pay, supervision, relations
    • - Motivating factors are factors which will motivate people more e.g. recognition, responsibility, personal development
  39. Operational target: Unit costs
    The way of minimising the unit cost which is total cost divided by output. This can be done through improving productivity.
  40. Operational target: Capacity Utilistation
    • Amount currently being produced/Maximum possible that can be produced
    • It can be used to find how much spare capacity there is.
  41. Unit cost calculation
    Total costs/Number of units
  42. Overtime
    Work performed in excess of a basic work day.
  43. Rationalisation
    The process of using resources more efficiently which usually involves reducing the size of a business, e.g. through removing levels of heirarchy.
  44. Sub-contracting
    Emplay a business or a person outside of the company to do work as part of a larger project for a set period of time.
  45. Quality control
    A system of maintaining standards in manufactured products by testing samples.
  46. Quality assurance
    The maintenance of a desired level of quality in a service or product.
  47. TQM - Total Quality management
    A system of management based on the principle that every staff member must be commited to maintaining high standards of work.
  48. Quality standards
    Quality control is a process by which entities review the quality of all factors involved in production
  49. Customer service
    Customer service is the provision of service to customers before, during and after a purchase.
  50. Suppliers
    A business which sells a particular good or service to another business.
  51. Robotics
    The use of robots and machinery in the manufacturing process as an alternative to labour. These are usually used in tasks which are repetitive, dangerous, precise or all three.
  52. Automation
    The use of a control system like a robot or technology that can continually run without human assistance.
  53. Productivity
    The output per worker over a period of time
  54. Marketing
    The process of identifying, anticipating and satifying customer needs.
  55. Niche market
    A clearly identifyable, small part of a market.
  56. Mass market
    The type of marketing aimed to appeal to lots of consumers.
  57. Marketing mix
    The 4 Ps of marketing: Product, Price, Place and Promotion
  58. Product
    The good or service targeted at the consumer
  59. Product portfolio
    The range of products that the business sells. Can be shown in the Boston matrix.
  60. Boston matrix
    A model that analyses the product portfolio into four different segments (Rising star, Cash cow, Problem child and Dogs)
  61. Product life cycle
    The pattern of sales of a product over time from developing the product until its final demise.
  62. USP (Unique selling point)
    The feature of the product or business that differentiates it from the competition.
  63. Promotion
    The methods used to inform and persuade customers into buying the products.
  64. Above the line
    Extensive promotional campaigns in the National media that targets the majority of the consumer market. E.g. TV
  65. Below the line
    The method of promotion that is more focused on a more defined target market.
  66. AIDA
    (Aims of Promotion): Attention, Interest, Desire, Action
  67. SMART
    (Objectives that a business wishes to achieve): Specific, Measurable, Attainable, Realistic, Timeline
  68. PR (Public Relations)
    A form of promotion managing the flow of information between an organization and the public.
  69. Branding
    The words, slogans and images used to represent either a product or a business.
  70. Merchandising
    The methods, practices, and operations used to promote and sell the business' products
  71. Sales promotions
    The methods used to increase demand for a short period of time.
  72. Direct selling
    The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs.
  73. Advertising
    Advertising is a form of communication used to encourage or persuade an audience (viewers, readers or listeners) to continue or take some new action.
  74. Price
    The amount of money the customer has to pay for the business' product. It is one of the the 4Ps of marketing.
  75. Price skimming
    When price is set at a high price initially and lowered over time. This is to maximise revenue in the long run.
  76. Penetration pricing
    When price is set low when the product is put onto market to generate sales.
  77. Price Leaders
    A firm with market power that has the most influence on demand on the price they set.
  78. Price takers
    The firms which do not have as much influence on the market than price leaders where generally they follow the price leaders.
  79. Loss leaders
    Where a price is set deliberately below the cost of production in order to attract customers.
  80. Psychological pricing
    When the pricing of a product isn't a whole round number which affects a consumer way of thinking e.g. £2.99
  81. Price elasticity of demand
    The responsiveness of demand to a change in price.
  82. Inelastic demand
    Where price elasticiy is less than 1. This means higher prices mean more revenue as the drop in quantity demanded doesn't drop as much.
  83. Elastic demand
    Where price elasticity is more than 1. This means higher prices mean less revenue as the drop in quantity demanded is bigger than the price increase.
  84. Place
    One of the 4Ps where it is about where the product is sold.
  85. Traditional method of distribution
    This involves the Manufacturer, Wholesaler, Retailer and Consumer. This is used for fast moving consumer goods like Coca Cola where the wholesaler helps by breaking bulk.
  86. Modern method of distribution
    This involves only the Manufacturer, Retailer and Consumer. Usually the retailer is able to buy in big enough bulk to satisfy manufacturer sale quantities.
  87. Direct method of distribution
    This is where there is only the Manufacturer and the Consumer. This allow the greatest control of the location of where the product is sold.
  88. Competition
    The market which the business is part of where there are other businesses selling similar products.
  89. Competitiveness
    It is the ability of how a business can compete in a marketplace.
Card Set
Business Unit 2.txt
Some key terms for my Business unit 2 exam