Unit 1
Occurs when people and businesses concentrate on what they are best at.
What is specialisation?
Payment related to number of sales made
What is Commission?
It is a small, usually specialised, segment of a much larger market
What is a niche market?
Output measured against the inputs used to create it
What is Productivity?
Surplus after total costs have been subtracted from revenue
What is Profit?
It has social objectives as well as an aim to make a profit to reinvest back into the business.
What is a social enterprise?
Number of subordinates working directly under a manager
What is Span of Control?
Cost of manufacturing the product plus a profit mark-up
What is cost-plus pricing?
Inventory held to deal with uncertainty in customer demand and deliveries of supplies
What is buffer inventory?
Capital available to a business in the short term to pay for day-to-day expenses
What is working capital?
Companies that have separate legal status from their owners.
What are incorporated businesses?
Style of leadership that makes the broad objectives of the business known to employees, but then they are left to make their own decisions and organise their own work.
What is Laissez-faire leadership?
When people are selected on the basis of certain characteristics (eg: income, age) as a source of information for market research.
What is a quota sample?
Factors that lead to a reduction n average costs as a business increases in size
What are economies of scale?
Fall in the value of an asset over time
What is Depreciation?
When one business merges with or takes over another one in the same industry at the same stage of production
What is horizontal integration?
When messages are sent through established channels using professional language
What is formal communication?
What is an agent?
Quantity that must be produced / sold for total revenue to equal total costs
What is break-even level of output?
Measurement of profit made relative to either the value of sales achieved or capital invested in the business
What is Profitability?
Resources needed to produce goods or services.
What are factors of production?
When all employees must be a member of the same trade union
What is a closed shop?
A strategy and way of keeping a product at the maturity stage of the life cycle and extending the cycle
What is an extension strategy?
Checking for quality standards throughout the production process by employees, whether it is the production of a product or service
What is Quality Assurance?
Assets are not easily convertible into cash
What is illiquid?