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Accounts
The financial records of a firm’s transactions.
Brand image
An image or identity given to a product that gives it a personality of its own and distinguishes it from its competitors’ brands.
Consumer boycott
When consumers decide not to buy products from businesses that do not act in a socially responsible way.
Division of labour
When the production process is split up into different tasks and each worker performs one of these tasks. It is a form of specialisation.
Economies of scale
The factors that lead to a reduction in average costs as a business increases in size.
Agent
An independent person or business that is appointed to deal with the sales and distribution of a product or range of products.
Business objectives
The aims or targets that a business works towards.
Capital employed
Shareholders’ equity plus non-current liabilities and is the total long-term and permanent capital invested in a business.
Direct taxes
Taxes paid directly from incomes, for example, income tax or profits tax.
Exchange rate
The price of one currency in terms of another, for example, £1 : $1.5.
Added value
The difference between the selling price of a product and the cost of bought-in materials and components.
Batch production
Where a quantity of one product is made, then a quantity of another item will be produced.
Chain of command
The structure in an organisation that allows instructions to be passed down from senior management to lower levels of management.
Diseconomies of scale
The factors that lead to an increase in average costs as a business grows beyond a certain size.
Economic growth
When a country’s GDP increases – more goods and services are produced than in the previous year.
Average cost per unit
The total cost of production divided by total output (sometimes referred to as ‘unit cost’).
Break-even level of output
The quantity that must be produced/sold for total revenue to equal total costs (also known as break-even point).
Communication barriers
Factors that stop effective communication of messages.
Dynamic pricing
Charging different consumer groups different prices for the same product because they have different demand levels.
Extension strategy
A way of keeping a product at the maturity stage of the life cycle and extending the cycle.
Autocratic leadership
Where the manager expects to be in charge of the business and to have their orders followed.
Business plan
A document containing the business objectives and important details about the operations, finance and owners of the new business.
Crowdfunding
Funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the internet.
Delegation
Giving a subordinate the authority to perform particular tasks.
External recruitment
When a vacancy is filled by someone who is not an existing employee and will be new to the business.