All major definitions
AS Level Business (9609) — Proper 2 Mark Definitions
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.
Based on Cambridge International AS & A Level Business 9609 Syllabus.
Business Activity
The process of producing goods and services to satisfy customer wants and needs.
Added Value
Difference between the selling price of a product and the cost of bought-in materials/components.
Opportunity Cost
The next best alternative forgone when a business or individual makes a choice.
Entrepreneur
A person who takes financial risks and organises factors of production to start a business.
Intrapreneur
An employee who develops innovative ideas and improves products/processes within a business.
Business Plan
A written document outlining business objectives and explaining how they will be achieved.
Sole Trader
A business owned by one person who has unlimited liability.
Partnership
A business owned by two or more people who share profits and responsibilities.
Private Limited Company
A company owned by shareholders whose shares cannot be sold publicly.
Public Limited Company
A company whose shares can be bought and sold on the stock exchange.
Franchise
A business agreement where a franchisor allows another business to use its brand and business model.
Co-operative
A business owned and run by members who share profits and decision-making.
Joint Venture
An agreement where two or more businesses work together on a specific project.
Social Enterprise
A business that aims to achieve social objectives while also making profit.
Limited Liability
Owners can only lose the amount invested and personal assets are protected.
Unlimited Liability
Owners are personally responsible for business debts and may lose personal assets.
Merger
When two businesses join together and operate as one organisation.
Takeover
When one business gains control of another business by buying it.
Horizontal Integration
Merger between businesses operating at the same stage of production.
Vertical Integration
Merger between businesses at different stages of the production process.
Conglomerate Integration
Merger between businesses operating in unrelated industries.
Organic Growth
Business expansion using internal resources rather than external takeover/merger.
Stakeholder
Any individual or group with an interest in the activities or decisions of a business.
Corporate Social Responsibility (CSR)
Business responsibility towards society and the environment beyond profit-making.
Mission Statement
A short statement describing the purpose and overall aims of a business.
SMART Objectives
Objectives that are Specific, Measurable, Achievable, Realistic and Time-limited.
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.
HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM)
Managing employees effectively to help a business achieve its objectives.
Workforce Planning
Forecasting the number and type of employees needed in the future.
Labour Turnover
Percentage of employees leaving a business during a given period of time.
Recruitment
Process of attracting suitable applicants to apply for a vacancy.
Selection
Process of choosing the most suitable candidate for a job.
Job Description
Document outlining duties, responsibilities and tasks of a job.
Person Specification
Document stating qualifications, skills and qualities needed for a job.
Internal Recruitment
Filling a vacancy using existing employees from within the business.
External Recruitment
Hiring employees from outside the business to fill vacancies.
Redundancy
Loss of employment because a job is no longer required by the business.
Dismissal
When an employee is removed from a job due to poor behaviour or performance.
Induction Training
Training given to new employees to introduce them to the business and job.
On-the-job Training
Training carried out while the employee is performing their job duties.
Off-the-job Training
Training conducted away from the normal workplace environment.
Trade Union
Organisation that protects employee rights and improves working conditions.
Collective Bargaining
Negotiation between employers and trade unions over wages and working conditions.
Motivation
The willingness of employees to work hard and achieve business objectives.
Financial Motivator
Monetary reward used to encourage employees to improve performance.
Non-financial Motivator
Non-monetary method used to improve employee satisfaction and motivation.
Piece Rate
Payment system where employees are paid according to output produced.
Commission
Payment system where employees earn based on sales achieved.
Job Enrichment
Increasing responsibility and challenge within a job to improve motivation.
Empowerment
Giving employees authority and responsibility to make decisions.
Autocratic Leadership
Leadership style where managers make decisions alone with little employee input.
Democratic Leadership
Leadership style where employees participate in decision-making.
Laissez-faire Leadership
Leadership style where employees are given freedom to make decisions independently.
Paternalistic Leadership
Leadership style where managers act like parent figures and consider employee welfare.
MARKETING
Marketing
Process of identifying customer needs and satisfying them profitably.
Market Share
Business sales expressed as a percentage of total market sales.
Market Growth
Increase in the total size or sales of a market over time.
Product Orientation
Business focus on producing products efficiently rather than customer needs.
Market Orientation
Business focus on identifying and satisfying customer needs and wants.
Market Segmentation
Dividing a market into groups of customers with similar characteristics.
Niche Market
Small specialised market segment with specific customer needs.
Mass Market
Large market targeting many customers with similar products.
Customer Relationship Marketing (CRM)
Building long-term relationships with customers to improve loyalty and sales.
Primary Research
Collecting original data directly from customers for a specific purpose.
Secondary Research
Using existing data collected previously by another source.
Qualitative Data
Non-numerical information based on opinions, attitudes or preferences.
Quantitative Data
Numerical information that can be measured and analysed statistically.
Product Life Cycle
Stages a product goes through from launch to decline.
Unique Selling Point (USP)
Feature that makes a product different from competitors.
Boston Matrix
Tool used to analyse products based on market share and market growth.
Penetration Pricing
Setting a low price initially to gain market share quickly.
Price Skimming
Setting a high price initially before lowering it over time.
Psychological Pricing
Pricing strategy designed to influence customer perception and buying behaviour.
Branding
Creating a unique identity or image for a product or business.
Promotion
Methods used to inform, persuade and remind customers about products.
Place
Distribution channels used to get products to customers.
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.
OPERATIONS MANAGEMENT
Operations Management
Managing the production process to create goods and services efficiently.
Productivity
Measure of output produced per worker or unit of input.
Efficiency
Producing goods/services with minimum waste and low costs.
Effectiveness
Extent to which business objectives are successfully achieved.
Labour Intensive
Production method mainly using human labour rather than machinery.
Capital Intensive
Production method mainly using machinery and equipment.
Job Production
Producing one customised product at a time for individual customers.
Batch Production
Producing goods in groups before moving to the next batch.
Flow Production
Continuous production of identical standardised products.
Inventory
Stocks of raw materials, work-in-progress or finished goods held by a business.
Buffer Inventory
Extra stock kept to avoid production delays or shortages.
Lead Time
Time taken between ordering inventory and receiving it.
Just in Time (JIT)
Inventory system where stock arrives only when needed for production.
Capacity Utilisation
Percentage of maximum possible output currently being produced.
Outsourcing
Using another business to perform tasks or provide services.
FINANCE & ACCOUNTING
Working Capital
Difference between current assets and current liabilities used for day-to-day operations.
Capital Expenditure
Spending on long-term assets such as machinery or buildings.
Revenue Expenditure
Day-to-day spending on running the business.
Internal Sources of Finance
Finance obtained from within the business itself.
External Sources of Finance
Finance obtained from outside individuals or organisations.
Venture Capital
Finance provided by investors to high-risk businesses with growth potential.
Crowd Funding
Raising small amounts of money from many people, usually online.
Cash Flow Forecast
Prediction of future cash inflows and outflows over a period of time.
Fixed Costs
Costs that remain unchanged regardless of output levels.
Variable Costs
Costs that change directly with the level of output produced.
Direct Costs
Costs directly linked to producing a specific product.
Indirect Costs
Costs not directly linked to production of a specific product.
Contribution
Difference between selling price per unit and variable cost per unit.
Break-even
Point where total revenue equals total costs and no profit/loss is made.
Margin of Safety
Difference between current output and break-even output.
Budget
Financial plan showing expected income and expenditure for a future period.
Variance
Difference between budgeted figures and actual figures.
Favourable Variance
Occurs when actual results are better than budgeted figures.
Adverse Variance
Occurs when actual results are worse than budgeted figures.
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.