4.4 A2 Business key terms Flashcards Preview

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Flashcards in 4.4 A2 Business key terms Deck (12)
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1

reverse engineering

a method of analysing a product's design by deconstructing it, following detailed examination of its components and composition

2

transfer pricing

a system operated by MNCs
it is an attempt to avoid relatively high tax rates through the prices which one subsidiary charges another for components and finished goods/services

3

subsidiary

a company owned and controlled by another company

4

ethics

the moral rules or principles of behaviour that should guide members of a profession or organisation and make them deal honestly and fairly with each other and their stakeholders

5

institutional framework

the system of formal laws, regulations and procedures, and informal conventions customs and norms that shape activity and behaviour

6

codes of conduct

a set of rules outlining the proper practices of an organisation that contribute to the welfare of key stakeholders and respects the rights of all that may be affected by its operations

7

stakeholders

an individual or groups who have an interest in a business’ activities and are also affected by its actions

8

competition policy

government policy that exists to promote competition and ensure that firms do not:
- abuse their market power
- attempt to fix prices
- use of pricing strategies to drive out competitors

9

direct action

where a group tries to implement a policy or prevent the implementation of a policy itself, via demonstrations, protests, strikes or even sabotage

10

pressure groups

voluntary organizations that operate at all levels of society, including international levels, and aim to change either political or commercial decision-making

11

tax avoidance

using legal methods to reduce the amount of tax that a company pays
these include:
- taking tax credit for spending money on legitimate reasons (contributing to Individual Retirement Accounts)
- charitable contributions are tax-deductible

12

tax evasion

using illegal means to avoid paying taxes that are owed
these include:
- providing false information in a business' balance and income sheet to the IRS
- underpayment of taxes