AQA Business A1 Key Terms Units 1-6 Flashcards
1
Q
a business
give definition
A
an entity established to fulfil a want or need ; usually a commercial purpose to produce and sell something
2
Q
Mission statement
What is it and why is it useful?
A
Sets out a business’s overall purpose to direct and stimulate the entire organisationeg. Nike - to bring inspiration and innovation to every athlete in the world.
3
Q
Aims
A
Long term plans of the business from which its corporate objectives are derivedeg growth
4
Q
Objectives
A
Medium to long term goals established to coordinate the business. There is a hierarchy ie corporate, functional, departmental, individual
5
Q
SMART objectives
What does SMART stand for? Can you give an example?
A
Objectives have much high chance of being achieved if Specific, Measurable, Agreed, Realistic and Time-bound)
6
Q
Profit
What is it? Why is it important? Can you give some formulas?
A
A core objectives of most businesses. Measures the extent to which revenues from selling a product exceed the costs incurred in producing it over time. A business cannot survive long without making profits. Profit = Total Revenue - Total Costs
7
Q
Cash flow
What is cash flow? Why is it important?
A
Core short-term obejctive - The amount of money moving into and out of a business over a time period. Need positive cash flow to pay bills
8
Q
Stakeholders
What are they and why do they matter?
A
Individuals or groups (such as employees, customers and local residents) who have an interest in the businessand differing degrees of power over the business
9
Q
Revenue
What is it? What are some other names for revenue? What is formula?
A
The earnings or income generated by a firm as a result of its trading activities (also called turnover or sales revenue)
10
Q
Fixed costs
What are they? What are some examples?
A
Costs that do not alter when a business alters its level of output. Examples include rent and rates.Also called indirect costs
11
Q
Variable costs
What are they? What are some examples?
A
Costs that alter directly with the business’s level of output, for example raw materials, fuel costs, etc - also called direct costs
12
Q
Total costs
What is the formula?
A
Fixed and variable costs added together
13
Q
Average costs
What are they? What are they also known as?
A
Total costs of production divided by the level of production or output to give the cost of producing a single unit of output
14
Q
Sole trader
What is is and what are advantages and disadvantages?
A
A business that is owned and managed by one person, but it may employ other people. Advantage is single owner has all control and profit for themselves but can be very difficult as they have sole responsibility for solving all problems
15
Q
Partnership
A
An unlimited liability form of ownership where 2-20 people own a business together - owners have unlimited liability for debts of business
16
Q
Unlimited liability
What is this and why does it matter?
A
Occurs when an individual or group of individuals is personally responsible for all the actions of their business
17
Q
Private Limited Company (Ltd)
A
A business organisation that has its own legal identity and that has limited liability and where investors are invited to buy in (not publically traded)
18
Q
Public Limited Company (plc)
A
a large business where ownership is open to anybody around the world - shares are traded on stock exchange; share price changes with performance and reflects supply and demand for the shares. eg Tesco
19
Q
not-for-profit organisation
A
an organisation that is not run for profit eg Greenpeace - it usually follows a social cause
20
Q
Public sector organisation
A
an organisation that is funded by the government to provide services for the public - eg NHS, schools, local government, etc
21
Q
Charity
A
a not for profit which is funded by donations or charity shop sales eg CancerResearch
22
Q
Mutuals
A
an organisation that has a shared ownership structure where its customers are its owners and a get an annual dividend based on the percentage of their purchases eg COOP
23
Q
Incorporation
A
The process of establishing a business as a separate legal entity that allows it to benefit from limited liability
24
Q
Shareholder
A
A person or group that has an ownership stake in a business
25
Limited liability
| What is this and why is it so important? What ownership forms have this?
the shareholder's liability for the debts of the business is limited to their investment. personal assets are safe
26
Dividends
A share in the profits of a company that are distributed to the holders of certain types of company shares
27
Ordinary share capital
Money invested into a business by owners - its the money raised from the sale of shares eg 1000 shares at £10 each is £10,000 of ordinary share capital in the business
28
Market capitalisation
| What is it and what is the formula?
The total value of the issued shares of a public limited company (share price * number of shares issued)
29
Takeover
Occurs when one company acquires control of another company by buying more than 50% of its share capital (can only happen with plcs)
30
Privatisation
The process under which the state sells businesses that it has previously owned and managed to private individuals and businesses
31
external environment
the trading environment in which the business operates - determined by economic, political, social, technological, legal, ethical factors and the level of competition. These forces are outside control of the business and create opportunities and threats to which the business must respond.
32
Market conditions
Features of a market that affect demand - such as the level of sales, degree of seasonaility, the rate at which sales are changing and the number and strength of competitors.
33
Demand
The amount of a particular good or service that consumers or organisations want, and can afford, to buy at given prices. Could be seen a level of sales.
34
Gross Domestic Product (GDP)
Measures the value of a country's total output of goods and services over a period of time, normally one year
35
Business ethics
Refer to whether a business decision is perceived as morally right or wrong
36
Incomes
How much people are paid by their employers. Higher incomes mean more money available to spend which is good for business.
37
Interest rates
The cost of borrowed money eg 5% For an individual it may be the mortgage of their home. For a business it wil be business loans. Changing rates make the cost of the loans change month to month.
38
Goods
A physical (tangible) product such as a house or a designer suit
39
Service
An intangible item such as insurance or decorating
40
Product
A general term which includes goods and services
41
Fair trade
A social movement that exists to promote improved trading terms and living conditions for producers of products in less developed countries
42
Sustainable production
Occurs when the supply of a product does not impose costs on future generations by, for example, depleting non
43
Leadership
Includes the functions of ruling, guiding and inspiring other people within an organisation in pursuit of agreed objectives. Has a direct impact on staff morale and performance
44
Leadership styles
differing approaches to managing people - often based around how much trust is given and/or how much leaders and managers involve staff in the decision-making
45
Authoritarian leadership
leadership where very little automomy is given to staff - staff not involved in decision making and leader exerts full control and close supervision
46
Democratic leadership
staff are normally asked for input in decision-making and feel involved in the business
47
Management
activities include - Planning, setting objectives, organising, directing, reviewing and controlling all or part of a business enterprise
48
Authority
The power or ability to carry through an action
49
Delegation
Passing authority down the organisational hierarchy
50
Empowerment
Provides subordinates with the means to exercise power or control over their working lives
51
Decentralisation
Passing authority from the centre of the organisation to those working elsewhere in the business
52
Tannenbaum Schmidt continuum
model of leadership showing the degree of autonomy and involvement in decision-making that managers/ leaders wil give their staff (sell vs tell)
53
Blake Mouton Grid
Leadership model showing the mix of how much leaders focus on performance vs how much they focus on staff welfare (eg produce/ perish vs country club style leadership)
54
Programmed decisions
Familiar and routine decisions
55
Non programmed decisions
Less structured decisions that require unique solutions and alot more careful thought and analysis
56
Risk
The chance of incurring misfortune or loss - the higher the risk the more careful the decision making needs to be
57
Uncertainty
A situation in which there is a lack of knowledge and events, outcomes or consequences are unpredictable
58
Opportunity cost
The next best alternative foregone
59
Scientific decision making
Based on data and uses logical, rational approach to decision making
60
Decision tree
A scientific decision-making model that represents the likely outcomes for a business of a number of courses of action on a diagram showing the financial consequences of each.
61
Probability
The chance of a particular event occurring
62
Expected values
The financial outcomes from a specific course of action adjusted to allow for the probability of it occurring (eg high/ low sales)
63
Net gains
The total expected values of a course of action minus the costs associated with it
64
Ethics
Moral principles, which should underpin business decisions and actions
65
influences on decision-making
factors that affect the business decision eg objectives, ethics, risk v reward, resource contraints, opportunity costs, competitors actions etc
66
Stakeholders
Groups or individuals who have an interest in a business
67
Social responsibility
The duties a business has towards stakeholder groups such as employees, customers and the government
68
Communication
The exchange of information or ideas between two or more parties
69
Stakeholder engagement
A process by which managers involve individuals and groups who may be affected by their decisions in those decisions
70
Stakeholder mapping
allows the business to consider differing stakeholder needs when making decisions based around differing levels of interest and power eg 'key players' have high power/high interest and need to be managed carefully
71
Consultation
A process by which one group discovers the views of another one
72
Marketing objectives
A target set for the marketing function, for example to increase sales by 10% within
73
Big data
A term used to describe a massive volume of both organised and non
74
Primary market research
Gathers data for the first time for a specific purpose eg with questionnaires, focus groups, observations etc
75
Quantitiive data
Data where findings can be quantified - ie counted by numbers eg 5000 people chose product A
76
Qualitative data
data focussing on reasons for choices or other non-number factors eg around quality
77
Sales Forecasting
the process of predicting future demand so that business operations can be planned accordingly - eg using extrapolation of correlation
78
Sales value
Measures the level of sales in a given period in pounds sterling (in the UK)
79
Sales volume
Measures the level of sales in a given period in terms of units sold
80
Market share
Measures the sales of one brand or business as a percentage of total market sales in a given period
81
Sales growth
The percentage change in sales volume or value over a given period
82
Market growth
The percentage change in the total sales in the market over a given period (formula is difference / orginal level) *100
83
Globalisation
The increasing trade between countries and the growing internationalisation of businesses
84
Marketing research
Involves gathering and analysing data relevant to the marketing process
85
Competitiveness
Measures the extent to which a business offers good value for money relative to competitors
86
Secondary market research
Uses data that already exists eg reports, company data, news articles, etc
87
Target population
All the items or people that are relevant to the market research being undertaken
88
Sampling
the process of picking a group of customers to do the research on -eg quota or randon sampling - need to have a valid sample whose views accurately represent the views of the wider population
89
Sample
A group of people or items selected to represent the target population
90
Market mapping
Analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria eg price v quality - identifies nearest competitors and potential gaps
91
Extrapolation
a method of sales forecasting where past data is used to identify trendlines and these are projected forward
92
Correlation
a sales forecasting technique that attempts to identify the strength of the link between 2 variables - an independent one and a dependent one eg impact of advertising spend on sales - strong positive correlation can give very useful insights
93
Confidence level
The probability that the research findings are correct eg 95% confident that the customers will make the choices as choice in the research
94
Confidence interval
The possible range of outcomes for a given confidence level (eg plus of minus 5%) so 95% confident that sales will be eg 2000 plus or minus 5%
95
Product
the items that a business are selling; products normally need a Unique Selling Point to make them stand out from competitors products
96
Unique Selling Point (USP)
the product feature that is the key to its appeal to customers eg lowest price; best quality; uniqueness; etc
97
Brand
A "promise of an experience" and conveys to consumers a certain assurance as to the nature of the product or service they will receive
98
Patent
Protects new inventions and covers how things work, what they do, how they do it, what they are made of and how they are made
99
Trade mark
A sign which can distinguish the goods and services of a business from those of its competitors
100
Price elasticity of demand (PED)
Measures how responsive demand is to changes in the price, all other factors constant. Key concept as it helps businesses set prices that maximise revenue
101
Price elastic demand
ie PED > 1. sales are predicted to change by bigger proportion than price change. eg if prices decrease by 10% then sales will increase by more than 10%
102
Price Inelastic demand
ie PED < 1 sales are predicted to change by smaller proportion than price change. eg if prices decrease by 10% then sales will increase by less than 10%. Careful! - this price drop would lose the business overall revenue.
103
Factors affecting price elasticity
availability of substitutes; whether good is luxury or necessity; proportion of income spent on the good
104
Income elasticity of demand (YED)
Measures how responsive demand is to changes in the income, all other factors constant
105
Income inelastic demand
a market situation where a change in consumers incomes will lead to a less than proportional change in demand eg if incomes go up by 5% then demand (sales) will go up by less than 5%
106
Income elastic demand
a market situation where a change in consumers incomes will lead to a more than proportional change in demand eg if incomes go up by 5% then demand (sales) will go up by more than 5%
107
Factors affecting income elasticity
What type of good it is (inferior good YED is negative so as incomes rise people buy less of these; normal goods YED is between 0 and 1; and then for luxury goods people buy disproportionally more of these if incomes rise)
108
Big data
Refers to large and complex data sets
109
Segmentation
Occurs when similar customer needs and wants are grouped within a market
110
Market segments
The groups of similar needs and wants within a market
111
Targeting
Occurs when a business decides which segments it wants to operate in / target eg young men aged 18-35 living in Brighton
112
Niche marketing
Focuses on a particular segment of the market eg selling golf equipment to golfers
113
Mass marketing
An approach that aims to provide products that meet some of the needs of a large proportion of the market eg products such as soap
114
Positioning
Identifies the benefit and price combination of a product relative to competitors
115
Marketing mix
a KEY theory in business showing what marketing techniques can be used to sell a product (7Ps - product, price, place, promotion, physical environment, people and packaging)
116
Consumer products
Goods bought for consumption by the general public
117
Industrial products
Goods bought for use in business processes
118
Relationship marketing
An approach to marketing in which a company seeks to build long term relationships with its customers by providing consistent satisfaction
119
Product life cycle model
Shows the sales of a product over its life across various stages eg research, intorduction, growth, maturity and decline - diff techniques can be used at different stages to boost sales
120
Product portfolio analysis
Examines the market position of all of the products of a business, for example in terms of market share or market growth
121
Boston Matrix
Analyses all of the firm's products in terms of their market share and the growth of the market (products classifies into stars, cash cows, question marks and dogs)
122
Balanced portfolio
An appropriate mix of products in terms of their market shares and market growth
123
Pricing policy
a business approach to pricing its products that achieves highest revenue
124
penetration pricing
pricing products very cheaply at first to gain a hold in the market and then slowly raising over time eg Uber taxis
125
price skimming
charging very high prices knowing that customers will pay - perhaps due to inelastic demand eg for iphones, designer brands
126
promotion
how businesses make customers aware of the products and create a desire to purchase eg advertising
127
promotional mix
the range of techniques used together to build brand aware and drive sales growth eg advertising (print, digital, tv, radio, social, etc)
128
Social media
Refers to the social interaction among people where they create, share or exchange information and ideas in virtual communities
129
social media marketing
using social media to promote products including use of influencers
130
Viral marketing
A marketing technique that uses social media and networks to raise brand awareness and boost sales by getting users to recommend the promotional campaign to others
131
Multichannel distribution
Means that customers can buy the product in several ways, for example instore, online, through app or 'click and collect'
132
E-commerce
The buying and selling of products and services through electronic means eg websites
133
Operations management
Describes the activities, decisions and responsibilities of the managing production and delivery of products and services
134
Labour intensive production
where a relatively high proportion of labour is used in the production used compared to capital equipment, for example hairdressing, school teaching
135
Capital intensive production
Uses a relatively high proportion of capital equipment relative to labour, for example a bottling process, car manufacturing, etc
136
Optimal mix of capital and labour
the ideal proportion of labour and capital that achieves desired quality with lowest unit costs
137
Supply chain
Is the series of activities involved in receiving the initial raw materials to providing the final product
138
Operational objectives
targets within the ops mgnt function eg improve quality, speed of response, dependability, reliability, etc)
139
Added Value
the process of increasing the worth of an produced good beyond the cost of its components. eg by branding, exclusivity, etc
140
Competitive advantage
Is a way in which a business offers superior value to its competitors. usually based on focus on price vs quality/ uniqueness
141
Total costs
Are made up of fixed costs and variable costs ; Formula TC = FC + VC
142
Unit costs (average costs)
Are the cost per unit - keep as low as possible to improve profits; Formula: Unit Costs = total cost/number of units
143
Capacity
Is the maximum output of a business at a moment in time given its resources eg 1000 cars per day
144
Capacity utilisation
Measures the existing output over a given period as a percentage of the maximum output eg 92 % ; needs to be high otherwise shows wasted resources and inefficiencies
145
Labour productivity
Is the amount of output per employee; Formula: Labour productivity = Total Output / number of staff. higher is better - higher productivity gives lower unit costs allowing savings
146
Efficiency
Is measured by the inputs used to generate output ; improving efficiency is key business goal
147
Lean production
Occurs when managers reduce waste and therefore operations become more efficient
148
Just in Time Production
A type of lean production technique where suppliers bought and delivered just before they are needed in the production process; saves money and space but higher risk
149
Just in Case Production
An approach to managing supplies where larger orders are places so that there is always some spare raw materials in case of supply chain disruption eg delivery problems
150
Quality
Is measured by the extent to which product meets its customer requirements
151
Quality assurance
Is the maintenance of product quality by attention to detail at every stage of the production process; checking quality is perfect at each stage in production; 'no-fault forward' idea
152
Quality control
Is the system of maintaining standards by testing or inspecting the output against standards
153
Mass customisation
Is the term for producing on a large scale while still enabling individual customer preferences to be met
154
Inventory
Is the goods or stock it holds
155
matching supply to demand
an important operational focus so that there is no overproduction (waste) and no underproduction (lost opportunities for sales); can be done by outsourcing; use of temp staff; producing to order)
156
Part time staff
Work less than a full working week, for example 20 hours per week
157
Temporary staff
Work for a limited period of time as needed, for example for the summer eg in hotel industry more staff are needed during holiday period
158
producing/ making to order
an approach to production where order must be recieved before item is made; if business cannot afford to not sell the item - it is already sold, then the make it
159
Supply chain
Refers to all of the providers of resources (such as money, people, finance, machinery, equipment) at different stages of the operations process
160
inventory control chart
a tool used to track inventory levels to show when a business needs to reorder inventory to ensure it arrives before business runs out and cannot produce
161
reorder level
the inventory level that is reached when a new order is placed
162
reorder quantity
the quantity of inventory that is ordered when the reorder level is reached
163
buffer stock
spare stock/ inventory that can be used in emergency is new stock does not arrive
164
lead time
the time it takes from an order being placed for the stock to arrive
165
Vertical integration
Is the combination of two or more stages of production normally operated by separate companies
166
influences of choice of supplier
eg price charges, location, time it will take, existing relationships, quality, etc
167
Corporate social responsibility
Refers to the extent to which a business takes into account its stakeholder views and accepts its obligations to society over and above the legal requirements
168
Outsourcing
Is when a business uses an outside supplier to help cover spikes in demand or where a specialsim is required
169
Financial objectives
objectives pursued by the finance department (or function) within an organisation eg improving profits, cash flow, etc
170
Profit
Measures the extent to which revenues from selling a product over some time period exceed the costs incurred in producing it
171
Cash flow
The movement of cash into and out of a business over time; essential for a business to have enough cash readily available to cover essential bills eg staff, materials, rent etc
172
Return on Investment (ROI)
the profit made from an investment relative to its cost; FORMULA ROI= (profit / cost) * 100 the higher the better
173
Income statement
Records a business' sales revenue over a trading period and all relevant costs incurred as well as the business' profit or loss
174
Gross profit
Income received from sales minus the cost of goods and services sold ; shows how well a business is managing its direct costs
175
Direct costs
Expenditure that can clearly be allocated to a particular product or area of the business e.g. raw materials and components
176
Indirect costs
Expenditure that relates to all aspects of a business' activities, such as maintenance costs for buildings or senior managers' salaries
177
Operating profit
The financial surplus arising from a business' normal trading activities and before taxation ie gross profit - expenses
178
Profit for the year
the final measure of a business' profits that takes into account a wider range of expenditures and incomes including taxation ie operating profit - all other costs = net profit (ie profit for the year)
179
Capital Investment
The purchase of assets such as property, vehicles and machinery that will be used for a considerable time by the business
180
Non-current assets
the items a business ownes whose value doesnt change much from month to month eg property, vehicles, etc
181
Current assets
the items a business ownes whose value does change from month to month ie in the short term (current period) eg cash, receivables, inventory, etc
182
Capital expenditure
Spending undertaken by businesses to purchase non
183
Capital structure
the proportion of debt to equity in the business (ie how much of all the money in the business is borrowed?)
184
Budgets
Financial plans that forecast revenue from sales and expected costs over a time period ; they are financial targets which allow a business to track its performance and taken action as required
185
Variance analysis
The process of investigating any differences between forecast (budgeted) data and actual figures
186
Favourable Variance
a variance that is good news for the business ie where costs are lower than expected or sales income is higher
187
Adverse Variance
a variance that is bad news for a business - ie where costs are higher than expected or sales income is lower than expected
188
Cash flow forecasts
State the inflows and outflows of cash that the managers of a business expect over some future period; Opening Balance + inflows - outflows = Closing Balance; need to have a surplus showing or take action
189
Trade credit
The period of time given by suppliers before customers have to pay for goods and services
190
Breakeven analysis
a modelling tool for a business to examine the impact of differing levels of selling price, variable cost per unit and fixed costs on its ability to make a profit.
191
Breakeven output
That level of output or production at which total costs exactly equal revenue from sales ; FORMULA Breakeven Level = Fixed Costs / (selling price - variable cost per unit)
192
Breakeven Chart
A chart showing output on x axis and money on Y axis and 3 lines ie Fixed costs, Total Revenue and Total Costs. Where TR intersects with TC line is the breakeven level. Sales beyond that point contribute to profit
193
Contribution per unit
The difference between selling price and variable cost per unit. Also Total Contribution = Contrinbution per unit * items sold
194
Margin of safety (MOS)
Measures the amount by which a business' current level of output exceeds breakeven level; the more the better
195
Profitability
A measure of financial performance that compares a business' profits to some other factors such as revenue
196
Profit margin
A ratio that expresses a business' profit as a percentage of its revenues
197
Internal source of finance
A source of finance that exists within the business
198
External source of finance
An injection of funds into the business from outside - eg from individuals, other businesses or financial institutions
199
Short term finance
Finance needed for a limited period of time, normally less than one year
200
Long term finance
Sources of finance that are needed over a longer period of time, usually over a year
201
Bank loan
The amount of money provided by a business for a stated purpose in return for a payment in a the form of interest charges
202
Overdraft
Exists when a business is allowed to spend more than it holds in its current bank account up to an agreed limit ; essential as part of managing cash flow
203
Venture capital
Funds advanced to businesses thought to be relatively high risk in the form of share and loan capital
204
debt factoring
selling debts to a debt collector who will give instant cash for a reduced proportion of what is owed; debt factoring business keeps the difference from what they can recover
205
Share capital
Finance invested into a company as a result of the sale of shares in the business
206
retained profit
the profits built up from running the business over time; the most common source of finance; internal and simple to access
207
Mortgages
Long term loans, repaid over periods of up to 50 years, and used to purchase property
208
Debentures
Loans with fixed interest rates that are long term and may not even have a repayment date
209
Crowdfunding
Practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet
210
Opportunity cost
The next best alternative that is foregone
211
Trade credit
Offered when customers are allowed a period of time (frequently 30,60 or 90 days) to pay for products they have bought
212
payables
money owed to the business from customers who bought on credit
213
receivables
debts the business owes eg to it suppliers
214
Human resource objectives
The targets pursued by the HR function or department of the business eg improving engagement and involvement; talent development; improving diversity of staff; more training to improve skills; better workforce planning etc
215
Labour productivity
Measures the output of a firm in relation to its number of employees
216
Employee engagement
Describes the connection between a business's employees and its mission, goals and objectives
217
Employee involvement
Exists in a business in which people are able to have an impact on decisions and actions that affect their working lives
218
Training
A process whereby an employee gains job related skills and knowledge
219
Talent development
The development and guidance of outstanding or star employees who have the potential to make major contributions to an organisation's performance and success
220
Valuing Diversity
Valuing the differences between individual employees and their backgrounds and also the differences that may exist between different groups of employees
221
Unit labour costs
Measure the labour cost per unit of output produced
222
Labour turnover
The percentage of a business's employees who leave the business over some period of time (normally a year) FORMULA labour turnover = (leavers / average staff) * 100. UK average is 12%
223
Labour retention
The extent to which a business holds onto its employees ; low retention can be sign of dissatisfied staff and causes high recruitment costs
224
Human resource plan
Assesses the current and future capacity of a business's workforce and sets out actions necessary to meet the business's future human resource needs ; also called workforce plan; the plan to have right staff in right place at right time to deliver services
225
Big data
Describes the enormous quantity of structured and unstructured data that is difficult to process using traditional techniques such as databases
226
Job design
The process of grouping together or dividing up tasks and responsibilities to create complete jobs
227
Job enrichment
Occurs when employee's jobs are redesigned to provide them with more challenging and complex tasks
228
Empowerment
A series of actions designed to give employees greater control over their working lives
229
Authority
The power to give orders, make decisions and to control events and people
230
Organisational structure
The way a business is arranged to carry out its activities; depicted in organisational chart; important to organise staff effectively for teamwork, comms, efficiency etc
231
Organisational design
A process to ensure that the organisation is appropriately structured to deliver organisational objectives in the short and long term
232
Levels of hierarchy
Refer to the number of layers of authority within an organisation i.e. how many levels exist between the CEO and the shop floor employee
233
Tall structures
Have many layers; often bigger more traditional organisations; lots of opp for promotion but comms can be difficult
234
Flat structures
Have fewer layers; often smaller more dynamic businesses; staff more easily able to adapt roles and work across tradional boundaries
235
Span of control
The number of subordinates directly responsible to a manager
236
Chain of command
The line of communication and authority existing within a business i.e. a shop floor worker reports to a supervisor, who is responsible to a departmental manager and so on
237
Delegation
The passing down of authority (but not responsibility) down the organisational structure
238
Human resource flow
The movement of employees through an organisation, starting with recruitment
239
Recruitment and selection
The process of filling an organisation's job vacancies by appointing new staff
240
Redundancy
Takes place when an employee is dismissed because a job no longer exists
241
Dismissal
Takes place when an employer terminates an employee's contract of employment and leads to employees exiting the human resource flow
242
Redeployment
Occurs when an employee is offered suitable alternative employment within the same business
243
Motivation
Describes the factors that arouse, maintain and channel behaviour towards a goal ; highly motivated staff try much harder and give extra effort and the performance of the whole business improves
244
Division of labour
The breaking down of production into a series of small tasks carried out repetitively by relatively unskilled labour
245
Time Rates
Staff are paid by the hour eg £12
246
Salary
An annual payment eg £35000 per year paid monthly
247
Commission
A method of payment in which the amount paid is related to the value of goods or services that an employee sells
248
Bonus pay
an extra sum paid if certain targets are achieved. so full pay may be salary with opportunity to earn extra 50% bonus
249
Piece rate
A system whereby employees are paid according to the quantity of a product they produce ; encourages speed of production
250
Performance related pay
Some part of an employee's pay is linked to the achievement of targets at work eg 80% set salary and 20% performance related
251
Variable pay
A flexible form of pay that offers employees a highly individual pay system related to their performance at work
252
Employee welfare
A broad term covering a wide range of facilities that are essential for the well
253
Appraisal
The process of considering and evaluating the performance of an individual employee
254
Teamworking
When an organisation breaks down its production processes into large units instead of relying upon the use of the division of labour
255
Trade union
An organisation of workers established to protect and improve working conditions of its members including pay rates, annual leave, etc
256
Collective bargaining
involves negotiations between management and employee's representatives, often trade unions, over pay and other conditions of employment. used eg in NHS and schools for teachers, doctors, nurses etc. cannot do individual bargaining as too many staff
257
Works council
A forum within a business where workers and management meet to discuss issues such as working conditions, pay and training. Its a method of staff involvement in decision making
258
Communication
The transfer of information between people; a key elememt of a successful business; becomes more important and difficult the bigger and org gets
259
Arbitration
A procedure for the settling of a dispute if all informal attempts fail, under which the parties agree to be bound by the decision of a third party
260
Industrial dispute
A disagreement between an employer and its employees, usually represented by a trade union, over some aspect of the terms and conditions of employment usually pay
261
Conciliation
A method of resolving individual or collective disputes in which a neutral third party encourages the continuation of negotiations and tres to facilitate an agreeable outcome for all sides
