key Terms

Question 1

What is a mission statement ?

Answer 1

The Purpose of the business

Question 2

What is a vision statement ?

Answer 2

A business’s aspirations for the future

Question 3

What is a corporate objective?

Answer 3

A medium to long term goal established to coordinate the business

Question 4

What is a tactic ?

Answer 4

Short term decisions

Question 5

What is a strategy?

Answer 5

A long term plan to achieve the business’s vision

Question 6

What is a balance sheet?

Answer 6

Financial statement showing the assets and liabilities of a business

Question 7

What are assets?

Answer 7

An asset is something that a business owns. What they use the capital to purchase.
Non current
Current

For example, land property and equipment

Question 8

What are liabilities ?

Answer 8

A liability is a debt owed by the business.
Non current
Current

For example, mortgages and loans

Question 9

What is total equity?

Answer 9

Money invested into the business by its owners

Question 10

What is an income statement ?

Answer 10

An accounting statement showing a firms sales revenue ( either profit or loss)

Question 11

What is absenteeism?

Answer 11

When an employee is not present at the workplace

Question 12

What is labour turnover?

Answer 12

The percentage of a business’s employees who leave the business within a year

Question 13

What is employee retention?

Answer 13

The extent that the business holds onto its employees

Question 14

What are core competencies ?

Answer 14

The unique abilities that a business has

Question 15

What is a competitive advantage ?

Answer 15

A specific superiority that a business has in comparison to competitors and rivals

Question 16

What is outsourcing?

Answer 16

When an organisation uses a separate business to complete part of the work

Question 17

What is privatisation?

Answer 17

Transferring an organisation from state ownership to the private sector

Question 18

What is GDP?

Answer 18

Gross domestic product measure the value of a country’s total output of goods and services

Question 19

What is price elasticity of demand?

Answer 19

This measures the sensitivity of the quantity demanded of a product

Question 20

What is inflation?

Answer 20

Rise in the price level and fall in the value of money

Question 21

What is deflation?

Answer 21

A fall in the price level and rise in the value of money

Question 22

What is the difference between the fiscal policy and the monetary policy?

Answer 22

The fiscal policy is the use of tax and public expenditure to manage the economic activity

The monetary policy is controlling the amount of money within the economy to achieve the desired economic activity level

Question 23

What are barriers to entry?

Answer 23

Factors that make it difficult for a business’s to sell products in a market for the first time

For example, high advertising costs

Question 24

What is the opportunity cost?

Answer 24

The best alternative as a result of a deciison

Question 25

What are economies of scale ?

Answer 25

When unit costs fall as a business expands

Question 26

What are diseconomies of scale?

Answer 26

When unit costs rise as the business expands

Question 27

What is kaizen?

Answer 27

A process of continuous improvement. | Small improvements can leads to major improvements to performance over time

Question 28

What is benchmarking ?

Answer 28

When a business tries to match the approach and success to another organisation

Question 29

What is the difference between tariff and quota ?

Answer 29

Tariff is a tax places on foreign in goods and services | A quota is a limit on the number of imported goods and services

Question 30

What is e-commerce ?

Answer 30

The buying and selling of goods or services

Question 31

What is the difference between incremental change and distributive change ?

Answer 31

Incremental is step by step changes, with gradual improvements Disruptive changes are big 'game changing' developments that make a significant impact

Question 32

What is the difference between a planned strategy and an emergent strategy?

Answer 32

A planned strategy is the strategy that the managers intend to implement An emergent strategy is the strategy that actually develops over time

Question 33

What is strategic drift?

Answer 33

When the strategy of the business no longer matches the environment in which it operates For example, it drifts from the original strategy

Question 34

What is divorce between ownership and control?

Answer 34

When the owners of a business do not control the day to day decisions

Question 35

What is contingency planning?

Answer 35

When a business plans for possible but unlikely events

Question 36

What is network analysis?

Answer 36

When a network diagram is used to analyse the activities involved in a project to identify the fastest way of completing the project