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Flashcards in Partial 3 Deck (21):

Backward vertical integration

It occurs when a business amalgamates with a firm operating in an earlier stage of production.



They are businesses that provide a diversified range of products and operate in an array of different industries.


Diseconomies of scale

They are the cost disadvantages of growth. Unit costs are likely to eventually rise as a firm grow due to a lack of control, coordination and communication.



It is a high risk growth strategy that involves a business selling new products in new markets.


Economies of scale

It refers to lower average costs of production as a firm operates on a larger scale due to gains in productive efficiency.


External growth

It occurs when a business grows by collaborating with, buying up or merging with another firm.


Forward vertical integration

It is a growth strategy that occurs with the amalgamation of a firm operating at a later stage in the production process.



It refers to an agreement between a franchisor selling its rights to franchisees to allow them to sell products under its name in return for a fee and regular royalty payments.



It is the growing integration and interdependence of the world's economies, causing consumers around the globe to have increasingly similar habits and tastes.


Horizontal integration

It is an external growth strategy that occurs when a business amalgamates with a firm operating in the same stage of production.


Internal growth

It occurs when a business grows using its own capabilities and resources to increase the scale of its operations and sales revenue.


Joint venture

It is a growth strategy that combines the contributions and responsibilities of two different organizations in a shared project by forming a separate legal enterprise.


Lateral integration

Refers to M&A between firms that have similar operations but do not directly compete with each other.



It is a form of external growth whereby two or more firms agree to form a new organization, thereby losing their original identities.


Multinational company

It is an organization that operates in two or more countries, with its head office usually based in the home country.


Optimal level of output

It is the most efficient scale of operation for a business which occurs at the level of output where average costs of production are minimized.


Decision trees

They are a quantitative organization planning tool that calculate the probable values of different options, helping managers to minimize the risks in dexision-making.


Force field analysis

It deals with the forces for and against change.


Fishbone diagram

It is an organization planning tool based on identifying and dealing with the root causes of a problem or issue facing a business.


Gantt charts

They are a visual representation of all the tasks in a particular project plotted against the timescale. As a planning and scheduling too, it allows project managers to monitor progress.


Organization planning tools

They are the various methods that business use to aid their decision-making.