Professional Documents
Culture Documents
GCSE Business (9‐1) Key Terms:
Theme 2 Building a Business
1. Advertising ‐ Communication between a business and its customers where images are placed in the
media to encourage the purchase of products.
2. Aesthetics ‐ How well the product appeals to the senses.
3. Availability ‐ Being able to access the correct products when needed.
4. Average rate of return ‐ The return of profit from a proposed capital project.
5. Barriers to effective communication ‐ Something that prevents the flow of communication. E.g. Use of
jargon, misunderstanding, person delivering the message is not clear.
6. Batch production ‐ Where work is divided into parts, each part is completed before the next one.
7. Bonus ‐ A payment in addition to the basic wage for reaching targets or in recognition of a service.
8. Branding ‐ Giving an identity to a product, through things such as design, reputation, or image which
consumers easily recognise.
9. Centralised structure ‐ An organisation in which decisions are made at Head Office.
10. Commission ‐ Percentage payment on a sale, made to the salesperson.
11. Curriculum vitae (CV) ‐ A document that lists personal details, qualifications, experience, referees and
other information about a job seeker.
12. Decentralised structure ‐ An organisation that allows staff to make decisions at local/branch level.
13. Differentiation ‐ The process of making a product seem distinct from its competitors, maybe with a
USP.
14. Distribution ‐ The route a product takes from the producer to the customer.
15. Economic manufacture (Cost) ‐ Making sure the design is cost effective.
16. Effective communication ‐ Communication that is clear, accurate and easily understood.
17. Environment ‐ The natural world around us, which may be affected business.
18. e‐tailer ‐ A retailer selling goods via electronic transactions on the Internet.
19. Ethics ‐ The moral rules and principles of a business. Going over and above what is required by law.
20. Excessive communication ‐ Too much communication causing overload.
21. Extension strategy ‐ A strategy to maintain or increase sales and avoid decline on the product area life
cycle.
22. External recruitment ‐ Appointing workers from outside of the business.
23. Flat structure ‐ A structure with 3 or less levels of hierarchy.
24. Flexibility ‐ The ability to change quickly.
25. Flexible hours ‐ When an employee can choose their work hours.
26. Flotation ‐ When a firm offers its shares for sale to the public on the stock exchange for the first time.
27. Flow production ‐ Where a task is worked on continuously and products are uniform.
28. Formal training ‐ Training which is done away from your normal place of work in an organised/planned
manner.
29. Freelance contractors ‐ Workers who do not work directly for an employer but are given a contract to
complete an agreed task for a set fee.
30. Fringe benefits ‐ Rewards given to staff, also known as 'perks'. E.g. Company car, private health care,
discounts of products.
31. Full‐time employees ‐ A work contract where the employee works approximately 37.5 hours or more a
week.
32. Function ‐ Making sure the product works well every time.
33. Gross profit ‐ The difference between revenue and the cost of sales figure.
34. Gross profit margin ‐ The proportion of revenue left over after the business has paid its cost of sales.
35. Hierarchical structure ‐ A structure with 4 or more levels of hierarchy.
36. Import tariff ‐ A way of protecting UK products by adding a tax to imports into the UK.
37. Informal training ‐ Learning on the job, normally by working with a more experienced colleague.
38. Inorganic (External) growth ‐ Two or more businesses joining together to make one much larger one in
a merger or takeover.
39. Internal recruitment ‐ Appointing workers from within a business.
40. Job description ‐ A document that shows clearly the tasks, duties and responsibilities expected of a
worker for a particular job.
41. Job enrichment ‐ Giving employees greater responsibility and recognition by vertically extending their
job role.
42. Job production ‐ A complete task handled by one person or a group of people. Often only one product
is worked on at a time.
43. Job rotation ‐ Changing jobs or tasks from time to time.
44. Just‐in‐time ‐ Having regular but smaller deliveries, so stock is ordered and delivered as needed.
45. Lead time ‐ The time it takes for a supplier to deliver after a customer places an order.
46. Logistics ‐ Ensuring supplies are ordered and delivered on time.
47. Marketing ‐ Anticipating and meeting customers' needs and wants.
48. Market share ‐ The proportion of total sales in a market for which one product, business or brand is
responsible.
49. Merger ‐ Occurs when two or more businesses join together and operate as one.
50. Motivation ‐ The will to work.
51. Multinational ‐ A business which operates in more than one country.
52. Net profit ‐ The profit left after all costs have been paid.
53. Net profit margin ‐ The proportion of revenue left over after the business has paid all of its costs.
54. Organic (Internal) growth ‐ A business growth strategy that involves a business growing gradually using
its own resources.
55. Organisational structure
56. A diagram showing the different job roles in a business and how they relate to each other.
57. Part‐time employees ‐ A work contract where the employee works less hours than a normal full time
position.
58. Performance reviews ‐ Discussions between employee and their manager about their performance and
target setting for the future.
59. Permanent employees ‐ Employees who work directly for the employer and have an on‐going contract.
60. Person specification ‐ A person profile of the type of person needed to fill a particular job role. This may
be split into essential and desirable experience, qualifications and personal qualities.
61. Post‐sales service ‐ Service after the point of sale. E.g. A free service for a car or complaints procedures.
62. Pricing strategy ‐ The pricing policies or methods used by a business when deciding what to charge for
its products, to achieve the aims of the company.
63. Procurement ‐ Obtaining the correct supplies from the correct supplier.
64. Product area life cycle ‐ A graph showing the stages that products go through within their lifetime from
research to decline.
65. Productivity ‐ A measure of efficiency, usually measured as output per person.
66. Product trial ‐ When a business tests a market by releasing a product for a short period of time or in a
restricted area.
67. Public limited company (Plc) ‐ An incorporated business, with Plc after its name that can openly sell
shares on the stock market.
68. Quality assurance ‐ A method of working for businesses that takes into account customers wants when
standardising quality.
69. Quality control ‐ Making sure the quality of a product meets specified quality performance criteria,
usually done by checking the product at the end of the production process by inspectors.
70. Remote working ‐ Working away from your normal place of work.
71. Remuneration ‐ The reward for work.
72. Retailer ‐ A business that buys goods from manufacturers and wholesalers, and sells them in smaller
quantities to the consumer.
73. Sales process ‐ Ensuring an interested person becomes a customer.
74. Self‐learning ‐ Teaching yourself.
75. Special offers ‐ Method of promoting products in the short term to boost sales. E.g. free gifts, vouchers
or BOGOF.
76. Sponsorship ‐ Making a financial contribution to an event/team in return for publicity. E.g. Carling Cup.
77. Staff retention ‐ What proportion of staff stay working for a business rather than leave.
78. Stock ‐ The raw materials, work in progress and finished products a business has to sell.
79. Stock control ‐ Ensuring that stock is always available for customers, but without over stocking.
80. Stock market ‐ Where buyers and sellers can trade shares.
81. Takeover ‐ The process of one business buying another.
82. Temporary employees ‐ Employees who work directly for the employer but have an end date on their
contract.
83. Trade bloc ‐ A group of countries that has signed an agreement to reduce or eliminate all import/export
protection.
84. Viral advertising ‐ Advertising that encourages people to spread your message through social media.