GCSE Business Studies Glossary
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1890 Partnership Act - this is a law that states that everything in a partnership is shared equally by the partners unless otherwise specified in a Deed of Partnership Absenteeism how often workers are away from work due to illness. ACAS a body that tries to promote good relations between businesses and their employees. They will attempt to settle any disputes. Administration and ICT support ensure the smooth running of the business on a day to day basis. They responsibility for clerical duties, cleaning, computer and software support, security and health and safety; Adverse is a variance that leads to lower profits, for example, higher costs or lower revenues. Advertising Standards Authority (ASA) are responsible for ensuring that all businesses follow the British Code of Advertising and Sales Promotion Practice. After sales service is the service the business provides customers with after they have bought the product, it can include dealing with complaints, repairs, offering guarantees and exchanging goods if the customer is not happy. Aged debtor analysis this printout puts customers in order of the age of debt outstanding. It can also provide information such as the amount of the debt and previous payment times. Aged debtor analysis this puts customers in order of how long they have been in debt to the business. Aged stock analysis is a printout of the stock in order of age. Aged stock analysis this is a printout of the stock in order of its age, it makes it easy for the manager to make decisions about future prices and stock purchases. AGV Automatically Guided Vehicle are used to carry materials around a factory. They are guided by a number of sensors or wires. An interview is used by the business to ask the applicant questions about their suitability for the job. Annual reports produced by businesses at the end of the year. It reports on past performance and identifies future aims and objectives; Applicant is the person applying for a job. Application form is completed by job applicants. It will ask the applicant to provide answers to a number of questions that have been set by the business. Appraisal is carried out by a workers superior and it is a way of assessing how well an employee is doing their job. It will normally be done on a regular basis, judge the employee upon their performance during the previous time period and provide targets for the future. Aptitude tests are used to measure skills the applicant already has, for example word processing or language skills. Arbitration both sides state their case and ACAS make recommendations that both side have to accept. Articles of association lays out how the company will be run. It contains information about how meeting will be conduction, how much power the directors have and the voting rights of the shareholders. Assembly this is simply another form of manufacturing, where component parts are put together to make a finished item Assets are the resources that the business owns. Auditors report (or auditor) all companies must get an independent accountant to check their accounts. They produce an auditors report which states that the accounts represent a true and fair view. Authority the person with authority will be expected to control the situation or activity he or she is involved in. Automisation this occurs when machinery is able to operate without workers controlling them, they just supervise them. Balance sheet - this lists all of the businesses assets and liabilities. Balance sheet it is a picture of the financial position of a business at a particular point in time. Bankruptcy when business owners are unable to pay their debts, but their creditors insist that they do, they can be declared bankrupt. Creditors may then receive payment from the sale of the assets of the business and, in the case of unlimited liability, from the sale of the possessions of the owners. Basic pay the amount an employee earns before he/she is paid commission, bonuses or expenses. Boom a period of rising demand, employment and business growth Boom the amount of goods and services sold in the economy rises. Fewer people are unemployed as businesses are looking for people to work for them. Branding providing a product (or range) with a distinct and recognisable identity. Break even forecast - shows the amount of sales which the business thinks it will have to make in order to break even, in other words, the number of sales it must make so that its revenue covers its costs. Break-even is the point at which total revenue equals total costs. Its calculated as follows: Fixed costs χ (Selling price per unit minus Variable cost per unit) British Standards Institute (BSI) attempt to set high standards of safety and quality for goods sold in the UK. They award the kitemark and BS standards. Budget is a plan of what the business hopes to achieve in the future. It shows the cost and revenue plans. Buffer stocks these are stocks that are held in case of unforeseen rises in demand. Bureaucratic Structure is a traditional approach where the business is divided into functional areas such as marketing, production and finance. Business cycle the general cycle of booms and recessions that an economy passes through CAD Computer Aided Design is the use of computers to help in the design of the products. It allows products to be viewed and tested without having to actually produce them. Call centre are usually large buildings containing many employees who spend their working day on the telephone answering and making calls to customers. CAM Computer Assisted Manufacture uses a computer to operate a piece of machinery. Capital the money and machinery that is used in the production of goods and services. Capital this is the money given to the business by the owners usually in exchange for shares. Cash flow forecast - shows the amounts of money which the business predicts it will spend and receive on a month by month basis. Cash flow forecast this shows the inflows and outflows of money to and from a business. Cash flow statement this provides a record of how cash has flowed in and out of the business. Centralised Networks in this network the information must pass through a central position. Chancellor of the Exchequer is the minister in the Government responsible for the UKs finances. Channels of communication the way in which messages can be passed. Charities these are organisations that aim to provide help to those in need of it or to support good causes. Cheques are completed by the customer in payment for goods and services. CIM Computer Integrated Manufacturing uses a computer to control the production process in a factory. Closed questions only allow the respondent to choose from a limited number of answers Collective bargaining occurs when a union represents a group of workers to their employers. Commercial aims those directly linked to profitability Commercial employment agencies theses are businesses that specialise in recruiting and selection. Commission this will be given to sales staff as a reward for making a sale. It will often be a percentage of the price of the good or service. Company a business that has a separate legal existence from its owners it can, for example, be sued in a court or sold to someone else Company magazines information about the company and its employees are distributed to those within the business; Competitor based you will price your good very similarly to other businesses. Component an item that has already been manufactured that is needed in the production process. For example a car manufacturer will put car stereos in to their cars. The car stereos are produced elsewhere and bought as a component. Conciliation this is a voluntary process where employers, trade unions, and worker representatives are helped to reach an agreement that they are all happy with. Conflict of interest can occur when different stakeholders want different things from the business. Consultation during this process managers will try and find out how employees feel about key decisions. Consumer co-operative - a group of consumers who have joined together so they can get lower prices by bulk buying; Consumer Protection Act ,1987 made businesses responsible for any damage that their defective goods caused. These laws help to ensure that goods sold are of a high quality. Consumers Association produce a magazine called Which? and attempt and help customers with complaints against businesses. Consumers Association represent the views of consumers and publish the magazine Which?. Contract a formal agreement that contains information about the working arrangements an employee will face Co-operative a business set up to operate for the benefit of its members. Co-operative an organisation where the aim is to gain shared (mutual) benefit for its members. Corporate videos produced by a business and is often used to describe its aims and how it operates; Cost of sales is equal to the cost of producing the goods that are sold, for example, the cost of raw material and wages. Cost plus pricing the cost of a particular job is calculated then a percentage mark up is added on top. Costs are the money the business spends over a period of time. Counterfoil when a cheque is written this is left in the check book. It is a place to record the details of the cheques that has been written. Craft Unions are the oldest type of union made up from workers with common skills. Credit card can be used by customers in payment for goods and services. Credit facilities allows customers to buy now but pay over a period of time Credit notes will be issued by the supplier if incorrect goods were supplied or damaged goods were supplied, then returned and not replaced. Creditors people or businesses that are owed money by a business, perhaps for raw materials, or for work or services completed Current assets are assets that will be changed into cash within a year, for example, cash in the bank, stocks and debtors. Current liabilities these are debts the business has to pay within one year, for example, money owed to suppliers (trade creditors), tax owed to the Government and money owed to the bank for an overdraft. Curriculum vitae is provided by an applicant for a job. It will normally contain information such as personal details; education history; previous job experience; interests; and references. Customer panels are used by a business to judge the reaction of customers to a good or service over a period of time. customer service will help the customer before and after a sale has been made by providing information, giving advice, providing credit facilities, delivering goods and providing after-sales support; Databases contains large amounts of information that can be sorted into different lists and searched very quickly for records with particular features. Debit card can be used by customers in payment for goods and services. Debtors these are the customers that owe money to the business. Decentralised Networks the information is generally passed around to all employees. o Deed of Partnership this an agreement between partners will lay out how the partnership will be run. If a Deed of Partnership is not completed the rules laid out in the 1890 Partnership Act will apply. - this lays down that everything in a partnership is shared equally by the partners Delayering usually occurs when there is a decrease in the numbers of middle management. This leads to an increase in the span of control and a decrease in the levels of hierarchy. Delegation occurs when somebody in charge gives the authority to do something to a person he or she is responsible for. Delivery note is attached to the goods when they are delivered. It is signed by the customer as proof of delivery. Desk research this involves the use of secondary data; this is information that is already available both within and outside the business. Destroyer Pricing the product or service is sold at a very low price in order to drive out new or existing competitors. Development is used to help a worker to achieve their full potential. It does not necessarily relate to the job the worker is doing at the moment. Development review is carried out by a workers superior and it is a way of assessing how well an employee is doing their job. It will normally be done on a regular basis, judge the employee upon their performance during the previous time period and provide targets for the future. Direct Debit allows banks and building societies to pay bills to businesses directly from customers bank accounts. discrimination occurs when decisions are made against a group of people based upon their race, religion, sexuality, disability or other factor which has nothing to do with their ability to do the job Dismissal is the process of removing a worker from their job. This may occur is the employee is not doing their job well or if they carry out a serious offence (such as stealing from the company). Dividend is the share of a businesss profits that shareholders receive. Divisional Structure the business is organised into divisions responsible for a product or customer type. Divorce of ownership and control occurs when there is a conflict of interest between the owners and managers of a business. Drawer is the person who is pays a cheque DTI the Department for Trade and Industry is the Government Department for business. E and OE stands for Errors and Omissions Excepted. This allows a supplier to correct any mistakes in an invoice afterwards. Electronic data interchange (EDI) is a permanent electronic link with the suppliers that automatically re-orders stocks. Electronic data interchange (EDI) this is a permanent electronic link with the suppliers that can automatically re-order stocks. E-mail an electronic form of mail. Documents are sent quickly and cheaply either internally or externally; Employee is employed by somebody to perform a task in return for a wage or salary. Employer will employ somebody to do a task for them in return for a wage or salary. Employment Tribunals are set up to try and settle a wide range of disputes such as unfair dismissal, equal pay and discrimination. Enterprise Zones - are areas where there is high unemployment. They are usually inner city locations, however the Rhondda Valley in Wales is one example of a rural enterprise zone. The government will offer businesses reduced rent and taxes in return for them locating here. Entrepreneurial Structure is used by small businesses and the employer has direct control over all of the employees in the business. EPOS (Electronic point of Sale) the system scans bar codes at the checkout of a business. EPOS (Electronic Point of Sale) the system that uses bar codes to scan information into a computer at the cash register. European Union is a group of 15 European countries that have joined together to create trade, peace and economic prosperity. European Union is a group of nations in Europe including the United Kingdom. They co-operate on a number of business, economic and political issues. All of the countries in the European Union except the United Kingdom, Sweden and Denmark use the same currency, the Euro. Exchange rate measures how much of another currency you will get for £1. Exports - when UK companies sell goods and services to other countries. External factors are things that the business has no control over. External recruitment the new employee is employed from outside of the business. External stakeholders are those outside of the business; customers, the local community, government, pressure groups, suppliers and financiers. Favourable is a variance that leads to higher profits, for example, lower costs or higher revenues. Fax a paper document that is sent over a telephone line; Field research this involves the collection of primary data; this is information has nobody has yet collected. finance will keep a record of all monies coming in and out of the business. They have responsibility for securing finances for future expansion and paying staff and suppliers; Financial accounting - looks at the money that has come into and out of the business. Finished goods consisting of products ready for sale. Fixed assets are assets that have a life span of more than one year, for example, machinery, buildings, cars, tables and chairs. Fixed costs these costs have to paid no matter how much the business produces Fixed Order Quantity Approach an order of fixed size is placed whenever stock falls to a certain level. Flotation the word for floating a company on the Stock Exchange (also called going public. It means that at least £50,000 worth of a companys shares is offered for sale to the public, making it a public limited company. Flotation the word for floating a company on the Stock Exchange (also called going public). It means that at least £50,000 worth of a companys shares is offered for sale to the public, making it a public limited company. Focus groups are usually made up from around 10 people who discuss new products. They will let the business know what they think of the new product and suggest changes that could be made to improve it. Formal network this takes place within the official channels, i.e. the lines of communication approved by senior management, for example a marketing manager talking to the marketing director. Franchise - When one business (the franchiser) licenses others (franchisees) to trade using its successful product, reputation, brand, logo and expertise. (Remember, an employer employs, an employee is employed; a franchiser sells franchises, a franchisee buys them). Functional area a department within the business responsible for a particular task, such as marketing, finance or administration. Functional area a group within the business with a specific responsibility, such as operations, human resources and marketing and sales. Functional Structure is a traditional approach where the business is divided into functional areas such as marketing, production and finance. General Unions are made up of workers with a wide range of skills from different industries. Goods received note this will be used if the business uses a delivery service to get the goods to the customer. The goods received note will be signed by both the delivery employee and the customer as proof that the goods were delivered. Gross profit is equal to revenue minus the cost of sales. Guarantee is a promise made by the business which promises to fix any problems that the product may have over a fixed period, such as one or two years. Headhunting businesses will ask executive agencies approach individuals who have an excellent reputation in a particular field of work. Health and Safety Act of 1974 states that that an employer must ensure the health, safety and welfare of its employees. It covers areas such as machinery, handling and transportation of goods, training and supervision. Health and Safety Executive this body was set up by the government to protect employees and customers. They can enter any workplace and order changes to be made. Hierarchy shows the level responsibility of the workers within a business, starting with the lowest to the highest. Hire purchase a finance house pays for equipment that a business receives. The business then pays the finance house for the equipment in installments. Hiring a finance house pays for equipment that a business receives. The business then pays the finance house for the equipment in installments. Hour based pricing some businesses charge a standard charge per hour. human resources ensures the business has the best staff for the job and that they are able to work effectively in a safe environment; ICT information and communications technology. It involves the use of computers to handle information. Imports - when UK companies buy goods and services from abroad; Induction training is given to a new worker when he or she starts a new job. The purpose of it is to introduce the employee to the job and the business. Induction training is given to new employees of the business. Employees will be given information about the businesss history, aims, objectives and rules. Industrial action taken by the employees to disrupt the normal working life of the business in the hope of achieving their way in a dispute. Industrial Unions are formed by workers of a particular industry. Inflation - a general rise in the prices of goods and services Inflows is the money that flows into the business. Informal interviews these may take place in addition to a formal interview. It may occur over lunch or during a tour of the workplace. Informal networks informal communication can be defined as passing information outside the official channels, for example employees chatting in the canteen or pub. It can dictate what happens with a business, particularly if the formal system has broken down. Intelligence tests are used to measure the general mental ability of the applicant. Questions may cover areas such as numeracy, literacy and general knowledge. Interest free credit the business with let the customer pay for the product over a period of time without charging them any extra in interest. Internal factors are things the business can control Internal recruitment the job is filled by a person already working for the company Internal stakeholders are those within the business; employees, managers, owners and shareholders. Internal telephone systems a cheap method of communicated within a business over telephones. Interview is used by the business to ask the applicant questions about their suitability for the job. Interviews give the business an opportunity to find out more about the applicant. Intranets a form of the internet that can only be viewed by people within the business Investors in People is a national standard that encourages businesses to develop training and development their workforce. If a business achieves the standard, by satisfying the four following principles, they are allowed to display a plaque. Invisibles - are exports or imports services that can not be touched or seen, for example finance, transport and insurance. Invoice this will let the customer know how much the order cost and details of when the money has to be paid. Jargon is a word or phrase with a specialised or technical meaning. Job analysis outlines what the job involves; the skills required; the tasks that are carried out; and the level of performance expected by the business. Job centres are government run and they can find people easily as they have access to national databases of the unemployed. Job description contains information about the job, such as, key responsibilities; tasks or activities; job security; and skills, qualifications and personal qualities required. Job description is a word picture of the job that outlines what each worker should be doing and the qualifications and qualities he or she should have. Job tests are used to help a business decide upon the most appropriate person for a job. The business will hope that the tests will give them an indication of how the applicant would perform if appointed. Just in time (JIT) it operates with minimal buffer stocks and relies on daily or hourly deliveries from trusted suppliers. Labour turnover the frequency that workers join and leave a business. A low labour turnover implies that people work at the business for long periods of time. Lateral Communication people in the same level within the organisation pass information to each other, for example manager to manager or worker to worker. Lead time, this is the amount of time it takes for an order to be delivered and ready for use. Stock pile companies may build up stocks to deal with seasonal demand. Leasing the business pays a leasing business for the use of a piece of equipment. The business never owns the equipment that has been leased. Letter a written record of information that can be used either internally or externally; Letter of application is used by a job applicant to outline why they want the job. Liabilities these are the debts of the business, in other words, the money it owes. Liability something that a business owes Liability the owner or owners responsibility for debt Limited liability this means the owners of the company can only lose the amount that they have risked should it go bankrupt Loans the business must pay back the money borrowed plus interest at regular periods over an agreed period of time. Long term liabilities these are the debts the business must pay after one year, for example, mortgages and loans owed to banks. Loss leader - charging less for an item than it actually costs to try and encourage people in to the shop where they will hopefully buy other items. Luxury goods consumers spend more on these goods when their incomes increase, examples are electrical goods and foreign holidays Management accounting gives a financial overview that can help the managers with planning for the future and decision making. Manager he or she is responsible for the running of a functional area. Manufacturing this is another word for making and refers to the process of taking raw materials and turning them into a good that can be sold. Margin of safety is the difference between the break-even and present output. It shows how much the quantity sold can fall before the firm will start to lose money Market orientated a business that is market orientated will try to find out what consumers like before designing a product, for example Diet Coke was designed to suit the needs of the more health conscious consumers. Market research this will hopefully give the a better idea of what consumers want at that moment in time. It can be carried out using either desk research or field research. Market segment is a part of a market that contains a group of buyers with similar characteristics. Market segment is a part of a market that contains a group of buyers with similar characteristics. Market segment is a part of a market that contains a group of buyers with similar characteristics. Market share this is the percentage of sales in a particular market that a business makes. marketing and sales will try and maximize the level of sales by carrying out market research, promoting the good or service and having a motivated sales team; maternity leave gives time off to a mother after the birth of her child. Mediation both sides state their case and ACAS make non-binding recommendations. Medium the method by which a message is sent; Memorandum of Association this contains information about the company, such as its name, address, purpose and objectives. Memos internal documents that are used to pass information throughout a business; Mission statement - states the overall aims of the business and its values Modern Apprenticeships were set up to try and improve the training offered by businesses. They are available in over 70 industries, including services, engineering and manufacturing. Monopoly there is only one business in a particular market. This business may be able to charge high prices and exploit customers as there are no competitors, for example, there is only one business who supplies water to your home. Multinational a business that has offices in different countries. Mutual organisation - a group of people who have joined together to provide financial benefits. Mutual society a business set up to operate for the benefit of its members Mystery customer an employee of the business pretends to be a consumer to see what level of customer service s/he is given. National insurance is a tax paid by the employer and employee. It was set up to help pay for the National Health Service. National Training Awards (NTA) are given to UK businesses that have provided excellent training for a number of years. Nationalised industry is a business owned by the Government. Negotiation during negotiations the business and employees will try and settle their dispute through discussion and compromise. Net cash flow is equal to cash inflows minus cash outflows Net profit is equal to gross profit minus operating expenses. Newsletter produced for the people who have an interest in the business; non-price competition is the competition that occurs between businesses on factors other than price such as quality or after sales service. Objectives shorter term targets to be reached on the way to reaching the aims Observation is often used by retail businesses to view the actions of customers in the store. Off the job training is given to employees away from their job, at a conference or at a local college for example. Off the job training is given to employees away from their job, at a conference or at a local college for example. Office of Fair Trading (OFT) is the body responsible for enforcing laws that protect the customer. Official action is industrial action that is approved by the unions headquarters. off-the-job training training the employees receive away from the business at a training institution or college On the job training is given the employee whilst they are carrying out their job. On the job training is given to employees whilst they are carrying out their job. One-way communication is communication without any feedback, for example putting a piece of paper up on a notice board and sending adverts to customers. on-the-job training training the employees within the business Open questions allow the respondent to think of an answer themselves Opening balance is the amount of money a business has at the start of the month. It equals the closing balance from the previous month. Operating expenses are those costs that are not directly related to production, for example, marketing, delivery and office staff. operations have the task of producing the good or service in the most efficient way. This is done by making best use of the businesses workers, machinery, building and raw materials; Ordinary shares entitles the shareholder to receive a share of the businesss profits, called a dividend. The dividend will vary from year to year depending on the amount of profit the business owns. organisational structure shows the way that the businesss workers are organised. Outflows is the money that flows out of a business. Owners funds is the money that the businesss owners put into the business. Parcel Force a business that make deliveries around the UK and the world. Partly finished goods (referred to as work in progress) that are awaiting the next stage of production. Partnership - a partnership is a business that is owned by two or more people. Partnerships are common in shop ownerships, e.g., Sam and Jane's Tea Shop, Pete and Sons Mechanics; and professional practices, e.g., dentists, accountants, lawyers, doctors Patents they protect the inventor of a new product or manufacturing process. It allows a business to design, produce and sell a new invention and prevents competitors from copying it for up to 20 years. paternity leave gives time off to a partner after the birth of his or her child. Payee is the person or business who receives a cheque. Penetration pricing when a new product is released it is offered at a very low price to encourage people to buy the product. When they reach higher levels of sales they can raise prices. Pension plan money paid into a pension plan will provide the employee with an income when they retire. Periodic Review System (Fixed Re-Order Intervals) orders of various sizes are placed at fixed intervals, e.g., every day, week or month. Perks are benefits the employee receives in addition to his/her wage. They can include free meals, discount gym membership, company car and private medical insurance. Person specification provides a profile of the ideal person needed for the job. It can include details such as skills, experience, qualifications and personality. Personality or psychometric tests are used to try and find the characteristics or attitudes of the applicant. The tests may indicate how the person may react to a particular situation or how they deal with colleagues and consumers. Place - The product must in the right place at the right time. Point of sale the place where goods are actually bought Preference shares entitles the shareholder to receive a fixed dividend each year which does not change with the level of profit. Presentations applicants may be asked to give a presentation on a particular topic relating to the business as part of the interview. Price - This must be at the right level so customers will buy it. Price competition occurs where businesses compete with each other by changing the price. Often they will try and undercut each other. Price discrimination where you charge different people different prices for the same product or service depending on their income, location or the time of day. Primary sector extraction of raw materials (e.g. agriculture and fishing for food, forestry and mining for materials); Private limited company (Ltd) a company with limited liability that is owned by a few shareholders (usually family and friends). It is not allowed to sell shares to the general public. It displays Ltd after its name to warn people of its status. Privatisation involves the government selling a business in the public sector to the private sector. Privatisation occurs when the government sells one of the businesses it owns. Process what a manufacturer does to inputs in order to turn them into outputs. Processing this involves taking raw materials and putting them through a process that changes them in order to produce a finished good, for example iron ore may be smelted in order to produce steel Producer co-operative - a group of producers who have joined together to sell their goods or services; Product - It must have the right features. Product extension strategies ways of extending the products life cycle. Product life cycle is a natural cycle that a product passes through from launch to decline Product orientated a business that is product orientated will design a product and then try to convince consumers to buy it, e.g., computing companies will develop new technologies and then try and convince consumers to it. Productivity the level of output or sales each worker is able to achieve in a set period of time, for example output per day. Profit this is the money that a business makes. It is calculated by taking away the business costs from its revenue (the money it receives from its sales). Profit and loss account it is a financial record of the revenue and costs of the business. Profit and loss account this provides a record of all the costs and revenues of a business over a particular period. Profit maximisation the aim of the business is to make as much profit as possible for its owners. Promotion - Target market segments need to be aware of the product. Promotional pricing involves a temporary price reduction. Prospectus gives details about a companys activities and accounts. It is used to try and persuade people to buy shares when the business is floating. Prototype an early version of the product that can be used for testing. Psychological pricing this focuses on consumers perceptions of price, for example charging high prices to give the impression quality, charging £2.99 rather than £3.00 and stressing reductions in price (e.g. was £20 now only £10). Psychometric or personality tests are used to try and find the characteristics or attitudes of the applicant. The tests may indicate how the person may react to a particular situation or how they deal with colleagues and consumers. Public limited company (plc) a company with limited liability that is owned by shareholders (other companies or members of the public). Its shares are traded on the stock exchange. It displays plc after its name to warn people of its status. Public sector contains businesses that are owned by the government. Purchase order is completed by the customer when he/she decide to make a purchase. It will be sent to the business and it may contain information such as the goods that are required and their catalogue numbers and the price. Purchasing the part of the operations department responsible for providing the business with what it needs. Qualitative objectives targets linked to quality that are difficult or impossible to measure Quality Control ensures that the good or service reaches a standard that meets the customers needs. Quality defects the amount of output that can not be sold because it does not meet the quality control standards. Questionnaires are used by businesses to get feedback from customers. Quotation is given to a potential customer by a business. The quotation will let the customer know how much the business will charge for the good or service. Rate of interest is set by the Bank of England and it dictates how much businesses and consumers are charged for borrowing money. Raw materials are the things needed to produce goods and services. Raw materials these are required for the production of goods, for example, the raw material required to build a chair is wood. Raw materials and components to be used in the making of products. RDC - They support businesses with between 5 and 50 employees in manufacturing, service, tourism and some forms of retailing. The support the offer can include training courses on both rural and business skills. Receipt will be issued by the supplier as a proof of payment. Recession a period of falling demand, employment and business growth Recession the amount of goods and services sold in the economy fall. More people become unemployed as they are unable to find a job. Redundancy if the business no longer needs an employee because of a fall in demand for their product (as may occur during a recession) or a new form of technology allows the task to be done cheaper it can make the worker redundant. This form of dismissal simply means the worker is no longer needed rather than they were doing their job badly. Referee is the person who writes a reference. Referee will provide information about the applicants ability to carry out the job in a confidential letter called a reference. Reference this is a confidential letter written by a referee that provides information about the applicants ability to carry out the job. Refining this involves removing impurities or unwanted parts from a raw material in order to obtain a finished product, for example, petrol is refined from crude oil Regulators are responsible for the newly privatised businesses. They tell the businesses how much they are allowed to increase prices by and are responsible for introducing new competition into the markets. Remittance advice slip is sent with the payment for goods by the customer to the business. This allows the business to easily see who the payment is from and what it is for. Rent the amount of money it costs a business to occupy a building for a period of time. Research and development the department that is responsible for creating new products to meet the ever changing demands of the marketplace. research and development will help the business remain competitive by developing new goods and services and updating the existing ones; Respondent is a person or organisation which answers questions in a questionnaire. Retained profit is profit that the business has kept it to help with cash flow problems or to help pay for assets. Retained profits are profits used by the business for investment rather than being paid in dividends to the businesss owners. Retraining is given to workers to give them the skills to use new machinery or updated software. Revenue is equal to the total amount of money received from the businesss sales. Revenue is equal to the total amount of money that the business receives from the sales of its goods or services. It is calculated using the following formula: number of goods sold x average selling price. Revenue is the money the business receives over a period of time. Royalty is the payment made by the franchisee to the franchiser for the use of their name. It is calculated as a percentage of the franchisees sales turnover. RPI (Retail Price Index) a measure of inflation in the economy using a basket of typical household purchases Running costs these are the costs that a business must pay once it has opened. Salary is a set amount per year that employees receive each month. It demonstrates that the employers trust the employees to use their time effectively. Sale of Goods Act, 1983 and 1979 stated that products sold must be of a good quality and be able to do what they were supposed to do. Sales turnover the money that is received from the sales of goods and services. The turnover for a shop on a particular day would be the amount of money it has taken in the till that day. Secondary sector the manufacture of goods (e.g. consumer goods such as radios and capital goods such as machine tools); Shareholder approach this traditional approach suggests that the only responsibility managers have is to the owners. Shortlist when a business receives many applications for a job, it will reduce the number into a manageable number for interviews. Shortlist when a business receives many applications for a job, it will reduce the number into a manageable number for interviews. Short-term loan money is lent at an agreed rate of interest. Sickness benefits some businesses will still pay you even if do not work if you are ill. Situational interviews applicants may be asked to take part in a role play as part of their interview, for example, how to deal with an angry customer or a worker who is frequently late; Skimming when a new product is released it may be possible to start off charging a quite high price which is gradually lowered over time. Sleeping partners can be introduced to a partnership and they will have limited liability. They will only have limited liability as long as they take no active part in the running of the business. SMART objectives objectives that are specific, measurable, attainable, relevant and time- related Social aims those that are linked to service or the community Sole trader or sole proprietor; when a business is owned and controlled by one person who also takes all the decisions, responsibility and profit Span of control this describes the number of workers who are answerable directly to a superior. Specialization occurs when workers get better at a particular task because they are able to work on it repeatedly. Spreadsheets are used to store data and carry out calculations. Staff associations are set up for employees of a particular business. Stakeholder individuals or groups who have an interest in or an influence on the business Stakeholder approach this approach believes that managers should take into account the views of all the stakeholders of the business. Stakeholders these are individuals or groups that have an effect on or are affected by the business. Start up costs these are the costs that a business must pay before it can open. Statement of employment it can provide more information about the terms and conditions of the job. Statements of account this will show all of the transactions that have taken place between a customer and the business over a specific time period, usually one month. Stock is held by the business for future production or sales. There are three main types of stock: raw materials and components to be used in the making of products; partly finished goods (referred to as work in progress) that are awaiting the next stage of production; and finished goods consisting of products ready for sale. Stock take is the recording the amount and value of stocks the business is holding. Stocks these are raw material, components, semi-finished goods and finished goods. Stocks will hopefully be sold in the near future. Structure by Product the business is organised into divisions responsible for a product or customer type. Supervisor he or she is in-charge of a group of workers. A manager will be responsible for the work of the supervisors. Tall and Thin organisational structures have a small span of control with many levels of hierarchy. Tasting and testing groups of customers are asked to take part in tasting and testing trials where they will report their reactions back to the business. Team briefings meetings held by supervisors to pass information on to the people in their charge; Terms of delivery describes how the good is to be delivered and whether the business or customer pays the delivery costs. Terms of payment provides information about how and when the goods are to be paid for. Tertiary sector sales of goods (e.g. retail, wholesale, mail order, internet) and services (e.g. financial, health care, leisure and sport, internet access, transport and communications); Test marketing marketing a product available to a group of consumers to test its popularity. The European Court of Justice it enforces laws that have been passed by the European Union. The Food Safety Act, 1990 made it an offence to sell food that was not of the quality expected by the customer. The Independent Television Commission (ITC) is responsible for controlling advertising on the television and radio. The milk round this involves visiting universities and meeting final year students at universities careers fairs. Total cost is equal to fixed plus variable costs. Total costs are equal to Fixed Costs + Variable Costs. Total Quality Management (TQM) has been adopted by many companies in recent years. TQM expects all workers to check for quality at their stage of production which should prevent faulty goods reaching the end of the production line. Total Revenue is equal to the total amount of money that the business receives from the sales of its goods or services. It is calculated using the following formula: number of goods sold x average selling price. Trade Descriptions Act, 1968 prevents businesses from making false or misleading claims about a good or service. Trade union is a group of workers who act in their members best interests and try to secure the best possible working conditions. Training may take place in the workplace (on the job) or away from workplace (off the job). On the job training will normally be practical. Off the job training can be practical, but can also involve studying for qualifications at a college. Training occurs when workers learn new skills or improve the ones they already have. It will help the worker become better at their present job. TURER - Trade Union Reform and Employment Rights (TURER) Act 1993 laid down the conditions under which a statement of employment is issued Two-way communication is one where there is feedback, for example in a general discussion and during a customer complaint. Unions are set up to protect the rights of the employees and act on their behalf in a variety of situations such as pay negotiations, redundancy payments and unfair dismissal. Unlimited liability this means the owners can lose all of their personal possessions if they can not pay the debts of the business Unofficial action will occur without the unions headquarters approval. Variable costs these costs increase as output increases. Variance is the difference between the budgeted figure and the actual figure. VAT is a tax that is added to the cost of most goods. VAT is usually 17.5% on top of the price charged. When you buy goods from most shops the VAT is included in the price, but when businesses buy goods the prices they are given do not usually include VAT. VAT registration number the Value Added Tax number is unique to each business. Venture capital is the money invested in a business by venture capitalists. Venture capitalists they invest venture capital into businesses that others feel is too risky. Vertical Communication people in different levels within the organisation pass information to each other, for example manager to worker. Video communication (e.g. video conferencing, internet video link) can be used to communicate over long distances using both sound and pictures; Visibles - are exports or imports goods that we can touch and see, for example cars, bananas and computers; Voluntary Groups small businesses group together to form these to take advantage of the discounts available for bulk buying. They are an attempt to compete with larger businesses. Wage negotiations are the talks that take place between employees and employers to allow them to agree on wage and salary levels. Wages the money that workers are paid by a business. Weights and Measures Act, 1963 and 1985 made it illegal to sell goods below their stated weight. White collar unions are made up of non-manual workers. Wide and flat organisational structures have a large span of control with few levels of hierarchy. Worker co-operative - a group of workers pooling their labour and sharing the profits; Working capital is the cash that the business can get quickly. It is calculated as: current assets current liabilities. Zero budgeting is a method of budgeting where the budget is originally set to zero and managers have to justify every pound they ask for.
