In Augment’s notes, a marked term shows its definition when you hover or tap it, and each page ends with the terms it introduces.
916 terms from the Business syllabus, each defined in a sentence or two, with the part of the syllabus where you first meet it. 261 of them are HL only, and marked.
Paid advertising through mass media such as television, radio, newspapers, magazines, cinema and outdoor posters, aimed at a broad audience.
The situation in which employees are absent from work without a good reason, often measured as the percentage of working days lost, and a common sign of low motivation.
A costing method that allocates all costs, including a share of overheads, to cost centres or products using a chosen basis such as floor space, labour hours or machine hours.
The principle that submitted work is the student's own, with every idea, quotation and piece of data taken from others acknowledged; breaking it, for example by plagiarism or collusion, is malpractice.
The obligation of an employee or manager to explain and justify their decisions and results to a superior, and to accept the consequences.
The rule that a business's assets always equal its liabilities plus equity, so that total assets minus total liabilities equals equity.
The total depreciation charged on a non-current asset since it was bought, deducted from its original cost in the statement of financial position to give its net book value.
A liquidity ratio that divides current assets minus stock by current liabilities, showing whether a business can pay its short-term debts without selling its stock.
The purchase by one business of a controlling interest (more than 50% of the shares) in another business, which then becomes part of the buyer; friendly when the target's board agrees.
A task within a project that takes time and resources to complete, shown on a network diagram as an arrow labelled with its letter and duration.
The changing of the marketing mix, such as the product, price, promotion or place, to suit the tastes, culture, incomes, laws and competition of each foreign market.
Creativity that improves, modifies or finds new uses for existing products, processes or ideas, usually to meet needs that customers already recognise.
The difference between the price a business charges for its output and the cost of the inputs it buys in from other businesses to produce it.
A formal legal process in which an independent administrator manages an insolvent company and tries to rescue it, or to sell all or part of it, so that creditors recover more than in liquidation.
A difference between budgeted and actual figures that reduces profit, because actual revenue is lower than budgeted or actual cost is higher than budgeted.
An intermediary that negotiates sales or finds buyers on behalf of a producer, usually for a commission, without taking ownership of the products.
The broad, long-term goals of a business, expressed in general terms, that set out what it intends to achieve in order to fulfil its mission.
Systematic and unfair discrimination in the outputs of an automated decision-making system, usually caused by biased training data or by the design of the algorithm.
The spreading of the cost of an intangible asset with a limited life, such as a patent or licence, over that life; the intangible equivalent of depreciation.
An AO2 command term asking for an issue to be broken down to bring out its essential elements or structure, tracing causes, effects and links between them.
A visual signal, usually a board of lights above a production line, that shows when and where a worker or machine has stopped production because of a problem, so that it can be fixed at once.
A yearly meeting at which a company's directors report to its shareholders, who vote on matters such as the election of directors and the dividend.
A planning tool that classifies growth strategies by whether they involve existing or new products and existing or new markets, giving four strategies with different levels of risk.
Research that uses existing knowledge to solve a specific practical problem or to develop a particular product or process.
A formal process of reviewing an employee’s performance against agreed objectives, giving feedback and setting targets and development plans for the future.
A method of resolving a dispute in which an independent third party considers the case of both sides and decides the outcome, which is binding on both if they agree in advance.
The ability of computer systems to perform tasks that normally require human intelligence, such as recognising patterns, understanding language, learning from data and making decisions.
A computing system made of layers of connected nodes that learns to recognise patterns and make predictions by adjusting the strength (weight) of its connections as it is trained on examples.
A selection method in which candidates take part, over one or more days, in activities such as interviews, tests, group exercises, role plays and presentations while trained assessors observe them.
The descriptors, each with a range of marks, against which assessed work is judged; the business research project has seven criteria, A to G, worth 25 marks in total.
The four groups of skills the course assesses: AO1 knowledge and understanding, AO2 application and analysis, AO3 synthesis and evaluation, and AO4 the use of appropriate skills such as calculating and constructing.
Resources owned or controlled by a business that have value and will bring future benefits, such as buildings, machinery, stock, debtors and cash.
An independent examination of a business's final accounts by qualified accountants (auditors), who give an opinion on whether the accounts present a true and fair view.
Technology that adds computer-generated images or information to a live view of the real world, through a phone, tablet or glasses, such as showing how furniture would look in a room.
A leadership style in which the leader makes decisions alone, without consulting employees, and expects instructions to be followed, with close supervision and one-way communication.
The use of machines, robots and software to carry out tasks previously done by people, reducing the need for some types of labour.
The cost per unit of output, calculated as total cost divided by the quantity produced.
The average annual profit of an investment, after deducting its initial cost, expressed as a percentage of the initial cost: ((total returns − capital cost) ÷ years of use) ÷ capital cost × 100.
The revenue received per unit sold, calculated as total revenue divided by the quantity sold; equal to the price when every unit sells at the same price.
The mean value of a business’s stock over a period, found by adding opening stock and closing stock and dividing by 2.
A for-profit company certified by the non-profit B Lab as meeting high standards of social and environmental performance, accountability and transparency, with its stakeholder commitments written into its governing documents.
Integration with a business at an earlier stage of production, such as a supplier of raw materials or components, to secure and control supplies.
A research question about something an organisation has already done, asking how successful or justified it has been, so that the project ends with a justified judgment.
The legal status of an individual, or in some countries a business, declared by a court to be unable to pay their debts, after which their assets are sold to repay creditors.
A chart in which data for separate categories are shown as bars of equal width whose lengths are proportional to the values, drawn horizontally or vertically.
Factors that prevent or distort the transfer of a message between a sender and a receiver, so that it is not received or understood as intended.
Research carried out to increase knowledge and understanding, without a specific commercial product or use in mind.
A method of production in which a group of identical products is made together, with each batch completing one stage of production before moving to the next.
Dividing a market according to customers' behaviour towards a product, such as the benefits sought, usage rate, brand loyalty and the occasion of purchase.
Promotion that does not use paid mass media, such as sales promotions, direct marketing, public relations, sponsorship and personal selling, usually aimed at specific customers.
The process of comparing a business's products, processes or performance with those of the best-performing organisations, in its own or another industry, and adopting their practices in order to improve.
A systematic distortion in research results, caused by the way the sample is chosen or the data is collected, which makes the results unrepresentative of the population.
An alphabetical list, at the end of a piece of work, of the full references of every source used, so that each one can be traced.
Extremely large and complex sets of data, generated at high speed from many sources and in many formats, that need specialised technology and analytics to store, process and interpret.
Materials in a product, such as natural fibres, that are designed to biodegrade safely at the end of its life and return to the soil or water without causing harm.
The group of people elected by the shareholders to set the strategy of a company and oversee its management on their behalf.
A portfolio analysis tool that classifies a business's products or business units as stars, cash cows, question marks or dogs according to their relative market share and market growth rate.
A name, term, sign, symbol, design or combination of these that identifies the products of a business and distinguishes them from those of competitors.
The extent to which customers recognise or can recall a brand and know what it offers.
The process of strengthening a brand’s image and reach over time, for example by improving its products, investing in promotion and extending the brand to new products or markets.
The set of ideas, feelings and associations that customers hold about a brand, such as its quality, reliability, style or values.
The extent to which customers repeatedly buy one brand in preference to competing brands, even when rivals offer lower prices or new alternatives.
The financial worth of a brand, based on the extra revenue and profit it is forecast to earn because customers recognise and prefer it.
The process of creating, developing and managing a distinctive name, design and image for a product so that customers can identify it and develop positive associations with it.
A decision-making tool that uses fixed costs, variable costs and selling price to find the output at which total revenue equals total cost, and the profit or loss at other outputs.
A graph showing a business's fixed cost, total cost and total revenue lines against output, on which the break-even point is where the total revenue and total cost lines intersect.
The level of output at which total revenue equals total cost, so that the business makes neither a profit nor a loss; fixed costs divided by contribution per unit.
The value of sales at which total revenue equals total cost; the break-even quantity multiplied by the selling price.
A quantitative financial plan, agreed in advance, that sets out the expected revenues and costs of a business or a part of it for a future period.
The manager who is responsible for a particular budget and accountable for explaining any differences between its budgeted and actual figures.
The minimum level of stock a business aims to hold at all times as a safety margin against late deliveries or unexpectedly high usage.
A BCG strategy of investing heavily in a product, usually a question mark, to increase its market share so that it becomes a star.
An organisational system that relies on formal rules, written procedures, paperwork and a clear hierarchy of authority, which can make decision-making slow and inflexible.
An organisation that uses resources such as land, labour, capital and enterprise to produce goods or services that meet the needs and wants of customers.
A wealthy individual who invests their own money in a small, new business with high growth potential, usually in return for a share of the ownership.
The ability of an organisation to keep its essential activities running, or restore them quickly, during and after a disruption; a business continuity plan sets out how this will be done.
The four main areas of activity within a business: human resources, finance and accounts, marketing, and operations, which depend on each other.
A written document that sets out the aims of a new or existing business, the strategies it will use to reach them, and the resources and finance it needs, usually with forecasts for the next three to five years.
A report of at most 1,800 words that applies business management tools and theories to a real issue facing one organisation, using one key concept as a lens and three to five supporting documents.
A market in which businesses sell goods or services to other businesses, such as machinery, raw materials or accounting services, rather than to final consumers.
A market in which businesses sell goods or services directly to individual consumers for their own use, such as food, clothing or streaming subscriptions.
An AO4 command term asking for a numerical answer with the relevant stages of the working shown.
The maximum output a business can produce in a given period with its existing resources, such as its premises, machinery and workforce.
The percentage of a business's productive capacity that is actually being used in a period: actual output divided by productive capacity, multiplied by 100.
A factor of production consisting of man-made resources, such as machinery, tools, vehicles and buildings, used to produce other goods and services; its reward is interest.
The total long-term finance invested in a business, equal to its non-current liabilities plus equity.
Spending on non-current assets, such as buildings, machinery and vehicles, that will be used in the business for more than one year.
The output produced per unit of capital input, such as per machine, per machine hour or per dollar of capital, in a given period.
Describes production that uses a high proportion of machinery and equipment relative to labour, so that capital costs make up a large share of total costs.
A written account of a real or fictional organisation and the issues it faces, used as the context for exam questions, especially the unseen case in Paper 1.
The money a business holds in notes and coins and in its bank accounts at a given date; the most liquid current asset.
A product with a high relative market share in a slow-growing market, which generates more cash than it needs and so funds other products in the portfolio.
The movement of money into and out of a business over a given period of time.
A statement of the expected cash inflows and cash outflows of a business, month by month, over a future period, showing the net cash flow and closing balance of each month.
Money received by a business in a period, for example from cash sales, payments by debtors, loans, owners' capital or the sale of assets.
Money paid out by a business in a period, for example for stock, wages, rent, interest, tax, loan repayments or the purchase of non-current assets.
A relationship in which a change in one variable directly brings about a change in another; correlation between two variables does not by itself show causation.
A mark that a manufacturer places on a product to show that it meets the European Union's safety, health and environmental protection requirements, needed for many products to be sold in the European Economic Area.
An organisational structure in which most decision-making authority is kept by senior managers at the top of the hierarchy or at head office.
The formal line of authority through which instructions pass down an organisation, and information and accountability pass up, from the top to the bottom of the hierarchy.
The stages a product passes through, from the extraction of raw materials in the primary sector through processing in the secondary sector to sale in the tertiary sector, with value added at each stage.
A point in a decision tree, drawn as a circle, from which two or more possible outcomes follow that are outside the decision maker's control, each with a probability.
A key concept: the process by which businesses respond to a dynamic environment of new competitors, technology, consumer tastes and regulation by adapting their objectives, strategies and operations.
A person or group, from inside or outside an organisation, responsible for leading, supporting and communicating a change.
The planning, introduction and support of changes in an organisation, such as to its structure, technology, processes or culture, so that they achieve their aims with as little disruption and resistance as possible.
The time during which machinery is stopped and reset to switch production from one product or batch to another, so that no output is made.
A non-profit organisation registered as existing for purposes that benefit the public, which usually gives it tax advantages in exchange for strict rules on how it uses its funds.
A way of creating value and earning revenue that keeps products, components and materials in use for longer and recovers their value, reducing the use of new resources and the creation of waste.
An economic system in which products, components and materials are kept in use for as long as possible and at their highest value, through reuse, repair, remanufacturing and recycling, so that waste is designed out.
A circular business model in which a business replaces new, finite raw materials with renewable, bio-based or recovered materials as the inputs to its products.
A short reference in the body of a text, such as the author and year or a supporting document number, that links an idea or piece of data to its full entry in the bibliography.
A question that offers respondents a fixed set of possible answers, such as yes/no, multiple choice or a rating scale, so that results are easy to count and compare.
The amount of cash a business holds at the end of a period, found by adding the period's net cash flow to its opening balance.
The delivery of computing services, such as data storage, processing power and software, over the internet from remote data centres owned by a provider, usually paid for according to use.
A sampling method in which the population is divided into areas or groups, some of these clusters are chosen at random, and people are sampled only within the chosen clusters.
A document that sets out the ethical principles and rules of behaviour that an organisation expects its employees and managers to follow.
An asset that a borrower pledges to a lender as security for a loan, which the lender can take and sell if the loan is not repaid.
The process of negotiation between an employer or employer association and trade unions or employee representatives to agree pay, working conditions and other terms of employment for a group of employees.
A word or phrase at the start of an exam question, such as define, explain or evaluate, that tells the student what kind of answer is wanted and how deep it must go.
An AO2 command term asking for a judgment based on a given statement or on the result of a calculation.
A payment to an employee, usually a percentage of the value of the sales they make, paid in addition to or instead of a basic salary.
The transfer of information, ideas or instructions from a sender to a receiver through a medium, so that the message is received and understood as intended.
The stages through which a message passes: a sender encodes it, sends it through a medium to a receiver who decodes it, and feedback returns, with noise able to interfere at every stage.
An AO3 command term asking for both the similarities and the differences between two or more items, referring to each of them throughout.
An advantage over rivals that allows a business to earn higher profits than the industry average, by offering lower costs or greater value that customers are willing to pay for.
Setting a price based on the prices charged by competitors for similar products, at the same level or slightly above or below them.
The combined market share of a stated number of the largest businesses in a market, such as the three-firm concentration ratio, used to measure market concentration.
A method of resolving a dispute in which an independent third party helps the employer and employees, or their representatives, to communicate and reach their own voluntary agreement.
A merger or acquisition between businesses in unrelated industries, usually to spread risk across different markets.
An AO4 command term asking for information to be displayed in a diagrammatic or logical form, such as a break-even chart or an organisation chart.
The person who uses or consumes a good or service, who may or may not be the customer who paid for it.
A cooperative owned by its customers, who receive a share of the surplus, usually in proportion to how much they buy.
A description of the typical customer in a target market, covering characteristics such as age, gender, income, location, lifestyle, interests and buying habits.
The process of preparing in advance for unexpected events that could disrupt a business, by identifying possible risks and deciding how the business would respond to each one.
A legal agreement between an employer and an employee setting out the terms and conditions of the job, such as duties, hours, pay, holidays and the notice period.
In Handy's shamrock organisation, the outside individuals and firms contracted to carry out specialist or non-core work, paid for results rather than time.
The difference between sales revenue and variable costs, which is used first to pay a business's fixed costs and then provides its profit.
A costing method that charges only variable costs to products and treats fixed costs as a total for the business, so that products and decisions are judged by their contribution.
The selling price of one unit minus its variable cost per unit; the amount each unit sold adds towards fixed costs and then profit.
Setting a price that covers the variable cost per unit and makes a contribution towards fixed costs and profit, without each price having to cover full average cost.
A sampling method in which the researcher selects the people who are easiest and quickest to reach, such as passers-by or friends, without trying to represent the population.
A business owned and democratically controlled by its members (its workers, customers or suppliers), who usually have one vote each and share the surplus according to their use of the business.
A legal right that protects the owner of an original creative work, such as writing, music, film, software or art, from having it copied or used without permission for a set period.
The extent to which two variables are related, so that a change in one is associated with a change in the other; it can be positive, negative or absent, and strong or weak.
A number between −1 and +1 (Pearson’s r) that measures the direction and strength of the linear relationship between two variables; values near ±1 show a strong relationship and values near 0 a weak one.
A department, section, product, location or activity of a business to which costs can be directly attributed, but which does not earn revenue of its own.
A generic strategy in which a business aims to have the lowest costs in serving a narrow segment of a market.
A generic strategy in which a business aims to have the lowest costs in a broad market, so that it can earn above-average profits at prices similar to or below rivals'.
The direct cost of producing or buying the goods a business sold during an accounting period, calculated as opening stock plus purchases minus closing stock.
The total cost of buying a given quantity of a product or component from an external supplier: the price per unit multiplied by the quantity.
The total cost of producing a given quantity of a product or component in-house: total fixed costs plus average variable cost multiplied by the quantity.
A pricing method that sets the price by adding a percentage mark-up to the average cost of producing each unit: price = unit cost × (1 + mark-up %).
An approach to design and manufacturing in which products are designed so that all their materials can be safely returned to nature or recovered and reused at the same quality, creating no waste.
The use of accounting methods, estimates and judgments that may be legal but are chosen to make a business's financial performance or position look better than it really is.
A key concept: generating new ideas, or seeing existing ideas from new perspectives, in products, processes and problem-solving.
An efficiency ratio that measures the average number of days a business takes to pay its suppliers: creditors divided by cost of sales, multiplied by 365.
Suppliers and other organisations to which a business owes money for goods or services bought on credit; trade creditors are shown as a current liability.
An unexpected event or situation that threatens to cause serious harm to a business, its stakeholders or the public, and that needs an urgent response.
The steps an organisation takes to respond to a crisis once it has happened, to limit harm to people, operations, finances and reputation and return to normal as quickly as possible.
An activity on the critical path, with zero total float, so that any delay to it delays the completion of the whole project.
The essential physical and digital systems, such as energy, communications, data centres and payment networks, whose disruption would seriously harm the economy, public safety or the functioning of society.
The sequence of activities through a network that takes the longest time, which sets the project's minimum duration; any delay to an activity on it delays the whole project.
A project planning technique that uses a network diagram of activities, durations and dependencies to find the minimum time needed to complete a project and the activities that cannot be delayed.
Raising finance from a large number of people, each contributing a relatively small amount, usually through an online platform, in return for a reward, shares, interest or nothing.
A systematic assessment of an organisation’s culture, including its values, norms, behaviours, leadership style and reward systems, used to identify cultural differences and plan change.
The process by which local cultures, tastes and traditions become more alike across countries as global brands and media from multinational companies spread.
The ability of a person or organisation to understand people from different cultures and to adapt behaviour, communication and decisions so as to work effectively with them.
A conflict that arises when groups with different values, beliefs and ways of working must work together, for example after a merger or acquisition, during rapid growth or under a new leader.
The running total of a project's net cash flows from year 0 onwards, showing at each point how much of the initial cost has been repaid.
Assets a business expects to turn into cash or use up within one year, mainly cash, debtors and stock.
Debts a business must pay within one year, such as bank overdrafts, trade creditors and short-term loans.
A liquidity ratio that divides current assets by current liabilities, showing whether a business has enough short-term assets to cover its short-term debts.
A person or organisation that buys a good or service from a business; the customer is not always the person who uses it.
A marketing scheme that rewards customers for repeat purchases, through points, discounts, member prices or other benefits, to encourage loyalty and to collect data on their buying behaviour.
Criminal activity carried out using computers, networks or the internet, or directed at them, such as hacking, data theft, phishing, fraud and ransomware attacks.
The technologies, processes and practices that protect computers, networks, programs and data from attack, damage or unauthorised access, including staff training and access controls.
A movement of data above or below the trend linked to the business cycle of booms and recessions, usually lasting several years and less regular than seasonal variation.
The process of examining, cleaning, transforming and modelling data to discover useful information, draw conclusions and support decision-making, ranging from descriptive to predictive and prescriptive analysis.
A dedicated facility that houses computer servers, data storage and networking equipment, with the power, cooling and security needed to process and store data for one or many organisations.
The process of analysing large data sets with statistical and computational techniques to discover hidden patterns, relationships and trends that can inform business decisions.
A central store that combines data copied from many operational databases and other sources, organised for analysis and reporting rather than for day-to-day transactions.
An organised collection of structured data, stored electronically, that can be easily searched, sorted, updated, combined and analysed, usually held in linked tables of records and fields.
A long-term loan certificate (bond) issued by a company to investors, paying a fixed rate of interest and repaid on a stated date.
An efficiency ratio that measures the average number of days a business takes to collect money from its credit customers: debtors divided by total sales revenue, multiplied by 365.
Customers who have bought goods or services on credit and still owe the business money; shown as a current asset in the statement of financial position.
An organisational structure in which decision-making authority is spread from senior managers or head office to lower levels of the hierarchy, departments or branches.
A theory that people are most motivated, and most likely to be intrinsically motivated, when their basic psychological needs for autonomy, competence and relatedness are satisfied.
A point in a decision tree, drawn as a square, at which the decision maker chooses between two or more options.
A diagram that sets out the options available in a decision, the possible outcomes of each with their probabilities and financial results, so that the expected value of each option can be calculated and compared.
The final stage of the product life cycle, in which sales and profits fall steadily, usually because tastes have changed or better products have replaced it.
A legal agreement between partners setting out the terms of the partnership, such as each partner's capital, the sharing of profits and losses, and how disputes are settled.
The percentage of total output that is faulty and fails to meet the required quality standard: defective units divided by total units produced, multiplied by 100.
An AO1 command term asking for the precise meaning of a word, phrase or concept, in a way that would be accepted without any example.
The decline in the relative importance of the secondary (manufacturing) sector in an economy, measured by its share of output or employment.
The removal of one or more levels of hierarchy from an organisational structure, usually layers of middle management, which widens the remaining spans of control.
The passing of authority to carry out a task or make a decision from a manager to a subordinate, while the manager keeps overall responsibility for the outcome.
A qualitative forecasting method in which a panel of experts answers questionnaires anonymously over several rounds, seeing a summary of the group’s answers after each round, until their forecasts converge.
The separation of part of a company into a new, independent company, usually with its own shares given to the original company's shareholders.
A leadership style in which the leader involves employees in decision-making by sharing information, discussing options and taking account of their views, with two-way communication.
A change in the size or structure of a population, such as its age profile, birth rate, life expectancy or ethnic composition.
Dividing a market according to measurable population characteristics such as age, gender, income, occupation, family size and ethnicity.
A reduction in an employee’s willingness to work hard or well, often caused by poor management, unfair treatment, job insecurity or unrewarding work.
A relationship between two tasks or activities in which one cannot start until another, its predecessor, has been completed.
The variable whose value is thought to depend on another variable, plotted on the vertical y-axis of a scatter diagram, such as sales revenue.
The fall in the value of a non-current asset over its useful life because of wear and tear, obsolescence or the passage of time, recorded as an expense in the accounts.
An AO1 command term asking for a detailed account of something, giving its main features without needing reasons or a judgment.
Numerical measures and charts that summarise and present the main features of a set of data, such as its typical value (average) and its spread.
A payment system, proposed by Taylor, in which workers who reach a standard output are paid a higher rate for every unit produced than workers who fall below the standard.
A generic strategy in which a business offers distinctive products to a narrow segment of a market whose special needs broad-market rivals do not fully meet.
A generic strategy in which a business aims to offer products seen as unique across a broad market, in ways customers value enough to pay a price premium.
The use of digital technology to standardise, measure and control work in detail, breaking jobs into simple tasks, setting targets and monitoring each worker continuously, as in Taylor’s scientific management.
A cost that can be clearly identified with and allocated to a particular product, service or department, such as the raw materials or labour used to make it.
Promotion that communicates directly with individual customers, for example by email, text message, post or app notification, usually using customer data.
The number by which a future cash flow is multiplied to find its present value, which depends on the discount rate and the number of years until the cash flow arrives.
The process of converting future cash flows into their present values, by reducing them to allow for the time value of money.
An AO3 command term asking for a considered and balanced review of a range of arguments or factors, ending in a clear conclusion supported by evidence.
Increases in average cost (cost per unit) that occur when a business, or an industry in an area, grows beyond a certain scale of operation.
The termination of an employee's contract by the employer because of the employee's conduct, capability or performance; often called being fired or sacked.
An innovation that creates a new market or enters the bottom of an existing one with a simpler, cheaper or more convenient product, and improves until it displaces established products and firms.
An AO2 command term asking for the differences between two or more concepts or items to be made clear.
The route by which a product passes from the producer to the final consumer, including any intermediaries involved.
A growth strategy in which a business sells new products in new markets; it is related when the new activity is linked to the existing business and unrelated when it is not.
A BCG strategy of selling or closing a product or business unit, usually a dog or a weak question mark, to free resources for more promising parts of the portfolio.
The part of a company's profit for the period that is paid out to shareholders, usually as an amount per share.
The situation in which the shareholders who own a company are not the managers who control its day-to-day decisions.
A product with a low relative market share in a slow-growing or declining market, which usually generates little cash and may be a candidate for withdrawal.
The internal and external factors that push an organisation towards a proposed change, such as new technology, competition, customer demand, cost savings or support from employees.
An activity with zero duration, drawn as a dashed arrow on a network diagram, which shows a dependency that ordinary arrows cannot show and uses no time or resources.
A pricing method in which the price of a product changes frequently, often automatically, according to current demand, supply and other market conditions.
The buying and selling of goods and services over the internet, through websites, apps and online marketplaces.
The earliest time at which an activity can begin, given that all the activities it depends on must first be completed.
Changes in the economy that affect a business, such as economic growth, inflation, interest rates, exchange rates, unemployment, taxation and consumer incomes.
The ability of an organisation to operate profitably and efficiently over the long term, using its resources in ways that allow it to survive, invest and grow.
The reductions in average cost (cost per unit) that a business gains as it increases its scale of operation.
An approach to managing change in which managers explain the reasons for and effects of a change to employees before and during its introduction, so that they understand and accept it.
The extent to which an organisation achieves its intended objectives, such as producing what customers want, at the quality they expect and when they need it.
How well an organisation uses its resources to produce output, measured by the inputs or cost needed for each unit of output, such as cost per unit or output per worker.
A ratio that measures how well a business manages its assets and liabilities, such as how quickly it sells stock, collects debts and pays suppliers, and how much it relies on long-term debt.
The transfer of messages using digital technology, such as email, intranets, instant messaging, collaboration platforms, video conferencing and social media.
The use of technology by an employer to collect data on employees’ activities, location, communications or output, in order to manage performance, productivity, safety or security.
The involvement of employees in decision-making in their organisation, through methods ranging from consultation and suggestion schemes to works councils and representation on the board.
An employee elected or appointed to represent the views and interests of colleagues in discussions with management, such as a union representative (shop steward) or a works council member.
An organisation of employers, usually in the same industry, that represents their shared interests, advises members on employment matters and may negotiate with trade unions on their behalf.
Giving employees the authority, resources and trust to make decisions about their own work and to solve problems without referring them to a manager.
A person who sets up a business, organising the factors of production and taking the financial risk of doing so in the hope of making a profit.
The process of identifying a business opportunity and organising resources to exploit it while accepting the risks involved; also called enterprise, the fourth factor of production.
Changes in the natural environment, and in concern for it, that affect a business, such as climate change, extreme weather, the supply of natural resources, pollution and waste.
Operating in a way that does not damage the natural environment or use up natural resources faster than they can be replaced, for example by cutting emissions, waste and pollution.
The owners' stake in a business, made up of the capital they have put in (share capital for a company) and the profits kept in the business (retained earnings); equal to net assets.
A theory that employees compare the ratio of their outputs (rewards) to inputs (contributions) with that of a referent, and that perceived unfairness reduces motivation.
Moral expectations about how a business should behave that go beyond the law, such as fair treatment of workers and suppliers, honest marketing and responsibility towards the environment and communities.
Targets based on moral principles, such as fair treatment of workers and suppliers or care for the environment, that a business pursues even when the law does not demand them.
The moral principles that guide the behaviour of a person or group, used to judge whether a decision or action is right or wrong.
A form of observation in which researchers study people in their own everyday surroundings, such as homes or shops, over a period of time, to understand how and why they behave as they do.
An AO3 command term asking for an appraisal that weighs up strengths and limitations and reaches a supported judgment.
An AO3 command term asking for an argument or concept to be considered in a way that uncovers its assumptions and the interrelationships within the issue.
The price of one currency expressed in terms of another currency, for example £1 = US$1.25.
A short overview at the start of a business plan that states the business idea, its market, its management, its main financial forecasts and the finance requested, so that a reader can judge the plan quickly.
A theory that effort depends on the belief that effort leads to performance (expectancy), that performance leads to a reward (instrumentality), and on how much the reward is valued (valence).
The weighted average financial result of an option, found by multiplying the value of each possible outcome by its probability and adding the results.
The indirect costs of running a business over an accounting period, such as salaries, rent, marketing, insurance and depreciation, deducted from gross profit in the statement of profit or loss.
An AO2 command term asking for a detailed account that includes reasons or causes, showing how and why something happens, applied to the context.
An approach to managing change in which managers force employees to accept a change by using their authority and the open or implied threat of negative consequences.
Selling goods or services produced in the home country to customers in other countries, either directly or through an intermediary such as an agent or distributor.
A 10-mark exam answer in continuous prose that applies tools and theories to the case, weighs arguments and reaches a justified conclusion or recommendation, marked against markbands.
A method used to lengthen the life of a product by preventing or delaying the decline in its sales, such as new markets, new uses, repackaging or product improvements.
Increases in average cost that a business suffers because its industry has grown too large in an area, for example through congestion or rising land and labour costs.
Reductions in average cost that a business gains from the growth of its industry, often in one location, rather than from its own growth.
The factors outside an organisation that affect its activities and performance but that it cannot directly control, such as economic conditions, laws, technology and social trends.
Growth achieved by joining with, buying or cooperating with another business, through mergers, acquisitions, takeovers, joint ventures, strategic alliances or franchising; also called inorganic growth.
Filling a vacancy with a person from outside the organisation, for example through advertisements, online platforms, agencies or headhunting.
Money raised from people or organisations outside the business, such as shareholders, banks, suppliers, investors and other lenders.
Individuals and groups outside an organisation who are affected by, or can affect, its activities, such as customers, suppliers, government, financiers, the local community and pressure groups.
Extending a trend or relationship found in past data beyond the range of those data in order to predict future or unobserved values.
The drive to do an activity in order to gain a separate outcome, such as pay, a bonus or praise, or to avoid a punishment.
An approach to managing change that helps employees adapt to it through training, counselling, time and practical resources.
A method of improving cash flow in which a business sells its debtors (unpaid customer invoices) to a specialist finance company for immediate cash, in return for a fee.
The four types of resource a business uses to produce goods and services: land, labour, capital and enterprise.
A branding approach in which one brand name is used for all or most of a business’s products.
A difference between budgeted and actual figures that increases profit, because actual revenue is higher than budgeted or actual cost is lower than budgeted.
The five activities that, according to Henri Fayol (1916), make up the work of every manager: planning, organising, commanding, coordinating and controlling.
The response of the receiver to a message, which confirms to the sender whether the message has been received and correctly understood.
The financial statements a business prepares at the end of an accounting period, mainly the statement of profit or loss and the statement of financial position, to show its performance and financial position.
The money a business obtains and manages to pay for its activities; also the business function responsible for raising, planning, recording and controlling that money.
Reductions in average cost from raising finance more cheaply, such as borrowing at lower interest rates, because lenders see a large business as less risky.
The section of a business plan that sets out the start-up costs, the sources of finance, and forecasts of sales, cash flow and profit, often with a break-even analysis.
Payments to employees in money, or with a monetary value, such as salaries, wages, commission, bonuses, shares and fringe payments.
The benefit a business can gain by being first to enter a new market or launch a new type of product, such as brand recognition, customer loyalty, economies of scale and control of patents.
A cost that does not change with the level of output in the short run, such as rent, insurance and salaries; it must be paid even if output is zero.
An organisational structure with few levels of hierarchy and wide spans of control, giving a short chain of command.
A working arrangement in which employees choose their start and finish times within agreed limits, usually working a set total of hours and being present during fixed core hours.
A budget that is adjusted to the actual level of output or sales, so that costs which vary with output are compared with what they should have been at that level.
In Handy's shamrock organisation, the part-time, temporary and seasonal workers hired as demand requires, usually with less security and fewer benefits than core staff.
Any working pattern other than fixed full-time hours at a fixed workplace, such as part-time work, job sharing, compressed hours, flexi-time, teleworking or hybrid working.
The amount of time by which an activity can be delayed without delaying the whole project (total float) or the next activity (free float); critical activities have zero float.
A primary research method in which a small group of people, led by a moderator, discusses its opinions of and attitudes to a product, brand, advertisement or idea.
A generic strategy in which a business targets a narrow segment of a market and aims to serve it better than broad-market rivals, through lower cost or differentiation.
Describes a multinational company that can move its operations between countries easily, at low cost, in search of lower costs or better incentives.
A decision-making and change-management tool, developed by Kurt Lewin, that identifies and scores the forces supporting and opposing a proposed change, to judge whether it is likely to succeed and how to manage it.
Investment by a business from one country in productive assets in another country, such as building or buying a factory, in which it has a lasting controlling interest.
Communication through the official channels of an organisation, following the chain of command or agreed procedures, such as reports, minutes of meetings, official emails and announcements.
An ongoing review of an employee’s performance that gives regular feedback and support to help them improve and develop, rather than to judge them.
The sheet provided in the exam that lists the ratio, investment appraisal and (HL) capacity and productivity formulas; other formulas must be learnt.
Integration with a business at a later stage of production, closer to the final customer, such as a manufacturer buying a retailer.
A research question about a decision an organisation still faces, asking what it should do, so that the project ends with a justified recommendation.
An agreement in which a franchisor sells a franchisee the right to trade under its brand name, using its products and business methods, in return for fees and royalties.
A business or person that buys a franchise and runs an outlet under the franchisor's brand, following its rules and paying fees and royalties.
The business that owns a brand and business model and sells franchises, giving franchisees the right to trade under its name in return for fees and royalties.
The time by which an activity can be delayed without delaying the earliest start of the following activity, calculated as the next activity's earliest start time minus duration minus this activity's earliest start time.
Benefits in addition to wages or salary that have a monetary value, such as a company car, health insurance, pension contributions, staff discounts or subsidised meals.
A contract of employment for a full working week, typically about 35 to 40 hours, usually permanent and with full employment benefits.
A horizontal bar chart that shows the tasks of a project against a time scale, with the start, duration and end of each task, used to plan a project and monitor its progress.
An area of a market, often shown on a position map, where customer needs exist but no product or brand is currently positioned to meet them.
The percentage of a business’s capital employed that is financed by non-current liabilities, showing how far it relies on long-term borrowing rather than equity.
The European Union law, in force since 2018, that regulates how organisations collect, store and use personal data, gives individuals rights over their data, and allows large fines for breaches.
Dividing a market according to the location of customers, such as country, region, urban or rural area, or climate.
The ease with which workers can move from one location to another to take up work, which depends on factors such as housing costs, family ties, language and transport.
A labour market in which individuals work on short-term tasks or projects, often arranged through digital platforms and paid per task, rather than in permanent employment.
A supply chain in which sourcing, production and distribution take place in several countries, linking suppliers, producers and customers across national borders.
The growing integration and interdependence of the world's economies through increased trade in goods and services, flows of capital, people, technology and ideas across borders.
A strategy that combines a standardised global brand and core product with adaptation of parts of the marketing mix to local tastes, culture and conditions; often summed up as “think global, act local”.
A form of industrial action in which employees deliberately reduce the pace of their work, lowering output while remaining at work.
Physical, tangible products, such as cars, clothing and food, that can be stored, transported and transferred from one owner to another.
An intangible asset that arises when one business buys another for more than the fair value of its net assets; the excess paid for reputation, customers, staff and brands.
A sum of money given by a government or public body to a business for a specific purpose, which does not have to be repaid if its conditions are met.
The informal and unofficial network of communication between employees through which information and rumours spread quickly across an organisation.
A form of foreign direct investment in which a business builds new operations, such as a factory, office or store network, in a foreign country rather than buying an existing business.
The practice of giving a misleading impression of how environmentally friendly a business, product or activity is, in order to improve its image or sales.
The profit a business makes from trading before its expenses are deducted, calculated as sales revenue minus cost of sales.
Gross profit expressed as a percentage of sales revenue, showing how much of each $1 of sales is left after paying the cost of sales.
The stage of the product life cycle in which sales rise rapidly, unit costs fall, the product becomes profitable and competitors begin to enter the market.
Unconventional, often low-cost promotion that uses surprise and creativity in public or online spaces to attract attention and get people talking about a brand.
Charles Handy’s model of four types of organisational culture, each named after a Greek god: power culture (Zeus), role culture (Apollo), task culture (Athena) and person culture (Dionysus).
Charles Handy's model of an organisation made up of three groups of workers: a permanent professional core, a contractual fringe of outside suppliers, and a flexible labour force.
A BCG strategy of cutting investment in a product, usually a cash cow or weak dog, to maximise the cash it generates in the short term, even if its market share falls.
The direct approach of a person working for another organisation, usually by a specialist recruiter, to persuade them to apply for a senior or specialist job.
A theory that the factors causing job satisfaction (motivators) differ from those causing dissatisfaction (hygiene factors), so removing dissatisfaction does not by itself motivate employees.
The levels of goals in an organisation, from its vision and mission through its aims and strategic objectives to tactical and operational objectives, each level supporting the one above.
A model that compares national cultures on six scales: power distance, individualism, masculinity, uncertainty avoidance, long-term orientation and indulgence, with each country scored roughly from 0 to 100.
A BCG strategy of investing just enough in a product, usually a star or strong cash cow, to keep its current market share.
The country in which a multinational company has its headquarters and where it is legally registered.
Communication between people at the same level of hierarchy, often in different departments, in order to coordinate their work; also called lateral communication.
A merger or acquisition between businesses in the same industry and at the same stage of production, such as two car makers.
A country in which a multinational company from another country has set up operations, such as a factory, office or sales subsidiary.
The management of people in an organisation, including planning the workforce, recruiting, selecting, training, appraising, rewarding, retaining and releasing employees so that the organisation meets its objectives.
A competitive strategy that combines relatively low costs and prices with meaningful differentiation, aiming to offer customers better value than both cost leaders and premium rivals.
A flexible working arrangement in which employees divide their working time between the employer's workplace and working remotely, usually from home.
Aspects of a job’s context, such as pay, working conditions, job security, supervision and company policy, that cause dissatisfaction if inadequate but do not motivate when improved.
An AO1 command term asking for one answer to be picked out from a number of possibilities, often from the case or the data.
The movement of people into a country to live and work there; emigration is the movement of people out of a country.
The legal process of registering a business as a company, which gives it a legal identity separate from that of its owners.
A method of setting budgets in which last period's budget or actual results are used as the starting point and adjusted by a percentage or amount for expected changes.
A series of small improvements to an existing product, service or process that makes it better, cheaper or more convenient without changing its basic nature or the market it serves.
The variable that is thought to influence another variable, plotted on the horizontal x-axis of a scatter diagram, such as advertising spending.
A cost that cannot be linked to a single product or service because it is shared by the whole business or several products, such as head office rent, administration and insurance.
The extent to which people see themselves as independent individuals responsible for themselves (individualism) or as members of tightly knit groups that look after them in exchange for loyalty (collectivism).
Training given to new employees to introduce them to the organisation, its culture, policies and procedures, their colleagues and their job.
The extent to which a society allows relatively free gratification of desires related to enjoying life and having fun (indulgence) rather than controlling them through strict social norms (restraint).
Collective measures taken by employees, or by employers, to put pressure on the other side in a dispute, such as an overtime ban, a work-to-rule, a go-slow, a strike or a lockout.
A geographical concentration of interconnected businesses, suppliers and related institutions in one industry, giving each firm access to shared skilled labour, specialist suppliers and knowledge.
A system in which employees share in the control and decision-making of their organisation, for example through elected representatives on the board of directors.
The relationship between the management of an organisation and its employees and their representatives, including how pay and conditions are agreed and how conflicts between them are handled.
A sustained rise in the general level of prices in an economy over time, which reduces the purchasing power of money.
A form of promotion in which a business pays or rewards individuals with a large or loyal social media following to feature or recommend its products.
A visual presentation that combines charts, icons, short text and key figures to communicate information quickly to a general audience.
Communication outside the official channels of an organisation, through personal and social contacts between employees, such as conversations at breaks, private message groups and the grapevine.
The situation in which a person receives more information than they can process effectively, so that important messages are missed or decisions are delayed.
The agreement of a person to take part in research after being told clearly who is carrying it out, what it involves and how their information will be used.
The first sale of a company's shares to the general public, after which the shares are listed and traded on a stock exchange.
The successful commercial introduction of a new or improved good, service or process, or of a new way of doing business, that creates value for customers and the business.
Creativity that produces completely new products, processes or ideas, often meeting needs that customers were not aware of before.
The resources a business uses in production, including the factors of production and bought-in materials, components and services.
The financial situation in which a person or business cannot pay its debts as they fall due, or in which its liabilities are greater than its assets.
Bringing a business activity that was previously outsourced back in-house, so that it is carried out by the business's own employees and resources.
Non-current assets that have no physical form but bring a business value, such as patents, copyrights, trademarks, licences, brands and goodwill.
Creations of the mind, such as inventions, designs, brand names, software and artistic works, that can be owned and legally protected so that others cannot use them without permission.
The price paid for borrowing money, expressed as a percentage of the amount borrowed per year; for a lender or saver, the reward for lending.
A business that operates between the producer and the final consumer in a distribution channel, such as a wholesaler, retailer or agent.
The coursework component of IB Business Management, marked by the teacher and moderated by the IB; at SL and HL it is the business research project, worth 25 marks.
Increases in average cost caused by a business's own size, mainly through problems of communication, coordination, control, motivation and bureaucracy.
Reductions in average cost that a business gains from increasing its own scale of operation, such as technical, purchasing, financial, managerial, marketing and risk-bearing economies.
Growth achieved by a business expanding its own operations with its own resources, for example by selling more, launching new products or opening new outlets; also called organic growth.
Filling a vacancy with an existing employee of the organisation, for example by promotion or redeployment.
Money raised from within the business or from its owner, such as personal funds, retained profit and the sale of assets.
Stakeholders who are members of the organisation, such as its employees, managers, directors and owners or shareholders.
The marketing of goods and services across national borders, including choosing which foreign markets to enter, how to enter them and how far to adapt the marketing mix for each one.
The network of physical devices, such as machines, vehicles, meters and wearables, embedded with sensors, software and connectivity that collect and exchange data automatically over the internet.
Estimating a value within the range of the observed data, for example by reading from a line of best fit between known points.
A measure of spread equal to the upper quartile minus the lower quartile, showing the range of the middle 50% of a set of ordered data.
A primary research method in which an interviewer asks an individual respondent questions directly, allowing answers to be explored in depth through follow-up questions.
An employee who uses entrepreneurial skills to develop new products, processes or ventures within an existing organisation, which provides the resources and bears the financial risk.
The drive to do an activity because it is interesting, enjoyable or meaningful in itself, rather than for a separate reward.
The first stage of the product life cycle, when a product is launched: sales are low, unit costs and promotion spending are high and the product usually makes a loss.
An approach to management decision-making based on a manager’s experience, instinct, feelings and judgment rather than on systematic analysis of data.
The creation of a new product, device or process, or of a new idea for one, that did not exist before; it becomes an innovation only when brought successfully into use.
Spending on capital assets, such as machinery, buildings or technology, now in the expectation of earning returns over several years in the future.
The use of quantitative techniques to assess whether an investment project is financially worthwhile, by comparing its expected returns with its cost, and to compare competing projects.
A benefit offered by a government, such as a tax holiday, a grant or cheap land, to persuade a business, often a multinational company, to invest in its country or region.
The international standard for quality management systems, setting requirements for how an organisation plans, controls and continuously improves its processes to meet customer needs; organisations are certified by independent bodies.
The international standard for environmental management systems, requiring an organisation to identify and control its environmental impacts, meet legal requirements and continuously improve its environmental performance.
Specialist or technical language used by a particular profession or group, which people outside that group may not understand.
A principle of the Toyota Production System in which machines or workers stop production as soon as an abnormality appears, so that faults are fixed at their source and defective output is not passed on.
The process of studying a job to identify its tasks and responsibilities and the skills, knowledge and qualities needed to do it.
A document that sets out the title, purpose, main tasks, responsibilities and reporting relationships of a job.
Increasing the number and variety of tasks in a job, at a similar level of skill and responsibility.
Redesigning a job to give the employee greater responsibility, challenge and control over their work, for example by adding planning, decision-making and checking tasks.
A method of production in which a single, unique product or service is made to an individual customer’s specification, one job at a time, usually by skilled workers.
Moving employees between different jobs or tasks at regular intervals, so that they gain a variety of experience and skills.
An agreement between two or more businesses to create and jointly own a new, separate business for a shared project, sharing its costs, risks, control and profits.
An approach to stock management in which a business holds large stocks of materials, components and finished goods as a buffer against supply disruption or unexpected rises in demand.
A method of lean production in which materials, components and finished goods are produced or delivered only when they are needed and in the quantities needed, so that very little stock is held.
A method of lean production in which all employees make frequent, small, incremental improvements to processes, products and working practices in order to remove waste and raise quality.
A signal, traditionally a card attached to a container of parts, that tells the previous stage of production or a supplier to make or deliver more of an item in a just-in-time pull system.
The single key concept (change, creativity, ethics or sustainability) through which a business research project analyses the organisation and its issue, stated on the title page and applied throughout.
The four ideas that run through the course and frame analysis of any business decision: change, creativity, ethics and sustainability.
A factor of production consisting of the physical and mental effort of the people who work in a business; its reward is wages and salaries.
The cost of labour needed to produce one unit of output, found by dividing the wage cost per hour by the output per worker per hour; it combines wage rates with productivity.
The ease with which workers can move between jobs, either between occupations (occupational mobility) or between locations (geographical mobility).
The output produced per unit of labour input, such as per worker or per hour worked, in a given period.
The percentage of a business’s workforce that leaves over a period, usually a year: number of staff leaving in a year divided by the average number of staff, multiplied by 100.
Describes production that uses a high proportion of labour relative to machinery and equipment, so that labour costs make up a large share of total costs.
A leadership style in which the leader sets broad objectives and gives employees the freedom to make most decisions about how to achieve them, with minimal direction or supervision.
A factor of production covering all natural resources used in production, such as sites, water, minerals, forests, fish and energy sources; its reward is rent.
Needs that customers have but are not aware of, or cannot express, until a new product or service shows them what is possible.
The latest time by which an activity must be completed if the project as a whole is not to be delayed.
The time between placing an order with a supplier and receiving the delivery.
The ability to influence, inspire and motivate others to work willingly towards a vision or a set of goals, whether or not the leader holds a formal position.
A model developed by Tannenbaum and Schmidt (1958) that arranges leadership styles along a line according to the balance between the leader’s use of authority and the freedom given to employees.
The way in which a leader makes decisions, communicates with and directs employees, especially how far employees are involved in decision-making.
An approach to operations that aims to minimise waste of all resources, including materials, time, space and labour, while meeting customer needs, so that output is produced with fewer inputs and at higher quality.
A contract that allows a business to use an asset owned by another firm (the lessor) in return for regular payments, without buying the asset.
Laws and regulations that affect how a business operates, such as employment law, consumer protection, health and safety, competition law, data protection and product standards.
The number of layers of management and authority in an organisation, from the most senior position down to the front-line employees.
The debts a business owes to people and organisations outside it, such as suppliers, banks and other lenders, which must be paid in the future.
An agreement in which a business allows another business to use its intellectual property, such as a brand, patent or production process, for a stated period in return for a fee or royalty.
The legal protection of shareholders, who can lose no more than the amount they invested in a company if it cannot pay its debts.
A chart that plots values against time, or another continuous variable, as points joined by lines, used to show trends and changes over time.
A straight line drawn through the points of a scatter diagram that best represents the relationship between the two variables; by least squares, the line that minimises the sum of squared vertical distances to the points.
An economic system in which raw materials are extracted, made into products, used and then thrown away as waste, so that the value of the materials is lost at the end of each product's life.
The legal process of closing a company, in which a liquidator sells its assets and pays its creditors in a set order of priority; also called winding up.
The ability of a business to meet its short-term debts when they fall due by turning its current assets into cash quickly enough.
The extent to which a business is able to meet its short-term debts as they fall due, judged by comparing its liquid assets with its current liabilities.
A ratio that compares current assets, or the most liquid current assets, with current liabilities to show whether a business can pay its short-term debts.
The percentage of a transport operator's available capacity, such as the seats on a flight, that is actually sold or used in a period.
Money borrowed from a bank or other lender for a set period, which must be repaid, usually in instalments, together with interest.
Rules set by a host government requiring that a minimum share of a product's parts, materials or value is produced or bought within the country.
The geographical site where a business carries out its production or other operations, chosen by weighing the costs and benefits of the alternative sites available.
An action by an employer in a dispute in which employees are prevented from working, and are not paid, until they accept the employer’s terms.
The management of the movement and storage of materials, components and finished goods, and of the related information, from suppliers to a business and from the business to its customers.
A curve showing the lowest average cost of producing each level of output when all inputs, including the scale of operation, can be changed; usually drawn U-shaped.
Loans a business must repay after more than one year, such as long-term bank loans, mortgages and debentures, shown under non-current liabilities.
Finance available to a business for more than five years or permanently, such as share capital, mortgages, debentures and retained profit, used mainly for non-current assets and expansion.
The extent to which a society values thrift, persistence and adapting to prepare for the future (long-term orientation) rather than tradition, stability and quick results (short-term orientation).
A product sold at a price below its cost to attract customers, who are then expected to buy other products on which the business makes a profit.
A branch of artificial intelligence in which computer systems learn to make predictions or decisions from patterns in data, improving with experience, instead of following rules written by a programmer.
A comparison of the cost of producing a good or service within the business with the cost of buying it from an outside supplier, together with qualitative factors, to decide which to do.
The process of planning, organising, directing and controlling an organisation’s resources so that it achieves its objectives efficiently and effectively.
An approach to management, introduced by Peter Drucker, in which managers and employees agree specific objectives for each person and team that support the organisation’s overall objectives, and review performance against them.
An organised system of people, hardware, software, data and procedures that collects, stores and processes data from inside and outside a business and gives managers information to plan, control and make decisions.
Reductions in average cost from employing specialist managers, whose expertise improves efficiency and whose salaries are spread over a large output.
An approach to managing change that uses selective information, or gives the leaders of resisting groups a symbolic role in the change, to win support without genuine involvement.
A branding approach in which the producer sells products under its own brand name through many different retailers.
The amount by which actual or forecast output exceeds the break-even quantity, showing how far sales could fall before the business makes a loss.
The amount added to the unit cost of a product to set its price, usually expressed as a percentage of the unit cost.
A range of marks, such as 7–8, with a description of the qualities an answer must show to be placed in it; extended responses are marked by finding the best-fitting band.
Any place or system, physical or online, where buyers and sellers come together to exchange a particular good or service.
A published report on a particular market, usually by a specialist research firm, giving secondary data such as its size, growth, market shares, trends and forecasts.
The total market value of a publicly held company's shares, found by multiplying the current share price by the number of shares issued.
The degree to which sales in a market are controlled by a small number of the largest businesses, often measured by a concentration ratio.
A growth strategy in which a business sells its existing products in new markets, such as new geographical areas, new market segments or new distribution channels.
The percentage change in the size of a market over a period, calculated by comparing current market size with market size in the previous period.
The percentage change in the total sales of a market over a period, usually a year, used as the vertical axis of the Boston Consulting Group matrix.
The business or brand with the largest market share in a particular market, measured by value or by volume of sales.
An outward-looking approach in which a business uses market research to find out what customers want and then develops and markets products to meet those needs.
A growth strategy in which a business aims to increase sales of its existing products in its existing markets, usually by raising its market share.
The process of collecting, analysing and interpreting information about a market, its customers and competitors, in order to make better marketing decisions.
An identifiable group of customers within a market who share similar characteristics or needs and respond in a similar way to a marketing mix.
The process of dividing a market into distinct groups of customers who have similar characteristics, needs or buying behaviour.
The total sales of all businesses in a market over a given period, measured either by value (sales revenue) or by volume (units sold).
The management process of identifying, anticipating and satisfying customers' needs and wants profitably, by deciding what to offer, at what price, where and how to promote it.
Reductions in average cost from spreading the fixed costs of advertising, promotion and distribution over a larger volume of sales.
The combination of elements, product, price, promotion and place (and for services people, processes and physical evidence), that a business uses to market a product to its target market.
The specific targets of the marketing function, such as sales, market share or brand awareness, which support the organisation's overall objectives.
A document that sets out a business's marketing objectives and the strategies, marketing mix, budget and timeline it will use to achieve them over a given period.
The systematic process of analysing a business's marketing position, setting marketing objectives, and choosing the strategies, actions, budget and timescale needed to achieve them.
A medium- to long-term plan of how a business will achieve its marketing objectives, based on its target market, its intended position against competitors and the marketing mix that supports it.
The document examiners use to mark a paper, setting out acceptable answers, how marks are awarded for each part and, for extended responses, the markbands.
The extent to which a society is driven by competition, achievement and success (masculinity) rather than by caring for others and quality of life (femininity); also called motivation towards achievement and success.
A theory that people are motivated by five levels of need (physiological, safety, social, esteem and self-actualisation), each becoming the main motivator once the levels below are largely satisfied.
A method of production that combines the high volume and low unit costs of mass production with the ability to tailor each product to an individual customer’s choices, usually using flexible technology.
A large market in which products are aimed at most customers, with little or no difference between segments, and are sold in high volumes.
A method of production in which large quantities of standardised products are made continuously, each unit moving from one stage to the next along a production line.
An organisational structure in which employees report to two managers at once, a functional manager and a project or product manager, so that teams from different departments work together on projects.
The stage of the product life cycle in which sales are at or near their peak but grow slowly, competition is strongest and profit and cash flow are usually highest.
The highest level of stock a business plans to hold, reached when a delivery arrives; the buffer stock plus the reorder quantity.
A theory that people are motivated by three needs learned through experience, the needs for achievement, affiliation and power, and that the dominant need differs between individuals.
The sum of all the values in a data set divided by the number of values; the arithmetic average.
The middle value of a data set when the values are arranged in order of size; with an even number of values, the mean of the two middle values.
The method or channel through which a message is sent, such as a meeting, a telephone call, an email, a report, a video call or a notice board.
The agreement of two businesses, usually of similar size, to combine into a single new business owned by the shareholders of both.
The information, instruction or idea that a sender transmits to a receiver; an effective message is accurate, clear, complete and suited to its audience.
The account, in the introduction of a research project, of how the research was carried out: which primary and secondary sources were used, how they were chosen, and their limitations.
The ways in which a business can begin selling in a foreign market, from exporting and e-commerce through licensing, franchising and joint ventures to acquisitions and wholly owned subsidiaries.
Financial services, mainly small loans, provided to people on low incomes who cannot obtain credit from traditional banks, usually to start or expand a small business.
A significant event or checkpoint in a project, such as the completion of a phase or a launch date, which has no duration and is shown as a point, usually a diamond, on a Gantt chart.
The lowest level of output at which a business achieves the lowest possible average cost on its long-run average cost curve.
The lowest hourly rate of pay that employers are legally allowed to pay their workers, set by the government.
The process by which a social enterprise or NGO gradually moves away from its original social or environmental purpose, often under financial pressure or as it grows.
A short statement of an organisation's current purpose, setting out what it does, for whom it does it and the values that guide how it does it.
An economy in which resources are allocated partly by private sector businesses through markets and partly by the government through the public sector.
The value or category that occurs most often in a set of data.
The process in which IB examiners re-mark a sample of a school's internally assessed work and adjust the teacher's marks if they are out of line with the IB standard.
A long-term loan to buy land or buildings, secured on the property, which the lender can take if repayments are not made.
The internal and external forces that cause a person to act, and that determine the direction, intensity and persistence of their effort towards a goal.
Aspects of the work itself, such as achievement, recognition, responsibility, interesting work, advancement and personal growth, which create job satisfaction and motivate employees, according to Herzberg.
The average of a fixed number of consecutive values in a time series, recalculated as the group moves forward one period at a time, used to smooth out short-term variations and show the trend.
A business that has its headquarters in one country (its home country) and owns and controls operations, such as factories or offices, in at least one other country.
A form of observation in which a researcher acts as an ordinary customer to assess the quality of service, products and staff behaviour of a business or its competitors.
The shared values, beliefs and unwritten rules of behaviour that most members of a country learn while growing up and that distinguish them, on average, from people of other countries.
The transfer of the ownership of a private sector business into the public sector, so that it is owned and controlled by the government.
The relocation of business activities to a country close to the home country, usually a neighbouring country with lower costs, combining lower costs with shorter and less risky supply chains.
The basic requirements that people must have to survive, such as food, water, shelter and clothing, and in modern societies healthcare and education.
An approach to managing change in which managers offer incentives or concessions to employees or their representatives in exchange for accepting a change.
The value of a business's total assets minus its total liabilities; it always equals total equity.
The value of a non-current asset in the accounts at a given date, calculated as its original cost minus the accumulated depreciation charged so far.
The difference between the total cash inflows and the total cash outflows of a business in a period; negative when outflows are larger than inflows.
The sum of the present values of an investment's future net cash flows minus its initial cost; a positive value means the project earns more than the discount rate.
A diagram that shows a project's activities as arrows between numbered nodes, in the order in which they must be completed, so that the project's sequence and timing can be analysed.
A small, clearly defined segment of a larger market, with specific needs that are not fully met by mass-market products.
An agreement between an employer and a trade union in which the union agrees not to take strike action for a set period, usually in return for improved terms or arbitration of disputes.
A circle on a network diagram marking the start or end of activities, divided to show the node number, the earliest start time and the latest finish time.
Any interference that prevents a message from being received or understood as the sender intended, such as physical sound, technical faults, unclear language or the receiver’s emotions.
Assets a business expects to keep and use for more than one year, such as land, buildings, machinery, vehicles and intangible assets.
Debts a business does not have to repay within the next year, such as long-term bank loans, mortgages and debentures.
Ways of motivating employees that do not involve direct payment, such as job enrichment, job rotation, job enlargement, empowerment, purpose and teamwork.
A non-profit organisation that is independent of government and pursues social, humanitarian or environmental aims, reinvesting any surplus in those aims.
The transfer of meaning without words, through body language, facial expressions, gestures, eye contact, tone of voice and appearance.
Specific, measurable targets that a business sets in order to achieve its aims, usually with a deadline.
A primary research method that collects information by watching and recording people’s behaviour, such as how customers shop or use a product, instead of asking them questions.
The loss of value of an asset because it has become out of date, for example when newer technology replaces it, even though it may still work.
The ease with which workers can move from one type of job or occupation to another, which depends on their skills, qualifications and access to retraining.
Training that takes place away from the employee’s usual place of work, such as courses at a college, a training centre, a conference or online.
The relocation of a business activity, such as manufacturing or customer service, from the home country to another country, either to the business's own operations abroad or to a foreign subcontractor.
A distribution approach that integrates a business’s physical stores, websites, apps and other channels so that customers have one seamless experience across them.
Training that takes place at the workplace while the employee is doing their job, for example through coaching, mentoring or shadowing an experienced colleague.
A distribution channel with one intermediary, usually a retailer, between the producer and the consumer.
A question that lets respondents answer in their own words rather than choose from fixed options, giving detailed qualitative information that is harder to analyse.
The amount of cash a business holds at the start of a period, equal to the closing balance of the previous period.
The extent to which a business's costs are fixed rather than variable, so that a change in sales revenue causes a more than proportionate change in profit before interest and tax.
Short-term, specific objectives for teams and individuals, set by junior managers or supervisors, that contribute to achieving tactical objectives.
The planning, organising, controlling and improvement of the activities that transform resources into goods and services, so that they meet customers’ needs efficiently and effectively.
The five aspects of performance that operations managers aim to improve to satisfy customers and support a business’s strategy: quality, speed, dependability, flexibility and cost.
The section of a business plan that explains how the business will produce its goods or deliver its services, including premises, equipment, suppliers, production methods, capacity and quality control.
External factors in an organisation’s environment that it could use to its advantage, such as a growing market, new technology, a change in consumer tastes or a competitor leaving the market.
The value of the next best alternative given up when a choice is made.
The transfer of messages using the spoken word, such as face-to-face conversations, meetings, presentations, telephone calls and video calls, which allows immediate feedback.
A diagram that shows the formal structure of an organisation: its roles and departments, the levels of hierarchy, the chains of command and the spans of control.
The shared values, beliefs, norms and attitudes of the people in an organisation, which shape how they behave and how work is done; “the way we do things around here”.
The formal way in which an organisation arranges its roles, departments and lines of authority, communication and accountability.
A value in a data set that is much higher or much lower than most of the other values, either a genuine unusual case or an error in the data.
The goods and services that a business produces from its inputs and sells to customers.
The transfer of a business activity, such as manufacturing, IT, cleaning or customer service, to an external business that carries it out under contract instead of the business doing it in-house.
A flexible short-term facility that allows a business to withdraw more money from its bank account than it holds, up to an agreed limit, paying interest only on the amount overdrawn.
A form of industrial action in which employees refuse to work beyond their contracted hours, reducing the employer’s output without employees losing their basic pay.
The situation in which a business expands its sales and operations too quickly for its working capital and finance to support, so that it runs short of cash despite strong demand.
The marking principle under which an error carried forward from an earlier part of a question is not penalised again, so later parts earn marks if the correct method is applied to the student's own figure.
A branding approach in which a retailer sells products under its own brand name, made for it by other manufacturers.
The exam taken by SL and HL students that is based on a pre-released statement and an unseen case study, with structured questions and one extended response, excluding HL-only content.
The exam with a quantitative focus, based on unseen stimulus material presented in parts, with structured questions including calculations and constructions, and an extended response.
The HL-only exam based on unseen stimulus material about a social enterprise, ending with a recommended plan of action marked against four criteria.
Tasks that do not depend on each other and can therefore be carried out at the same time, which shortens the duration of a project.
A contract of employment for fewer hours than a normal full working week, such as mornings, school hours or weekends only.
An approach to managing change in which employees take part in planning and implementing the change, which increases their commitment to it.
An unincorporated business owned by two or more people, who share its capital, decisions and profits and usually have unlimited liability for its debts.
A legal right granted by a government that gives the owner of an invention the exclusive right to make, use and sell it for a limited period, usually up to 20 years.
A leadership style in which the leader makes decisions in what they believe are the best interests of employees, often after consulting them, and looks after their welfare in return for loyalty.
The length of time it takes for the net cash flows from an investment to repay its initial cost.
The financial result of a particular outcome at the end of a branch of a decision tree, such as the revenue or profit it would bring, before the cost of the option is deducted.
A form of arbitration in which the arbitrator must choose either the employer’s final offer or the employees’ final claim in full, with no compromise between them.
Setting a low price when a product is launched in order to attract customers quickly and gain market share, with the intention of raising the price later.
In the marketing mix, the employees who deliver a service and interact with customers, whose skills, attitudes and behaviour shape the customer’s experience.
The value below which a given percentage of the values in an ordered data set lie; the 50th percentile is the median and the 25th and 75th are the quartiles.
A type of organisational culture in which the organisation exists mainly to serve the individuals in it, usually skilled professionals who work independently while sharing resources.
A document that sets out the qualifications, experience, skills and personal qualities needed by the ideal candidate for a job, often divided into essential and desirable criteria.
The owner's own savings or personal money invested in the business; the main source of start-up capital for sole traders.
Promotion in which sales staff communicate directly with individual customers, face to face or remotely, to persuade them to buy.
The tangible elements of a service that customers can see or touch, such as premises, décor, uniforms, equipment, packaging and websites, which help them judge its quality.
A circular chart divided into sectors, each showing one category’s share of a whole, with the angle of each sector proportional to that share.
A payment system in which employees are paid a fixed amount for each unit of output they produce.
A short slide presentation of a business plan that entrepreneurs use to persuade investors to fund a business, covering the problem, solution, market, business model, team, forecasts and finance requested.
The element of the marketing mix concerned with how and where a product is made available to customers, including distribution channels and outlets.
A recommended, sequenced set of decisions for an organisation, with reasons, timings, expected impacts and risks; in Paper 3 it answers the final question and is marked against four criteria.
The practice of designing products to wear out, break or become out of date after a limited time, so that customers need to buy replacements sooner.
Government actions and political conditions that affect a business, such as tax and spending policy, trade policy, subsidies, political stability and relations between countries.
The entire group of people or organisations that a piece of market research is about and wants to draw conclusions on.
Michael Porter's model of three basic ways to achieve competitive advantage: cost leadership, differentiation and focus, chosen by the source of advantage and the breadth of the target market.
A diagram that shows how customers perceive competing brands or products on two dimensions, such as price and quality, with the axes crossing in the centre.
The place a product or brand occupies in the minds of customers relative to competing products, in terms of features such as price, quality and image.
A type of organisational culture in which power and decision-making are concentrated in one person or a small group at the centre, with few rules and influence based on closeness to the leader.
The extent to which the less powerful members of organisations and institutions, such as the family, accept and expect that power is distributed unequally.
A short document issued about three months before Paper 1, giving the opening of the case study and a few contextual topics for students to research in advance.
Setting a price deliberately low, often below cost, to force competitors out of the market or deter new entrants so that prices can be raised later; illegal for dominant firms in many countries.
An AO4 command term asking for data from the stimulus to be put into a suitable format, such as a statement of profit or loss or a cash flow forecast.
The value today of a sum of money to be received in the future, found by discounting it at a chosen interest rate.
An organisation of people who share an interest or cause and campaign to influence the decisions of businesses, governments or the public on that issue, without seeking election.
The amount of money that customers pay to obtain a good or service, set by the business as one element of its marketing mix.
Charging different prices to different groups of customers for the same product, where the groups can be kept apart and differ in their willingness to pay.
Demand for which the percentage change in quantity demanded is greater than the percentage change in price, so that PED, ignoring its sign, is greater than 1.
A measure of the responsiveness of the quantity demanded of a product to a change in its price: the percentage change in quantity demanded divided by the percentage change in price.
Demand for which the percentage change in quantity demanded is smaller than the percentage change in price, so that PED, ignoring its sign, is less than 1.
The method a business uses to set the price of a product, chosen to suit its costs, competitors, customers and marketing objectives.
The collection of new, first-hand data for a specific purpose, directly from customers or the market, through methods such as surveys, interviews, focus groups and observations.
The part of the economy that extracts or harvests natural resources, such as agriculture, fishing, forestry, mining and oil extraction.
The part of the economy made up of organisations owned and controlled by private individuals or groups, most of which aim to make a profit.
An incorporated business with limited liability whose shares are not traded on a stock exchange and can be sold only with the agreement of existing shareholders.
The transfer of the ownership of an organisation, or the provision of a service, from the public sector to the private sector, often by selling shares to private investors.
The likelihood that an outcome will occur, expressed as a number from 0 (impossible) to 1 (certain); the probabilities of all outcomes at a chance node add up to 1.
In the marketing mix, the procedures, systems and activities through which a service is delivered to customers, from first contact to after-sales service.
A cooperative owned by producers, usually farmers, who combine to buy inputs, process and market their output, gaining scale and bargaining power.
A good or service, or a combination of both, that a business offers to the market to satisfy customers’ needs and wants.
A branding approach in which each product has its own separate brand name, often with little reference to the business that owns it.
A growth strategy in which a business sells new or modified products to its existing markets.
Making a product or brand distinct from competitors' products in ways that customers value, so that it is less easily substituted and can command loyalty or a higher price.
The stages a product passes through from launch to withdrawal (introduction, growth, maturity, saturation and decline), shown as the pattern of its sales over time.
A circular business model in which a business extends the working life of its products through durable design, repair, maintenance, upgrading, refurbishment or resale.
A group of closely related products sold by a business, such as different sizes, flavours or models of the same basic product.
An inward-looking approach in which a business focuses on developing and making products it believes are good, then tries to persuade customers to buy them.
The full range of products that a business sells, usually analysed to check that it holds products at different stages of the product life cycle.
The process of asking customers to return a product, or withdrawing it from sale, because it has been found to be faulty or unsafe.
A circular business model in which a business sells the use or result of a product as a service, such as leasing, renting or paying per use, while keeping ownership of the product and responsibility for its maintenance and recovery.
The process of using resources such as land, labour, capital and enterprise to make goods or provide services that satisfy customers’ needs and wants.
A measure of the efficiency of production that compares the quantity of output with the quantity of inputs, such as workers, labour hours or machines, used to produce it.
Total output divided by total input, multiplied by 100, usually with both measured in money; a rate above 100% means output is worth more than the inputs used.
In Handy's shamrock organisation, the permanent, highly skilled employees and managers whose knowledge is essential to the organisation and who are hard to replace.
The amount by which total revenue exceeds total cost in a period; if total cost is greater than total revenue, the result is a loss.
The regions of a break-even chart between the total revenue and total cost lines: the loss area left of the break-even point and the profit area to its right.
The profit a business makes from its operations, calculated as gross profit minus expenses, before interest on borrowing and tax are deducted.
The profit left after interest on a business's borrowing has been deducted from profit before interest and tax, and before tax on profits is paid.
A department, product, branch or other part of a business to which both costs and revenues can be attributed, so that its profit or loss can be calculated.
The profit left for the owners after interest and tax have been deducted, calculated as profit before tax minus tax; it is either paid out as dividends or kept as retained profit.
Profit before interest and tax expressed as a percentage of sales revenue, showing how much of each $1 of sales is left after cost of sales and expenses.
The objective of making the largest possible profit, by producing the output at which the difference between total revenue and total costs is greatest.
The transfer of profits earned by a multinational company's subsidiary in a host country back to the parent company in its home country.
The ability of a business to make a profit in relation to its sales revenue or the capital invested in it.
A ratio that measures profit as a percentage of sales revenue or capital employed, such as the gross profit margin, profit margin and ROCE.
A temporary set of related tasks with a defined start, a defined end and a specific objective, carried out within limits of time, cost and quality.
The planning, organising, monitoring and control of a project’s tasks and resources so that it meets its objectives on time, within budget and to the agreed quality.
An organisational structure in which work is arranged around temporary projects, with teams formed from people with the necessary skills and disbanded when each project ends.
The communication between a business and its customers that aims to inform them about, persuade them to buy, or remind them of a product or brand.
The combination of promotional methods, such as advertising, sales promotion, public relations, sponsorship, direct marketing and personal selling, that a business uses.
The tangible non-current assets a business uses in its operations, such as land, buildings, machinery, vehicles and computers, shown at cost in the statement of financial position.
Marking the options rejected at a decision node of a decision tree with two short parallel lines across their branches, leaving the option with the highest net gain (expected value minus cost).
Dividing a market according to customers' lifestyles, values, attitudes, interests and personality.
Setting prices that appeal to customers’ perceptions rather than to calculation, such as $9.99 instead of $10.
The management of a business’s reputation and relationships with the public and the media, for example through press releases, events and interviews.
The part of the economy made up of organisations owned and controlled by the government, which provide goods and services such as healthcare, education, defence and infrastructure.
An incorporated business with limited liability whose shares can be bought and sold by members of the public, usually on a stock exchange.
Reductions in average cost from buying inputs in bulk, which allows a large business to negotiate discounts and better credit terms from suppliers.
An employee’s sense that their work is meaningful and makes a positive difference to other people, the organisation or society.
Predicting future sales from the judgment, opinions and experience of people who know the market, such as experts, managers and salespeople, rather than from statistical analysis of past data.
Factors affecting a location decision that are difficult to measure in money, such as infrastructure, access to markets, skilled labour, political stability, regulations and local culture.
Research that collects non-numerical information about people’s opinions, feelings, motivations and attitudes, usually through interviews, focus groups, open questions or observation of small numbers of people.
The extent to which a good or service meets or exceeds customers' expectations and is fit for its intended purpose, consistently and at an acceptable price.
A system for preventing faults by setting and checking quality standards at every stage of production, from suppliers and design to delivery, so that output is right first time.
A small group of employees doing similar work who meet regularly to identify, analyse and solve problems related to quality and working methods, and present their solutions to management.
The process of checking finished output, or samples of it, against agreed standards, so that faulty products are found and rejected or reworked before they reach customers.
An agreed set of requirements for a product, service or management process, set by a national or international body, against which a business can be independently assessed and certified.
Factors affecting a location decision that can be measured numerically, such as the costs of land, labour and transport and the value of government incentives.
Research that collects numerical data, such as how many people buy a product or what percentage prefer a design, which can be measured, counted and analysed statistically.
One of the three values that divide a set of ordered data into four equal parts: the lower quartile (Q1), the median (Q2) and the upper quartile (Q3).
In force field analysis, a situation that stays stable because the driving and restraining forces acting on it are equal in strength, but that changes as soon as either set of forces changes.
The part of the economy that provides knowledge-based services, such as research and development, information technology, data analysis and consulting.
A product with a low relative market share in a fast-growing market, which needs heavy investment and may become a star or fail; also called a problem child.
A written set of questions, in a fixed order, used to collect information from respondents in a survey.
A sampling method in which the population is divided into groups and a set number of people is chosen non-randomly from each group, usually in proportion to its share of the population.
Research and development spending expressed as a percentage of sales revenue, used to compare how much businesses of different sizes invest in R&D.
A sampling method in which every member of the population has an equal chance of being selected, for example by using a random number generator on a list of the population.
An irregular, unpredictable movement in data caused by one-off events such as extreme weather, strikes or accidents, which cannot be forecast from past patterns.
A measure of spread equal to the difference between the highest and the lowest values in a data set.
A quantitative management tool that uses figures from the final accounts to calculate ratios, which are compared over time and with other businesses to judge financial performance.
The person or group for whom a message is intended, who decodes it and interprets its meaning.
An AO3 command term asking for an advisable course of action for a given situation, supported by evidence and reasons, usually after comparing the options.
The process of identifying the need for a new employee, defining the job and the person needed, and attracting suitable candidates to apply.
A business that finds, screens and puts forward candidates for an employer’s vacancies in return for a fee.
The termination of an employee's contract because the job no longer exists or fewer workers are needed for that kind of work, not because of the employee's performance or conduct.
A future cost that changes as a result of a decision, such as variable costs and avoidable fixed costs; costs that stay the same whichever option is chosen are not relevant.
The level of stock at which a new order is placed, equal to the buffer stock plus the usage rate multiplied by the lead time.
The amount of stock ordered each time an order is placed, equal to the maximum stock level minus the buffer stock.
Changing customers' perception of a product or brand relative to competitors, usually to appeal to a different or larger target market.
The systematic investigation and creative work a business carries out to discover new knowledge and use it to develop new or improved goods, services and production processes.
The precise question, naming one organisation and one issue, that a business research project sets out to answer and that its conclusion must answer explicitly.
The return of production or other business activities from another country to the business's home country, reversing an earlier decision to offshore them.
The amount a business expects to receive for a non-current asset when it sells or scraps it at the end of its useful life.
The unwillingness of employees or other stakeholders to accept or adapt to a change in the workplace, shown through opposition, delay, low morale or leaving the organisation.
A circular business model in which a business recovers useful materials, components or energy from waste, by-products or used products and uses them to make new products.
The duty to complete a task or achieve an outcome; a manager who delegates a task can pass on authority but keeps overall responsibility for it.
The internal and external factors that hold an organisation back from a proposed change, such as its cost, a lack of finance, employees' fear of job losses, existing culture or regulation.
A business that buys products from producers or wholesalers and sells them in small quantities to the final consumer, in shops or online.
The total of all the profits a business has kept since it started, after tax and dividends, shown as part of equity in the statement of financial position.
The profit left after tax and dividends have been paid, which is kept in the business and can be reinvested.
The ability of an organisation to keep its employees, measured by the proportion of staff who stay with the organisation over a period of time.
Profit before interest and tax expressed as a percentage of capital employed, measuring the profit generated from the long-term finance invested in a business.
Spending on the day-to-day running costs of a business, such as wages, rent, utilities and raw materials, whose benefit is used up within the year.
A distinct source from which a business earns revenue, such as product sales, subscriptions, advertising, licensing, commission or renting out assets.
The process of identifying the risks a business faces and judging how likely each one is to happen and how serious its impact would be, so that the most important risks are planned for first.
The ability of a large business to spread risk across many products and markets, so that a loss in one area can be absorbed by the others.
A type of organisational culture in which power comes from a person’s position in the hierarchy, and work is controlled by rules, procedures and clearly defined job roles.
A regular payment made to the owner of a brand, patent or other intellectual property for the right to use it, usually a percentage of sales revenue.
A fixed amount of pay for a year’s work, usually paid in equal monthly instalments, regardless of the exact hours worked or output produced.
The sale of an asset, usually property, to another party, which then leases it back to the seller, so that the business receives cash but continues to use the asset.
Raising finance by selling items the business owns and no longer needs, such as unused buildings, land, machinery or vehicles, or a part of the business.
A qualitative forecasting method in which the sales estimates of individual salespeople for their own territories or customers are added together to give a forecast for the whole business.
The process of predicting the future sales of a business, in volume or value, over a given period, using past sales data, market information and judgment.
A short-term incentive to encourage customers to buy, such as a discount, coupon, free sample, competition or “buy one, get one free” offer.
The value of the goods and services a business sells during an accounting period, calculated as the price of each item multiplied by the quantity sold; the first line of the statement of profit or loss.
The objective of making the highest possible sales revenue, even if this means accepting lower profit, for example to grow market share or meet managers' sales targets.
A group of people selected from a population to take part in market research, whose answers are used to draw conclusions about the whole population.
The number of people, or other members of the population, included in a sample for market research.
The process of selecting a group of people from a population to take part in market research, so that conclusions about the population can be drawn from the group.
The difference between a result from a sample and the true value for the whole population, caused by chance because only part of the population was studied; it falls as sample size rises.
The stage of the product life cycle in which the market is full, so sales stop growing and firms can grow only by taking customers from competitors.
A graph that plots pairs of values of two variables as points, with the independent variable on the x-axis and the dependent variable on the y-axis, to show whether they are related.
A model of organisational culture with three levels: artefacts (visible signs such as dress and layout), espoused values (what the organisation says it believes) and basic underlying assumptions (unspoken beliefs taken for granted).
An approach to management decision-making based on the systematic collection and analysis of data, measurement and evidence, so that decisions are logical and can be justified.
A regular and predictable movement of data above or below the trend that repeats within a fixed period, usually a year, because of the seasons, holidays or customs.
The use of data that already exists, collected by someone else or for another purpose, such as market analyses, government publications, academic journals, media articles and online content.
The part of the economy that processes raw materials into finished or semi-finished goods, including manufacturing and construction.
A shift in the relative importance of the primary, secondary, tertiary and quaternary sectors in an economy, measured by their shares of output or employment.
The process of choosing the most suitable candidate for a job from those who applied, using methods such as interviews, tests and references.
The highest level in Maslow’s hierarchy of needs: the need to fulfil one’s potential, for example through challenging, creative and meaningful work.
An appraisal method in which employees evaluate their own performance against their objectives, usually before discussing it with their manager.
A cost with both a fixed element, paid regardless of output, and a variable element that changes with output, such as a utility bill with a standing charge.
The person or group who starts a communication by encoding an idea into a message and choosing the medium through which to send it.
The status of an incorporated business, which exists in law independently of its owners, so that it can own assets, enter contracts, sue and be sued in its own name.
Tasks that must be carried out one after another, because each depends on the completion of the task before it.
Intangible products, such as banking, education, healthcare and transport, that are provided to customers but cannot be stored or physically owned.
The extended marketing mix used for services: product, price, promotion and place plus people, processes and physical evidence.
Loans and other borrowing a business must repay within one year, shown as other short-term loans under current liabilities in the statement of financial position.
Finance that must be repaid within one year, such as an overdraft or trade credit, used mainly to pay for working capital.
The process of selecting, from all applicants for a job, the small number who best match the person specification and will be invited to interview or further selection.
A statistical method that fits a straight line, y = a + bx, to data on two variables in order to describe the relationship between them and to predict one from the other.
An agreement in which an employer recognises only one trade union to represent all the employees at a workplace or in a company for the purposes of collective bargaining.
An approach to leadership in which the leader adapts their style to the situation, especially to the competence and commitment of employees and the nature of the task, as in the Hersey–Blanchard model.
A distribution of data that is not symmetrical, with a longer tail on one side; in a positively skewed distribution the tail is to the right and the mean is greater than the median.
A business whose number of employees, and often its sales revenue or assets, is below limits set by a government; in the European Union, fewer than 250 employees.
Objectives that are specific, measurable, achievable, realistic (or relevant) and time-bound, so that they are clear to everyone involved and progress towards them can be checked.
A sampling method in which existing respondents recommend or recruit further respondents from among their contacts, used to reach small or hard-to-find groups.
An approach to marketing that meets customers' wants profitably while also protecting or improving the long-term well-being of consumers, society and the environment.
An unincorporated business owned by one person, who has full control, keeps all the profit and has unlimited liability for its debts.
The ways in which a business obtains the money it needs, either from within the business (internal sources) or from outside it (external sources).
The number of subordinates who report directly to one manager or supervisor.
A one-off order from a customer, usually for a large quantity at a price below the normal selling price, which a business must decide whether to accept.
The division of work into separate tasks, each carried out by a worker or team that concentrates on it, which raises skill and output per worker.
A form of promotion in which a business pays to be associated with an event, team, programme or person in order to raise awareness and improve its image.
An individual or group that has an interest in the activities of a business, because they affect the business or are affected by its decisions.
A situation in which the interests or objectives of different stakeholder groups cannot all be met at the same time, so that a decision benefits some groups at the expense of others.
A method of analysing stakeholders by placing each group on a matrix according to its power over the business and its interest in a decision, in order to decide how to manage it.
A measure of the spread of a data set that shows how far, on average, the values lie from the mean; a larger standard deviation means more widely spread data.
The use of the same, or largely the same, marketing mix in every country in which a business operates, in order to build one global brand and gain economies of scale.
A product with a high relative market share in a fast-growing market, which earns a lot of cash but also needs heavy investment to keep its position.
A newly established business in its early stages of operation, usually small and with limited finance, that is developing its product and building its first customers.
The finance needed to set up a new business and pay for its first assets and costs before it generates enough revenue to cover them.
An AO1 command term asking for a specific name, value or other brief answer, without explanation or calculation.
A business owned and controlled, wholly or mostly, by the government that sells goods or services to customers as a private sector business does.
A financial statement that shows what a business owns (assets), what it owes (liabilities) and the owners' equity at one particular date, usually the last day of the accounting period.
A financial statement that shows a business's sales revenue, costs and profit or loss over an accounting period, usually one year, and how the profit is divided between tax, dividends and retained profit.
A framework for analysing the external environment of an organisation under seven headings: social, technological, economic, environmental, political, legal and ethical factors.
The text, data, tables or images given in an exam paper about an organisation, which answers must use as their context.
The raw materials, work in progress and finished goods a business holds for production or sale; shown as a current asset and also called inventory.
A line graph showing the stock level of an item over time, with its maximum stock level, reorder level and buffer stock, used to plan when to reorder and how much to order.
A regulated market on which the shares of publicly held companies and other securities are bought and sold.
An efficiency ratio that measures how quickly a business sells its stock, as cost of sales divided by average stock (times a year) or as the average number of days stock is held.
The situation in which a business has no stock of an item left when it is needed, so that production stops or customers cannot be supplied.
A method of depreciation that charges the same amount each year, calculated as the cost of the asset minus its residual value, divided by its useful life in years.
An agreement between two or more independent businesses to cooperate and share resources to achieve shared objectives, without creating a new business.
A division of a large organisation that serves a distinct market with its own products, objectives and management, and is planned and assessed as a separate business.
The long-term objectives of an organisation as a whole, set by senior management, that determine its overall direction and the strategies it follows.
A long-term plan of action, set by senior managers, that shows how a business intends to achieve its aims and strategic objectives.
A sampling method in which the population is divided into groups (strata) and a random sample is taken from each group, usually in proportion to its size.
Internal factors that give an organisation an advantage over its competitors or help it to achieve its objectives, such as a strong brand, skilled staff or a sound financial position.
A form of industrial action in which employees collectively stop working for a period, in order to pressure the employer to meet their demands.
An organisational culture in which the core values and norms are clearly defined, widely shared and deeply held by employees, so that behaviour is consistent across the organisation.
An organisational structure in which employees are grouped into departments by the function they perform, such as marketing, finance, human resources and operations.
An organisational structure in which the business is divided into divisions based on its products or product lines, each with its own functional staff.
An organisational structure in which the business is divided into divisions based on geographical areas, each responsible for its operations in that region.
The position of a business that has neither the lowest costs nor a clear source of differentiation, so it lacks a competitive advantage and usually earns below-average profits.
An employee who reports directly to a manager or supervisor above them in the hierarchy and works under that person's authority.
A company that is owned and controlled by another company, its parent company, which holds more than half of its shares; an overseas subsidiary operates in a foreign market on the parent’s behalf.
A payment from the government to a business that reduces its costs of production or the price of its product, usually paid on a continuing basis.
An AO2 command term asking for a possible solution, explanation or answer to be proposed, with a reason.
A review at the end of a period, usually a year, that judges an employee’s overall performance against set criteria, often with a rating used for pay or promotion decisions.
The network of organisations, activities and resources involved in moving a good or service from raw materials, through production, to the final consumer.
The planning, coordination and control of all the activities and organisations in a supply chain, from sourcing raw materials to delivering the final product, so that it runs efficiently and meets customer needs.
The three to five sources, published within three years before submission and chosen by the student, from which most of the information in a business research project comes; they are labelled, highlighted and attached.
The amount by which the income of a non-profit organisation exceeds its spending over a period, which is kept in the organisation rather than distributed to owners.
A primary research method that collects information from a sample of people by asking each of them the same set of questions, usually in a questionnaire.
The objective of continuing to trade by covering costs and having enough cash to pay debts as they fall due; the main objective of most start-ups and of businesses in a crisis.
A key concept: meeting the needs of the present without compromising the ability of future generations to meet their own needs, considering social, environmental and economic effects.
A planning tool that assesses an organisation’s current position by identifying its internal strengths and weaknesses and the external opportunities and threats in its environment.
The extra value created when two businesses combine, because together they can achieve lower costs or higher revenues than they could separately.
Medium- to short-term objectives set for a department or division, usually by middle managers, that contribute to achieving the organisation's strategic objectives.
The short- to medium-term actions and methods a business uses to carry out its strategy, usually decided by middle managers within one department.
The purchase of a controlling interest in another company; a hostile takeover is one opposed by the target's board, so the buyer offers to buy the shares directly from its shareholders.
An organisational structure with many levels of hierarchy and narrow spans of control, giving a long chain of command.
Assets that have a physical form, such as land, buildings, machinery, vehicles and stock, as opposed to intangible assets.
The market segment or segments that a business chooses to aim its products and marketing at.
The selling price per unit needed to achieve a target profit at a given level of output; fixed costs plus target profit divided by output, plus variable cost per unit.
The level of profit that a business sets out to achieve in a given period.
The level of output a business must sell to achieve a chosen target profit; fixed costs plus target profit, divided by contribution per unit.
A type of organisational culture in which teams are formed to complete specific tasks or projects, and power and influence come from expertise rather than position.
A compulsory payment to the government; in the statement of profit or loss, the tax a company pays on its profits, deducted from profit before tax.
The legal arrangement of a business's affairs to reduce the tax it pays, for example by recording profits in low-tax countries (tax havens) through transfer pricing.
The view that employees are motivated mainly by money, so output is maximised by studying tasks scientifically, training workers in the most efficient method and paying them according to output.
Organising employees into groups that work together and share responsibility for completing a task or meeting a goal.
Reductions in average cost from using larger, more efficient or more specialised equipment and production methods, which only become worthwhile at high levels of output.
Synthetic or mineral materials in a product, such as metals and plastics, that are designed to be recovered and reused in continuous industrial cycles without losing quality.
Changes in technology that affect a business, such as new products and materials, automation, digital platforms, communication and production methods.
The spread of technology, production methods, management practices and skills from a multinational company to workers and businesses in a host country.
Working away from the employer's premises, usually from home, while staying in contact through digital technology; also called remote working.
A contract of employment that lasts for a fixed period or until a specific task is completed, such as seasonal work or cover for an absent employee.
The part of the economy that provides services to consumers and to other businesses, such as retail, transport, banking, tourism, healthcare and education.
Launching a product in a limited geographical area or to a small part of the market for a trial period, to measure customers’ response before deciding on a full launch.
External factors in an organisation’s environment that could damage its performance or its ability to achieve its objectives, such as new competitors, rising costs, recession or new regulations.
An integrated promotional strategy that combines above the line and below the line methods so that they reinforce one another.
The observation and timing of each step of a task in order to find the quickest efficient method of doing it and to set a standard time or output for the job.
A payment system in which employees are paid a fixed amount for each hour worked, often with a higher rate for overtime.
A quantitative forecasting method that studies data recorded at regular intervals over time to identify the trend and the variations around it, and uses them to predict future values.
The principle that a sum of money is worth more now than the same sum in the future, because money available now can earn interest or a return in the meantime.
An AO3 command term asking for the merits of an argument or concept to be weighed, ending in a clear judgment of how far it holds, supported by evidence.
The value of everything a business owns at a given date, calculated as non-current assets plus current assets.
The contribution made by all the units sold in a period, equal to contribution per unit multiplied by quantity sold, or total revenue minus total variable costs.
The sum of all the fixed and variable costs of producing a given level of output: total fixed cost plus total variable cost.
The time by which an activity can be delayed without delaying completion of the project, calculated as the latest finish time minus the duration minus the earliest start time.
An approach to quality in which every employee, in every department, is responsible for continuously improving quality to meet customers' needs, so that quality becomes part of the organisation's culture.
The total income a business receives from selling its output in a period, calculated as price multiplied by the quantity sold.
A tool that generates strategic options by matching an organisation’s strengths and weaknesses with the opportunities and threats from a SWOT analysis, giving SO, WO, ST and WT strategies.
A restriction imposed by a government on the free exchange of goods and services between countries, such as a tariff, quota, embargo or regulation that favours domestic producers.
An agreement with a supplier to receive goods or services now and pay for them later, typically within 30 to 90 days.
The reduction or removal of barriers to international trade, such as tariffs and quotas, often through trade agreements or membership of the World Trade Organization.
Confidential business information, such as a recipe, formula, process or customer list, that gives a business an advantage and is protected by keeping it secret rather than by registration.
An organisation of employees that acts collectively to protect and improve its members’ pay, working conditions and job security, mainly by negotiating with employers.
A situation in which gaining more of one objective or benefit means accepting less of another, such as faster growth at the cost of weaker liquidity or a weaker social mission.
A registered sign, such as a name, logo, symbol or slogan, that distinguishes one business's goods or services from those of others and cannot legally be used by competitors.
The process of improving employees’ knowledge, skills and attitudes so that they can perform their current or future jobs more effectively.
A written record of the essential points of an audio or video file; a business research project may use at most one as a supporting document, from a reliable organisation and traceable to the original.
The prices that different parts of the same multinational company charge each other for goods, services or rights; when manipulated, used to move profits to low-tax countries.
The process by which an organisation converts inputs such as materials, labour, information and equipment into goods and services that are worth more to customers than the inputs alone.
The underlying long-term movement in a set of data over time, upwards, downwards or flat, once short-term fluctuations have been smoothed out.
An approach that judges the performance of a business on its social (people), environmental (planet) and economic (profit) results, rather than on profit alone.
A member of the board that is legally responsible for governing a charity or NGO, making sure that it pursues its purposes and uses its funds properly.
A distribution channel with two intermediaries, usually a wholesaler and a retailer, between the producer and the consumer.
The extent to which members of a society feel threatened by ambiguous or unknown situations and try to avoid them through rules, structure and planning.
The termination of an employee's contract without a fair reason or without following a fair procedure, for which the employee can claim compensation or reinstatement.
A feature or benefit of a product that distinguishes it from competitors' products and gives customers a reason to buy it.
A method of depreciation that charges each year according to how much the asset is used, calculated from cost minus residual value divided by the total expected units, times the units in the year.
The legal obligation of the owners of an unincorporated business to pay all its debts, if necessary from their personal assets.
Needs or problems of customers that existing goods and services do not satisfy, or satisfy only poorly, which a business can address with a new or improved product.
The quantity of an item of stock used or sold per period of time, such as 100 units per week.
The period over which a business expects to use a non-current asset, measured in years or in units of output, before it is sold or scrapped.
Material about a brand or product, such as reviews, photos, videos and posts, that is created and shared by customers rather than by the business.
A cost that changes in direct proportion to the level of output, such as raw materials, packaging and piece-rate wages; it is zero when output is zero.
The difference between a budgeted figure and the actual figure for a revenue or a cost, calculated as budgeted figure minus actual figure and labelled favourable or adverse.
The process of calculating the differences between budgeted and actual figures, investigating their causes and taking action to correct problems or to update future budgets.
Finance provided by specialist investment firms to new or fast-growing businesses with high potential but high risk, in return for a share of the ownership.
Communication between different levels of hierarchy in an organisation, either downwards from managers to subordinates or upwards from subordinates to managers.
A merger or acquisition between businesses in the same industry but at different stages of production, such as a manufacturer and its supplier or its retailer.
A computer-generated, three-dimensional simulated environment that a user experiences and interacts with, usually through a headset, as if they were inside it; used for training, design and marketing.
A statement of what an organisation aspires to become or achieve in the long term, setting out its ideal future and giving a sense of direction to everyone in it.
The transfer of messages using images, such as charts, graphs, diagrams, infographics, photographs, videos, signs and symbols.
Payments to employees calculated according to the number of hours worked (a time rate) or the amount produced (a piece rate), usually paid weekly or monthly.
Desires for goods and services that are not essential for survival but improve the quality of life; people's wants are almost unlimited.
Any activity or use of resources that adds cost or time but no value for the customer, such as excess stock, waiting, unnecessary movement, overproduction or defects; called muda in lean production.
An organisational culture in which values and norms are unclear, inconsistent or not widely shared, so that employees behave differently across the organisation and need more rules and supervision.
Internal factors that put an organisation at a disadvantage compared with its competitors or limit its ability to achieve its objectives, such as high costs, poor cash flow or a narrow product range.
An intermediary that buys large quantities of products from producers, stores them and sells them in smaller quantities to retailers.
A form of creative accounting in which a business makes its final accounts look more attractive just before the reporting date, for example by delaying payments or temporarily selling assets.
The maximum length of a piece of assessed work; for the business research project 1,800 words, counting the introduction, main body and conclusion but not tables, diagrams, calculations, citations, the bibliography or the documents.
A form of industrial action in which employees follow their contracts and the official rules exactly, refusing any voluntary or extra work, so that output and efficiency fall.
A cooperative owned and democratically controlled by the people who work in it, who share its surplus.
The process of forecasting an organisation's future labour needs (the number of workers, the skills required, and when and where they are needed) and planning how to meet them from internal and external sources.
The money available for the day-to-day running of a business, measured as current assets minus current liabilities.
The period of time between a business paying cash for stock, materials and labour and receiving cash from the sale of the finished goods or services.
A body of elected employee representatives that management must inform and consult on workplace matters such as working hours, restructuring and new technology, common in many European countries.
The transfer of messages using written words, on paper or on screen, such as letters, reports, memos, minutes and emails, which gives a permanent record.
A method of setting budgets in which every budget starts at zero and each item of planned spending must be justified before it is approved.
A contract of employment under which the employer does not guarantee any minimum number of hours, and the worker is paid only for the hours actually worked.
A distribution channel in which the producer sells directly to the consumer, with no intermediaries.
A method of manufacturing that builds an object layer by layer from a digital design, so that each item can be different without new tools or moulds.
An appraisal method in which an employee receives feedback on their performance from a range of people they work with, such as their manager, colleagues, subordinates and customers.
An independent assessment of the impact of a business's activities on society and the environment, such as its treatment of workers, community involvement and emissions.