Read each term where it’s used
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.
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.
124 terms from Business management toolkit, each defined in a sentence or two, with the part of the syllabus where you first meet it. 54 of them are HL only, and marked.
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.
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.
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.
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.
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 BCG strategy of investing heavily in a product, usually a question mark, to increase its market share so that it becomes a star.
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 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.
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 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 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.
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.
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 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 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'.
An activity on the critical path, with zero total float, so that any delay to it delays the completion of the whole project.
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.
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 separation of part of a company into a new, independent company, usually with its own shares given to the original company's shareholders.
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.
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 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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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 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.
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.
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.
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.
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.
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.
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.
The variable that is thought to influence another variable, plotted on the horizontal x-axis of a scatter diagram, such as advertising spending.
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).
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).
A sustained rise in the general level of prices in an economy over time, which reduces the purchasing power of money.
A visual presentation that combines charts, icons, short text and key figures to communicate information quickly to a general audience.
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.
The latest time by which an activity must be completed if the project as a whole is not to be delayed.
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.
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 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 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.
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 total sales of a market over a period, usually a year, used as the vertical axis of the Boston Consulting Group matrix.
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 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.
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.
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 value or category that occurs most often in a set of data.
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.
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 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.
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.
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.
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.
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.
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 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 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 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.
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.
The extent to which the less powerful members of organisations and institutions, such as the family, accept and expect that power is distributed unequally.
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.
A growth strategy in which a business sells new or modified products to its existing markets.
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 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.
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.
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).
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.
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 measure of spread equal to the difference between the highest and the lowest values in a data set.
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.
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 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 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.
Tasks that must be carried out one after another, because each depends on the completion of the task before it.
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.
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 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.
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.
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 framework for analysing the external environment of an organisation under seven headings: social, technological, economic, environmental, political, legal and ethical factors.
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.
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.
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.
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.
Changes in technology that affect a business, such as new products and materials, automation, digital platforms, communication and production methods.
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.
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.
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.
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.
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.
Changes in society that affect a business, such as demographics (the size, age and make-up of the population), lifestyles, tastes, attitudes, education and culture.