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.
146 terms from Introduction to business management, each defined in a sentence or two, with the part of the syllabus where you first meet it.
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.
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.
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.
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 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.
The group of people elected by the shareholders to set the strategy of a company and oversee its management on their behalf.
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.
The four main areas of activity within a business: human resources, finance and accounts, marketing, and operations, which depend on each other.
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 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 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 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 document that sets out the ethical principles and rules of behaviour that an organisation expects its employees and managers to follow.
A merger or acquisition between businesses in unrelated industries, usually to spread risk across different markets.
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 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 key concept: generating new ideas, or seeing existing ideas from new perspectives, in products, processes and problem-solving.
The process by which local cultures, tastes and traditions become more alike across countries as global brands and media from multinational companies spread.
A person or organisation that buys a good or service from a business; the customer is not always the person who uses 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 decline in the relative importance of the secondary (manufacturing) sector in an economy, measured by its share of output or employment.
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 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.
The reductions in average cost (cost per unit) that a business gains as it increases its scale of operation.
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.
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.
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.
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.
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.
The four types of resource a business uses to produce goods and services: land, labour, capital and enterprise.
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.
Describes a multinational company that can move its operations between countries easily, at low cost, in search of lower costs or better incentives.
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.
Integration with a business at a later stage of production, closer to the final customer, such as a manufacturer buying a retailer.
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 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.
Physical, tangible products, such as cars, clothing and food, that can be stored, transported and transferred from one owner to another.
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 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.
The country in which a multinational company has its headquarters and where it is legally registered.
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 legal process of registering a business as a company, which gives it a legal identity separate from that of its owners.
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 resources a business uses in production, including the factors of production and bought-in materials, components and services.
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.
Stakeholders who are members of the organisation, such as its employees, managers, directors and owners or shareholders.
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.
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.
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.
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.
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.
The legal protection of shareholders, who can lose no more than the amount they invested in a company if it cannot pay its debts.
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.
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.
Reductions in average cost from employing specialist managers, whose expertise improves efficiency and whose salaries are spread over a large output.
The total market value of a publicly held company's shares, found by multiplying the current share price by the number of shares issued.
Reductions in average cost from spreading the fixed costs of advertising, promotion and distribution over a larger volume of sales.
The agreement of two businesses, usually of similar size, to combine into a single new business owned by the shareholders of both.
The lowest level of output at which a business achieves the lowest possible average cost on its long-run average cost curve.
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.
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.
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 basic requirements that people must have to survive, such as food, water, shelter and clothing, and in modern societies healthcare and education.
A non-profit organisation that is independent of government and pursues social, humanitarian or environmental aims, reinvesting any surplus in those aims.
Specific, measurable targets that a business sets in order to achieve its aims, usually with a deadline.
Short-term, specific objectives for teams and individuals, set by junior managers or supervisors, that contribute to achieving tactical objectives.
The goods and services that a business produces from its inputs and sells to customers.
An unincorporated business owned by two or more people, who share its capital, decisions and profits and usually have unlimited liability for its debts.
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 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.
A cooperative owned by producers, usually farmers, who combine to buy inputs, process and market their output, gaining scale and bargaining power.
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 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.
The part of the economy that provides knowledge-based services, such as research and development, information technology, data analysis and consulting.
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 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.
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.
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 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.
Intangible products, such as banking, education, healthcare and transport, that are provided to customers but cannot be stored or physically owned.
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.
An unincorporated business owned by one person, who has full control, keeps all the profit and has unlimited liability for its debts.
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.
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 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.
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 regulated market on which the shares of publicly held companies and other securities are bought and sold.
An agreement between two or more independent businesses to cooperate and share resources to achieve shared objectives, without creating a new 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.
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.
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.
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.
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.
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.
The spread of technology, production methods, management practices and skills from a multinational company to workers and businesses in a host country.
The part of the economy that provides services to consumers and to other businesses, such as retail, transport, banking, tourism, healthcare and education.
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.
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.
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.
The legal obligation of the owners of an unincorporated business to pay all its debts, if necessary from their personal assets.
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 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.
Desires for goods and services that are not essential for survival but improve the quality of life; people's wants are almost unlimited.
A cooperative owned and democratically controlled by the people who work in it, who share its surplus.
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.