39 of the Business glossary’s terms, each with the part of the syllabus where you first meet it.
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.