PARTIAL 1

Primary sector

the part of the economy engaged in extraction [such as of minerals or oil] or production of raw
materials (farming, fishing, forestry, raising livestock, and quarrying)

Secondary sector

the part of the economy engaged in the production of finished goods ( ie the manufacturing
sector of the economy)

tertiary sector

the part of the economy engaged in the delivery of services, such as banking, healthcare and
restaurants

Quaternary sector

the part of the economy engaged in the production, processing and transmission of
information. Whereas some consider the quaternary sector a subset of the tertiary sector,
others emphasize that quaternary sector activities are based on advanced knowledge and
include information technology services, consultancy, and research and development.

Private sector

the portion of an economy not controlled or owned by the government.

Public sector

those portions of the economy owned or controlled by the government, such as government
services, public schools, and state-owned corporations

Sole trader

a business owned and operated by one person. No legal distinction exists between the
business and the owner. Thus, the owner has unlimited liability for the liabilities of the
business, and the business ceases to exist when the owner dies.
Partnership

a business owned and operated by two or more people. No legal distinction exists between the
business and the partners, each of whom are legally responsible for 100% of the liabilities of
the partnership.

Privately held company

an incorporated business offering limited liability to the owners. Owners' liability is limited to
their investment in the company. In most countries, shareholders of privately held companies
cannot sell their shares unless they have first been offered to existing shareholders; the shares
cannot be traded on a stock exchange; and there are limits on the number of shareholders.

Publicly held company

an incorporated business offering limited liability to the owners. Owners' liability is limited to
their investment in the company. The shares of the company are traded on some public
exchanges, and publicly held companies must disclose or make public considerable information
about the company, including audited financial information.

Social enterprise

a business that advances a social purpose in a financially sustainable way. While aiming to do
social good, social enterprises rely on business models, have sales revenue, and reinvest what
profits they make in the business. Social enterprises generally do not depend on philanthropy.

For-profit social enterprise

an organization with many similarities to a normal social enterprise, except that it often earns a
profit, some of which might be distributed to owners. The primary aim of a for-profit social
enterprise is to provide a social service.

Cooperative

business organization owned and operated by its members, who share any profits.
Cooperatives exist in many industries but are common in agriculture.

Non-profit social enterprise

an organization with many similarities to a normal social enterprise, except that it is less willing
to [and often does not) earn a profit or surplus. The primary aim of a non-profit social
enterprise is to provide a social service.
Non-governmental organization (NGO)

non-profit organizations, often with a humanitarian or social purpose. NGOs are independent
of government, but they often receive government grants or funding and cooperate with
government.

vision statement

a philosophy, vision or set of principles which steers the direction and behavior of an
organization

mission statement

states a company's purpose and explains why the business exists. A mission statement
generally includes the business's objectives and, whether expressly stated or implied, indicates
its most important values.

Business objectives

the articulated, measurable targets that a business must meet to achieve the objectives or
long-term goals of the business. It is critical that objectives are specific and measurable.

Strategic objectives

the long-term goals of a business that indicate how the business intends to fulfill its mission.
Strategic objectives usually include performance goals, such as increasing market share or
improving profitability.

Tactical objectives

short-to medium-term targets that, if consistently met, will help a business achieve its strategic
goals. Whereas strategic objectives are typically set by the board of directors with top
executive management, tactical objectives are usually set by executive management working
with middle-level management.

Corporate social responsibility (CSR)

CSR is the view that businesses, rather than focusing solely on increasing shareholder value,
should contribute to the economic, social, and environmental well-being of society.

Stakeholder

a person or organization that affects or is affected by a business. Stakeholders are often

classified as internal versus external, market versus non-market, or primary versus secondary.
Internal stakeholder

a stakeholder who is internal to (inside] the business, such as an employee, a manager, or

shareholders

External stakeholder

a stakeholder who is external to [outside] the business or organization, such as suppliers,

customers, government, media, or the community .

Economy of scale

the decrease in per unit production cost as output or activity increases

Diseconomy of scale

the increase in per unit production cost as output or activity increases

Fixed costs

costs which do not change according to the amount of goods or services produced by the
business

Variable costs

costs which increase or decrease according to the amount of goods or services produced

internal growth

sometimes referred to as organic growth, this occurs when a business grows by relying on its
own resources and capabilities: investment in new products, or new sales channels, or more
stores etc to increase sales

External growth

occurs when a business expands with the aid of resources and capabilities not developed
internally by the company itself. Instead, the company obtains these new resources and
capabilities by acquiring another company or forming some type of relationship, like a joint
venture, with another organization.
Merge

occurs when two companies that are theoretically "equal" legally become one company

Acquisition

when one company purchases a majority or all the shares of another company

takeover

when one company acquires a majority or all the shares in another company. When the word
"takeover" is used, the situation usually means that the company being acquired does not
welcome the transaction.

Joint venture

an organization created, owned, and operated by two or more other organizations. The joint
venture is legally distinct from the organizations that created it.

strategic alliance

occurs when two or more businesses cooperate in some legal way that enhances the value for
all parties. Members of the alliance retain their independence. A strategic alliance is less
binding than a joint venture, so no new organization is created.

Franchising

a method of distributing products or services, where the franchisor develops products or

services and its brand and then sells the right to use the brand and its products or services to
franchisees. The franchisee pays a fee and typically some percentage of revenue or profits to
the franchisor.

Multinational corporation [MNC]

a company that operates in two or more countries. It is generally a very large company, but it
does not have to be. MNCs are also sometimes referred to as a multinational enterprises
(MNEs)
 PARTIAL 2

Human resource management

how an organization manages its human resources; includes recruitment and retention, setting
compensation and benefits, and specifying job responsibilities

Demographic changes

shifts in demographic factors, such as birth rates, death rates, education levels, religion,
ethnicity, age, etc.

Labor mobility

the ability of workers to move occupationally or geographically (within countries or

internationally). Learn how easily workers can change their place or type of work.

Immigration

the international movement of people into countries where they are not citizens. People who
are temporarily in a foreign country, like tourists or students, are not considered to be
immigrants; rather immigrants are those who seek permanent residency in the new country.

Flexi-time

a flexible work schedule that allows workers to adjust the starting and finishing times of their
work day, giving them flexibility to meet other demands [such as childcare requirements)

Gig economy

an economy where many positions are temporary and organizations hire independent workers
for short-term commitments

Organization chart

depicts the reporting relationships within an organization. All levels of the organization are
depicted and the chart shows who reports to whom down to the least senior level of
employees in the organization.

Hierarchy

a system organizing or ranking people according to power or importance

Chain of command

the official hierarchy in an organization. The chain of command indicates who reports to which
manager and which manager has authority over specific employees.

Span of control

the number of people reporting to a specific manager. A wide span of control means many
people reporting to the manager; a narrow span of control means a small number of people
reporting to the manager.

Delegation

assigning authority or responsibility over specific tasks from one person, a manager, to
someone lower on the organizational chart. The manager remains accountable for the
successful completion of the delegated tasks.

Bureaucracy

refers to any organization with multiple layers of authority. Because bureaucracies often have
complex approval processes, decision-making is typically slower than in small organizations.

Centralization

when personnel at the main or central office of the business have the authority for decision-
making. Personnel not in the central office implement the decisions made by it. Centralization
can also occur at one location, when senior management retain all key decision-making
functions for themselves and delegate little or no decision-making authority to others.

Decentralization

the opposite of centralization; Decision-making authority is delegated out to offices from the
main or central office. Managers in regional or outlying offices have authority for making many
types of tactical and operational decisions.

Delayering

the process of removing levels (layers) of hierarchy in an organization. The aim of delayering is
usually to improve an organization's efficiency by making it less bureaucratic.
Matrix structure

typically exists in contexts where projects and project completion require involvement from
people with different expertise from different areas of the organization (such as HR, marketing,
operations, etc ). In a matrix structure, people work in teams and report to these people with
different expertise. Thus, they report to more than one person when doing their job.

Project-based organization

an organizational form, often similar to a matrix structure, that organizes work into projects.
Thus, project-based organizations create temporary systems for carrying out different projects.

Shamrock organization

An organizational structure based upon the work of human-resources expert Charles Handy,
who modeled the structure on the shamrock [a clover-like plant). A shamrock organization has
three types of employees: the full-time professional core, a flexible labor force, and a
contractual [outsourced] group.

Management

the ongoing process of planning, decision-making, organizing, leading, motivating and

controlling the financial, human, physical, and information resources of a business or
organization, with the aim of efficiently and effectively achieving the goals of the business or
organization

Leadership

a process of motivating a group or team of people to work towards the goals of a business or
organization. Unlike management, which is generally considered a science, much of leadership
is an "art": an intangible ability to inspire, lead, coerce, or charm through charisma and other
affective and intellectual qualities.

Autocratic leadership

occurs when the leader concentrates all or most decision-making in their own hands.
Autocratic leaders typically do not seek input from others and are confident in their own
decision-making.
Paternalistic leadership

occurs when the head of an organization treats employees like they are part of their family. A
paternalistic leader is typically warm and protective of employees but also expects loyalty and
obedience.

Democratic leadership

occurs when the leader regularly seeks input from employees and involves them in decision-
making

Laissez-faire leadership

occurs when the leader of an organization gives employees considerable freedom to make
decisions on their own.

Situational leadership

Situational leadership occurs when leaders in an organization adapt their leadership style to (1]
the nature of the situation, task, or work and (2] the ability and expectations of the people in
the organization

Intrinsic motivation

motivation which comes from the satisfaction of carrying out a particular activity (no external
reward is required)

Extrinsic motivation

that is derived from external factors (in a business context, typically money)

Labor turnover

the percentage of employees who leave a company during a fixed period of time, typically one
year. The percentage is calculated by the ratio of the number of an organization's employees
who leave (whether because of attrition, dismissal or resignation) to the total number of
employees during that period.

Internal recruitment

occurs when a position becomes available at an organization, and the organization recruits
someone who is already working there to take on the new position
External recruitment

when an organization recruits employees who are not presently employees of the organization

Induction

the introduction of new employees to an organization. The process aims to increase the
likelihood that new employees can successfully do their new job.

On-the-job training

involves training employees at their place of employment during their normal working hours

Off-the-job training

involves employees receiving training not at their place of employment but offsite. The
employee's company typically pays for the tuition, which is usually provided by outside parties.

Formative appraisal

occurs during the training or work of employees. It is ongoing, continuous, and intended to
improve employees' performance.

Summative appraisal

occurs at the end of the training or at a fixed time during a year. Summative appraisals are the
formal, documented evaluation of employees. They attempts to measure employees'
performances.

360-degree feedback

occurs when an employee receives input from all categories of people [peers, customers, their
supervisor, among others) with whom the employee interacts. Because 360-degree feedback is
comprehensive and expensive, usually only senior members of an organization receive it.

Self-appraisal

occurs when an employee evaluates their own performance. It can be part of formative or
summative evaluation.
Financial rewards

rewards that an employer gives to employees, typically as part of an extrinsic motivation

scheme, that have a specific monetary value (pay rise, bonus, commission, employee
ownership scheme, etc. )

Salary

a fixed, regular compensation paid to employees on a periodic basis, usually bi-weekly or

monthly. Salaries are typically expressed on an annual basis ["He makes $52,000 a year") and
are typically paid to white-collar workers.

Wages (time and piece rates)

the monetary compensation paid by employers to workers either on a time basis ( eg $22 per
hour) or on a piece basis [ eg $8 for every item completed]. Blue-collar workers typically
receive wages rather than a salary.

Commission

payment to an employee when they complete a sale. The commission amount is usually a
percentage of the sale value.

Performance-related pay

compensation that is based upon performance of an individual, a unit, or even an entire

company. In performance-related pay schemes, management establishes measurable goals.
When an individual, a unit, or the company exceeds the goals, employees receive
compensation in addition to their regular wages or salary.

Employee share-ownership schemes

award employees shares in the company, permit employees to purchase shares in the company
at a below-market price, or match employees' purchases of shares ( eg for every share that
employees purchase, the company buys 0.5 shares for them)

Fringe payments

forms of compensation that an employee receives other than their salary, such as life insurance
coverage or use of a company car
Non-financial rewards

rewards that an employer gives to employees, typically as part of an extrinsic motivation

scheme, that do not have precise monetary value but which employees still value, such as a
better job title or some type of recognition ["employee of the month")

Job enrichment

When an employee is given additional tasks that are challenging and usually done by
managers. These extra tasks lead to professional growth and improve motivation.

Job rotation

occurs when employees rotate positions in an organization

Job enlargement

occurs when additional tasks associated with a job are added to the job description. Differs
from job enrichment in that the additional tasks do not generally require additional skill or are
more difficult.

Culture

the achievements, arts, attitudes, customs, norms, social institutions, and values of a particular
nation, people, or other social group. Organizations can have their own culture, which in
business is referred to as corporate culture.

Organizational culture

similar to corporate culture. It is the achievements, arts, attitudes, customs, norms, social
institutions, and values of a particular organization. An organization's culture will often reflect
some of the cultural practices of its host country, although two organizations within the same
country could also have different cultures.

Power culture

It exists when a few individuals retain the essential power in an organization. Power cultures
have few rules and procedures, and decision-making tends to be swift.

Role culture

refers to organizations where employees have clearly defined roles and operate in a highly
controlled and precise organizational structure. Organizations with a role culture are usually
hierarchical bureaucracies.
Task culture

refers to an organizational culture focused on specific problems. In this context, power shifts
from person to person as different people are suited to different tasks or issues.

Person culture

exists where individuals believe themselves to be superior to the organization. Some

professional partnerships, such as architecture firms and some university departments, can be
predominantly person cultures.

culture clash

when two different cultures come into conflict. In a business setting, a culture clash occurs
when one organization has to work with another organization, often because of a merger or
acquisition, and the two organizations have very different cultures.

Formal communication

refers to the official and formally recognized methods of communication in an organization.

Traditionally, formal communication was often through paper memos and meetings. Today,
formal communication occurs more commonly through group or individual emails, some type
of electronic announcement system, and, for natural disaster and emergency communication,
via text.

Informal communication

refers to the various ways in which information is casually disseminated. A manager might "get
the word out" by dropping by people's offices or sharing information with a few key , highly
connected individuals who then share the information with others in the department. Informal
communication also includes gossip and rumors .

Barriers to communication

the various impediments that prevent communication from happening when and how it
should. Sometimes these barriers are linguistic (people do not all speak the same language).
Sometimes they are psychological [people do not "hear" the message as it was communicated).
Sometimes they are structural (because of organizational structure management has limited
opportunities or windows to communicate].
Conflict in the workplace

most commonly refers to conflict between management and organized groups of workers.
Disputes usually occur over pay, benefits, and control over the work.

collective bargaining

occurs when employees of an organization work together when bargaining with management
about wages and work conditions. Typically, collective bargaining occurs at organizations where
the employees are unionized, and union representatives assist with the bargaining process.

Work-to-rule

occurs when employees precisely follow the rules of their existing contract. In this way, they do
the minimum required. They meticulously follow every single regulation, which may slow down
work or decrease productivity. During work-to-rule, workers typically will not work overtime or
beyond their contracted hours.

strike action

when workers stop working because they are dissatisfied with work conditions or
compensation. When workers "go on strike," the work stoppage provides leverage against the
employer to discuss pay and conditions.

Threats of redundancies

when management threatens to eliminate employment positions if workers do not accept

terms in an industrial dispute. Were those positions to be made redundant, the workers in
them would lose their jobs.

Changes of contract

when agreement is reached over new contract terms in collective bargaining and negotiation.
Changes are made in the existing contract between management and labor , and typically
relate to pay, benefits, and control over the work.
Lockout

When, as part of the negotiating process, management locks up the company or factories,
preventing workers from entering them. During a lockout, workers can no longer work and so
they do not receive any pay.

Closure

refers to the permanent or temporary shutting down of a site, such as a factory, a plant, or an
office. Many countries have national laws, which vary from country to country, stipulating
various conditions and consequences of closure.

Conciliation

occurs when a third-party conciliator mediates between management and labor and offers
ideas that may help the two sides come to an agreement.

Arbitration

occurs when a third-party arbitrator mediates between management and labor . Unlike in
conciliation, the arbitrator has the authority to decide how the conflict between management
and labor will be resolved.

PARTIAL 3
Capital expenditure

money spent to acquire fixed assets in a business

Revenue expenditure

money used in the day-to-day running of a business

Personal funds

a source of finance for sole traders that comes mostly from their own personal savings
Retained profit

profit that remains after a business [a profit-making entity) has paid out dividends to its
shareholders

Sale of assets

when a business sells off its unwanted or unused assets to raise funds

Share capital

money raised from the sale of shares of a limited company

Loan capital

money sourced from financial institutions such as banks, with interest charged on the loan to
be repaid.

Overdraft

when a lending institution allows a firm to withdraw more money than it currently has in its
account

Trade credit

an agreement between businesses that allows the buyer of goods or services to pay the seller
at a later date

Crowdfunding

when a business venture or project is funded by a large number of people each contributing a
small amount of money.

Leasing

a source of finance that allows a firm to use an asset without having to purchase it with cash

Microfinance providers

institutions that provide banking services to low-income or unemployed individuals or groups

who would otherwise have no other access to financial services.
Business angels

Highly affluent individuals who provide financial capital to small start-ups or entrepreneurs in
return for ownership equity in their businesses.

Fixed costs

costs that do not change with the amount of goods or services produced

Variable costs

costs that change with the number of goods or services produced

Direct costs

costs that can be identified with the production of specific goods or services

Indirect costs

costs that are not clearly identified with the production of specific goods or services.

Revenue

a measure of the money generated from the sale of goods and services

Total revenue

the total amount of money a firm receives from the sale of goods or services, found by
multiplying the price per unit by the number of units sold.

Profit and loss account

Also known as the income statement, this is the record of income and expenditure flows of a
business over a given time period

Cost of sales

the direct cost of producing or purchasing the goods that were sold during that period
Gross profit

found by deducting cost of sales from sales revenue

Profit before interest and tax

the difference between gross profit and expenses

Profit before tax

found by subtracting interest from profit before interest and tax

Profit for period

equal to profit before tax less tax

Dividends

a sum of money paid to shareholders, which is decided by the board of directors of a company

Retained profit

the amount of earnings left after dividends and other deductions have been made.

balance sheets

a financial statement that outlines the assets, liabilities and equity of a firm at a specific point
in time

Assets

resources of value that a business owns or that are owed to it

Liabilities

a firm's legal debts or what it owes to other firms, institutions or individuals

Net assets

found by subtracting total liabilities from total assets.

Equity

refers to the amount of money that would be returned to a business if all of the assets were
liquidated

Liquidation

a situation where all of a firm's assets are sold off to pay any funds owing.

Intangible assets

assets that are non-physical in nature

Patents

provide inventors with the exclusive rights to manufacture, use, sell or control the product or
process they invented

Goodwill

the value of positive or favorable attributes that relate to a business

Copyright laws

legislation that provides creators with the exclusive right to protect the production and sale of
their artistic or literary work

trademark

a recognizable symbol, word, phrase or design that is officially registered and that identifies a
product or business-

Depreciation

the decrease in the value of a fixed asset over time

Straight-line depreciation

a method that spreads out the cost of an asset equally over its lifetime by deducting a given
constant amount of depreciation of the asset's value per annum
Units of production depreciation

Also called units of activity method, it calculates the depreciation of the value of an asset
based on usage.

residual value

an estimate of an asset's worth or value over its useful life, also known as scrap or salvage
value.

Gross profit margin

calculated by dividing the gross profit by the sales revenue, expressed as a percentage

Profit margin

calculated by dividing the net profit before interest and tax by the sales revenue, expressed as
a percentage.

Return on capital employed

assesses the returns a firm is making from its capital employed

current ratio

a ratio that compares a firm's current assets to its current liabilities

Acid test ratio

a stringent ratio that subtracts stock from the current assets and compares this to the firm's
current liabilities.

Stock turnover ratio

measures how quickly a firm's stock is sold and replaced over a given period

Debtor days ratio

measures the average number of days a firm takes to collect its debts
Creditor days ratio

measures the average number of days a firm takes to pay its creditors

Gear ratio

measures the extent to which the capital employed by a firm is financed from loan capital.

Insolvency

a financial state where a person or firm cannot meet their debt payments on time.

Bankruptcy

a legal process that happens when a person or firm declares that they can no longer pay their
debts to creditors.

Cash flow

money that flows in and out of a business over a given period of time.

profit

the positive difference between sales revenue and total costs.

Cash flow forecast

the future prediction of a firm's cash inflows and outflows over a given period of time.

investment

the act of spending money on purchasing an asset with the expectation of future earnings.

investment appraisal

the quantitative techniques used in evaluating the viability or attractiveness of an investment

proposal

Payback period

the length of time required for an investment project to pay back its initial cost outlay.
Average rate of return [ARR]

measures the annual net return on an investment as a percentage of its capital cost.

Net present value [NPV]

the difference in the summation of present values of future returns and the original cost of
investment

Discounted cash flow

Use a discount factor that converts future cash flows to their present value.

Budget

a quantitative financial plan that estimates the revenue and expenditure over a specified future
time period.

budget holder

a person involved in the formulation and achievement of a budget.

Cost center

a section of a business where costs are incurred and recorded

profit center

a section of a business where both costs and revenues are identified and recorded.

Variance

the difference between the budgeted figure and the actual figure

Favorable variance

when the difference between the budgeted and actual figure is financially beneficial to the firm
Adverse variance

when the difference between the budgeted and actual figure is financially costly to the firm.

Decision-making

a process that involves selecting a course of action from various possible alternatives with the
aim of providing a solution to a given problem.

PARTIAL 4
Marketing

the management process of getting the right product to the right customer at the right price,
the right place and the right time

Product orientation

a business approach that focuses on making the product first before attempting to sell it

Market orientation

a business approach of first establishing consumer demand through market research before
producing and selling a product.

Market size

the total sales of all firms in a market

market growth

the percentage change in the total market size over a period of time.

Market share

the percentage of one firm's share of the total sales in the market

market leaders

a firm with the largest market share in a given market.

Marketing planning

the process of formulating marketing objectives and devising appropriate marketing strategies
to meet those objectives.

Market segment

a sub-group of consumers with similar characteristics in a given market

Market segmentation

the process of dividing the market into distinct groups of consumers so as to meet their desired
needs and wants.

Target market

a group of consumers with common needs or wants that a business decides to serve or sell to

Targeting

the process of marketing to a specific market segment

mass market

a large or broad market that ignores specific market segments.

niche market

a narrow, smaller or more specific market segment

Consumer profile

the characteristics of consumers of a particular product in different markets based on their

gender, age, and income levels, among other characteristics.

Product position map/perception map

a visual representation of how consumers perceive a product in relation to other competing

products.
Unique selling point/ proposition [USP]

a product's feature that differentiates it from other competing products in the market.

Sales forecasting

the process of predicting the future sales of a firm

Time series analysis

a quantitative sales forecasting method that predicts future sales levels from past sales data.

Moving average

sales forecasting method that identifies and emphasizes the direction of a trend.

Extrapolation

an extension of a trend line to predict future sales.

Variation

difference between current sales and trend values.

Market research

the process of collecting, analyzing , and reporting data related to a particular market.

primary research

the collection of first-hand information from the market.

secondary research

the collection of second-hand information from the market.

Qualitative research

the collection, analysis, and interpretation of data about consumer opinions, attitudes, or
beliefs.
Quantitative research

the collection, analysis and interpretation of numerical data or data that can be measured.

sample

a group of people selected to represent the population or target market under research.

Sampling

the process of selecting an appropriate sample.

Marketing mix

the key elements of a marketing strategy that ensure the successful marketing of a product.

Product

any good or service that is offered to the market with the aim of satisfying consumer needs or
wants.

Price

what consumers pay to acquire a product.

Promotion

ways of convincing consumers why they need a product and why they should buy it.

place

these concerns where the product will be sold and how it will be delivered to the market.

People

the human capital in terms of skills, attitudes, and abilities necessary in the production of
goods or the provision of services.

Processes

the procedures and policies pertaining to how an organization's product is provided and
delivered.
Physical evidence

the tangible or visible touch points that are observable to customers in a business.

Product life cycle

the course a product passes through from its development to its decline in the market.

Price skimming

setting a high price when introducing a new product to the market.

Penetration pricing

setting a low initial price for a product with the aim of attracting a large number of customers
quickly and gaining a high market share.

Promotional pricing

temporarily reducing the price of a good or service to attract customers.

Extension strategies

plans by firms to stop sales from falling by lengthening the product's life cycle.

Boston Consulting Group matrix

an analysis method of a firm's product portfolio regarding its market share and market growth.

brand

a name, symbol, sign, or design that differentiates a firm's product from those of its
competitors.

Branding

the process of distinguishing one firm's product from another.

Brand awareness

the ability of consumers to recognize the existence and availability of a firm's good or service.

Brand loyalty

when consumers become committed to a firm's brand and are willing to make repeat
purchases over time.

Brand value

how much a brand is worth in terms of its reputation, potential income, and market value.

Cost-plus pricing

refers to adding a mark-up to the average cost of producing a product.

loss leader

charging a low price for a product, usually below its average cost, to attract consumers to buy
other higher-priced products.

Predatory pricing

when a firm deliberately sets a very low price on its good or service with the aim of driving its
competitors out of the market.

Premium pricing

where a firm sets a high price for a high-quality product.

Dynamic pricing

where firms charge different prices for their products depending on which customers are
buying them or when the products sell.

Competitive pricing

where a firm sets the price of its product relative to the competitors' prices

Contribution pricing

the calculation of the variable cost of production of a firm's product, after which the product's
price is set.
Price elasticity of demand

a measurement of how the quantity demanded of a good is aff ected by changes in its price.

Price discrimination

charging different prices to different groups of consumers for the same product.

Above-the-line promotion

a paid form of communication that uses independent mass media to promote a firm's
products.

Below-the-line promotion

a form of communication that gives a business direct control over its promotional activities so
that it is not reliant on the use of independent media.

Through-the-line promotion

a form of promotion that uses an integrated approach of combining both above-the-line and
below-the-line promotion strategies.

Social media marketing

a marketing approach that uses social networking websites to market a firm's products.

Channel of distribution

the path taken by a product from the producer or manufacturer to the final consumer.

international marketing

the marketing of goods and services across national boundaries

Globalization

the increasing worldwide competition leading to a rise in international marketing.

E-commerce

trading over the internet

Piggybacking

the use of the existing distribution channels of one domestic business by another home
country business trying to sell a new product overseas.

PARTIAL 5
Economic sustainability

the need to use available resources and raw materials to their best advantage, ultimately
ensuring profitability and financial performance.

Social sustainability

the need to take human factors into account, both internally ( eg workers) and externally ( eg
local communities), when making business decisions.

Ecological sustainability

the need to take environmental factors into account when making business decisions
[especially about nature and ecosystems).

Triple bottom line

the need to take economic, social, and ecological factors into account when making business
decisions (the 3Ps).

Job production

production of a special "one-off" product made to a specific order (for one individual
customer).

Batch production

production of a group of identical products (the word "batch" refers to the fact that the items
in each group go together from one stage of production to the next).
mass production

production of a high volume [hence the word "mass"] of identical, standardized products.

Mass customization

combines mass production with the personalization of custom-made products for marketing
purposes.

Lean production

a Japanese approach to operations management focusing on less waste and greater efficiency.

Kaizen

a method of lean production based on continuous improvement.

JIT (just-in-time)

a method of stock control which means avoiding holding stock by getting supplies only when
necessary and producing only when ordered.

JIC (just-in-case)

holding reserves of both raw materials and finished products in case of a sudden increase in
demand.

Cradle-to-cradle design and manufacturing

a recent approach to design and manufacturing based on principles of sustainable

development, especially recycling.

Quality circle

a formal group of employees who meet regularly to discuss and suggest ways of improving
quality in their organization.

Benchmarking

a tool for businesses to compare themselves to their competitors in order to identify how they
can improve their own operations and practices.
Total quality management (TOM)

an approach to quality enhancement that permeates the whole organization (TOM can include
quality circles and benchmarking).

Outsourcing or subcontracting

the practice of employing another business [as a third party) to perform some peripheral
activities (this enables the organization to focus on its core activity).

Offshoring

the practice of subcontracting overseas, ie outsourcing outside the home country.

Insourcing

the practice of performing peripheral activities internally, within the company (the opposite of
outsourcing).

Reshoring

the practice of bringing back business functions (jobs and operations) to the home country (the
opposite of offshoring).

Contribution per unit

the difference between selling price per unit and variable cost per unit.

Total contribution

the difference between total sales revenue and total variable costs.

profit

obtained by subtracting total fixed costs from the total contribution; the positive difference
between total revenue and total costs.

Break-even chart

a graphical method that measures the value of a firm's costs and revenues against a given level
of output.
Break-even quantity

a measure of output where total revenue equals total costs.

Margin of safety

the output amount that exceeds the break-even quantity.

Target profit output

the level of output that is needed to earn a specified amount of profit.

supply chain

the system of connected organizations, information, resources, and activities that a business
needs to produce goods or provide services to its customers.

JIC ("just-in-case")

the traditional method of stock control, which involves holding reserves of both raw materials
and finished products in case of a sudden increase in demand [or a problem in the supply
chain).

JIT ("just-in-time")

a modern method of stock control, which involves avoiding holding stock by being able to get
supplies only when necessary and to produce just when ordered Buffer stock the minimum
amount of stock that should be held (to ensure that production is still possible and customers'
orders can still be fulfilled)

Reorder level

the level at which stock has to be reordered [a form of trigger or signal].

Reorder quantity

the amount of stock that is reordered.

Lead time

the amount of time it takes between ordering new stock and receiving it.
Crisis management

the systematic steps and efforts by an organization to limit the damage from a sudden crisis.

Contingency planning

an organization's attempts to put in place procedures to deal with a crisis, anticipating it

through scenario planning, modeling and simulation.

R&D

a form of innovation directly associated with the technical development of existing products or
processes, or the creation of new ones.

Product innovation

a type of innovation where new products are created or improvements to existing products are
made.

process innovation

a type of innovation where some parts of the manufacturing or service delivery are improved.

Adaptive innovation

an innovation in existing organizational elements.

Disruptive innovation

an innovation so important that it may change the industry itself.

Database

a collection of data that is organized to be easily accessed, managed, explored and updated.

Data mining

the process of finding trends, patterns and correlations within large databases.

Date analytics

the process of inspecting and modeling data in order to discover useful information.
Digital Taylorism

the use of digital technology to monitor workers.

Cybersecurity

the practice of defending computers and IT systems against malicious attacks.

Artificial neural network [ANN)

an element of a computing system designed to simulate how the human brain analyzes and
processes information.

Data center

a building or a room designed to house computer systems and their components.

Cloud computing

the delivery of services via the internet, especially data storage, databases, networking, and
software.

big data

extremely large databases that can be analyzed to show trends and patterns.

virtual reality

the creation of a simulated three-dimensional environment that can be explored by a person

who has entered that computer-generated world.

The internet of things ( loT )

the network of connected devices that transmit data to one another without human
involvement.

Artificial intelligence [AI]

the ability of computers (and other machines such as computerized robots] to mimic humans,
especially how humans think and process information.