Pancyprian TS Bus. Org. flashcards

36 cards. Read the term and the definition here. The deck at the top of this page is optional.

Opportunity cost

The value of the next best alternative given up when a resource is committed to one use. It applies to money, time and production capacity.

PESTLE analysis

A framework scanning six external macro-environment factors: political, economic, social, technological, legal and environmental. Firms cannot control these but must anticipate their impact.

Stakeholder

Any individual or group affected by, or able to affect, a business's decisions and outcomes, such as employees, customers, suppliers, owners, creditors, government and local communities.

Sole proprietorship

A business owned and run by one person with no separate legal personality. The owner keeps all profit but bears unlimited liability for business debts.

Limited liability

A legal protection limiting an owner's financial loss to the capital they invested. Personal assets stay protected if the company cannot pay its debts.

Private limited company

A company with separate legal personality whose shares are not offered to the general public. Share transfer is usually restricted and disclosure requirements are lighter than a public company.

Franchise

A contractual arrangement where a franchisor licenses its brand, products and operating systems to a franchisee, who pays an initial fee and continuing royalties.

Cooperative

A business owned and democratically governed by its members, typically applying one member one vote and distributing surplus to members in proportion to their use.

SMART objectives

A test for well-written objectives: specific, measurable, achievable, relevant and time-bound. Vague goals fail the test and cannot be controlled effectively.

Span of control

The number of subordinates reporting directly to one manager. A wide span produces a flatter structure; a narrow span produces more management levels.

Control cycle

The sequence of setting a performance standard, measuring actual performance, comparing the two, identifying deviations and taking corrective action.

Delegation

Assigning authority to a subordinate to carry out a task. Authority passes down, but accountability for the final result stays with the delegating manager.

Matrix structure

An organisational design where employees report both to a functional manager and a project or product manager. It improves coordination but creates dual-authority conflict.

Delayering

Removing one or more levels of management from the hierarchy. It reduces cost and speeds communication but widens spans of control and can lower staff morale.

Decentralisation

The dispersal of decision-making authority from senior management to lower levels or local units. It improves responsiveness but can reduce consistency and central control.

Herzberg two-factor theory

Hygiene factors such as pay and working conditions prevent dissatisfaction but do not motivate. Motivators such as achievement, recognition and responsibility create genuine satisfaction.

Expectancy theory

Vroom's theory that motivation equals expectancy multiplied by instrumentality and valence. If any one factor is zero, motivation disappears entirely.

Job enrichment

Redesigning a job to add greater responsibility, autonomy and scope for achievement, usually vertically by giving planning and checking tasks to the jobholder.

Labour turnover rate

The proportion of the workforce leaving during a period, calculated as leavers divided by average employees, multiplied by one hundred.

Market segmentation

Dividing a broad market into groups of buyers with similar needs or characteristics, commonly demographic, geographic, psychographic or behavioural, so marketing can be targeted.

Price elasticity of demand

The percentage change in quantity demanded divided by the percentage change in price. A value above one in absolute terms means demand is elastic.

Marketing mix

The controllable elements a firm combines to serve a target market: product, price, place and promotion. Services add people, process and physical evidence.

Market share

A firm's sales expressed as a percentage of total sales in its market, calculated as the firm's sales divided by total market sales, multiplied by one hundred.

Productivity

Output produced per unit of input used. Labour productivity divides total output by the number of workers and measures efficiency of the workforce.

Break-even output

The quantity at which total revenue equals total cost and profit is zero, calculated as fixed costs divided by contribution per unit (price minus variable cost).

Just-in-time production

A stock system where materials arrive as needed for production rather than being held in inventory. It cuts storage cost but relies on dependable suppliers.

Total quality management

An approach where every employee is responsible for continuous quality improvement, aiming to prevent defects rather than detect them through final inspection.

Accounting equation

The fundamental relationship that total assets equal total liabilities plus owners' equity. Every transaction keeps this equation balanced.

Current ratio

A liquidity measure calculated as current assets divided by current liabilities. It shows whether short-term assets can cover obligations falling due within a year.

Return on capital employed

A profitability ratio calculated as operating profit divided by capital employed, multiplied by one hundred. It shows profit generated per unit of invested capital.

Cash flow forecast

A period-by-period projection of cash inflows and outflows, showing opening and closing balances. It identifies timing gaps between receipts and payments.

Triple bottom line

A reporting approach measuring performance on three dimensions: profit, people and planet. It records economic, social and environmental results alongside financial ones.

Corporate social responsibility

The voluntary commitment of a business to act ethically and contribute to economic development while improving the lives of employees, their families and the wider community.

Sustainability

Conducting business so that present needs are met without compromising the ability of future generations to meet their own needs, balancing economic, social and environmental outcomes.

Business plan

A written document setting out a venture's market analysis, marketing and operations plans, management team, financial forecasts and risk assessment, used to guide and fund the start-up.

Venture capital

Equity finance provided by specialist investors to young or growing firms with high growth potential, in exchange for shares and often a say in management.