NSSCAS Business Studies (8245) flashcards

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

Added value

The difference between the selling price of a product and the cost of the bought-in materials and components used to make it; it funds wages, overheads and profit.

Span of control

The number of subordinates reporting directly to one manager. It widens when staff are skilled and work is standardised, and narrows when tasks are complex or risky.

Delayering

Removing one or more levels of management from an organisation's hierarchy. It reduces salary costs and shortens communication lines but can increase workload and reduce promotion prospects.

SMART objectives

Targets that are Specific, Measurable, Achievable, Relevant and Time-bound. They allow managers and employees to judge performance against a clear standard rather than a vague aim.

Centralisation

Keeping decision-making authority at head office or senior management level. It gives consistent policy and tighter control but slows response to local conditions.

PESTLE analysis

A framework reviewing Political, Economic, Social, Technological, Legal and Environmental influences on a business. Each factor is judged by likelihood and impact to inform strategy.

Stakeholder mapping

Plotting stakeholders by power and interest. High power and high interest means manage closely; high power and low interest means keep satisfied; low power and high interest means keep informed.

Corporate social responsibility

Voluntary business action that goes beyond legal requirements to benefit society and the environment, such as community projects or emissions cuts, often at short-term cost to profit.

Market share

A firm's sales expressed as a percentage of total market sales: firm sales divided by total market sales, multiplied by one hundred. It indicates competitive strength and pricing influence.

Price elasticity of demand

The percentage change in quantity demanded divided by the percentage change in price. If the value exceeds one, demand is elastic and a price cut raises total revenue.

Market segmentation

Dividing a market into groups with similar needs using demographic, geographic, psychographic or behavioural bases, so that the marketing mix can be tailored to each group.

Primary market research

First-hand data collected for a specific purpose through surveys, interviews, observation, focus groups or test marketing. It is current and relevant but costly and time-consuming.

Product life cycle

The stages a product passes through: development, introduction, growth, maturity and decline. Sales and profit patterns differ at each stage, so marketing and pricing must adapt.

Break-even output

The quantity at which total revenue equals total cost, calculated as fixed costs divided by contribution per unit. At this output profit is zero and any extra unit adds profit.

Contribution per unit

Selling price per unit minus variable cost per unit. It shows how much each sale contributes towards covering fixed costs and then generating profit.

Just-in-time production

Ordering materials to arrive just as they are needed, minimising stock holding costs and waste. It depends on reliable suppliers and leaves little buffer against disruption.

Capacity utilisation

Actual output divided by maximum possible output, multiplied by one hundred. Low utilisation spreads fixed costs over fewer units and raises unit cost.

Total quality management

An approach where every employee takes responsibility for quality, aiming for zero defects and continuous improvement rather than relying on inspection after production.

Labour turnover

The number of employees leaving during a period divided by average number employed, multiplied by one hundred. High turnover raises recruitment and training costs.

Herzberg two-factor theory

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

Job enrichment

Giving employees more responsibility, variety and autonomy over how their work is done, aiming to satisfy higher needs and increase motivation and quality.

Workforce planning

Forecasting the number and skills of staff the business will need, comparing this with the existing workforce, then deciding whether to recruit, train, redeploy or make redundancies.

Cash flow forecast

A projection of expected cash inflows and outflows over a period, giving an opening balance, net cash flow and closing balance to reveal likely liquidity problems in advance.

Acid test ratio

Current assets excluding stock divided by current liabilities. A value near one suggests the firm can meet short-term debts without selling stock, which may be slow to convert.

Gearing ratio

Non-current liabilities divided by total capital employed, multiplied by one hundred. High gearing means greater fixed interest commitments and higher financial risk.

Payback period

The time taken for cumulative net cash inflows from a project to equal the initial investment. Shorter payback reduces risk but ignores cash flows after the payback point.

Net present value

The sum of future cash flows discounted to present value, minus the initial investment. A positive result suggests the project adds value at the chosen discount rate.

Ansoff matrix

A grid of growth options: market penetration, product development, market development and diversification. Risk generally rises as a firm moves away from its existing products and markets.

Porter five forces

An industry attractiveness model covering new entrants, buyer power, supplier power, substitutes and competitive rivalry. Stronger forces generally compress profit margins.

Decision tree

A diagram of options, possible outcomes and probabilities, used to calculate expected values. It clarifies risk but relies on estimated probabilities and ignores qualitative factors.

Sole trader

A business owned and controlled by one person who has unlimited liability for its debts. It is simple and cheap to start but has limited capital and continuity.

Business plan

A written document setting out the business idea, market analysis, marketing and operations plans, management and financial forecasts, used to test feasibility and raise finance.