Business A-Level

Business A-Level glossary

592 key terms for Business A-Level, A to Z, each linked to the topic pages that use it.

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A

Accounting Rate of Return (ARR): A measure of the average annual profit from an investment as a percentage of the initial investment.Eduqas
added value: The difference between output price and input costs, which can be increased by cutting waste or by improving quality to justify a higher price.AQA
Adding value: The difference between the price a customer pays and the cost of the bought in inputs, which is the reason the business exists at all.AQA
adverse variance: A variance that is adverse when the outcome worsens profit, such as revenue below budget or costs above it.AQA
alignment: A claim to test against the case, since real plans are overtaken by a recession or a new entrant, not an assumption.AQA
Alignment and consistency: Done well this gives consistent direction and a basis for choosing between options, so the targets reflect the stated purpose.AQA
alignment of employee and employer values: One of the human resource objectives, covering the alignment of employee and employer values alongside engagement, talent development, training and diversity.AQA
amending a network: Recalculating both passes when the case changes a duration and saying whether the completion date moves or the delay is absorbed by float.AQA
analysis: Building a chain in which a cause leads to an effect and the effect to a consequence for something the firm cares about.AQA
Ansoff matrix: Sorts growth options by how far each takes the firm from what it already knows, pairing existing and new products with existing and new markets.AQA
Ansoff's Matrix: A strategic planning framework developed by Igor Ansoff (1957) that categorises four growth strategies — Market Penetration, Product Development, Market…AQA
application: Naming the firm and using its figures and market rather than a generic business.AQA
application to a named business: Developing one lens on the named business, carrying a single chain of reasoning through to a business consequence.AQA
attribution and time lag: A fall in turnover may be the scheme or may be a slack local labour market, so other causes at work are considered before the scheme is credited.AQA
autocratic: A style that keeps every decision at the top.AQA
automation: Strips out routine tasks, leaving more complex work, and can cut the headcount needed while raising the skill level of the posts left.AQA
automation and robotics: Computer aided design and factory robots used in operations, bought for a reason a marker can see in the numbers.AQA
Automation and the cost structure: Shifts the cost structure towards high fixed costs and low variable costs, which raises the break even output and makes volume decisions riskier.AQA
average rate of return: Total net profit over the project's life divided by the number of years, then divided by the initial outlay and multiplied by 100.AQA
averages: Summaries of data sets, where the arithmetic mean is the total divided by the count and a weighted mean is needed when items have different importance.AQA
axes and scales: Labelling both axes with the variable and its unit and plotting to an even scale, since an unlabelled vertical axis cannot show break-even output.AQA

B

balanced scorecard: Kaplan and Norton's four perspectives set side by side: financial, customer, internal process, and learning and growth.AQA
barriers to entry: Factors that resist the threat of new entrants to an industry, such as patents or economies of scale.AQA
base year: The period set at one hundred, with every other period expressed as its value divided by the base value, multiplied by one hundred.AQA
bases of division: The ways a market is cut into groups that behave alike, such as by age or family stage, where people live, what they earn, or how they behave.AQA
benchmarking: Involves identifying and adapting best practices from other organisations, even in different sectors, to improve processes and spark new ideas.AQA
big data and data mining: A different investment from automating a production line, with a different payback and different risks, such as the mining of loyalty card records.AQA
brand: The asset that promotional spending builds, which makes demand less price sensitive, supports a premium, makes shelf space easier to win and turns a search…AQA
Brand loyalty: Shows up as repeat purchase and retention rates, and it protects future revenue.AQA
brand position: The place the brand is given in the buyer's mind relative to rivals.AQA
branding and price sensitivity: Differentiation, branding and loyalty schemes are each an attempt to dull the response to price, which is why they are worth paying for.AQA
break-even charts: A chart with output along the horizontal axis and money up the vertical, showing break-even output and margin of safety.AQA
break-even output: The output in units at which the firm covers everything and earns nothing, found by dividing fixed costs by contribution per unit.AQA
budgets and trade offs: Spending plans where cutting one budget makes the cost surface somewhere else, since trimming training raises turnover, which raises recruitment costs and…AQA
buffer inventory: A level of stock held so that demand or delivery that is less predictable does not leave the firm short.AQA
buffer stock: Stock held against a supplier or a demand forecast disappointing, which the stockless approach replaces with the reliability and frequency of deliveries.AQA
business context: Studying business in a variety of contexts, such as large or small, UK focused or global, and service or manufacturing.AQA
business ethics: These narrow the box further, sometimes expensively, when a firm refuses a supplier whose labour practices would not survive being published.AQA
Buyer power: The bargaining power of buyers, which is one of the five forces shaping competitive strategy.AQA

C

capacity: The maximum output existing resources can make in a period.AQA
capacity and flexibility: Running close to full capacity suits a growing market with few rivals, but flexible capacity is needed where demand is volatile or rivals compete hard on price.AQA
capacity and headcount: The link between the number of staff and the ability to meet demand, since a recruitment freeze with demand maintained could increase capacity utilisation and…AQA
capacity and quality: Operations needs flexible capacity, new equipment and tighter quality systems, and often has to carry deliberate spare capacity so that trials can happen at…AQA
capacity utilisation: Actual output divided by maximum possible output times one hundred, which a promotion that lifts orders can raise from perhaps sixty per cent towards ninety…AQA
capacity utilisation and productivity: Capacity utilisation is actual output divided by maximum possible output times one hundred; labour productivity is output per worker per period.AQA
capital gain: The return an investor makes if the share price rises after buying an ordinary share.AQA
capital intensive: A process where machines convert variable cost into fixed cost, so cost per unit falls at volume but break even output rises.AQA
capital investment and payback: The capital cost of technology, with a payback period measured in years, weighed against the gain it brings.AQA
capital mobility: Deregulated capital markets let firms fund investment abroad.AQA
Carroll's Corporate Social Responsibility pyramid: Ranks responsibilities as economic, legal, ethical and philanthropic.AQA
case study application: Using reasoning that could only have been written about this business rather than generic claims that fit any firm.AQA
case study evidence: Quoting evidence from the extract or the appendix rather than paraphrasing it loosely, so the answer names the product, the figure and the year.AQA
Cash flow and working capital: Finance is needed for the working capital tied up before customers pay, because marketing spend and stock build come before the cash from sales arrives.AQA
cash flow forecast: A month by month timetable of receipts and payments, built by adding net cash flow to the opening balance to get a closing balance.AQA
cash flow objectives: Cash targets keep the firm solvent while sales, cost and profit targets are pursued.AQA
cash flow versus profit: Cutting costs and selling more may improve profit over several months yet do nothing for cash this month, because those extra sales would still be made on…AQA
centralisation and decentralisation: Separate decisions from tall and flat: centralised structures give consistency, buying power and tight cost control but are slow, while decentralisation gives…AQA
centralised decisions: Keeping decisions at the top, which is fast in a crisis and consistent across sites.AQA
change fatigue: The quieter cost where a workforce reorganised again and again stops believing in the next attempt.AQA
channel conflict: Arises where a firm sells direct and through retailers, because the retailer who built the demand watches the customer buy on the maker's own site instead.AQA
channel of distribution: The route to market through which the product reaches the buyer, involving a number of intermediaries.AQA
chart selection: Picking the form that suits the data and saying why, such as a pie chart for shares of one market and a line graph for a series running through time.AQA
choosing a group to serve: Selecting one or more of the groups identified so that the firm is not trying to be everything to everybody.AQA
commission: Tying reward to sales value, which can tip staff into mis-selling.AQA
Communication: A one-way process of 'telling' stakeholders about decisions already made, using channels like annual reports, the company website, or press briefings, and it…AQA
comparing series: Two series rebased on different years should not be compared, as this makes the faster grower look like the slower one.AQA
comparison over time: Analysing data by setting a figure against the same firm across three or more years, so a trend is read rather than a single point.AQA
Competing stakeholder claims: Different groups want different things from the same surplus, and judgement means saying whose claim wins, over what period, and what the business loses by…AQA
competition for staff: A rival opening nearby competes for the same staff and can bid up the wage this firm must pay.AQA
competition law: A law whose scope and effects can block a merger or force a disposal.AQA
competitive advantage: Gained when financial decisions fund strategies such as lowering unit costs to undercut rivals or creating a unique offering for which customers pay a premium.AQA
Competitive advantage and imitation: The judgement usually turns on how easily rivals can copy it.AQA
competitive pressure: Pressure from rivalry, buyer power, the threat of substitutes, new entrants or supplier power, located using Porter's five forces.AQA
competitive rivalry: A domestic firm now faces global competitors whose cost base it may struggle to match, intensifying rivalry within Porter's five forces.AQA
Competitiveness: The ability to win and keep customers against rivals while still earning an acceptable margin.AQA
competitiveness through people: A decision reaches competitiveness through labour cost per unit, through productivity or through the quality the customer experiences.AQA
conciliation and arbitration: Steps used once talks stall, including conciliation through an outside body as the step before industrial action, and binding arbitration under no strike deals.AQA
confidence intervals: A range is put around a sample figure, so a survey result quoted with an interval at the usual level says the real figure very probably lies within that range.AQA
conflict between cash and profit: A discount for early settlement brings cash forward and takes the same money straight out of profit.AQA
conflicting functional objectives: A genuine clash of functional objectives, such as marketing wanting a wide range and short runs while operations wants long runs and few changeovers.AQA
conflicting objectives: Targets that collide, since widening the product range pushes up unit costs and inventory, and a finance target to hold cash blocks the recruitment human…AQA
constraints on small firms: A small firm has fewer options than a large one because it holds less security, has less bargaining power over suppliers and cannot turn to a rights issue.AQA
Consultation: A two-way process of 'asking' for input before a decision is made, using methods like works councils, employee representatives, or supplier forums, and it is…AQA
Consultation cost and speed: The trade-off of time and money, because full consultation slows the decision and leaks it to rivals, while skipping it invites strike action, a supplier…AQA
consultation versus negotiation: Management asks staff and then decides, whereas agreement is needed in negotiation, and the difference decides how much power staff really hold.AQA
continuous improvement: One of the prevention approaches, alongside training, self checking and quality circles, that asks for a change in culture and supervision.AQA
Contribution and break-even: A price cut agreed by marketing changes contribution per unit, the selling price minus the variable cost per unit, and therefore the break-even output, fixed…AQA
contribution per unit: Selling price per unit less variable cost per unit, measured in pounds, and the money each sale leaves behind to put towards the fixed costs.AQA
contribution squeeze: A rise in variable cost per unit steepens the total cost line from the same starting height, cutting contribution per unit and pushing break-even to the right.AQA
control and motivation: The value of financial objectives lies in coordination, motivation and control, because each target becomes a budget and every budget throws up a variance…AQA
Control and performance review: Managers can be held to account because actual performance can be set against what was promised.AQA
controllable marketing variables: The four levers of product, price, promotion and place that a firm can actually pull.AQA
core competence: Something the firm does distinctively well that customers value, that rivals find hard to copy, and that can be carried into more than one market.AQA
core rigidity: The same capability that opened one market becomes a core rigidity when technology shifts, and the firms most invested in it are the slowest to let it go.AQA
Core vs non-core activities: The key strategic decision is whether the activity is core to the business's competitive advantage, with outsourcing non-core functions common but outsourcing…AQA
corporate and functional objectives: Functional plans sit below corporate objectives, so a marketing or operations decision is judged by whether it serves that objective.AQA
Corporate Objective: A long-term, measurable goal set at board level that translates the mission into a concrete target.AQA
corporate objectives: Aims that are tied directly to the owner, so shareholders push for returns, trustees push for the charitable purpose and a founder may push hardest for control.AQA, Pearson Edexcel
Corporate social responsibility: Accepting duties to stakeholders beyond what the law and the owners' return require, appearing as a cost now against a benefit later.AQA
Corporate Social Responsibility (CSR): Balancing commercial objectives with ethical ones, with reasons for and against it considered in the social environment.AQA
correlation and causation: Association is never proof of cause, and saying so is where the evaluation marks live.AQA
cost against benefit: The cash available matters, because a scheme that adds to the wage bill in a low margin firm can cost more than it returns.AQA
cost against conscience: Behaving ethically is usually a clear short term cost set against an uncertain long term gain, so the rise in unit cost is set against savings and the value…AQA
cost and timeliness: Weighing what it costs and how long it takes to gather evidence against the cost of getting the decision wrong, reaching a view suited to the firm's size.AQA
cost cutting trade offs: Cutting costs can lift the margin, but quality or brand damage is a conditional risk rather than an inevitability.AQA
cost leadership: Being the lowest cost producer in the market as a whole while charging close to the going rate, which needs scale, tight overheads and high capacity…AQA
cost now against benefit later: The trade-off where the cost is certain and immediate while the payoff is slow and uncertain, so the case is strongest where customers will pay for it and the…AQA
cost of quality: A defect found by a customer costs far more than one found on the line, which costs more than one designed out at the drawing stage.AQA
cost of rework: Money the firm has already spent and thrown away, removed on the cost side when quality improves, alongside scrap, returns and warranty work.AQA
cost of settlements: A price on the cost side, since conceding generous pay awards raises fixed costs that are hard to reverse in a downturn.AQA
cost of transition: The debit side of change, including consultancy fees, redundancy and output lost during the transition.AQA
cost savings: A lower unit cost or a smaller wage bill, one of the routes through which digital technology earns a return.AQA
cost, quality, speed and flexibility: Main operational objectives that often conflict, for example increasing speed may require more stock, raising costs.AQA
credit control: Tightening credit terms or offering a settlement discount shortens debtor days, while stretching creditor days uses the supplier as a free bank until the…AQA
credit terms: The terms on which customers take time to pay and suppliers must be paid, which quantify the gap between cash inflows and outflows.AQA
criterion rate: The rate against which the outcome is judged, alongside the firm's cost of capital or a competing project, rather than calling any positive number good.AQA
critical path: The chain with no spare time, which fixes the minimum duration, so a day lost on it is a day lost on the whole project.AQA
cross-referencing sources: Connecting two sources, reading a comment against a figure in the table, which is where the sharper points come from.AQA
crowd funding: Replaces one lender with many small backers, who in reward form pre buy the product, in equity form buy shares, and in peer to peer form lend at interest.AQA
cultural distance: A criterion for judging international markets, for which Hofstede's dimensions give a language, though they average a whole nation, ignore variation inside it…AQA
customer data: Data that makes promotion measurable in a way a billboard never was, so a firm can see cost for each click, conversion rate and what a customer is worth over…AQA

D

data protection: The legal duty to hold personal data safely, so a breach costs fines and trust as well as the price of the fix.AQA
data quality: Questioning the information given, its age, its source, the size of the sample, or whether an average is hiding a wide range of outcomes.AQA
data reliability: The quality of the numbers a decision is built on, which caps the quality of that decision; the habit is to ask who produced a figure and how old it is.AQA
days lost to industrial action: A measure of disputes that falls towards nothing where the workforce and management trust each other.AQA
debt factoring: Selling the sales ledger for roughly eighty to eighty five per cent of face value now, so cash arrives in days rather than at the end of the credit period.AQA
decentralised decisions: Pushing decisions down, which puts them next to the local market and hands over the responsibility that motivates.AQA
decision context: The set of circumstances that decides whether a choice is right, including size, finances, market position, objectives and how much risk the owners will carry.AQA
decision criteria: Using the business's own objectives as the yardstick, because a good outcome for a family firm planning for grandchildren is not a good outcome for a plc…AQA
Decision specific mapping: The map is drawn for one decision at one moment, so a change in the market or a campaign can move a group into another box.AQA
decision trees: A tool for scientific decision making, with squares as decision points and circles as chance points, used to understand and interpret options.AQA
delayering: Removes a tier of managers, which cuts overhead permanently, shortens the chain and forces delegation, but removes the people who trained the juniors and…AQA
delegation: Passing the task and the authority down, while accountability stays with the manager who gave it away.AQA
deliberate strategy: A strategy designed in advance through a formal process, providing direction, coordination and a basis for control.AQA
demand volatility and seasonality: A market condition where demand is volatile, meaning a firm needs flexible capacity, short lead times and a low cost base.AQA
democratic: A style that consults and sometimes hands the decision over.AQA
demographic, environmental and fair trade factors: Demographic change shifts demand and tightens labour supply, environmental issues raise costs through regulation but create demand for sustainable products,…AQA
differentiation: Offering unique value that commands a higher price, achieved through superior quality, customisation or speed of response.AQA
differing assessments: A source of resistance where experienced employees genuinely think the plan will not work.AQA
digital marketing: Selling and communicating through digital channels, which changes the economics of the mix rather than simply adding a lever to it.AQA
direction and control: Setting the direction against planning and control, rather than claiming leaders are senior and managers are junior.AQA
Direction and coordination: Targets give a direction everyone can pull in, so the marketing plan and the capacity plan are not solving different problems.AQA
Discount Factor: A factor used to convert a future cash flow into its present value.Eduqas
discretionary effort: The willingness to give this is what motivation means.AQA
disruptive change: The kind of change that rewrites a market, as streaming did to the rental of physical discs.AQA
Distribution of profit: The same pound spent on a dividend cannot fund the new line that protects jobs, so clashes concern how the surplus is shared out.AQA
diversification: Doing both at once, which spreads risk across markets while asking the firm to learn two unfamiliar things at the same time.AQA
dividend yield: The dividend per share divided by the share price and shown as a percentage, used to rank one company against another.AQA
durability: The issue that a competence rivals copy within two years cannot carry a ten year strategy.AQA
durable competitive advantage: An advantage judged by considering whether rivals can easily copy it, for instance a new machine versus a unique company culture.AQA
Dynamic pricing: Prices adjust based on real-time market demand, like airline seats or ride-sharing services, and can maximise revenue by responding to demand shifts.AQA

E

e-commerce channels: Selling online, which adds picking, packing, delivery and a returns rate a physical shop never carries.AQA
e-commerce economics: Reach is national or global from the first day and the cost of serving one more visitor is close to nothing.AQA
earliest start and latest finish times: Carried through the diagram by the forward pass taking the highest figure where paths meet and the backward pass taking the lowest.AQA
Economies of scale: Cost savings that lower unit costs through technical, purchasing and managerial economies as a business grows.AQA
Economies of scope: Cost savings that come from shared resources when a business produces a variety of products.AQA
education and communication: An approach that takes time but leaves staff convinced, used to overcome resistance to change.AQA
effectiveness versus efficiency: The first asks whether the right goods reach the right place at the right time and quality, the second asks what that cost, and improving one can damage the…AQA
efficiency ratios: The efficiency measures are in days or in times per year: payables days, receivables days, and inventory turnover, which is cost of sales divided by average…AQA
emergent strategy: An unplanned pattern that arises from a series of decisions made in response to unexpected opportunities or challenges.AQA
emerging economy: One industrialising quickly from a low base, with rising incomes and institutions that are still forming, and it matters to business as a market and as a…AQA
employee costs as a percentage of turnover: Total staff costs divided by sales revenue and multiplied by one hundred.AQA
employee engagement: One of the human resource objectives a firm can set, alongside talent development, training, diversity and alignment of employee and employer values.AQA
employer reputation and retention: The ethical choice is a cost now set against reputation and retention later, affecting the quality of applicants who apply.AQA
employment ethics: Treating the people a firm employs and the people its suppliers employ in a way that is defensible rather than merely lawful.AQA
employment law: A law whose scope and effects can lift labour costs through the minimum wage, holiday entitlement and pension duties.AQA
enforcement cost: The money an owner must be able to afford to go to court, since protection is worth little without it.AQA
entry method ladder: The four routes named here sit on a ladder of control against commitment.AQA
environmental cost of working patterns: Commuting, business travel and premises choices carry an environmental cost and can affect recruitment.AQA
environmental influences on workforce decisions: An environmental expectation about the footprint the employer leaves, where a decision such as relocation or remote working has an obvious environmental…AQA
environmental investment: Insulation, heat pumps and fleet replacement often fail a short payback test while saving money and reputation over a decade.AQA
environmental law: A law whose scope and effects can add compliance, monitoring and disposal costs.AQA
environmental objectives: Objectives such as reducing waste or carbon emissions, which are increasingly important and can create trade-offs but can also lead to efficiencies and…AQA
environmental objectives and waste: Stripping out packaging or switching to recycled inputs raises unit cost now but often cuts waste disposal and energy bills later.AQA
environmental scanning: Looking at the outside world; weak scanning is one of the internal causes of strategic drift.AQA
Environmental sourcing and packaging: Pressure that limits packaging, sourcing, transport and product life, increasingly arriving through law and retailer requirements rather than consumer…AQA
equity: A long-term source that fits a machine which will run for a decade, alongside a loan spread across the life of the asset.AQA
equity crowd funding: Hands slices of ownership and voting rights to thousands of strangers, and the equity version dilutes ownership permanently rather than being free money.AQA
equity finance: Selling a stake in the business, such as issuing share capital or securing venture capital for a high-risk start-up, which dilutes ownership but does not…AQA
erosion of advantage: A margin that looked structural turns out to have been a head start, as rivals copy a product within a season, patents expire, technology resets the cost base…AQA
ethical and environmental constraints: An influence to run over any operations decision, asking who is affected ethically or environmentally.AQA
Ethical constraints on promotion: Limits on the claim and the audience, covering advertising aimed at children, gambling and high fat products, the small print on a finance offer, and the…AQA
ethical sourcing: Choosing suppliers by ethical and environmental standards, where the assessable consequence of cheap sourcing exposed in the press is commercial rather than…AQA
ethical sourcing and supply chain audits: Every sourcing choice carries a cost and a reputation consequence, and a firm can only be as ethical as the suppliers it can afford to audit, police and if…AQA
Ethical, environmental and technological influences: These factors directly affect costs, revenues, brand image, and sources of finance, so they must be integrated into analysis.AQA
ethics and profit trade off: A principled stance costs cash now and pays later in loyalty, recruitment and lower risk, so judgement turns on the time horizon and on how visible the firm is.AQA
evidence based decisions: Collecting evidence is only worth it if it changes what the firm does, feeding the choices of what to sell, who to sell it to, what to charge and how much to…AQA
exchange rate movements: A weaker pound makes imported components dearer and squeezes contribution per unit, while making exports more price competitive; a strong pound means imports…AQA
exit interviews: Evidence that does the same job at a smaller scale as absence records, appraisal ratings and engagement scores, pointing at the department where something has…AQA
expected value: Each payoff multiplied by its probability, summed, then less the cost of taking that option.AQA
expected value and net gain: At each circle every outcome is multiplied by its probability and totalled in pounds, and the net gain is that expected value less the cost of the branch…AQA
exposure to a downturn: The income figure tells a firm whose sales will fall hardest in a downturn and whose will hold up.AQA
extension strategies: Such as a new format, a new user group or repositioning, buying maturity a few more years.AQA
external change: Pressure arrives from outside, where the usual scan covers political, economic, social, technological, legal and environmental conditions.AQA
external environment: Influences from outside that shape departmental targets, including competitor pricing, the state of the economy, technology, suppliers and law such as the…AQA
external growth: A merger, takeover, joint venture or franchise agreement, delivering capacity, customers and capability when the deal completes.AQA
external influences on finance: A rise in interest rates lifts the cost of servicing debt and makes a heavily geared firm's fixed repayments dangerous.AQA
external trading conditions: A recession, a price war or a rise in interest rates can undo a plan that was sound when it was written.AQA
Extrapolation: A prediction built by assuming the past pattern continues, which is precisely the assumption an external shock destroys.AQA

F

facilitation and support: An approach that costs real money in training and counselling, used to overcome resistance to change.AQA
factoring: A short-term source that turns invoices into cash straight away.AQA
falling transport and communication costs: Containerisation and cheap air freight cut the cost of moving goods, while the internet cut the cost of coordinating global operations.AQA
favourable variance: A variance that is favourable when it improves profit.AQA
Feasibility: Whether the business can actually carry a plan out with the finance, capacity, skills and time it has.AQA
Fiscal policy: It uses government spending and taxation, so for example lower corporation tax boosts retained profit.AQA
fitness for purpose: Quality means meeting the customer's needs rather than the highest specification, so a budget hotel and a luxury one can both be excellent.AQA
fitness for the task: The nature of the work shapes the decision, since payment by output needs countable units, while professionals answer to autonomy more readily than to a bonus.AQA
five forces: Analyses rivalry, threat of entry, substitutes, buyer power and supplier power, drawn as a snapshot around chosen industry boundaries.AQA
fixed and variable costs: Total cost is fixed costs plus variable costs, the variable part being variable cost per unit multiplied by output.AQA
fixed cost per unit: Fixed costs do not change with output, so running near the ceiling spreads them across more units and this falls.AQA
Fixed costs: Costs such as rent, salaries and insurance that do not change with output in the short run.AQA
flexibility versus control: The balance between planning, which provides direction and a basis for control, and emergence, which allows for flexibility, learning and adaptation in…AQA
Flexible employment contracts: Part-time or temporary contracts and outsourcing that allow capacity to match demand, turning fixed labour costs into variable ones but potentially reducing…AQA
focus: A position in Porter's generic strategies that aims a cost or differentiation advantage at a narrow segment.AQA
focus strategy: Applying either the low cost or the differentiation approach to one narrow segment.AQA
forecast risk: The sales forecast is what a plan really rests on and is usually the least dependable line in it, because behind it sit a sample, a method and sometimes an…AQA
forecasting risk: Continuing a trend past the last known point is only as safe as the assumption that nothing changes.AQA
founder values: The founder's own values and the stories still told about them, which help form a culture rather than the culture being chosen.AQA
fractions: A part of a whole, vital for calculating metrics like market share, often converted to percentages for easier interpretation.AQA
franchising: Transfers a whole business format including brand and operating standards, buying speed and somebody else's capital at the cost of standards resting on…AQA
Franchising models: Growth that uses others' capital but cedes daily control, with a loss of control over brand standards and customer service.AQA
Functional Coherence: The alignment between corporate objectives and the functional objectives of individual departments (Finance, Marketing, HR, Operations), ensuring that all…AQA
functional grouping: Grouping by specialism concentrates expertise and spreads the cost of a single finance or marketing team, but breeds silos and pushes every cross cutting…AQA
functional interdependence: The interrelationship between human resource decisions and other functions, where a workforce decision affects other functions and those functions also…AQA
functional objectives: Departmental targets that sit below the corporate ones, such as sales volume and market share for marketing, unit cost for operations, cash flow for finance…AQA
functional targets: The targets each department converts a chosen plan into, such as a unit cost and capacity utilisation target for operations.AQA
Functional trade-offs: Marketing led firms respond quickly to customers and can over promise, while finance led firms protect margin and can starve the brand.AQA
funding and cash flow: Development spending leaves the business years before any receipt arrives, so cash flow turns negative and the money must come from retained profit, new share…AQA
funding the wage bill: The finance constraint that wages, redundancy payments and training are all cash outflows occurring before any benefit is realised.AQA

G

GDP: Its growth affects demand, while negative growth is a recession that particularly harms firms selling products with high income elasticity.AQA
gearing: Low gearing provides capacity to borrow for new projects, while borrowing to invest raises gearing and creates fixed interest charges.AQA, Pearson Edexcel
generic strategies: Porter's framework for reaching competitiveness through cost leadership, differentiation or focus, though hybrid strategies and fast changes in a digital…AQA
generic strategy choice: Pressure from global competitors can force a clear choice among cost leadership, differentiation or focus.AQA
global and transnational strategy: High cost pressure alone gives global standardisation, high responsiveness alone gives localisation, and high on both demands a transnational firm that…AQA
goods vs services marketing: For tangible goods the focus is on features and distribution, while for intangible services the mix is often extended to include People, Process and Physical…AQA
Greenwashing and verification risk: Any gap between the claim and the supply chain becomes a story that costs more than the premium ever earned, so judgement depends on whether the claim can be…AQA
grievance and disciplinary procedures: A formal procedure so a complaint has somewhere to go before it becomes a dispute, handling the individual case.AQA
gross profit: Revenue less the cost of sales, so it reflects buying and making.AQA
gross profit margin: A profitability margin using profit after cost of sales, reflecting pricing strategy and direct production costs.AQA

H

Handy's four cultures: A way of sorting organisational culture four ways: power, role, task and person.AQA
hard human resource management: Treats labour as a cost to be minimised, using methods like zero-hours contracts, close supervision, and output-related pay.AQA
hedging and risk management: A management response using forward contracts, dual sourcing, invoicing in the firm's own currency, or moving production inside the barrier.AQA
hierarchy and span of control: Structural causes of poor communication: too many layers distort a message on the way down, and a wide span leaves managers no time to listen.AQA
holding cost versus stockout cost: The cost of holding stock, which is cash tied up, storage, insurance and obsolescence, set against the cost of running out, which is lost contribution, idle…AQA
Horizontal and conglomerate integration: Combining with a rival to gain market share and scale, or diversifying into unrelated markets to spread risk.AQA
human resource plan: The plan that keeps the decisions about the movement of people into, through and out of a business consistent with one another.AQA
hygiene factors and motivators: Herzberg separates factors that only stop dissatisfaction from motivators such as achievement and responsibility.AQA

I

imitation and entry: Rivals copy a product within a season and new entrants are slowed down by barriers such as brand, patents, scale or switching costs.AQA
implementation: The point at which a chosen plan becomes real because each department converts it into its own targets.AQA
implementation gap: The gap between intent and outcome opens in the middle of the hierarchy, because the people who carry out a plan were rarely in the room when it was written.AQA
implementing change: Introducing something such as new technology or a new shift pattern, which can be done in months rather than fought over for years where trust exists.AQA
Importance of marketing to a business: A lens linking marketing to brand loyalty, repeat purchase or the ability to charge a premium.AQA
income elasticity: A measure doing the same job against household earnings, positive for a normal good, above one for a luxury and negative for an inferior good.AQA
income elasticity of demand: The percentage change in quantity demanded divided by the percentage change in real income; a positive value above one means demand grows faster than income.AQA
incremental change: Small adjustments that staff barely notice.AQA
index numbers: A measure that sets its base year at 100, so a reading of 115 says the figure stands fifteen per cent above that base year.AQA
industrial vs consumer marketing: Industrial (B2B) buyers are often rational and informed, valuing technical support and credit terms, whereas consumer (B2C) marketing may focus more on brand…AQA
Inflation: It raises business costs such as materials and wages and erodes consumer purchasing power, forcing price reviews.AQA
influences on the marketing mix: Rising costs, new competitors or changing consumer incomes force businesses to adapt the marketing mix, which is dynamic.AQA
information: The raw record of what happened, which a firm can capture, store where colleagues can reach it and keep accurate.AQA
information overload: A trade-off where more data is not more insight, and a manager buried in dashboards decides later and no better.AQA
integration cost: The risk of external growth, where promised savings need two workforces, two software systems and two cultures to cooperate.AQA
interest cover: The figure to watch when borrowing to expand raises gearing and therefore the interest burden that must be paid whatever sales do.AQA
interest rates and gearing: A rise in interest rates raises loan repayment costs while cutting demand for credit-financed purchases, and significance depends on the business's level of…AQA
intermediary margin: The share of the selling price taken by each intermediary in the channel, leaving the producer the rest.AQA
internal and external failure costs: Costs that are expensive twice, once inside the factory and once out in the market, with the second bill larger and slower to clear.AQA
internal and external recruitment: Recruiting internally is cheaper, faster and motivating because it shows a route upward, while an outside appointment brings ideas the firm does not have.AQA
internal change: Pressure arrives from inside a firm, such as a new chief executive, a merger or a slide in productivity.AQA
internal conflict: The trade-off where functions get pulled in opposite directions by the same plan, since marketing wants a wider range while operations wants fewer variants…AQA
internal constraints: Influences from inside that shape departmental targets, including the corporate plan, the cash available, existing capacity and skills, culture and what the…AQA
internal environment: Cash, capacity, culture and leadership, which decide what the firm can attempt.AQA
internal labour supply: The supply already inside the firm once expected leavers and retirements are taken out, which the forecast demand for labour is set against.AQA
interrelatedness of business functions: Any change in the mix has knock-on effects, so a price cut might boost volume but squeeze margins and strain operations.AQA
intrapreneurship: Gives employees time and resources to develop their own ideas within the firm, applying motivators like responsibility and achievement, but requires a culture…AQA
inventory control: Barcode and radio frequency stock systems giving live stock data that frees the capital tied up in inventory and cuts stockouts.AQA
investment appraisal: Adopting digital technology is this rather than a fashion choice, so ask what the system costs, what it saves each year and how long the payback runs.AQA, Eduqas
Investment appraisal of new technology: Whether the payback period and the average rate of return justify locking up capital in assets that may be obsolete before they are written off.AQA
investment criteria: A minimum acceptable return or a maximum acceptable payback set first, so a project is judged against a stated hurdle.AQA
investment returns: The return a system earns against what it ties up, judged with payback or return on capital employed.AQA

J

job enrichment: Loading a job vertically with responsibility, which is Herzberg's own prescription.AQA
joint venture: Buys regulatory access and local knowledge, but shared control can generate disputes over strategy and profit.AQA

K

Kaizen: Also called continuous improvement, it asks every employee for minor gains, costs little and lifts productivity steadily but rarely produces a breakthrough.AQA
knock on effects: Following a decision through to a second function and naming the effect there, including the loop back to finance.AQA
knowledge: What a firm has learned to do with information, much of which sits in the heads of experienced staff rather than in any file.AQA
Kotter and Schlesinger: Set out six ways of handling resistance, from education and participation through to coercion, but assume the new design is right and say nothing about…AQA

L

labour cost per unit: Total employee costs divided by units produced, coming out in pounds per unit.AQA
labour intensive: A process where people cost more per unit yet can be scaled back, retrained and asked to do something different tomorrow.AQA
labour market conditions: Every workforce decision sits inside a labour market with a shortage or a surplus, which limits what the firm can do.AQA
labour productivity: Output per worker over a stated period, which when raised can lower labour cost per unit even where the hourly rate has gone up.AQA
labour turnover: Leavers over the period as a percentage of the average number employed, used as evidence that a retention problem is real.AQA
labour turnover and absence: Both fall as a benefit of motivated and engaged employees, along with the recruitment and induction bill that goes with turnover.AQA
laissez-faire: A style that sets the objective then stands back, delegating authority within agreed limits.AQA
lead time: The time that runs from placing the order to receiving the goods.AQA
lead time and responsiveness: Short lead times are needed where demand is volatile or rivals compete hard on price, and long overseas lead times may require buffer stock.AQA
leadership and vision: Deciding where the system ought to be going and persuading people to follow them there.AQA
leadership commitment: Putting money and people behind the priority instead of spreading both thinly, making the visible trade-off when two divisions want the same resource, and…AQA
legal monopoly: Protection granted to a patent holder over a new product or process for up to twenty years in the United Kingdom.AQA
levels of management: One of the four tests, where a decision taken by the board sits at one end and one delegated to a manager at the other.AQA
Lewin: Frames the job as unfreeze, change and refreeze, but assumes the new design is right and says nothing about whether the diagnosis was sound.AQA
Lewin's three stages: The sequence of unfreeze, change and refreeze, where new behaviour is locked in through appraisal, training and recruitment.AQA
licensing: Transfers rights to use intellectual property such as a patent or recipe, buying speed and somebody else's capital.AQA
licensing and royalties: Allowing a rival the right to use protected work and collecting royalties without building a factory.AQA
life cycle pressure: Pressure arising because life cycles shorten, so standing still is a decision with a price attached.AQA
limitations of ratios: The figures are historic, drawn from accounts prepared under policies that differ between firms, easy to flatter by timing a year end, and silent about brand,…AQA
limited liability: Incorporating as a private limited company creates a separate legal entity, granting shareholders this, so they can only lose their investment.AQA
limits of averages: Averages hide the problem, since an overall leaving rate of fifteen percent can conceal a rate three times that on one shift.AQA
limits of estimated data: Both numbers come from past behaviour, assume nothing else moves, and neither says a word about cost, so a price cut that lifts revenue can still cut profit.AQA
limits of forecasting: Forecasts are opinions carried to two decimal places, and five forces is blind to speed and to complementors.AQA
limits of historic records: Records describe yesterday and existing customers, so they are weakest in judging a product nobody has bought yet, and holding them brings a legal duty of…AQA
limits of models: Being a snapshot, it is static, subjective, only as good as the information behind it, and silent on whether the firm can afford to act.AQA
linearity assumption: Revenue and costs are drawn as straight lines, so a bulk discount on materials and a markdown to shift the last few hundred units both vanish.AQA
Liquidity vs. Profitability: The fundamental distinction between accounting profit, calculated on an accrual basis, and the actual cash position of the firm.OCR
logistics and distribution: Transport and warehousing decisions, which are among the levers for managing the supply chain.AQA
loss of market share: An early measurable symptom of drift, in which market share falls while revenue still rises.AQA

M

management functions: Planning, budgeting, organising people and checking progress against targets, keeping an existing system running.AQA
management style and trust: What decides the extent of involvement is management style and whether leaders trust staff with information.AQA
Managing reactions to change: Handling resistance from education and participation through to negotiation, pricing each approach in time or money.AQA
managing resistance: Human resources handles the resistance, where education, participation and negotiation are offered, while one model assumes change ends and refreezes, which…AQA
Managing resistance to change: In Kotter and Schlesinger's change management model, communication and participation are low-coercion methods that build trust when time permits, though…AQA
margin and volume: Being the low cost producer turns volume into margin and leaves room to cut price in a downturn without going into loss.AQA
margin improvement: A wider margin at the same price where rivals cannot match on cost, which lowers break even output.AQA
margin of safety: The gap in units between current output and the break-even point, which tells a manager how far sales can fall before losses start.AQA
margins and return on capital employed: Gross profit margin and operating profit margin are each stated as a percentage of revenue, and return on capital employed is operating profit as a percentage…AQA
market capitalisation: A measure of a PLC's value, tracked as share price multiplied by issued shares.AQA
market conditions and competition: Market conditions such as recession lower demand, and intense competition limits a firm's ability to pass cost increases on.AQA
market definition: A market is defined by the customers a firm actually competes for, and that definition drives every number after it.AQA
market development: In Ansoff's matrix this is the middle risk box, because the product is proven and only the customer is new.AQA
market expectations: Demand for shares moves on expectations of future earnings rather than on profit already reported, so results matter because they beat or miss what analysts…AQA
market mapping: Plotting rivals on two key attributes to visualise positioning and help identify gaps in the market.AQA
market penetration: Selling more of the current range to current customers, the cheapest because the product works and the channel exists.AQA
market saturation: A reason a firm looks abroad, when the home market is saturated.AQA
Market share: The firm's sales divided by total market sales, times one hundred, which strips the tide out and shows performance against rivals.AQA
market share arithmetic: A firm's sales as a percentage of the total market size, calculated as the firm's sales divided by total market sales and then multiplied by one hundred.AQA
Market size and growth: How big the market is and whether it is growing or shrinking, described with evidence rather than by calling it competitive.AQA
market size and income per head: Measures of a country's market that matter alongside the number of customers who can afford the product, rather than population alone.AQA
market structure: Matters next, where strong buyer power and easy entry drag prices down and reward efficiency, while a fragmented market full of loyal niches rewards focus.AQA
Marketing and operations capacity: A marketing decision is a promise the rest of the business has to keep, so a campaign that doubles orders needs operations capacity and stock.AQA
marketing planning: The marketing plan is the document where those four choices are written down with the reasoning behind them.AQA
mass marketing: Targeting a large market for high volume and economies of scale, but facing intense competition.AQA
matching principle: The rule that a short-lived need is paid for out of a short-term source and a long-lived asset out of a long-term one.AQA
matching strategy: Pairing a strength with an opportunity to give a plan, or a weakness with a threat to give a risk to fix, rather than leaving four separate lists.AQA
matrix working: A matrix crosses the two, giving staff a functional boss and a project leader, which suits Handy's task culture and breaks unity of command, so priorities…AQA
measurement limitations: The framework's weakness is that social and environmental strands have no common unit, so three lines measured in different units cannot be added.AQA
measuring effectiveness: Judged on before and after evidence, chiefly turnover, absence, output per worker, defect and complaint rates and engagement scores, all read against unit…AQA
Mechanistic structures: Structures with clear hierarchies that suit stable environments.AQA
Mendelow matrix: A tool that plots every interest group on power and interest, and the box a group lands in prescribes the treatment.AQA
merger: A deal agreed between boards, which changes the cost and the aftermath compared with a takeover that can be resisted.AQA
Methods of external growth: Ways of growing that include mergers, takeovers, ventures and franchising, distinguished from the type or direction of growth.AQA
milestones and review: A timescale with milestones forming part of the concrete requirements the strategy is turned into.AQA
mission: The purpose at the top of the chain, which gives no guidance when it is vague and lets almost any plan be justified after the event.AQA
mission and objectives: These set what the firm is even trying to do, so an option that does not belong to them is not on the table.AQA
mission drift: A risk where outside investors arrive with a return to earn and the stated purpose quietly loses the argument.AQA
Mission Statement: A broad, aspirational statement of a business's fundamental purpose — why it exists.AQA, Pearson Edexcel
mix consistency: Every lever has to say the same thing about the position the business has chosen, so the elements reinforce one another.AQA
Monetary policy: Set by the central bank, it uses interest rates to manage inflation, and higher rates increase loan costs and can dampen investment.AQA
motivation: A benefit of budgeting, since a delegated budget hands over real responsibility, which Herzberg's theory would classify as a motivator rather than a hygiene…AQA
Motivation and participation: People work harder towards a figure they helped to set, as assumed by Drucker's management by objectives.AQA
Motivation through purpose: A clear purpose gives staff a reason to care, a source of motivation that pay alone does not supply.AQA
multi-channel distribution: Running both a short channel, selling direct, and a long channel through retailers at the same time.AQA

N

national culture: The national cultures the business operates in, where Hofstede's power distance and uncertainty avoidance earn their keep.AQA
negotiation and agreement: An approach that buys agreement with cash or guarantees, used to overcome resistance to change.AQA
net present value: Multiplies each future flow by the discount factor supplied, adds them and takes off the outlay, so a positive figure in pounds means the project beats that…AQA
Net Present Value (NPV): The difference between the present value of future cash inflows and the initial cost of an investment, with future cash flows being discounted to reflect the…Eduqas
new product development: Developing something new spreads risk but burns cash long before any revenue arrives.AQA
niche defensibility: A focus approach trades volume for defensibility, because a segment too small to interest a national rival can still be served profitably on modest marketing…AQA
niche marketing: Targeting a small, specific segment, which can yield higher margins and loyalty but risks over-dependence on one group.AQA
non-financial factors: Qualitative considerations that move the ranking, such as the objectives and strategy of the business, staff morale and jobs, customers and pressure groups,…AQA
non-financial performance data: Operations, human resource and marketing figures that show why what happened to the money happened, rather than recording the money itself.AQA

O

objectives and constraints: Fixing from the stem which objective matters and which constraint bites first, so the judgement is anchored to the firm's stated objective.AQA
objectives as yardstick: Using the firm's own objective as the yardstick for success, not a general assumption that profit is the goal.AQA
operating profit: Takes off the overheads such as rent, salaries and marketing, so it reflects how the business is run day to day.AQA
operating profit margin: Operating profit over revenue, stated as a per cent of sales.AQA
opportunity cost: Judging the value against what else the money could do, such as reducing borrowing or refurbishing existing outlets.AQA
organic growth: Expanding from within, using retained profit to open outlets, launch products or widen distribution, so the firm keeps its culture, systems and quality…AQA
Organic structures: Structures with decentralised power that suit dynamic markets.AQA
organisational change: Coping with change, as framed by Kotter against coping with complexity, needing somebody to lead rather than only administer.AQA
organisational culture: An internal influence on the mission, listed alongside the founder's beliefs, the form of ownership and the resources available.AQA
outsourcing: Contracting an external firm for an activity previously done in-house, which can convert a fixed cost into a variable cost based on a per-unit charge.AQA
overdraft: A short-term source that charges interest only on the amount actually drawn and is repayable on demand.AQA
overtrading: When a profitable and fast growing business runs out of money because rapid growth absorbs the working capital it has to find in between.AQA
ownership: What sets what is even possible, since a family firm can chase independence while a listed company facing a takeover has to lift its share price.AQA
ownership and scale: Fixing from the stem whether the firm is large or small and what its ownership form is, so that feature drives the argument.AQA
ownership and time horizon: Ownership and the time horizon it imposes, so a family firm run for the grandchildren behaves differently from one bought by private equity on a five year exit.AQA

P

pace and sequencing: The judgement about whether a firm has the cash, leadership and goodwill to move now, or whether smaller steps deliver most of the gain at far less risk.AQA
participation and involvement: An approach that takes longer still and can improve the plan, used to overcome resistance to change.AQA
patents and copyrights: A patent gives its holder a legal monopoly over a new product or process, while copyright arises automatically over original written, musical and software work.AQA
paternalistic: A style that decides for people but explains the decision kindly afterwards.AQA
pay and non-pay rewards: Pay removes dissatisfaction rather than creating motivation, so a reward that is not pay, such as clear progression, may fit the workforce.AQA
payables: The money owed to suppliers, where a delivery bought on credit is a cost today and cash later.AQA
payback: The time taken for net cash inflows to cover the initial outlay, quoted in years and months.AQA
payback period: The time taken for cash returns to recover the outlay, found from a cumulative net cash flow column and given in years and months.AQA, Eduqas
penetration pricing: A low launch price set to buy volume and share, suiting elastic demand and falling unit costs.AQA
people: Covers recruitment, training and how much authority a front line employee has to fix a problem without asking a manager.AQA
percentage change: The new figure minus the original, divided by the original, then multiplied by one hundred, with the denominator always the earlier or base value.AQA
percentage points: A change in percentage points is distinct from a percentage change, so a margin moving from ten per cent to twelve per cent is a rise of two percentage points.AQA
performance related pay: Reconnecting effort and pay through appraisal, at the cost of subjectivity and of the teamwork it quietly punishes.AQA
person culture: The firm existing to serve the professionals inside it, as in a law partnership, and almost impossible to steer.AQA
Personalised pricing: Targets individuals, differing from dynamic pricing where prices change for all customers based on demand.AQA
physical environment: Covers the tangible cues that reassure a buyer who cannot test the service first, from the state of a waiting room to the clarity of an app.AQA
piece rate: Paying per unit produced, which lifts volume where output is countable and standardised, and wrecks quality where it is not.AQA
pivots and parallel shifts: A price change pivots the total revenue line upward from the origin so that it becomes steeper, while a rise in fixed costs shifts total cost upward in…AQA
planning versus flexibility: The payoff from planning rises with long lead times and heavy capital and falls in fast, unpredictable markets.AQA
political and exchange rate risk: Risks on the list of criteria, where a depreciation in the host currency cuts the sterling value of every future cash inflow.AQA
Porter's five forces: The usual frame in which fierce rivalry and powerful buyers squeeze margin, while a credible threat of new entry forces spending on capacity or brand.AQA
Porter's generic strategies: A model that includes cost leadership, differentiation, cost focus and differentiation focus as routes to competitive advantage.AQA
portfolio planning: The income ratio flags which lines will be hit first when household earnings tighten and which will carry the firm through, so a portfolio can be balanced.AQA
position audit: Answers the question where are we, using tools such as Porter's five forces and a SWOT analysis.AQA
positioning: Creating a distinct brand identity in the minds of a chosen consumer group.AQA
power and interest: Mapping each group by the power it holds and the interest it takes, so the useful question is who can do something about it.AQA
power culture: A web around one dominant founder, quick but fragile once the firm outgrows that person.AQA
precision against volume: The trade-off where a tighter fit lets a firm charge more, waste less promotion and keep customers longer, but costs volume and adds complexity.AQA
pressures for cost reduction: Pushes towards one standardised product made in a few large plants, cutting unit cost through economies of scale and suiting commodity-like goods.AQA
pressures for local responsiveness: Pushes towards products, prices and promotion adapted to national taste, distribution and law.AQA
prevention versus detection: The real choice is where in the process a fault gets caught, with prevention pushing responsibility onto the person doing the job and detection inspecting…AQA
price elasticity: A ratio dividing the percentage change in quantity demanded by the percentage change in price, normally negative, where below one is inelastic and above one…AQA
price elasticity of demand: Measures the percentage change in quantity demanded divided by the percentage change in price, telling the firm whether a premium survives contact with the…AQA
price indices: Indices businesses meet as a consumer prices index when deflating nominal revenue into real terms, as a commodity index when judging input costs, and as a…AQA
Price premium and willingness to pay: Certification such as Fairtrade or a recycled packaging claim can support a higher price, but judgement depends on whether the target segment will actually pay.AQA
price sensitivity: Differentiation makes demand less price sensitive, so a price rise costs fewer lost customers.AQA
price skimming: A high launch price set to harvest early adopters and recover development spending before stepping down.AQA
pricing decisions: A brand manager who knows buyers are unresponsive can raise price and expect revenue to rise, widening the room to charge more.AQA
pricing power: The ability to earn a premium because demand responds less to price, so a premium sticks and repeat purchase rises.AQA
process: Covers booking, queueing, payment and complaint handling, and is usually where cost and satisfaction are won together.AQA
process innovation: Changing how the thing is made or delivered, which cuts cost per unit, shortens lead times and supports a cost leadership strategy.AQA
producing to order: A way of matching supply to demand that almost eliminates finished goods inventory but lengthens the wait the customer has to accept.AQA
product divisions: Grouping by product gives each division its own profit figure and quick decisions in its own market, at the cost of duplicated support functions.AQA
product innovation: Creating something new or noticeably better, which adds value, supports a differentiation strategy and defends a price premium.AQA
product life cycle: Adds timing, from introduction through growth and maturity to decline, with extension strategies buying maturity a few more years.AQA
product portfolio decisions: Marketing gains new products to sell, which is product development or diversification, and must choose between skimming and penetration pricing at launch.AQA
product recall: An external failure cost whose cost is far more than the value of the returned goods, since retrieval, testing, legal advice and a regulator's fine usually…AQA
Profit: Total revenue minus total costs, which is distinguished from cash, a matter of timing rather than performance.AQA
profit for the year: Takes off interest and tax, so it reflects how the business is financed and where it trades.AQA
profit for the year margin: The final margin, calculated after deducting interest and tax.AQA
profit from operations margin: The margin calculated after deducting overheads like rent and salaries.AQA
profit margins: Each profit divided by revenue and shown as a percentage, labelled clearly which of the three has been worked out.AQA
profit versus profitability: Profit is an absolute sum of money, while profitability sets that sum against something else, so the two can move in opposite directions.AQA
profit, people and planet: The three strands of Elkington's framework, where profit is read straight from the accounts while social and environmental outcomes usually have no agreed unit.AQA
promotional mix: The combination of methods a firm uses to say what it says and where it says it, running from advertising and sales promotion to public relations, personal…AQA
Purpose against measurable targets: A mission states what the business is for in words rather than numbers, while the targets beneath it turn that purpose into something a manager can be held to.AQA

Q

qualitative and quantitative evidence: Research yields both quantitative data ('how many') and qualitative data ('why'), and a qualitative finding can explain a quantitative one.AQA
qualitative evidence: Evidence from the case used alongside the numbers in reaching a judgement, because no ratio can see the order book or the loss of a key customer.AQA
qualitative factors: Bringing in what the calculation cannot capture, such as staff morale, reputation, supplier relationships or the owners' own aims, and setting it against the…AQA
quota sampling: A non-probability method where interviewers fill quotas for certain demographics; it is fast and cheap but not random, so it carries no statistical guarantee.AQA

R

ratio interpretation: A ratio means nothing on its own, so quote last year or the industry figure beside it.AQA
rationalisation: Cutting capacity by closing a site, which is justified only when demand is steady enough to support it.AQA
ratios: Figures that compare one figure to another, such as the current ratio measuring liquidity and gearing assessing risk.AQA
re-order level and quantity: The level set high enough to cover expected usage across the supplier lead time, and the vertical rise when a delivery lands.AQA
re-shoring drivers: Chinese wages rising sharply, long lead times destroying responsiveness, quality and design leakage hard to police at distance, and automation cutting…AQA
real and nominal values: Nominal revenue is deflated by a price index to test whether revenue grew in real terms.AQA
realised strategy: The combination of a firm's deliberate strategy and its emergent strategy, as argued by Henry Mintzberg.AQA
receivables: The money customers owe, where a sale made on credit is revenue today and cash later.AQA
Recurring marketing themes: A planning checklist of lenses AQA expects you to apply throughout marketing management, not a topic to revise alone.AQA
redeployment: Moving staff to another role keeps knowledge the firm paid to build and avoids the cost of cutting posts, though it needs retraining and is often resisted.AQA
regional divisions: Grouping by region suits a firm whose customers, laws and tastes differ country by country, and duplicates more still.AQA
reinvestment: Fatter margins funding the research, the marketing and the equipment that keep the lead in place.AQA
Relationship marketing: Enabled by CRM systems that track customer behaviour to foster loyalty.AQA
remote and hybrid working: Ways of working that widen the recruitment pool and can reduce office costs, but may weaken the informal group contact linked to motivation.AQA
reputation and brand value: Paying above the local minimum wage or auditing suppliers protects the brand and reduces the chance of a boycott.AQA
reputational damage: A reputation that takes years and a marketing budget to rebuild while rivals collect the customers who left.AQA
research and development: A formal route to innovation that can produce a breakthrough, but is a high-risk investment with long time lags and no guarantee of success.AQA
Resistance and its cost to the business: Reactions run from quiet resignations and rising labour turnover, through industrial action and renegotiated supply contracts, to boycotts and regulatory…AQA
resistance to change: Staff resist the continuous reinvestment and repeated change that staying ahead requires, so participation and communication can be applied to the change this…AQA
resource commitment: One of the four tests, where a commitment of significant money sits at one end and a low cost adjustment at the other.AQA
resource constraints: Hard obstacles such as no cash for the investment, a structure too rigid to rearrange, a culture built on doing it the old way, and skills the workforce does…AQA
resources and capabilities: Internal matters such as the brand, the patents, the skills of the staff, the objectives, and the culture that would have to change.AQA
retained profit: The main internal source of finance, which avoids interest costs and loss of control but is limited by past profitability.AQA
retrenchment: A deliberate strategy to reduce scale, perhaps by selling a division, which can raise cash, improve liquidity and increase return on capital employed by…AQA
return on capital employed: Operating profit divided by capital employed as a percentage, showing whether the plan beats what the existing assets already earn.AQA
return on investment: The return earned divided by the capital put in and shown as a percentage, letting a board rank a new machine against a new store against leaving the money on…AQA
return on quality spending: The benefit judged net rather than gross, by costing the improvement including training days, new equipment and output lost during the transition.AQA
Revenue: Selling price multiplied by quantity sold, also called turnover or sales.AQA
revenue effects: The consequence for revenue of a coefficient: with inelastic demand a price rise raises revenue, and with elastic demand a price cut is the route to more…AQA
revenue, cost and profit targets: Sales targets drive the sales force, cost targets discipline overheads and profit targets reassure shareholders.AQA
reversibility and risk: One of the four tests, where a decision expensive to reverse carries risk because getting it wrong can end a business, while a reversible one is corrected…AQA
reward systems: What the business measures and pays for, the fastest lever and the most dangerous, because people optimise the target rather than the intention behind it.AQA
risk: A situation where outcomes can be given probabilities, as opposed to uncertainty where they cannot.AQA
risk and uncertainty: Probabilities are estimates, usually drawn from past data that a changed market has already made stale, and the method is risk neutral.AQA
risk appetite: How much risk the owners will carry, which is part of the set of circumstances that decides whether a choice is right.AQA
risk assessment: Assessing risks by their likelihood and impact, using historical data and expert judgement, though it can struggle to anticipate unprecedented 'black swan'…AQA
risk measurement: Margin of safety is used as the risk measure and related to how volatile demand looks in the extract.AQA
Risk Mitigation and Sensitivity Analysis: The use of 'what-if' scenarios within cash-flow forecasts to assess the impact of external shocks, such as interest rate hikes or supply chain disruptions, on…OCR
Risk of obsolescence: A long payback is far riskier where the technology dates quickly.AQA
risk reduction: Marketing research provides information to reduce the risk of business decisions, though it only narrows risk rather than removing it.AQA
risk spreading: Spreading risk across economies only works where those economies are not moving in step.AQA
ROCE (Return on Capital Employed): A financial ratio that measures a company's profitability and the efficiency with which its capital is employed.Pearson Edexcel
role culture: Rules and job titles, reliable and slow.AQA

S

sale and leaseback: Turning a freehold into a lump sum and a rent, though it surrenders an asset that was appreciating.AQA
Sales value: A marketing objective that counts revenue, which a discounting strategy can damage even while volume rises.AQA
Sales volume: A marketing objective that counts units, so a firm can sell more and earn less if it has discounted to do it.AQA
Scenario planning: A management response to forecasting difficulty, alongside sensitivity analysis on the key variable and staged investment that keeps the option to stop.AQA
self interest: A source of resistance where a manager expects to lose status, budget or a job.AQA
sensitivity analysis: Testing how far the conclusion moves if the estimate is wrong by a tenth, for example showing that payback stretches past the useful life of the machine.AQA
service characteristics: Intangible, perishable and variable, and all three extra elements exist because of them.AQA
setting objectives under uncertainty: In a price war a gross margin target of a fifth of revenue may be out of reach, so the board switches to cost and cash objectives until the fight ends.AQA
share price determination: A quoted price is set by supply and demand for the shares themselves.AQA
Shareholder view: Friedman's argument that managers are agents of the owners and spending their money on causes cuts the return.AQA
Shareholder vs stakeholder concepts: The difference between the shareholder concept, which prioritises profit, and the stakeholder concept.AQA
shift towards fixed costs: Investment in technology typically shifts costs from variable, such as wages, to fixed, such as depreciation.AQA
Short run against long run alignment: Most clashes are about timing and distribution rather than direction, so short run conflict can be separated from long run alignment to reach a judgement.AQA
short term cost and long term gain: The ethical route costs cash now and pays later in loyalty, recruitment and lower risk, so the time horizon matters.AQA
short termism: The pressure from shareholders and the reporting cycle that makes managers cut research, training and maintenance which would only repay years later.AQA
simple random sampling: A probability method where everyone has an equal chance of selection, so statistical inference is allowed.AQA
single and multiple sourcing: The choice between one supplier and several, judged by naming the specific risk the firm is exposed to if the supplier fails.AQA
single point of failure: A vulnerability such as one key supplier, one factory, or one key person that the case study usually plants.AQA
single product limitation: A firm selling a range has to apportion fixed costs by judgement because the model covers only one product.AQA
skills gaps and retraining: The struggle to fill higher skilled roles after technology redistributes jobs, so training spend rises as the wage bill falls.AQA
Social and ethical objectives: A social aim, as set by a social enterprise, which treats any surplus as the means rather than the end.AQA
social enterprise: An organisation that trades in order to fund a social purpose and measures success on the trading surplus and the social outcome.AQA
social media: A cheap-to-enter promotional method that is expensive to do well, because it is a conversation the firm does not control and a complaint travels faster than…AQA
soft human resource management: Views employees as assets to be developed, investing in training, consultation, and delegation.AQA
Sources of error: Reasons a projection goes wrong, such as a small or biased sample, out of date data, correlation mistaken for causation, or a horizon long enough for the…AQA
span of control: How many people one manager carries, which widens when layers are removed and can leave managers unable to support staff.AQA
spare capacity: Slack left when a business is not running near the ceiling, giving room for maintenance, an urgent order or a sickness absence.AQA
speed versus buy-in: The trade-off where driving it from the top is quick and breeds compliance, while consultation is slow and sticks.AQA
stakeholder conflict: Shareholders wanting a dividend and a community wanting local jobs are pulling on the same money, so stakeholder interests must be weighed explicitly.AQA
stakeholder perspective: The judgement that the right measure depends on who is asking and what decision follows, since a lender wants interest cover and gearing while a campaign…AQA
Stakeholder power and interest: The two axes on which every interest group is plotted: the power it holds over the business and the interest it takes in this particular decision.AQA
stakeholder priorities: Tying the horizon to a stakeholder, so shareholders wanting dividends now sit against employees and suppliers wanting a business still trading later.AQA
stakeholder reaction: The response of groups that can affect the firm or be affected by it, stated as an action with a consequence.AQA
standardisation against adaptation: Every local variant adds stock keeping units, shortens production runs and raises unit cost, so adaptation carries a cost.AQA
stepped fixed costs: Fixed costs are drawn flat when in reality they step up as soon as another supervisor or another unit of warehouse space is needed.AQA
Strategic decision: A decision that commits large resources over years and is hard to unwind.AQA
strategic direction: The route a firm picks for which markets to compete in and what products to offer, chosen for reasons that can be read straight off the case.AQA
strategy: The medium to long term plan that commits people and money, chosen to hit the goals rather than being the goal itself.AQA, Pearson Edexcel
stratified sampling: Divides the population into subgroups (strata) and samples randomly from each, ensuring key groups are represented.AQA
strength of relationship: The closer the points sit to the line of best fit the stronger the link, so a strong positive pattern supports a bigger budget while a weak one warns that…AQA
strengths and weaknesses: A judgement about a business that needs a trend or a benchmark, because a single year is a fact and none of these measures means anything on its own.AQA
structure follows strategy: Chandler's rule that the chart is shaped to fit the strategy, so a functional layout jams when a business diversifies into unrelated products.AQA
stuck in the middle: Having neither the lowest costs nor a reason for customers to pay extra, so the firm is squeezed from both sides.AQA
Substitute threat: The threat from substitute products or services, which can be created by new technology.AQA
Substitutes and buyer power: Forces within Porter's five forces, where substitutes compete and buyer power shows where a few buyers take most of the output.AQA
supplier bargaining power: One of Porter five forces, rising when alternatives are few and switching is costly, which explains why a firm can or cannot push its supplier on price or…AQA
Supplier power: The bargaining power of suppliers, which can increase through globalisation.AQA
supplier reliability: The capacity of a supplier to deliver consistently, so that an unreliable one causes stockouts and the lost contribution on every unit not sold.AQA
supply chain exposure: The trade-off of globalisation is exposure to global shocks, currency swings and supply chain risks.AQA
supply chain quality: The supply chain matters because a defect not produced in the firm can still leave the brands on the packets carrying the damage.AQA
supply chain resilience: The ability to withstand disruption, which stripping every buffer out undermines, as the blocked Suez Canal and the semiconductor shortage exposed.AQA
supply chain vulnerability: The fragility of a stockless approach, where a firm with no buffer stops the moment a supplier, a ferry or a chip factory does.AQA
supported judgement: Reaching a decision rather than parading a list of considerations, and saying explicitly which evidence carried the most weight and why.AQA
Survival: Staying solvent, the aim that comes first for a start up with a thin bank balance, because a firm can be profitable on paper and still fail when money leaves…AQA
Synergy: The forecast that a combined business is worth more than its parts.AQA
synoptic argument: Tracing a clear chain of reasoning from a specific workforce decision through a named function to a quantifiable impact or something the customer notices,…AQA

T

Tactic: A short-term action or policy used to implement a broader strategy.Pearson Edexcel
Tactical decision: A choice taken inside a single function, such as the choices a marketing or operations manager makes each week.AQA
Tactics: Short-term, operational decisions used to implement strategy on a day-to-day basis.AQA
takeover vulnerability: A consequence of a share price change is that a cheap company becomes somebody's target.AQA
talent development: One of the human resource objectives a firm can set, alongside employee engagement, training, diversity and alignment of employee and employer values.AQA
tariffs and trade barriers: Barriers such as tariffs, quotas and rules of origin that firms can respond to by moving production inside the barrier.AQA
technology and automation: An influence that changes the size of the effect of an operations decision, such as installing robots, which carries capital cost, disruption and the risk…AQA
temporary and part time employees: A way of matching supply to demand, buying flexibility at a price.AQA
The hierarchy of aims: The link runs downwards from purpose to corporate targets, then to functional targets in marketing, operations, finance and human resources, and finally to…AQA
The strategic importance of finance: Financial management is crucial for achieving business objectives and ensuring long-term viability, and is not just about calculation.AQA
tight and slack labour markets: A tight labour market makes recruitment cost more and take longer for this employer, while a slack one does not.AQA
time horizon: The length of time a decision is appraised over, with error growing as it lengthens, so a decision over several years is far more exposed than next quarter's…AQA
Time Value of Money: The concept that a sum of money is worth more now than the same sum will be at a future date due to its potential earning capacity and the impact of inflation.Eduqas
timing of cash and profit: Profit is recorded when a sale is made and a cost incurred, while cash moves when the customer actually pays.AQA
total contribution: Contribution per unit multiplied by units sold, from which fixed costs are taken to give profit.AQA
Total cost: Fixed cost plus variable cost per unit multiplied by output.AQA
total float: The latest finish time of an activity minus its duration minus its earliest start time, measured in days, showing how much slack a non critical job has.AQA
total revenue effects: Above one and buyers are responsive, so a price cut lifts total revenue; below one and they are not, so a price rise lifts total revenue.AQA
trade barriers: Tariff and non-tariff barriers that belong on the list of factors influencing the attractiveness of international markets.AQA
trade liberalisation: Falling trade barriers under the World Trade Organisation, China's accession in 2001 and the enlargement of the European Union opened markets.AQA
trade union recognition: A recognised trade union bargains collectively over pay and conditions and can escalate to a ballot and industrial action.AQA
training investment: Lifts productivity and retention but costs money up front and makes the trained person more attractive to a rival.AQA
transformational change: The final phase, after a period of flux, in which managers either transform the business or it fails.AQA
trend analysis and benchmarking: Analysing data over time or in comparison with other businesses, so that a three year trend or a benchmark against a named rival supports a judgement.AQA
trend and benchmark comparison: Ratios are only useful when compared over time or against competitors.AQA
trend description: Describing a trend by direction, rate and turning point rather than walking the marker through every plotted point in turn.AQA
triple bottom line: Elkington's framework asks a firm to report against money, people and the planet together, accepting that a gain on one line can be a loss on another.AQA
trust and communication: A source of resistance where staff have been told too little by people they have no reason to believe.AQA
Trust and expectation management: Consultation can raise an expectation the firm cannot meet, and consultation after the decision is taken is seen as public relations and can damage trust more…AQA
two way communication: Communication where the feedback loop actually closes, with evidence that feedback changed a decision, rather than a newsletter that only broadcasts…AQA

U

uncertainty: The change the firm cannot foresee, which is why testing the key assumption is worth more than another decimal place.AQA
uncertainty and risk: A strategic decision is taken on incomplete information and forecasts that are educated guesses.AQA
Unintended effects of targets: A target changes behaviour in ways nobody intended, so a volume target can be met by discounting until the margin vanishes.AQA
unit cost: A cost that falls as higher capacity utilisation spreads fixed costs, though lower unit cost is not the same as higher profit.AQA
unit labour cost: The cost of labour per unit, which depends on the wage rate set against labour productivity, so a wage saving can disappear if productivity does not rise or…AQA
unlimited liability: A sole trader has total control but also this, risking personal assets if the business fails.AQA

V

Variable costs: Costs such as materials and piece rate wages that rise with each unit made.AQA
variance analysis: Analysing budgets should include this, where a variance is the gap between the budgeted figure and the actual one.AQA
Vertical integration: Growth that moves along the supply chain, either backward towards suppliers or forward towards customers.AQA
viral marketing: A method that costs very little per contact but cannot be commissioned to order, since the firm chooses the content and the audience chooses whether it spreads.AQA

W

waste minimisation: Stripping out anything a customer would not pay for, whether that is stock sitting in a warehouse, time spent waiting, or units made twice.AQA
weighting and evidence: What SWOT cannot see, since one fatal threat and ten trivial opportunities look identical in a list and no evidence is demanded.AQA
winners and losers: A judgement of whether this firm is a net winner or loser, depending on its size, its cost base or its degree of differentiation.AQA
workforce planning: Starting from the sales or output forecast, converting it into the hours and skills the firm will need, then setting that against the supply already inside…AQA
workforce retraining: A workforce consequence of installing technology, alongside redeployment, redundancy and the resistance staff who fear for their jobs may show.AQA
Working Capital Management: The optimization of current assets and current liabilities.OCR
working capital pressure: A cash crisis arising when a marketing success that doubles orders means suppliers must be paid before customers do.AQA
working capital tied up in stock: Stock is working capital doing nothing, and cutting it improves liquidity without a single extra sale.AQA
works councils: A standing forum of elected staff that management must consult on major change, covering union and non-union staff.AQA

Z

zero based budgeting: A budget that forces every line to be justified from scratch but takes far longer to prepare.AQA

Where these terms come from

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