the act of selling state-owned and controlled business organizations to

privatization investors in the private sector.

the transfer of privately owned businesses to state (government) ownership

nationalization and control.
Employers are not allowed to pay less than the set minimum wage per hour (in
minimum wage some countries, it is a minimum payment per week or per month).
monopoly a market in which there is only one supplier with no close competitors.
businesses agree to work together and restrict competition by fixing prices and
collusion sharing contracts between themselves.
social audit a report on the impact a business has on society.
Demographic relating to the structure of the population.
the increasing freedom of movement of goods, capital, and people around the
Globalization world.
the use of electronic technology to gather, store, process and communicate
Information technology (IT) information.
aims to use the full capabilities of workers by giving them the opportunity to do
Job enrichment more challenging and fulfilling work.
Protectionism the use of barriers to free trade to protect a country's domestic industries.
tariff a tax imposed on an imported product.
quota a physical limit placed on the quantity of imports of certain products.
agreed limits to the quantity of certain goods sold by one country to another
voluntary export limits (possibly to discourage the setting of tariffs/quotas).
trade with no restrictions or barriers that might prevent or limit trade between
free international trade countries.
assesses the impact of the activities and decisions of a business on the
environmental audit environment.
activities that meet the needs of the present without compromising the ability
sustainability of future generations to meet their needs.
the trend for consumers to only buy products that are produced sustainably
green consumerism without environmental damage.
The costs of an economic activity not paid for by the producer or consumer,
External costs but by the rest of society.
Macroeconomic objectives The goals a government aims to achieve for the whole economy.
An increase in a country's productive potential, measured by an increase in its
Economic growth real GDP.
Gross Domestic Product (GDP) The total value of goods and services produced in a country in one year.
Real GDP GDP data adjusted for the effects of inflation.
An increase in the average price level of goods and services, resulting in a fall
Inflation in the value of money.
When members of the working population are willing and able to work but
Unemployment cannot find a job.
Imports Goods and services purchased from other countries.
Exports Goods and services sold to consumers and businesses in other countries.
Exchange rate The price of one currency in terms of another.
A decline in real GDP over two or more consecutive quarters (at least six
Recession months).
 Expenditure by businesses on capital equipment, new technology, and
Business investment research and development.
Labour productivity Average output per employee over a given time period.
Regular swings in output, measured by real GDP, from boom conditions to
Business cycle recession.
Deflation A fall in the average price level of goods and services.
Extremely high and accelerating inflation, eroding the value of the local
Hyperinflation currency.
Working population Those of working age willing and able to work.
Unemployment caused by low demand during slow economic growth or a
Cyclical unemployment recession.
Unemployment caused by the decline of important industries, leading to job
Structural unemployment losses in specific sectors.
Unemployment caused by workers taking time to find new jobs after leaving or
Frictional unemployment losing their previous jobs.
Monetary policy Decisions about interest rates and the money supply in the economy.
Fiscal policy Decisions about government expenditure, tax rates, and borrowing.
Budget deficit When government spending exceeds revenue from taxation.
Budget surplus When taxation revenue exceeds government spending.
Supply-side policies Government measures to improve market and economic competitiveness.
Exchange rate depreciation A fall in a currency's external value compared to other currencies.
Exchange rate appreciation A rise in a currency's external value compared to other currencies.
Common currency A currency used by multiple countries.
Eurozone European Union countries that use the euro as their currency.
Analysis of the current business situation, setting long-term objectives,
deciding on business strategies to achieve them, and implementing these
Strategic management strategies.
Researching the business environment and the business itself to identify
Strategic analysis future strategies.
The process of selecting a strategy from various alternatives and using
Strategic choice techniques to assist decision-making.
Strategic implementation Planning, allocating, and controlling resources to support the chosen strategy.
Exploiting uncontested market space through product differentiation and low
Blue ocean strategy cost.
Red ocean strategy Competing with rivals in existing markets.
Strategic analysis identifying internal strengths and weaknesses, and external
SWOT analysis opportunities and threats influencing business success.
Scenario planning Identifying potential future situations and preparing business responses.
Strategic analysis of a firm’s macro environment, focusing on political,
PEST analysis economic, social, and technological factors.
Porter’s five forces model Technique for analysing competitive forces within an industry.
Core competence An essential business capability that provides a competitive advantage.
A product based on a business's core competencies, not necessarily for the
Core product final consumer or end user.
 A model illustrating the degree of risk in growth strategies: market penetration,
Ansoff matrix market development, product development, and diversification.
Market penetration Increasing market share in existing markets with existing products.
Product development Developing and selling new or improved products in existing markets.
Market development Selling existing products in new markets.
Diversification Selling different, unrelated goods or services in new markets.
Identifying and analysing positive factors (driving forces) and negative factors
Force-field analysis (restraining forces) affecting a decision.
A diagram outlining decision options, outcomes, and potential economic
Decision tree returns.
The probable financial result of an outcome, calculated by multiplying the
Expected value probability of an event by its forecasted economic return.
A plan detailing a business's central objectives and the strategies to achieve
Corporate plan them.
The process used by companies to set long-term plans to meet objectives
Corporate planning such as growth and higher returns on capital.
The values, attitudes, and beliefs of an organisation’s people that influence
Corporate culture internal and external interactions.
Power culture A culture concentrating power among a few individuals.
Role culture A culture where each staff member has a clearly defined job title and role.
Task culture A culture emphasizing cooperation and teamwork.
A culture giving individuals freedom to express themselves and make their
Person culture own decisions.
Entrepreneurial culture A culture encouraging risk-taking, innovation, and testing new ventures.
A leadership style where the leader works with teams to identify the need for
Transformational leadership change, create a vision, and implement change collaboratively.
Planning, implementing, controlling, and reviewing the transition of an
Change management organisation from its current state to a new one.
Rethinking and redesigning business processes to achieve significant
Business process re-engineering performance improvements.
An individual supporting a project, driving it forward by explaining its benefits,
Project champion and assisting the team in implementing changes.
Teams formed within an organisation to solve problems requiring input from
Project groups various specialists.
Preparing resources to ensure the business can continue operations after a
Continuity planning major crisis.
Departments are organised by specialist areas such as marketing, finance,
Functional structure human resources, or operations.
Functional manager A senior employee with authority over a complete organisational unit.
A structure with multiple levels, where all members except one are
Hierarchical structure subordinate to someone else.
A stage in the organisational structure where all personnel share equal status
Level of hierarchy and authority.
Span of control The number of subordinates directly accountable to a manager.
Divisional organisational structure Organises business activities around geographical areas or product groups.
Delayering Removing one or more levels of hierarchy from the organisational structure.
 An organisational structure that creates project teams cutting across traditional
Matrix structure functional departments.
Delegation Passing authority down the organisational hierarchy.
The responsibility to account for, explain, and disclose the results of one's
Accountability work honestly.
Control Measuring and supervising employee performance.
Authority The power to give orders and make decisions.
Concentrating important decision-making powers within the head office or
Centralisation organisational centre.
Distributing decision-making powers down the hierarchy to empower
Decentralisation subordinates or area/product managers.
Managers with direct authority over people, decisions, and resources in the
Line managers organisational hierarchy.
Specialists who provide support, information, and assistance to senior line
Staff managers managers.
Effective communication The exchange of information between people or groups, with feedback.
Communication methods The media used to communicate messages.
Visual communication Conveying information or ideas in forms that can be seen.
Written communication Any type of message that uses written words.
Sending messages using media such as computers, email, or video
Electronic communication conferencing.
Receiving too much information, making it difficult to identify and act upon
Information overload important messages.
Spoken communication Sending messages verbally between two or more people.
Formal communication channels The official communication networks and routes used within an organisation.
Messages sent in one direction, from sender to receiver, with no feedback
One-way communication expected.
Communication involving message transmission that encourages response
Two-way communication and feedback.
Vertical communication Communication between people at different levels in a hierarchy.
Horizontal communication Communication between people on the same level of hierarchy.
Communication barriers Reasons why communication fails.
Unofficial communication channels that exist between informal groups within
Informal communication an organisation.
Leadership The art of motivating a group of people to achieve a common objective.
A person without formal authority but who has the respect of colleagues and
Informal leader some power over them.
The ability to understand and manage one's own emotions and those of others
Emotional intelligence (EI) to improve business performance.
The measurement of a person's emotional intelligence as assessed through a
Emotional quotient (EQ) standardized test.
Human resource management
(HRM) strategy A long-term plan for managing an organisation's human resources.
Hard HRM An approach to managing employees focused on cutting costs.
 An approach to managing employees focused on their development,
Soft HRM self-fulfillment, and motivation.
Full-time employment contract A contract for a complete working week.
A contract where the worker is employed indefinitely unless dismissed, made
Permanent employment contract redundant, or they decide to leave.
A contract offered for a fixed period, such as six months, with no obligation for
Temporary contract renewal.
A contract where workers are only required to work a certain number of hours
Part-time contract each week (less than full-time).
A contract with no guaranteed minimum hours per week, requiring availability
Zero-hours contract when called by the employer.
A labor market with temporary, flexible jobs, where workers are often
Gig economy independent contractors or freelancers.
Compressed working hours A full-time workweek completed in fewer days, such as four 10-hour workdays.
Work scheduled outside the traditional 9 a.m. to 5 p.m., including evening,
Shift work night, early morning, or rotating shifts.
The rate of workforce absence as a proportion of the total number of
Absenteeism employees.
A system comparing actual performance and achievements against pre-set
Management by objectives (MBO) objectives for each department or employee.
A measure of how demand for a product changes in response to a change in
Price elasticity of demand (PED) its price.
A measure of how demand for a product changes in response to changes in
Income elasticity of demand consumer incomes.
Inferior good A product whose demand increases when consumer incomes fall.
New product development (NPD) The design, creation, and marketing of new goods and services.
Research and development (R&D;) Scientific research and technical development of new products and processes.
Test marketing Launching a product on a small-scale market to test consumer reactions.
Sales forecasting Predicting future sales levels and trends.
Trend The underlying movement in data over time.
Seasonal fluctuations Regular, repeated variations in sales data within a 12-month period.
Cyclical fluctuations Variations in sales over longer periods, influenced by the business cycle.
Unpredictable variations in sales due to unexpected events, such as poor
Random fluctuations weather or a negative public image.
Qualitative sales forecasting Sales predictions based on expert judgment rather than numerical analysis.
A forecasting method combining individual sales predictions from all sales
Sales force composite representatives in a business.
A long-range qualitative forecasting technique that gathers forecasts from a
Delphi method panel of experts.
A forecasting method that relies on the expertise of specialists within a
Jury of experts business to predict the future.
A detailed and researched report outlining marketing objectives and the
Marketing plan strategy to achieve them.
Countries working together to achieve common goals, such as promoting free
Economic collaboration international trade.
 Agreements between countries or trading blocs to reduce or eliminate trade
Free-trade agreements barriers like tariffs and quotas.
International marketing Selling products in markets outside the original domestic market.
Acronym for five rapidly developing economies with significant market
BRICS opportunities: Brazil, Russia, India, China, and South Africa.
Marketing a standardised product worldwide as if the entire world were a
Pan-global marketing single market, using the same strategies everywhere.
Adjusting the marketing mix, including product differentiation, to suit local and
Global localisation regional tastes and cultures while maintaining local market differences.
A business location that offers the best combination of quantitative and
Optimal location qualitative factors.
Measurable issues in financial or numerical terms that managers consider in
Quantitative factors decision-making.
Non-measurable issues that managers consider, such as employee
Qualitative factors satisfaction or brand image.
Offshoring Relocating a business process from one country to another.
Taxes (tariffs) or other restrictions on the free international movement of goods
Trade barriers and services.
Reshoring Moving a previously offshored business operation back to its original country.
Scale of operations The maximum output achievable with the available resources.
Cost reductions per unit of production achieved as a business expands its
Internal economies of scale operations.
Internal diseconomies of scale Increases in unit production costs that occur when a business grows too large.
Demerger Separating one business unit from another, often reversing a prior merger.
Cost reductions per unit that benefit a business as the industry grows in a
External economies of scale region.
Increases in unit costs resulting from industry expansion, particularly in one
External diseconomies of scale region.
A good or service that meets customers' expectations and fulfils its intended
Quality product purpose.
Minimum acceptable production or service standards based on customer
Quality standards expectations.
Quality control Inspecting the product or a sample of products to check for defects.
Ensuring agreed quality standards are met at each production stage to satisfy
Quality assurance customers.
An internationally recognised standard for quality assurance methods meeting
ISO 9000 specific criteria.
Total Quality Management (TQM) A quality approach involving all employees in continuous improvement.
Internal customers People within the organisation relying on the quality of others' work.
A mindset focused on ensuring products consistently meet customer
Zero defects expectations.
Comparing a business's performance against the best companies in the same
Benchmarking industry.
Benchmark performance indicators Key areas of business performance measured and compared with
(BPI) competitors.
Producing goods and services with minimal wasted resources while
Lean production maintaining high quality.
 Using computer programs to create 2D or 3D graphical representations of
Computer-aided design (CAD) physical objects.
Computer-aided manufacturing Using computer software to control machine tools and equipment in
(CAM) manufacturing.
The ability to adjust production levels and product range based on changes in
Operational flexibility customer demand.
Process innovation Using new or significantly improved production or service delivery methods.
Using a single computer application to manage the purchase and use of
Enterprise resource planning (ERP) resources to improve operational efficiency.
Kaizen A Japanese term meaning continuous improvement.
Flow production organized into self-contained groups responsible for
Cell production completing a unit of work.
A planning technique that identifies tasks, sequences them, and identifies the
Critical path analysis (CPA) critical path.
A diagram used in CPA to show the logical sequence and dependencies of
Network diagram activities.
The sequence of tasks that must be completed on time to ensure the entire
Critical path project finishes by the agreed date.
Earliest start time The earliest time an activity can begin.
Latest finish time The latest time an activity can finish without delaying the project.
The amount of time an activity can be delayed without delaying the overall
Total float project.
The amount of time an activity can be delayed without affecting the start of the
Free float following activities.
Used in network diagrams to show logical dependencies between tasks,
Dummy activities without consuming time or resources.
A statement that records revenue, costs, and profit (or loss) over a specific
Statement of profit or loss period.
A statement that records a business's assets, liabilities, and shareholders'
Statement of financial position equity at a particular point in time.
Asset An item of monetary value owned by a business.
Liability A financial obligation that a business must pay in the future.
Gross profit Revenue minus the cost of sales.
Cost of sales The direct cost of the goods sold during a financial period.
Profit from operations Gross profit minus overhead expenses (operating profit).
Overhead costs in operating the business, deducted from gross profit to
Expenses calculate profit from operations.
Profit before tax Profit from operations minus interest costs.
Profit for the year (profit after tax) Profit before tax minus corporation tax.
Dividends A portion of profits paid to shareholders as a return on investment.
Low-quality profit One-off profits that are not easily repeated or sustained.
High-quality profit Profits that can be repeated and sustained.
Shareholders' equity The total value of assets minus the total value of liabilities.
The total value of capital raised from shareholders through the issuance of
Share capital shares.
 The value arising when a business is bought for more than the balance sheet
Goodwill value of its assets.
Techniques used by companies to manipulate financial statements to show
Window dressing more favorable results.
The capital required for day-to-day activities, also called working capital
Net current assets (current assets minus current liabilities).
Accumulated retained profits and capital reserves from the revaluation of
Reserves non-current assets.
Net realisable value (NRV) The amount for which inventory can be sold, minus the cost of selling it.
Depreciation The reduction in the estimated value of a non-current asset over time.
The current statement of financial position value of a non-current asset
Net book value (original cost minus accumulated depreciation).
Straight-line depreciation A fixed amount of depreciation subtracted from the asset's value each year.
Current ratio A ratio comparing current assets with current liabilities.
Acid test ratio A ratio comparing liquid assets with current liabilities.
A measure of a business's ability to make a profit from sales or capital
Profitability investment.
Gross profit margin ratio A ratio comparing gross profit (before overhead expenses) with revenue.
Operating profit margin A ratio comparing operating profit for the year with revenue.
Return on capital employed (ROCE) A ratio comparing operating profit (profit from operations) with the capital
ratio employed in the business.
Capital employed The total value of long-term finance invested in a business.
Rate of inventory turnover The number of times inventory is bought and sold within a year.
The average time (in days) to receive payment from customers who bought on
Trade receivables turnover (days) credit.
Trade payables turnover (days) The average time (in days) to pay suppliers for credit purchases.
Credit purchases The value of materials and supplies bought on credit (over one year).
A ratio that measures the proportion of capital employed that is financed by
Gearing ratio long-term borrowing (non-current liabilities).
Share price The quoted price of one share on the stock exchange.
Dividend The share of company profits paid to shareholders.
A ratio measuring the annual return from dividends as a percentage of the
Dividend yield ratio current market share price.
Dividend per share The financial amount received in dividends on one share.
A ratio measuring how many times dividends could be paid from profit for the
Dividend cover ratio year.
The number of years it would take, at the current earnings per share, to
Price/earnings ratio purchase one share at the current market price.
Earnings per share The amount of profit after tax and interest earned per share.
Investment appraisal Evaluating the profitability or feasibility of an investment project.
Net present value (NPV) The current value of estimated cash flows resulting from an investment.
Forecasted net cash flow Forecast cash inflows minus forecast cash outflows.
The length of time it takes for net cash inflows to recover the original capital
Payback period cost of the investment.
 A measure of the annual profitability of an investment as a percentage of the
Accounting rate of return (ARR) average investment (average capital cost).
The minimum accounting rate of return that a business would accept before
Criterion rate approving an investment.
Discounted cash flow The present-day value of a future cash flow.