Strategic management Analysis of current business situation , setting long
term objectives, deciding on business strategies to
achieve them and then implementing these
strategies.
Strategic analysis The process of conducting research into the business
environment and into the business itself, in order to
help identify future strategies
Strategic choice The process that leads to a decision to choose a
particular strategy from various alternatives and the
technique used to help make the choice.
Strategic implementation The process of planning, allocating and controlling
resources to support the chosen strategy.
Blue ocean strategy One that exploits uncontested market space through
product differentiation and low cost.
Red ocean strategy One that competes with rivals in existing market
Scenario planning Identifying possible future situations and how the
business might respond to them.
SWOT analysis A form of strategic analysis that identifies and
analyses the main internal strengths, and
weaknesses, and external opportunities and threats,
that will influence the future direction and success of
a business
PEST analysis The strategic analysis of a firm’s macro environment,
including political, economic, social and technological
factors.
Porter’s five forces model A technique for analyzing competitive forces within
an industry.
Core competence An important business capability that gives a firm
competitive advantage.
Core product Product based on a business’s core competencies,
but not necessarily for the final user or end user
Ansoff matrix A model used to show the degree of risk associated
with the four growth strategies of market
penetration, market development, product
development and diversification.
Market penetration Achieving higher market shares in existing markets
with existing products.
Product development The development and sale of new products or new
developments of existing products in existing markets
Market development The strategy of selling existing products in new
markets
Diversification The process of selling different, unrelated goods or
services in new markets.
Force-field analysis A technique for identifying and analyzing the positive
factors (driving forces)that support a decision and
negative factors that constrain it (restraining forces)
Decision trees A diagram that sets out the options connected with a
decision and the outcomes and economic returns
that may result.
Expected value The likely financial result of an outcome obtained by
multiplying the probability of an event occurring by
the forecast economic return if it does occur.
CH 6
Privatization The act of selling state owned and controlled
business organisations to investors in the private
sector.
Nationalization The transfer of privately owned businesses to state
ownership and control.
Minimum wage Employers are not allowed to pay less than the set
minimum wage per hour
Monopoly A market in which there is only one supplier with no
close competitors.
Collusion Businesses agree to work together and restrict
competition by fixing prices and sharing contracts
between themselves.
Social audit A report on the impact a business has on society.
Demographic Relating to the structure of population
Globalization The increasing freedom of movement of goods,
capital and people around the world.
Information and Technology The use of electronic technology to gather, store,
process and communicate information.
Job enrichment Aims to use the full capabilities of workers by giving
them the opportunity to do 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.
Voluntary export limits Agreed limits to the quantity of certain goods sold
by one country to another
Free international trade Trade with no restrictions or barriers that might
prevent or limit trade between countries.
Environmental audit Assesses the impact of the activities and decisions of
a business on the environment.
sustainability Activities that meet the needs of the present
without compromising the ability of future
generations to meet their needs
Green consumerism The trend for consumers to only buy products that
are produced sustainably without environmental
damage.
Chapter 9
Corporate plan A plan containing details of a business’s central
objectives and the strategies to achieve them.
Corporate planning The process used by companies to set long term
plans to meet certain objectives, such as business
growth and higher return on capital employed
Corporate culture The values, attitude and beliefs of people working
in an organization that affect the way they
interact with each other, and with external
stakeholders.
Power culture A culture that concentrates power among just a
few people
Role culture A culture in which each member of staff has a
clearly defined job title and role
Task culture A culture based on co-operation and teamwork
Person culture A culture in which individuals are given the
freedom to express themselves fully and make
decisions for themselves.
Entrepreneurial culture A culture that encourages management and
workers to take risks, to come up with new ideas
and test out new business ventures.
Transformational leadership The leader that works with teams to identify the
need for change, creates a vision to inspire
people to accept change and implements change
with the cooperation of the team.
Change management Planning, implementing, controlling and
reviewing the movement of an organization from
its current state to a new one.
Business process re-engineering Fundamentally rethinking and redesigning the
processes of a business to achieve a dramatic
improvement in performance.
Project champion A person appointed to support a project and
drive it forward by explaining the benefits of
change and assisting and supporting the team to
putting change into practice.
Project group Groups created by an organization to address a
problem that requires input from different
specialists.
Contingency plan A plan for preparing an organization’s resources
for unlikely events.
Crisis management The process of dealing with a sudden emergency
event.
Continuity planning Preparing resources so that a business can
continue operations after a major crisis.
Chapter 7
Market failure When market fails to achieve the most efficient
allocation of resources, resulting in under- or over
production of certain goods and services
External costs The costs of an economic activity that are not paid
for by the producer or consumer, but by the rest
of society.
Macro economic objectives The goals a government is aiming to achieve for
the whole economy.
Economic growth An increase in a country’s productive potential,
measured by an increase in its real GDP.
GDP The total value of goods and services produced in
a country in one year.
Real GDP Gross domestic product data adjusted for the
effects of inflation.
inflation An increase in the average price level of goods
and services resulting in a fall in the value of
money.
Unemployment When members of the working population are
willing and able to work but are unable to find a
job.
Imports Goods and services purchased from other
countries.
Exports Goods and services sold to consumer and
businesses in other countries.
Exchange rate The price of one currency in terms of another.
Recession A decline in real GDP of two or more quarters (at
least six months)
Business investment Expenditure by businesses on capital equipment,
new technology and research and development.
Labour productivity Average output per employee in a given time
period.
income elasticity of demand measures a product's responsiveness to changes
in consumer income, calculated as the percentage
change in quantity demanded divided by the
percentage change in income
The regular swings in output, measured by real
Business cycle GDP, that occur in most economies, varying from
boom conditions to recession
deflation A fall in the average price level of goods and
services.
hyperinflation Very high and accelerating inflation, which quickly
erodes the real value of the local currency.
Working population All those in the population of working age who are
willing and able to work
Cyclical unemployment Unemployment caused by low demand for goods
and services during a period of slow economic
growth or recession.
Frictional unemployment Unemployment caused by workers losing or
leaving jobs and taking a substantial period of
time to find alternative employment.
Structural unemployment Unemployment caused by the decline in
important industries, leading to significant job
losses in one sector of industry.
Monetary policy Decisions about the level of interest rates and the
supply of money in the economy.
Fiscal policy Decisions about the government expenditure, tax
rates and government borrowing
Budget deficit The value of government spending exceeds
revenue from taxation.
Budget surplus The value of taxation revenue exceeds the value
of government spending.
Chapter 13: organizational structure
Organizational Structure The internal, formal framework of a business that
shows the way in which management is organized
and linked together, and how authority is passed
through the organization.
Functional structure Departments have clearly defined roles and
responsibilities in a specialist area such as
marketing, finance, human resources or
operations.
Functional manager Senior employee who has authority over a
complete organizational unit.
Hierarchical structure A structure consisting of multiple levels in which
all members of the organization, apart from one,
are subordinate to someone else
Level of hierarchy A stage of the organizational structure where all
personnel have equal status and authority.
Span of control The number of sub ordinate employees directly
accountable to a manager.
Chain of command This is the route through which authority from the
chief executive and the board of directors is
passed down through an organization.
Divisional organizational structure A structure that organizes the activities of a
business around geographical areas or product
groups.
Delayering Removal of one or more of the levels of hierarchy
from an organizational structure.
Matrix structure An organizational structure that creates project
teams that cut across traditional functional
departments.
Delegation Passing authority down the organizational
hierarchy.
Accountability The obligation of the individual to account for and
explain their actions and to disclose the results of
their work honestly.
Centralization Keeping all the important decision making powers
within the head office or the center of the
organization.
Decentralization Decision-making powers are passed down the
hierarchy to empower subordinates and area or
product managers.
Line managers Managers who have direct authority over people,
decisions and resources within the hierarchy of an
organization.
Staff managers Managers who, as specialists, provide support,
information and assistance to senior line
managers
CH 15 LEADERSHIP:
leadership The art of motivating a group of people towards
achieving a common objective.
Informal leader A person who has no formal authority but has
the respect of colleagues and some power over
them.
Emotional intelligence The ability to understand one’s own emotions,
and those of others, to achieve better business
performance.
Emotional quotient The level of a person’s emotional intelligence as
recorded in a standardized test.
CH 16 HUMAN RESOURCE MANAGEMENT STRATEGY:
HRM strategy a long term plan for the management of an
organization’s human resources
Hard hrm an approach to managing employees that focus on
cutting costs.
Soft hrm An approach to managing employees that focuses on
their development so that they reach self fulfillment
and are motivated to work hard and stay with the
business.
Full time employment An employment contract that is for a complete
working week
Permanent employment contract A contract that employs a worker unless they are
dismissed , made redundant or decide to leave the
organisation
Temporary contract The contract is only offered for a fixed period of
time,such as six months. The contract can be renewed
but the employer doesn’t have to do that.
Zero hours contract A contract that does not guarantee a minimum
number of hours per week, but the worker is
expected to be available for work when called by an
employer.
Gig economy An employment mix, in which temporary, flexible jobs
are common and workers are hired as independent
contractors or freelance employees.
Flexible employment contract A contract that allows employees to have more
control over work life balance, including options to
work from home, flexible start and finish times, to
work part time or to job share.
Flexi time arrangement A flexible way of working that allows employees to fit
their working hours around their individual needs,
and accommodate other commitments outside of
work.
Home working When an employee works from home, often for a
specific number of days per week, but keeps contact
with the office by means of modern IT
communications.
Annualized hours contract A contract offering a specific number of hours of work
over the whole year, but with some flexibility about
when those hours are worked.
Job sharing A work schedule in which two employees voluntarily
share the responsibility of one full time job. They
receive a salary and benefits on a pro rata basis
Compressed working hours The number of hours per week of a full time job, but
worked in fewer days.
Shift work Work that takes place on a schedule outside the
traditional timings
absenteeism A measure of the rate of workforce absence as a
proportion of the employee total
MBO Establishing a management information system to
compare actual performance and achievements
against preset objectives for each department or
employee.
CH 14 BUSINESS COMMUNICATION
Effective communication The exchange of information between people or groups,
with feedback.
Communication methods The media used to communicate messages.
Visual communication Conveying message or ideas in forms that can be seen.
Spoken communication Sending messages by word of mouth between two or
more people
Written communication Any type of message that makes use of written words
Electronic communication Sending messages using media such as computers,
email or video conferencing.
Information overload The receipt of too much information, preventing
important messages being identified and acted upon.
Formal communication channels The official communication networks and routes used
within an organization.
One way communication Messages sent in one direction, from the sender to the
receiver, with no feedback expected.
Two way communication Communication between two or more people involving
the transmission of messages that encourage response
and feedback.
Vertical communication When people from different levels in hierarchy
communicate with each other.
Horizontal communication When people on the same level of hierarchy
communicate with each other.
Communication barriers Reason why communication fails.
Informal communication Unofficial channels of communication that exist
between informal groups within an organization.
CH 21 MARKETING ANALYSIS
PED A measure of responsiveness of demand for a
product following a change in its price
IED A measure of the responsiveness of demand for a
product following a change in consumer incomes.
Inferior good A product that experiences an increase in
demand when consumer income falls.
Promotional ED A measure of the responsiveness of demand for a
product followed by a change in the amount
spent on promoting it.
NPD The design, creation and marketing of new goods
and services
R&D The scientific research and technical development
of new products and processes.
Test marketing The launch of the product on a small scale market
to test consumers’ reactions to it
Sales forecasting Predicting future sales levels and sales trends
Trend The underlying movement in a series of data over
time
Seasonal fluctuations The regular and repeated variations that occur in
sales data within the period of 12 months.
Cyclical fluctuations Variations in sales over periods of time much
more than a year which are due to the business
cycle.
Random fluctuations Variations that occur at any time and cause
unusual and unpredictable sales figures, due to
events such as exceptionally poor weather or
negative public image.
Qualitative forecasting Predictions about future sales which use expert
judgement instead of numerical analysis
Sales force composite A method of sales forecasting that adds together
the individual predictions of future sales from all
the sales representatives working for a business
Delphi method A long range qualitative forecasting technique
that obtains forecasts from a panel of experts
Jury of experts A method that uses the specialists within a
business to make forecasts for the future
CH 22 MARKET ANALYSIS
Marketing plan A detailed and fully researched written report
on the marketing objectives and the
marketing strategy to be used to achieve
them.
Economic collaboration Countries working together to achieve , such
as common aims such as free international
trade
Free trade agreements Agreements made between countries to
reduce or eliminate trade barriers between
them such as import tariffs and quotas
International marketing Selling products in markets other than the
original domestic market
BRICS The acronym for five rapidly developing
economies with great market opportunities
such as brazil, Russia, India, china and south
Africa
Pan global marketing Marketing a standardized product across the
globe as if the entire world were a single
market, selling the same product in the same
way everywhere.
Global localization Adapting the marketing mix, including
differentiated products and adjusting for
national and regional tastes and cultures, in
order to maintain local differences.
Chapter 26: location and scale
Optimal location A business location that gives the best combination of
quantitative and qualitative factors.
Quantitative factors Issues that managers should consider that can be
measured in financial or numerical terms.
Qualitative factors Issues that managers should consider that are not
measurable in financial or numerical terms.
offshoring The relocation of a business process from one country
to another country.
Trade barriers Taxes, or other limitations on the free international
movement of goods and services.
reshoring Transferring a business operation that was moved
overseas back to the country where it was originally
located.
Scale of location The maximum output that can be achieved using the
available inputs.
Internal economies of scale Factors that cause reductions in unit costs of production
as the business expands its scale of operations.
Internal diseconomies of scale Factors that cause unit costs of production to increase
when a business increases its scale of operations.
External economies of scale Factors causing unit cost reductions that can benefit a
business as the industry expands in one region.
External diseconomies of scale Factors causing unit costs to rise as an industry expands,
especially in a given region.
CH 27 Quality management:
Quality product A good or service that meets customers’
expectations and therefore fulfils its intended
purpose.
Quality standards The expectations of customers expressed in
terms of the minimum acceptable production or
service standards.
Quality control Checking based on inspection of the product or
sample of products.
Quality assurance A system of agreeing and meeting quality
standards at each stage of production to ensure
customer satisfaction.
ISO 9000 An internationally recognized standard that
acknowledges the existence of a quality
assurance method that meets certain
conditions.
TQM An approach to quality that aims to involve all
employees in quality improvement.
Internal customers People within an organization who depend
upon the quality of work being done by others
Zero defects A way of thinking to ensure that products meet
customer expectations every time.
benchmarking Comparing a business against the performance
standards of the best businesses in the same
industry
BPI The areas of business performance that are
measured and compared with other businesses
Ch 28
Lean production Producing goods and services with the minimum
of wasted resources while maintaining high
quality.
CAD The use of computer programs to create two or
three dimensional graphical representation of
physical objects.
CAM The use of computer software to control
machine tools and related equipment in the
manufacturing of components or complete
products.
Operational flexibility The ability of a business to vary both level of
production and the range of products following
the changes in customer demand.
Process innovation The use of new or much improved production
methods or service delivery methods
ERP The use of a single computer application to plan
the purchase and use of resources in an
organization in order to improve operations
efficiency
Kaizen A Japanese term meaning continuous
improvement
Simultaneous engineering Product development organized so that different
stages are done at the same time instead of a
sequence.
Cell production Flow production split into self -contained groups
that are responsible for a complete unit of work
CPA A planning technique that identifies all tasks in a
project, puts them in the correct sequence and
allows for the identification of critical path
Network diagram The diagram used in critical path analysis that
shows the logical sequence of activities and the
logical dependencies between them, so the
critical path can be identified
Critical path The sequence of activities that must be
completed on time for the whole project to be
completed by the agreed date
Earliest start time An activity cannot begin before this time
Latest finish time An activity cannot finish later than this time
without delaying the project
Total float The amount of time an activity can be delayed
without delaying the whole project duration
Free float The length of time an activity can be delayed
without delaying the whole procedure
Dummy activities A device to show logical dependency between
activities, but which consume no time and no
resources themselves.