AS 1 · Business enterprise and central purposeBusiness enterprise
An organised activity that combines resources to provide goods or services while pursuing stated objectives.
Learn this term in context →AS 1 · Business enterprise and central purposeLand
Natural resources and physical space used in production.
Learn this term in context →AS 1 · Business enterprise and central purposeLabour
Human effort, skill and time used in production.
Learn this term in context →AS 1 · Business enterprise and central purposeCapital
Man-made resources used to produce other goods or services.
Learn this term in context →AS 1 · Business enterprise and central purposeEnterprise
The initiative and judgement used to combine resources and accept uncertainty.
Learn this term in context →AS 1 · Business enterprise and central purposeCalculated risk
A risk taken after assessing likely outcomes, evidence and downside rather than acting blindly.
Learn this term in context →AS 1 · Business enterprise and central purposeAdded value
Selling price minus the cost of bought-in materials and services.
Learn this term in context →AS 1 · Business enterprise and central purposeCompetitive advantage
A defensible source of customer preference or lower cost relative to rivals.
Learn this term in context →AS 1 · Business enterprise and central purposeCost advantage
A sustainable ability to operate at lower cost than rivals for comparable output.
Learn this term in context →AS 1 · Business enterprise and central purposeDifferentiation advantage
A sustainable valued distinction that supports demand, loyalty or price premium.
Learn this term in context →AS 1 · Forms of ownershipSole trader
A business owned and controlled by one individual, who is generally personally responsible for its obligations.
Learn this term in context →AS 1 · Forms of ownershipPartnership
A business owned by two or more persons who share control, return and responsibility under their agreement and applicable law.
Learn this term in context →AS 1 · Forms of ownershipLimited liability
A legal separation that normally limits an owner's loss to the amount invested or guaranteed, subject to law and conduct.
Learn this term in context →AS 1 · Forms of ownershipPrivate limited company
An incorporated company whose shares are not offered to the general public.
Learn this term in context →AS 1 · Forms of ownershipPublic limited company
An incorporated company meeting legal requirements to offer shares to the public.
Learn this term in context →AS 1 · Forms of ownershipShareholder
A person or organisation owning one or more shares in a company.
Learn this term in context →AS 1 · Forms of ownershipFranchise
A contractual arrangement allowing a franchisee to use a franchisor's brand and system for fees and compliance.
Learn this term in context →AS 1 · Forms of ownershipSocial enterprise
A trading organisation with a central social or environmental purpose.
Learn this term in context →AS 1 · Forms of ownershipCharity
An organisation established for recognised charitable purposes and subject to applicable charity rules.
Learn this term in context →AS 1 · Forms of ownershipIncorporation
Formation of a legal entity separate from its owners.
Learn this term in context →AS 1 · StakeholdersStakeholder
A person or group that can affect or is affected by business activity.
Learn this term in context →AS 1 · StakeholdersOwner
A person or entity holding residual control or financial interest in a business.
Learn this term in context →AS 1 · StakeholdersCreditor
A party to whom the business owes money.
Learn this term in context →AS 1 · StakeholdersShort-term lender
A provider of finance normally due within a relatively short period, often to support working capital.
Learn this term in context →AS 1 · StakeholdersPressure group
An organised group seeking to influence business or government decisions around an issue.
Learn this term in context →AS 1 · StakeholdersStakeholder conflict
A clash between desired outcomes of stakeholders.
Learn this term in context →AS 1 · StakeholdersReputation
Collective stakeholder perceptions that affect trust and behaviour.
Learn this term in context →AS 1 · StakeholdersSocial media engagement
Two-way creation, sharing and response through social platforms.
Learn this term in context →AS 1 · Markets and market forcesConsumer market
A market in which final customers buy goods or services for personal use.
Learn this term in context →AS 1 · Markets and market forcesCapital-goods market
A market for assets used to produce other goods or services.
Learn this term in context →AS 1 · Markets and market forcesLabour market
The interaction of employers demanding labour and people supplying skills and time.
Learn this term in context →AS 1 · Markets and market forcesMass market
A large market targeted with an offer intended to appeal broadly.
Learn this term in context →AS 1 · Markets and market forcesNiche market
A smaller, well-defined group with particular needs.
Learn this term in context →AS 1 · Markets and market forcesMarket size
Total sales volume or value in a defined market and period.
Learn this term in context →AS 1 · Markets and market forcesMarket share
A business's sales as a percentage of total defined market sales.
Learn this term in context →AS 1 · Markets and market forcesDemand
The quantity consumers are willing and able to buy at different prices over a period.
Learn this term in context →AS 1 · Markets and market forcesSupply
The quantity producers are willing and able to offer at different prices over a period.
Learn this term in context →AS 1 · Markets and market forcesEquilibrium
The price and quantity where intended demand equals intended supply in a simple market model.
Learn this term in context →AS 1 · Quality management, productivity and investmentQuality
The degree to which a good, service or process consistently meets relevant requirements and customer expectations.
Learn this term in context →AS 1 · Quality management, productivity and investmentQuality control
Inspection or testing used to identify whether output meets standards.
Learn this term in context →AS 1 · Quality management, productivity and investmentQuality assurance
Planned systems and procedures intended to prevent defects and provide confidence that standards will be met.
Learn this term in context →AS 1 · Quality management, productivity and investmentTotal quality management
An organisation-wide approach of continuous improvement, customer focus and responsibility for quality at source.
Learn this term in context →AS 1 · Quality management, productivity and investmentJob production
Production of a one-off or highly customised output.
Learn this term in context →AS 1 · Quality management, productivity and investmentBatch production
Production of a group of identical items before switching to another batch.
Learn this term in context →AS 1 · Quality management, productivity and investmentFlow production
Continuous or sequential production of standardised output through linked stages.
Learn this term in context →AS 1 · Quality management, productivity and investmentCell production
Production organised in teams or work areas responsible for a complete family of tasks or products.
Learn this term in context →AS 1 · Quality management, productivity and investmentLean production
A systematic approach to removing activity that does not create customer value while improving flow and quality.
Learn this term in context →AS 1 · Quality management, productivity and investmentProductivity
Output per unit of input over a period.
Learn this term in context →AS 1 · Quality management, productivity and investmentOutsourcing
Contracting an external organisation to perform an activity previously or potentially performed internally.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipWorkforce planning
Forecasting and acting on the number, skills, location and timing of people needed to achieve objectives.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipSkills audit
A systematic comparison of current workforce skills with present or future requirements.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipSuccession planning
Preparing internal or external candidates and contingencies for critical future roles.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipInternal recruitment
Filling a vacancy from existing employees.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipPsychometric test
A standardised assessment designed to measure specified abilities, aptitudes or personality-related constructs.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipAppraisal
A structured review of performance, objectives and development.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipMotivation
The forces influencing the direction, intensity and persistence of effort.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipJob enrichment
Increasing the depth of a role through responsibility, autonomy and more meaningful work.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipEmpowerment
Giving employees meaningful authority, information and resources to make defined decisions.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipPerformance-related pay
Pay linked to measured individual, team or organisational performance.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipAuthoritarian leadership
A style in which the leader makes decisions with limited subordinate input and expects compliance.
Learn this term in context →AS 1 · Organisational design, investing in people, motivation, management and leadershipDemocratic leadership
A style in which employees contribute to decisions while the leader normally retains accountability.
Learn this term in context →AS 2 · Spectrum of competitionCompetition
Rivalry among organisations seeking customers, resources or advantage.
Learn this term in context →AS 2 · Spectrum of competitionMarket size
Total sales value or volume in a defined market over a stated period.
Learn this term in context →AS 2 · Spectrum of competitionMarket growth
Percentage change in total market size over time.
Learn this term in context →AS 2 · Spectrum of competitionMarket share
A firm's sales as a percentage of total market sales.
Learn this term in context →AS 2 · Spectrum of competitionMarket structure
The competitive characteristics of a market, including number and size of firms, entry barriers, differentiation and information.
Learn this term in context →AS 2 · Spectrum of competitionBarrier to entry
A factor making entry difficult, costly or slow for new competitors.
Learn this term in context →AS 2 · Spectrum of competitionConcentration
The extent to which a small number of firms account for a large share of a market.
Learn this term in context →AS 2 · Spectrum of competitionDifferentiation
Perceived distinction between competing offers.
Learn this term in context →AS 2 · Market researchMarket research
Systematic collection and analysis of evidence about a market to support decisions.
Learn this term in context →AS 2 · Market researchPrimary research
New evidence collected for a specific current purpose.
Learn this term in context →AS 2 · Market researchSecondary research
Existing evidence originally collected for another purpose.
Learn this term in context →AS 2 · Market researchQualitative research
Evidence about meanings, motives and experiences, often expressed in words or observation.
Learn this term in context →AS 2 · Market researchQuantitative research
Numerical evidence used to measure amounts, frequency, relationships or change.
Learn this term in context →AS 2 · Market researchRandom sample
A sample selected so each member of the defined population has a known equal chance of selection.
Learn this term in context →AS 2 · Market researchQuota sample
A non-random sample in which researchers fill categories to specified proportions.
Learn this term in context →AS 2 · Market researchStratified sample
A probability sample drawn from relevant subgroups, normally in proportion or deliberately allocated.
Learn this term in context →AS 2 · Market researchCluster sample
A sample of naturally occurring groups, with selected clusters studied wholly or partly.
Learn this term in context →AS 2 · Market researchValidity
The degree to which evidence measures what the decision requires.
Learn this term in context →AS 2 · Market researchBias
A systematic influence that pushes evidence away from the true population or phenomenon.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleMarketing mix
The coordinated product, price, promotion, place, people, process and physical-environment decisions used to serve a target market.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cyclePrice skimming
Setting a high initial price to earn margin from less price-sensitive early buyers before reducing it.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cyclePenetration pricing
Setting a relatively low initial price to gain trial or share rapidly.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleValue-based pricing
Setting price with reference to customer-perceived value rather than cost alone.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleCost-plus pricing
Adding a chosen mark-up to estimated unit cost.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cyclePrice elasticity of demand
Responsiveness of quantity demanded to a price change: percentage change in quantity demanded divided by percentage change in price.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleIncome elasticity of demand
Responsiveness of demand to a change in consumer income.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleProduct life cycle
A model describing introduction, growth, maturity and decline patterns in sales over time.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleExtension strategy
Action intended to prolong demand or reposition a product before or during maturity/decline.
Learn this term in context →AS 2 · Marketing mix, elasticity and product life cycleDistribution channel
The route by which an offer reaches a customer.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessMarketing plan
A structured statement of diagnosis, objectives, target, positioning, strategy, actions, budget and control.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessMarketing objective
A specific result marketing should achieve in support of wider business objectives.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessSegmentation
Dividing a market into groups with similar characteristics, needs or behaviour relevant to marketing decisions.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessTarget market
The segment or segments a business chooses to serve.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessPositioning
The intended relative place of an offer in target customers' minds.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessDigital marketing
Use of digital channels and data to reach, understand and influence customers.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessE-commerce
Buying and selling through electronic networks.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessIntermediary
An organisation between producer and final customer that performs distribution, selling or information functions.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessConversion rate
The percentage of users or prospects completing a defined desired action.
Learn this term in context →AS 2 · Market planning, segmentation and e-businessCustomer acquisition cost
Relevant acquisition spending divided by new customers acquired.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingInternal finance
Finance generated within the business, such as retained profit or asset disposal.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingDebt finance
Borrowed finance requiring repayment and normally interest.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingEquity finance
Finance raised in exchange for ownership rights.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingContribution
Selling price minus variable cost per unit, or total revenue minus total variable cost.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingBreak-even output
Output where total revenue equals total cost and profit is zero.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingMargin of safety
Actual or forecast output minus break-even output.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingNet cash flow
Cash inflows minus cash outflows in a period.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingCash-flow forecast
An estimate of future cash receipts, payments and balances by period.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingFixed budget
A budget set for one planned level of activity and not adjusted for actual volume.
Learn this term in context →AS 2 · Sources of finance, break-even, cash flow and budgetingFlexible budget
A budget recalculated for the actual or alternative activity level.
Learn this term in context →AS 2 · Financial statements and ratio analysisIncome statement
A statement summarising revenue, costs and profit over a period.
Learn this term in context →AS 2 · Financial statements and ratio analysisStatement of financial position
A statement of assets, liabilities and owner's interest at a specified date.
Learn this term in context →AS 2 · Financial statements and ratio analysisAsset
A resource controlled by the business from which future economic benefit is expected.
Learn this term in context →AS 2 · Financial statements and ratio analysisLiability
A present obligation expected to require transfer of resources.
Learn this term in context →AS 2 · Financial statements and ratio analysisWorking capital
Current assets minus current liabilities.
Learn this term in context →AS 2 · Financial statements and ratio analysisROCE
Operating profit as a percentage of capital employed.
Learn this term in context →AS 2 · Financial statements and ratio analysisNet profit margin
Net profit as a percentage of revenue using the definition provided.
Learn this term in context →AS 2 · Financial statements and ratio analysisCurrent ratio
Current assets divided by current liabilities.
Learn this term in context →AS 2 · Financial statements and ratio analysisGearing
Long-term debt relative to the specified capital base under the formula given.
Learn this term in context →AS 2 · Financial statements and ratio analysisFinal accounts
Financial statements prepared for a completed accounting period.
Learn this term in context →A2 1 · Business objectives and organisational cultureMission statement
A public statement of an organisation's central purpose, values and intended direction.
Learn this term in context →A2 1 · Business objectives and organisational cultureVision
A description of the future position an organisation seeks to create.
Learn this term in context →A2 1 · Business objectives and organisational cultureAim
A broad, long-term intention that provides general direction.
Learn this term in context →A2 1 · Business objectives and organisational cultureObjective
A result an organisation intends to achieve within a stated or implied period.
Learn this term in context →A2 1 · Business objectives and organisational cultureCorporate objective
An organisation-wide result set by senior leaders to advance its overall purpose.
Learn this term in context →A2 1 · Business objectives and organisational cultureFunctional objective
A target for a business function that contributes to wider corporate objectives.
Learn this term in context →A2 1 · Business objectives and organisational cultureStrategic objective
A significant medium- or long-term result affecting the organisation's direction and competitive position.
Learn this term in context →A2 1 · Business objectives and organisational cultureOperational objective
A short-term, specific result for day-to-day implementation.
Learn this term in context →A2 1 · Business objectives and organisational cultureSMART objective
An objective designed to be specific, measurable, achievable, relevant and time-bound.
Learn this term in context →A2 1 · Business objectives and organisational cultureSurvival objective
An objective prioritising continuity, liquidity and the ability to meet obligations during threat or early trading.
Learn this term in context →A2 1 · Business objectives and organisational cultureProfitability objective
An objective to improve profit relative to sales, assets, capital or another meaningful base.
Learn this term in context →A2 1 · Business objectives and organisational cultureNon-financial objective
A target not expressed primarily in money, such as service, quality, employee wellbeing or environmental impact.
Learn this term in context →A2 1 · Business objectives and organisational cultureOrganisational culture
The shared practices, assumptions and norms that influence how people behave and make decisions in an organisation.
Learn this term in context →A2 1 · Business objectives and organisational cultureNorm
An informal expectation about acceptable behaviour within a group.
Learn this term in context →A2 1 · Business objectives and organisational cultureStrong culture
A culture in which important values and behavioural expectations are widely understood and consistently reinforced.
Learn this term in context →A2 1 · Business objectives and organisational cultureCultural artefact
A visible expression of culture, such as language, stories, rituals, symbols, workspace or routines.
Learn this term in context →A2 1 · Business objectives and organisational cultureCultural change
A deliberate shift in shared practices, expectations and underlying assumptions.
Learn this term in context →A2 1 · Stakeholder objectives and communicationStakeholder
An individual or group that can affect, or is affected by, an organisation's decisions and activities.
Learn this term in context →A2 1 · Stakeholder objectives and communicationStakeholder objective
An outcome a stakeholder seeks from its relationship with the organisation.
Learn this term in context →A2 1 · Stakeholder objectives and communicationStakeholder conflict
A situation in which meeting one stakeholder objective makes another harder to achieve.
Learn this term in context →A2 1 · Stakeholder objectives and communicationStakeholder influence
The capacity to shape objectives, decisions or implementation.
Learn this term in context →A2 1 · Stakeholder objectives and communicationStakeholder mapping
A structured comparison of stakeholders using factors such as power and interest to guide engagement.
Learn this term in context →A2 1 · Stakeholder objectives and communicationConsultation
Seeking stakeholder evidence or views before a decision is finalised.
Learn this term in context →A2 1 · Stakeholder objectives and communicationNegotiation
A process in which parties seek an acceptable agreement where interests differ.
Learn this term in context →A2 1 · Stakeholder objectives and communicationCommunication channel
The medium through which a message travels from sender to receiver.
Learn this term in context →A2 1 · Stakeholder objectives and communicationFeedback
A receiver's response that helps the sender judge whether a message was received and understood.
Learn this term in context →A2 1 · Stakeholder objectives and communicationCommunication noise
Any physical, semantic, technical or psychological factor that distorts a message.
Learn this term in context →A2 1 · Stakeholder objectives and communicationInformation overload
A volume or complexity of information that makes prioritisation and accurate processing difficult.
Learn this term in context →A2 1 · Stakeholder objectives and communicationSynchronous communication
Communication in which participants interact at the same time.
Learn this term in context →A2 1 · Scale, strategy and planningEconomy of scale
A reduction in long-run average cost resulting from an increase in the scale of operation.
Learn this term in context →A2 1 · Scale, strategy and planningInternal economy of scale
A unit-cost advantage created by the growth of the individual business.
Learn this term in context →A2 1 · Scale, strategy and planningExternal economy of scale
A unit-cost advantage available because the wider industry or geographic cluster grows.
Learn this term in context →A2 1 · Scale, strategy and planningDiseconomy of scale
An increase in long-run average cost caused by excessive scale, complexity or loss of control.
Learn this term in context →A2 1 · Scale, strategy and planningAverage cost
Total cost divided by output over a stated period.
Learn this term in context →A2 1 · Scale, strategy and planningProductivity
Output produced per unit of input during a stated period.
Learn this term in context →A2 1 · Scale, strategy and planningBusiness plan
A structured explanation of objectives, market, operations, people, finance, risks and implementation.
Learn this term in context →A2 1 · Scale, strategy and planningSWOT analysis
A structured review of internal strengths and weaknesses and external opportunities and threats.
Learn this term in context →A2 1 · Scale, strategy and planningPESTEL analysis
A review of political, economic, social, technological, environmental and legal influences.
Learn this term in context →A2 1 · Scale, strategy and planningInternal finance
Finance generated from within the business, such as retained profit or disposal of assets.
Learn this term in context →A2 1 · Scale, strategy and planningDebt finance
Borrowed finance carrying an obligation to repay principal and usually interest.
Learn this term in context →A2 1 · Scale, strategy and planningEquity finance
Finance raised in return for an ownership interest and claim on future returns.
Learn this term in context →A2 1 · Scale, strategy and planningSensitivity analysis
Testing how a forecast outcome changes when a key assumption changes.
Learn this term in context →A2 1 · Strategy and business performanceStrategy
A coherent set of long-term choices about scope, position and resource allocation designed to achieve objectives.
Learn this term in context →A2 1 · Strategy and business performanceMarket penetration
Seeking growth by selling more existing products in existing markets.
Learn this term in context →A2 1 · Strategy and business performanceMarket development
Seeking growth by taking existing products into new markets or segments.
Learn this term in context →A2 1 · Strategy and business performanceProduct development
Seeking growth by offering new or significantly changed products to existing markets.
Learn this term in context →A2 1 · Strategy and business performanceDiversification
Seeking growth through new products in new markets.
Learn this term in context →A2 1 · Strategy and business performanceRelative market share
A product's market share compared with that of the largest competitor, used in the Boston Matrix.
Learn this term in context →A2 1 · Strategy and business performanceMarket growth rate
The percentage change in total market size over a stated period.
Learn this term in context →A2 1 · Strategy and business performanceCost leadership
Achieving a sustainable lower-cost position across a broad market and using it to compete.
Learn this term in context →A2 1 · Strategy and business performanceDifferentiation
Offering valued distinctiveness for which customers are willing to pay or remain loyal.
Learn this term in context →A2 1 · Strategy and business performanceFocused strategy
Serving a narrow segment using either cost advantage or differentiation tailored to that segment.
Learn this term in context →A2 1 · Strategy and business performancePerceived added value
The benefit customers believe they receive beyond the price and alternatives.
Learn this term in context →A2 1 · Strategy and business performanceBalanced Scorecard
A framework linking strategic objectives and measures across financial, customer, internal-process and learning-and-growth perspectives.
Learn this term in context →A2 1 · Strategy and business performanceTriple Bottom Line
Elkington's framework for considering social, environmental and economic performance: people, planet and profit.
Learn this term in context →A2 1 · Strategy and business performanceKey performance indicator
A deliberately selected measure used to monitor progress toward an important objective.
Learn this term in context →A2 1 · Strategy and business performanceLeading indicator
A measure that may signal future performance before the final outcome is known.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyDecision tree
A diagram that represents choices, chance outcomes, probabilities and estimated financial consequences.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyDecision node
A point, normally shown as a square, where the decision maker chooses between options.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyChance node
A point, normally shown as a circle, from which uncertain outcomes branch with probabilities.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyProbability
A numerical estimate between 0 and 1 of how likely an outcome is, with complete branch probabilities summing to 1.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyExpected value
The probability-weighted average monetary outcome of an uncertain option.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyNet expected value
Expected value after deducting the specific cost of selecting an option.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyRisk
Uncertainty for which outcomes and probabilities can be estimated with some basis.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyUncertainty
A lack of reliable knowledge about future outcomes, probabilities or causal relationships.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyRisk appetite
The amount and type of risk an organisation is willing to accept in pursuit of objectives.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintySensitivity analysis
Testing how a decision changes when an uncertain input or assumption is varied.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyContingency plan
A prepared set of actions, responsibilities and resources for a specified disruption or adverse event.
Learn this term in context →A2 1 · Decision trees, risk and uncertaintyBusiness continuity
The capability to continue critical activities at acceptable levels during and after disruption.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalRevenue
Income earned from ordinary sales before costs are deducted.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalGross profit
Revenue minus cost of sales.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalOperating profit
Profit from ordinary operations before interest and tax, using the definition supplied in the accounts or question.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalCash flow
Movement of cash into and out of a business during a period.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalCapital employed
Long-term finance invested in the business, commonly equity plus non-current liabilities or total assets less current liabilities.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalROCE
Operating profit as a percentage of capital employed.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalGross profit percentage
Gross profit divided by revenue, multiplied by 100.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalNet profit percentage
The relevant net profit figure divided by revenue, multiplied by 100.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalCurrent ratio
Current assets divided by current liabilities.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalGearing
The proportion of long-term finance supplied by debt, calculated using the course or question convention.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalEarnings per share
Profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalReturn on equity
Profit attributable to ordinary shareholders as a percentage of ordinary shareholders' equity.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalPayback period
The time required for cumulative net cash inflows to recover the initial investment.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalDiscount factor
A multiplier that converts a future cash flow into present value using a stated discount rate and time.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalNet present value
The present value of future net cash flows minus the initial investment.
Learn this term in context →A2 1 · Company accounts, ratio analysis and investment appraisalInvestment appraisal
The systematic evaluation of the financial and qualitative attractiveness of an investment option.
Learn this term in context →A2 2 · Macroeconomic frameworkResource allocation
The distribution of scarce land, labour, capital and enterprise among competing uses.
Learn this term in context →A2 2 · Macroeconomic frameworkEnterprise
The identification of opportunities and organisation of resources while accepting uncertainty.
Learn this term in context →A2 2 · Macroeconomic frameworkMixed economy
An economy in which private markets, government and third-sector organisations all allocate resources and provide goods or services.
Learn this term in context →A2 2 · Macroeconomic frameworkSocial enterprise
A trading organisation whose central purpose includes a social or environmental objective and which reinvests or applies surpluses toward that purpose.
Learn this term in context →A2 2 · Macroeconomic frameworkBusiness cycle
Fluctuation in aggregate economic activity through expansion, peak, slowdown or recession, trough and recovery.
Learn this term in context →A2 2 · Macroeconomic frameworkBusiness confidence
Managers' expectations about future demand, costs and operating conditions that influence investment, hiring and inventory decisions.
Learn this term in context →A2 2 · Macroeconomic frameworkConsumer confidence
Households' expectations about their finances and the economy that influence willingness to spend or save.
Learn this term in context →A2 2 · Macroeconomic frameworkAutomatic stabiliser
A tax or spending mechanism that changes with economic activity without a new discretionary decision.
Learn this term in context →A2 2 · Government policyEconomic growth
An increase in inflation-adjusted output over a period.
Learn this term in context →A2 2 · Government policySustainable development
Development that meets present needs while protecting the capacity of future generations to meet theirs.
Learn this term in context →A2 2 · Government policyInflation
A sustained increase in the general price level, usually measured as a percentage rate.
Learn this term in context →A2 2 · Government policyBalance of payments
A record of economic transactions between residents of a country and the rest of the world.
Learn this term in context →A2 2 · Government policyDirect tax
A tax charged directly on income, profit or wealth.
Learn this term in context →A2 2 · Government policyIndirect tax
A tax levied on spending or production and normally collected by businesses for government.
Learn this term in context →A2 2 · Government policyFiscal policy
Government decisions on taxation and expenditure that influence activity, distribution and public services.
Learn this term in context →A2 2 · Government policyInterest rate
The price of borrowing or return to saving, expressed as a percentage over time.
Learn this term in context →A2 2 · Government policyExchange rate
The price of one currency in terms of another.
Learn this term in context →A2 2 · Government policyCustoms duty
A tax imposed on specified goods crossing a customs boundary.
Learn this term in context →A2 2 · Globalisation, global entry and tradeGlobalisation
Increasing cross-border integration of markets, production, finance, technology and information.
Learn this term in context →A2 2 · Globalisation, global entry and tradeForeign direct investment
Investment that gives an organisation lasting ownership or control of productive activity in another economy.
Learn this term in context →A2 2 · Globalisation, global entry and tradeExporting
Selling domestically produced goods or services to customers in another country.
Learn this term in context →A2 2 · Globalisation, global entry and tradeLicensing
Granting another business rights to use intellectual property under agreed conditions.
Learn this term in context →A2 2 · Globalisation, global entry and tradeFranchising
Allowing a franchisee to trade using a brand and operating format in return for fees and compliance.
Learn this term in context →A2 2 · Globalisation, global entry and tradeJoint venture
A jointly owned operation created by partners that share resources, control, return and risk.
Learn this term in context →A2 2 · Globalisation, global entry and tradeGlobal integration
Co-ordination and standardisation across countries to gain efficiency, consistency or shared learning.
Learn this term in context →A2 2 · Globalisation, global entry and tradeLocal responsiveness
Adaptation to local customers, institutions, channels and operating conditions.
Learn this term in context →A2 2 · Globalisation, global entry and tradeTariff
A customs duty on imported goods.
Learn this term in context →A2 2 · Globalisation, global entry and tradeNon-tariff barrier
A rule, standard, procedure or restriction that affects trade without being a tariff.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityBusiness ethics
Principles used to judge what a business ought to do when choices affect others.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityEthical code
A documented statement of expected conduct and decision principles.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilitySustainability
The capacity to meet present needs while maintaining environmental, social and economic systems over time.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityCorporate social responsibility
A business's responsibility for its economic, legal, ethical and societal impacts and obligations.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityGreenwashing
Communication that creates an unjustifiably favourable impression of environmental performance.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityExternality
A cost or benefit imposed on a third party and not fully reflected in the market transaction.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityStakeholder accountability
An obligation to explain decisions and accept scrutiny or consequences from affected parties.
Learn this term in context →A2 2 · Ethics, sustainability and corporate social responsibilityCompetitive advantage
A defensible source of superior customer value or lower cost relative to rivals.
Learn this term in context →A2 2 · Stakeholder influenceStakeholder outcome
A consequence experienced by a stakeholder because of a business decision.
Learn this term in context →A2 2 · Stakeholder influenceStakeholder power
The ability to influence a decision or its implementation.
Learn this term in context →A2 2 · Stakeholder influenceLegitimacy
The perceived validity or appropriateness of a stakeholder's claim.
Learn this term in context →A2 2 · Stakeholder influenceDependency
The extent to which a business or stakeholder relies on the other for critical resources or outcomes.
Learn this term in context →A2 2 · Stakeholder influenceTrade-off
A situation where gaining more of one outcome requires accepting less of another.
Learn this term in context →A2 2 · Stakeholder influenceProcedural fairness
Perceived fairness of the process used to reach and implement a decision.
Learn this term in context →A2 2 · Stakeholder influenceAccountability
The obligation to explain decisions, accept scrutiny and respond to consequences.
Learn this term in context →A2 2 · Stakeholder influenceStakeholder coalition
Two or more stakeholder groups combining influence around a shared issue.
Learn this term in context →A2 2 · Organisational design, competition and regulationChain of command
The formal line through which authority and accountability pass in an organisation.
Learn this term in context →A2 2 · Organisational design, competition and regulationSpan of control
The number of direct reports managed by one manager.
Learn this term in context →A2 2 · Organisational design, competition and regulationDelayering
Removing one or more levels of management from the hierarchy.
Learn this term in context →A2 2 · Organisational design, competition and regulationCentralisation
Concentration of significant decision authority near the top or centre of an organisation.
Learn this term in context →A2 2 · Organisational design, competition and regulationMonopoly power
The ability of a firm with limited competitive constraint to influence price, output or trading conditions.
Learn this term in context →A2 2 · Organisational design, competition and regulationHorizontal merger
A combination of firms operating at the same stage in the same or closely related market.
Learn this term in context →A2 2 · Organisational design, competition and regulationVertical integration
Combination with a supplier upstream or distributor/customer downstream.
Learn this term in context →A2 2 · Organisational design, competition and regulationTakeover
Acquisition of control of one company by another.
Learn this term in context →A2 2 · Organisational design, competition and regulationCompetition and Markets Authority
The UK authority responsible for promoting competition and addressing anti-competitive activity and relevant mergers under its powers.
Learn this term in context →A2 2 · Organisational design, competition and regulationSector regulator
A body with statutory responsibilities for a specified regulated sector.
Learn this term in context →A2 2 · Change, information and resistance to changeBusiness change
A significant alteration to objectives, structure, processes, technology, people, culture or market scope.
Learn this term in context →A2 2 · Change, information and resistance to changeIncremental change
A sequence of relatively small improvements made over time.
Learn this term in context →A2 2 · Change, information and resistance to changeInformation resource
Data processed and governed so it can support decisions, coordination, control and learning.
Learn this term in context →A2 2 · Change, information and resistance to changeData quality
The degree to which data is accurate, complete, timely, consistent, relevant and fit for purpose.
Learn this term in context →A2 2 · Change, information and resistance to changeDriving force
A factor supporting or increasing pressure for a proposed change.
Learn this term in context →A2 2 · Change, information and resistance to changeRestraining force
A factor obstructing, slowing or increasing the cost of change.
Learn this term in context →A2 2 · Change, information and resistance to changeForce Field Analysis
Lewin's method of identifying and assessing forces supporting and resisting a proposed change.
Learn this term in context →A2 2 · Change, information and resistance to changeResistance to change
Behaviour or attitudes that delay, oppose or redirect change because of perceived loss, uncertainty, disagreement or limited capability.
Learn this term in context →A2 2 · Change, information and resistance to changeModernisation
Updating technology, processes, skills or organisation to improve fit with current requirements.
Learn this term in context →A2 2 · Change, information and resistance to changeCoercion
Using formal authority, threat or sanction to require compliance with change.
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