KEY TERMS AND CONCEPTS
Benchmarking A mechanism for achieving continuous
improvement by measuring products, services or activities
against those of other best performing organizations.
Budget A financial plan for implementing
management decisions.
Continuous improvement An ongoing search to reduce
costs, eliminate waste and improve the quality and
performance of activities that increase customer value or
satisfaction.
Control A managerial function that consists of the
measurement, reporting and subsequent
correction of performance in order to achieve the
organization’s objectives.
Control process The process of setting targets or
standards against which actual results are measured.
Cost accounting Accounting concerned with cost accumulation
for inventory valuation to meet the
requirements of external reporting and internal
profit measurement.
Cycle time The length of time from start to completion
of a product or service and is the sum of processing
time, move time, wait time and inspection time.
E-business The use of information and
communication technologies to support any
business activities, including buying and selling.
E-commerce The use of information and
communication technologies to support the
purchase, sale and exchange of goods.
Employee empowerment Providing employees
with relevant information to allow them to
make continuous improvements to the output
of processes without the authorization of superiors.
Ethical behaviour Behaviour that is consistent with
the standards of honesty, fairness and social
responsibility that have been adopted by the
organization.
Financial accounting Accounting concerned with the
provision of information to parties that are external
to the organization.
Intellectual capital The intangible benefits
accessible by a firm from its workforce, and
more broadly, from its established relationships
with groups such as customers, suppliers and
competitors. It is often used interchangeably
with other terms such as ‘knowledge capital’,
‘knowledge economy’ and ‘intangible assets’.
Internet commerce The buying and selling of goods
and services over the internet.
Lean manufacturing systems Systems that seek to
reduce waste in manufacturing by implementing
just-in-time production systems, focusing on quality,
simplifying processes and investing in advanced
technologies.
Management accounting Accounting concerned with
the provision of information to people within the
organization to aid decision-making and improve the
efficiency and effectiveness of existing operations.
Management by exception A situation in which
management attention is focused on areas where
outcomes do not meet targets.
Master budget A single unifying statement of an
organization’s expectations for future periods
comprising budgeted profit and cash flow
statements.
Non-value-added activities Activities that can be
reduced or eliminated without altering the product’s
service potential to the customer.
Performance reports Regular reports to management
that compare actual outcomes with planned
outcomes.
Product’s life cycle The period of time from initial
expenditure on research and development to the
withdrawal of support to customers.
Stakeholders Various parties that have an interest
in an organization. Examples include managers,
shareholders and potential investors, employees,
creditors and the government.
Strategies Courses of action designed to ensure that
objectives are achieved.
Total quality management (TQM) A customer-
oriented process of continuous improvement that
focuses on delivering products or services of
consistent high quality in a timely fashion.