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Business Studies Glossary 1) 2) 3) 4) 5) 6) 7) 8) 9)

Advertising media the way in which an advertisement is presented. E.g. Newspaper, T.V. Articles of Association the rules that govern the internal running of a company. Automation production using machines rather than human beings. Batch Production where products are made in a set of a certain number before the next set occurs. Branding the process of giving a product a distinctive name and image. Business Objective a target which the company is aiming to achieve Capital the factor of production that involves making a sacrifice now for future gain. It includes machinery and money. Capital Intensive where the process of production involves the use of machinery rather than people. Chain of Command the route taken by orders through an organisational chart.

10) Chain of production the stages of production that a product goes through from raw material to finished product. 11) Channels of Distribution the different routes that goods can take from manufacturer to consumer. 12) Commission payments above the normal salary based on performance. 13) Communication the sending, receiving and understanding of information. 14) Computer Aided Design (CAD) using software programs to design products. 15) Computer Aided Manufacture production where the machinery on the production line is controlled by

16) Consumer Panel a group of customers who take part in detailed interviews with market researcher. 17) Contribution-cost Pricing where the price of the product coveres some of the fixed costs of production. 18) Co-operative a type of business organisation which is democratically controlled. Everyone has an equal say. 19) Cost Orientated Pricing a way of determining price which takes into account the costs of production. 20) Cost-plus Pricing a way of determining price by calculating the cost of production and then adding a mark-up. 21) Curriculum Vitae a document which lays out the qualifications and experiences of a person. Often used in job

22) Deed of Partnership a legal document which sets of the rights and duties of the partners. 23) Delegation giving subordinates the responsibility to make decisions. 24) Desk Research research that uses data that has already been collected by someone else. 25) Direct Selling selling directly to the consumer without involving middlemen. 26) Diseconomies of Scale the factors which cause unit costs to rise when the business becomes too large.

27) E-commerce conducting business using the internet. 28) Economies of Scale The factors which allow units costs to fall as production rises. 29) Electronic communication communication using information technology. E.g. E-mail, internet. 30) Electronic Research collecting information electronically. This could be the collection of customer information
through electronic tills.

31) Enterprise the factor of production undertaken by the person who takes the risk and makes the decisions. 32) European Union the organisation made up of several European countries which aims for economic and political

33) External communication communication with agencies outside the organisation. E.g. customers, suppliers. 34) Field Research collecting new data from new sources. 35) Fiscal policy the uses of taxation by the government to try to control the economy. 36) Flow Production the method of production where products move along a production line in a continuous flow. 37) Focus Group Customers who meet to give researcher feedback on new products. 38) Franchise a type of business organisation where small businesses can trade under the name of well-known
businesses and get a share of the profits.

39) Franchisee the small business owner who has a license to trade under the name of a well-known business. 40) Franchisor the well-known business which offers others the right to sell its product. 41) Full- cost Pricing determining the price of a product by taking into account the total cost of production. 42) Herzberg psychologist who carried out research into what motivated employees to work. 43) Hierarchy the levels which exist in an organisation which indicate the levels of responsibility. 44) Induction the first training a person receives when they join the company. It is usually used as a way for the new
employee to familiarise themselves with the company.

45) Inflation rising. 46) Internal communication communication within an organisation. 47) Interview a commonly used method of recruitment. 48) Job Description a document which describes the tasks that need to be carried of for a particular job. 49) Job Production each item is made individually. One product is finished completely before production starts on the

50) Just-in-time a method of production where no stock is held but is timed to arrive when it is needed. 51) Labour the factor of production which provides the mental and physical effort. 52) Labour intensive where the process of production involves the use of a loot of people.

53) Land the factor of production which includes building land, fields, the sea etc. 54) Lean Production making us of new technology and team work to improve production continuously. 55) Limited Liability an investor if only responsible for the debts of the company up to the amount of capital they
have invested.

56) Loss Leaders products that are sold at a loss to encourage consumers to buy them. 57) Loyalty Cards discount schemes intended to reward regular customers.
58) Marketing the way in which a business identifies customer needs and satisfies them.

59) Marketing Mix the four activities involved in marketing price, place, promotion and product. 60) Marketing plan the plan which shows how the business hopes to meet its marketing objectives. 61) Market-led Pricing pricing based on the price of other similar products. 62) Market-orientated pricing using the pricing of a product as a way to influence consumer behaviour. 63) Market Penetration attempting to obtain a large share of the market. 64) Market Research the collection, presentation and analysis of data. 65) Market Segment the group of customers who are likely to purchase the good or service. 66) Market share the share of the total market that the business sells to. 67) Market Skimming selling the product to those consumers who will create the most profit. 68) Maslows hierarchy of needs designed by the psychologist Maslow to explain what factors motive people to

69) Memorandum of Association a statement of the companys name, trading address and purpose. 70) Merchandising sales promotions and point of sale displays. 71) Monetary Policy policies used by the government to change the amount and value of money in order to influence
the economy.

72) Off-the-job training training which takes place a way from the workplace. 73) One-off Pricing pricing each product or service individually. 74) On-the-job training training which takes place in the workplace whilst the employees is carrying out their normal

75) Packaging the way in which the product is protected and promoted on the shelf. 76) Paper communication communication that is written. E.g memo, report. 77) Partnership a type of business organisation where between 2 and 20 people from the business together. 78) People (oral) Communication communication by talking and listening. E.g. meetings, telephone. 79) Personal Selling marketing a product by dealing directly with the customer.

80) Person specification a document which describes the ideal characteristics needed to carry out the job. 81) Place The part of the marketing mix which makes sure that the product is in the right place at the right time. 82) Price the part of the marketing mix which involves setting the price of the product. 83) Price Discrimination charging a range of prices for the same good or service depending on time or age. 84) Primary Activity the sector of the economy concerned with the extraction of raw materials. 85) Primary Data Data collected from a new source using field research. 86) Private Limited Company a type of business organisation which has limited liability and which sells share to
family and friends.

87) Private Sector the area of the economy where businesses are owned by private individuals. 88) Privatization where an industry is returned to private ownership. 89) Product the part of the marketing mix involved with researching and developing good and services to meet
customer needs.

90) Product Development The stage where a product is developed, tested and altered before it is offered for sale. 91) Product Differentiation making a product different from other similar products. 92) Product life Cycle the stages a product goes through from its introduction onto the market until its eventual

93) Production the process of manufacturing a product. 94) Promotion the part of the marketing mix involved in persuading consumers to buy the good. 95) Profit the money left over when a business has paid out all of its costs. 96) Profits a common business objective. 97) Public Limited Company a type of business organisation which has limited liability and sells its shares on the
stock market.

98) Public Relations methods or promoting the image of the company. 99) Quality Control the process by which the standard of the final product meets those set by the business, the
customer or the British Standards Institute.

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Questionnaire/interview survey methods which involve the use of structured questions. They may be written (questionnaire) or asked orally (interview) Regional Policy the use of grants and loan by government and th eEU to influence the location of industry. Research and Development the department in a business whose job it is to development new products. Salary form of payment based on a years work. It is usually paid monthly. Sales Promotion methods used to attract customers to buy the product.

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Sample a group of customers who represent the whole population. Secondary activity the sector of the economy concerned with turning raw materials into finished goods. Secondary Data Information already in existence and collected by someone else. Shareholder a person who holds shares in a a private or public limited company. Sole trader a person who sets up in business as the only owner. Span of control the number of employees one person is responsible for. Stakeholders a person or group that has an affect on or is affected by the operation of a business.

Stock control the system used by businesses to ensure that they have sufficient stock to meet their needs but not so much as to be inefficient. Target Market the customers at whom the product is aimed. Tertiary Activity the sector of the economy which provides services.

Test Market Introducing a new product into a limited area of the country to test whether it will be successful nationally. Total Quality Management everyone is responsible for ensuring that the quality is right.

117) Unlimited Liability total responsibility for the businesses debts.

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Wages the basic form of payment based on the number of hours a person works. Usually paid weekly. Wholesalers businesses which buy produce in bulk and then sell it in smaller quantities to retailers.

Business- A state of being busy in termed as business. Any human activity directed for production or acquisition of wealth through buying and selling of goods is known as business. Trade- Exchange of goods for cash or credit is known as trade. Trade is primarily concerned with buying and selling of goods. Trade is regarded as the nuclear around whom the various activities of the commerce rotate. Commerce- Commerce denotes the sum total of business activities relating to distribution, marketing and the exchange of goods and services from the production centre. The organized system for the exchange of goods between the members of the industrial world is termed as commerce. Industry-Those activities which are undertaken to produce, convert, extract and fabricate raw materials into finished product are known as industry. It is the place where raw materials are turned into finished product. Entrepreneur-Entrepreneur is a person who takes initiative for establishing a business unit and he recognizes the need for a product or service. Business Enterprise- The organization where various business activities are performed is called business enterprise. It is also regarded as a medium through which business activities are carried on. Plant- Plant refers to an establishment where goods are produced or provisions of service originate. It is the production centre where machine, equipment and workers work together. The plant is otherwise called as mill or factory. Firm -Firm denotes the broader sense of the term 'plant'. It refers to an establishment which owns an manages the plant, arranges marketing of the products, and maintains proper control.



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Home Trade - Buying and selling of goods and commodities within the national boundaries of a country is known as home trade. Home trade may consist of wholesale trade and retail trade. Foreign Trade- Purchase and sale of goods and commodities among different countries of the world is called foreign trade. Foreign trade may be an export trade or import trade. Marketing Enterprises- The organisation or establishment which does something with regard to sale of goods is called marketing enterprise. These organisations make frequent dealing with other business houses. Aids-to-trade- The facilities which facilitate buying and selling of goods and commodities are called aids-totrade. The aids-to-trade are transporting, packing, warehousing, insurance and financing. These are essential for the growth of trade in a country. Business Risks- The risks which a businessman faces during the ordinary course of a business are called business risks. The examples of business risks are goods lost by fire, theft or accident. Profession- Profession denotes some kind of vocation carried on by specialized knowledge of an individual. The professional man renders personal services of specialized nature in return of fees. Sole-Trader- A sole trader is a form of business which is owned and controlled by a single individual. Since ownership belongs to one individual, he is regarded as the financer, manager and the administrator of his business. Unlimited Liability- The word unlimited liability denotes that there is no limitation to the liability of the individual. The sole proprietorship as a form of business organisation enjoys the status of unlimited liability. Quick Decision- Promptness in taking decision is termed as quick decision. The sole trader can take prompt decision with regard to his business affairs as he ha supreme authority over his business. The sole trader arrives at a decision point quickly because no other consultants or associates are there who are to be contacted at the time of decision making. Partnership Deed- The agreement to carry on partnership business is called partnership deed. It contains exhaustive provisions with regards to the matters concerning the business and the partners. So it is the document where terms and conditions for the conduct of business are incorporated. This document is otherwise called as the "article of partnership". Sleeping Partner- As the name implies, a sleeping partner is a person who sleeps and does not take active part in the day-to-day conduct of the business. Such a partner contributes capital for the business but does not take active part in the conduct of the business. He is otherwise called as dormant partner. Limited partnership- Limited partnership is a type of partnership where there is at least one general partner whose liability is unlimited and at least one special partner whose liability is limited. This type of partnership is found in UK, USA and other European countries. There is no provision of limited partnership under Indian Partnership Act, 1932. Prospectus- A document which contains detail information about the joint stock company inviting public to subscribe for the share capital is called a prospectus. It is written invitation to the public to subscribe for share capital. Promotion- The process of conceiving an idea and developing it into concrete form through incorporation is called promotion. In other words, the process through which the idea of business opportunity is conceived, developed and assigned a shape in the form of company is called promotion. Wholesaler -A wholesaler is a person who buys large quantities of goods from the producers and resale them in small quantities to the retailers. He is regarded as the first intermediary in the channel of distribution.

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Super market- A large scale retail establishment dealing in food products is called a super market. There is no sale assistants to sell the products. The customers collect their required articles through wheeled trollies and pay cash at the counter. Vending machine- Vending machine is a type of selling machine where sale of the products is effected by inserting a coin to the machine. Railway tickets and bus tickets are sold by this machine. Foreign Trade- Trade between two countries is called foreign trade. Foreign trade takes place when there are differences in the cost of production of commodities to be exchanged. Foreign trade is otherwise called as international trade. Export Trade- The selling of goods by a home country to a foreign country is termed as export trade. The persons or institutions who carry on such types of trade are called exporters. Import Trade- The buying of goods and services from a foreign country for the use of home country is termed as import trade. The persons or institutions who perform such types of trade are called importers. Entrepot Trade- Purchase of goods from a foreign country not for the sake of consumption but for reselling those goods to another foreign country is termed as entrepot trade. Dock Challan- A printed form filled in all respect is submitted to dock authorities along with goods is called dock challan. This is prepared in duplicate. One copy is regained by dock authorities and the second copy is returned to the exporter which is known as dock receipt. Documentary Bill- Bill of exchange along with shipping documents like bill of lading, invoice, insurance and certificate of origin is called a documentary bill. Bank- Bank refers to an establishment for the custody of money and it pays out money on customer's demand. Bank is a financial institution which acts as a purveyor of money as well as creator of money. Banking- Banking denotes a certain type of activity engaged trading in money. The activities concerning trading in money are exchange of money, depositing of money and lending of money. Overdraft- It is a banking sector which helps the agricultural people. The primary objective of agricultural bank is to provide short-term as well as long-term loan to the people engaged in agriculture. Carrier- A carrier is a person or an organisation who carries goods or passengers from one place to another. For the services of the carrier, he may or may not be paid. Consignment Note- When goods are delivered to the railway authorities, the sender of the goods fill up a form called consignment note. It contains description of goods, quality, name and addresses of the consignor and the consignee. Storage- Storage is a marketing function which involves stocking of goods for some time to equalize demand and supply of goods. Storage bridges the time gap between production and consumption of goods. Warehouse- The service provided for storage of goods is termed as warehousing. A warehouse denotes a place where goods are stored by the owner till they are required. An establishment for storage or accumulation of goods is known as a warehouse. Delivery Order- The holder of warehouse warrant issues a delivery order when a part of the goods stored are transferred. The warehouse keeper gives a note on the warrant with regard to goods delivered. Nomination- The transfer of interest in the policy which enables a person to receive payment of the sum assured in case of death is called nomination. The person to whom such an interest is transferred is called a nominee. Nomination is termed as a device of transferring interest in the policy.

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Assurance- Assurance is a contract where the insurer undertakes to pay an agreed sum of money after expiry of certain period or on the death of the persons whichever happens earlier. The contract of life insurance is the best example of assurance. Re-insurance- When an insurance company insures the risks with some other insurance company, it is called re-insurance. So transfer a part of risks on a particular policy by insuring it with other insurance company is known as Re-insurance. Double Insurance- When the subject matter of the insurance is insured by the insurer with two insurance companies, it is called double insurance. Taking more than one policies in case of life insurance is the best example of double insurance. Insurance Policy- The written document which contains the contract of insurance is known as a policy. The terms and conditions stated in the policy are binding to both the insurer and the insured. Industrial Banks- Industrial bank denotes a kind of bank which provides long-term financial, technical and managerial assistances to industries. These banks play a significant role in the development of industry of a nation. Overdraft- Overdraft denotes a system of borrowing where the current account holder is allowed to draw more than the balance available to the credit of his account. Overdraft facility is allowed upto a certain limit. Commercial Banks- Commercial banks refer to a type of bank which provide financial assistance to the trader of a country. They provide short-term financial assistance for the business. They accept deposit from the investors and extend loans in the form of loan, cash credit, overdraft and discounting of bills. There are two types of commercial banks found in India. These are scheduled and non-scheduled banks. Home Trade- The process of buying and selling of goods or exchange of services within the national boundaries of a country is called home trade. The home trade may be a local or state or inter-state trade. The exchange of goods amongst the people of a particular locality is called local trade. The home trade is otherwise known as internal trade or domestic trade. Multiple shop- A multiple shop is a retail organisation where a single business owns a large number of retail shops which are scattered over various localities of a country and all are engaged in the same line of activities. Bata shoe Company and Delhi Cloth mills are the best examples of multiple shops in India. One-price shop- One price shop is a retail organisation where the prices of all commodities dealt carry a single price irrespective of their quality. These shops usually deal with low-priced articles. These shops are popular in USA and "Woolworth" is the best example of the one price shop. Mail order Business- Mail order business is a type of retail trade where orders for supply of goods are received through post and goods are sold through post. From the point of view of the buyer, it is regarded as shopping by post and from seller's viewpoint, it is regarded as "Selling by Post". Departmental Store- A departmental store is a type of retail organisation which deals in a wide variety of merchandise under one roof. The various departments of the departmental store are under same ownership, management and control. The primary aim of departmental store is too provide a wide varieties of goods to the consumer at one place.




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