360-degree appraisal - A type of appraisal system that provides feedback from a range of people who work with or interact with the appraisee, such as their line manager, co-workers, subordinates and even customers.

• Above the line (ATL) promotion - Form of promotion that refers to any form of paid-for promotional technique through independent consumer media.

• Academic journals - Also known as scholarly journals, these are publications that contain the latest educational research and academic theory.

• Accountability - The extent to which a person is held responsible for the success or failure of a task, job, or project. It allows senior managers to have better control over the running of their organizations.

• Accounting rate of return (ARR) - Also referred to as the average rate of return, this method of investment appraisal calculates the average annual profit of an investment project expressed as a percentage of the amount of invested.

• Acid test ratio - Also known as the quick ratio, this short-term liquidity ratio measures an organization’s ability to pay its short-term debts without having to sell any stock (inventories).

• Accumulated depreciation - This refers to the accrued value of non-current assets, most of which fall in value over time due to depreciation.

• Acquired needs theory (HL only) - D. McClelland’s theory of motivation, based on three types of needs that must be satisfied in order to improve motivation: the need for achievement, power, and affiliation.

• Ad-hoc market research - Market research conducted as and when required for a specific problem that the organization is facing.

• Adding value - The process of producing a particular good or service that is worth more than the cost of the resources used to produce it.

• Adaptive cultures - A type of organizational culture that exists in organizations that are responsive and receptive to change. Organizations with adaptive cultures tend to be highly creative and embrace, rather than resist, change.

• Adverse variance - This discrepancy in the budget occurs when profit is lower than expected, due to costs being higher than expected and/or revenues being lower than predicted.
• Advertising - A form of visual and/or audio marketing communication used to inform and persuade people to buy a certain good or service.
• Ageing population - A higher mean (average) age of the population.
• Agents - Also known as brokers, these independent intermediaries help to sell a vendor’s products in return for commission, e.g., real estate agents.
• Appraisal - Also known as a performance review, this is the formal procedure of assessing the performance and effectiveness of an employee, in relation to his/her job description.
• Arbitration - Method of stakeholder conflict resolution with all stakeholder groups in conflict agreeing to accept the decision or judgement of the independent arbitrator.
• Artificial intelligence (AI) - This is an area of computer science that develops the ability of smart machines to perform tasks rather than natural or human intelligence, e.g. voice activated commands on smart devices.
• Artificial neural networks (ANN) - These are a feature of critical infrastructure and refer to the use of learning algorithms that can learn things, solve problems, and make decisions independently by processing new data as these are received.
• Assets - The possessions owned by a business, which have a monetary value, e.g., buildings, land, machinery, equipment, inventories, and cash.
• Average revenue - This is the amount a business receives from its customers per unit of a good or service sold. Mathematically, AR = TR ÷ Q = P where: AR = Average revenue TR = Total revenue Q = Quantity of output, and P = Price
• Autocratic management (leadership) - Management style that involves centralised and autonomous decision-making, without input from others in the organization.
• Average costs - This is the cost per unit of output. It is calculated by the formula: AC = TC ÷ Q where: AC = Average cost TC = Total cost, and Q = Quantity of output

• Batch production - Operations method that involves producing a set of identical products, with work on each batch being fully completed before production switches to another batch, which may have slightly different specifications.

• Backwards vertical integration - A method of external growth that involves a company buying another company that is further away from the consumer in the chain of production.

• Bad debt - This occurs when a debtor is unable to pay outstanding invoices to the business. The result is it reduces the cash inflows for the vendor (seller).

• Balance sheet - Also known as the statement of financial position, this set of final accounts shows the value of a firm’s assets, liabilities, and the owners’ investment (or equity) in the business, at a particular point in time.

• Bankruptcy - Sometimes referred to receivership or corporate liquidation, this means a situation when a person or business declares that they can no longer pay back their debts, so the entity collapses (fails).

• Bargain products - Goods or services that are those perceived by customers to be of high quality but sold at a low price.

• Barriers to communication - Refers to the various factors that can prevent information being transferred effectively or accurately.

• Below the line (BTL) promotion - Form of promotion that refers to all forms of advertising or promotion that do not use external media agents.

• Benchmarking - The routine process of an organization comparing its products, processes (operations) and performance to that of its competitors or its own historical standards.

• Big data - This refers to access to extensive amounts of unprocessed (raw) and processed (structured) data from a broad range of sources.

• Break-even - This condition exists when a firm’s sales revenues cover all of its production costs.

• Break-even analysis - This is a business management tool used to determine the level of sales volume needed to cover all the costs associated with the output of a particular good or service.

• Break-even chart - This is a graphical illustration of an organization’s production costs, sales revenues, and profits (or loss) at given levels of output.

• Break-even point (BEP) - This is the point on a break-even chart where the firm’s total costs equal its total revenue, shown by the intersection of the TR and TC curves.

• Break-even quantity (BEQ) - The quantity of sales (sales volume) required for a firm to reach break-even. It is found by using the formula: BEQ = Fixed costs / (Price – Average variable cost).

• Break-even revenue - This is the value of the output needed to break-even.

• Brand - A brand is the registered name used to identify a product of a particular business organization.

• Branding - This is the practice of using an exclusive name (brand), symbol, or design which identifies a specific product or business.

• Brand awareness - The degree of customer knowledge and recognition of a particular brand in order to gain more customers.

• Brand development - Part of a firm’s marketing strategy in communicating the value of a brand and what the brand stands for.

• Brand loyalty - The degree of customer devotion to a particular brand.

• Brand switching - This is the opposite of brand loyalty and occurs when consumers turn to alternative brands, mainly because the original brand has lost some of its former appeal.

• Brand value - The expected earning potential of a brand, i.e., the likely future earning potential (value) of a particular brand.

• Budget - A detailed financial plan for the future, usually involving the expected costs and revenues or a cash flow forecast, for a pre-determined period of time.

• Budgetary control - The financial methods used to attempt to balance actual outcomes with budgeted outcomes. This is achieved by systematic observations and corrective measures to minimize variances.

• Bulk-increasing industries - Describes the businesses that need to be located near to their customer as the final product (such as hand-made home furniture) is bulkier and heavier than the raw materials used to make it.

• Bulk-reducing industries - Describes the businesses that need to be located near to the raw materials needed to produce a certain good, e.g., breweries should locate where there is a readily available supply of barley and water, as the weight of the final output is less than that of the raw materials.

• Business - A decision-making organization established to produce goods and/or provide services.

• Business angels - Wealthy and successful private individuals who risk their own money in a business venture that has high growth potential.

• Business etiquette - This refers to the mannerisms and customs by which business is conducted in different parts of the world.

• Bureaucracy - The administrative systems within an organization, such as the formal policies and procedures of the business. It includes the formal rules, regulations, and procedures of the organization.

• Capacity utilization - Refers to the extent to which an organization operates at its maximum level (known as the firm’s productive capacity).

• Capacity utilization rate - Measures a firm’s actual output as a percentage of its capacity (maximum potential output), at a particular point in time.

• Capital expenditure - Refers to business spending on fixed assets or capital equipment of a business.

• Capital employed - The value of all sources of finance for a business, including internal and external finance.

• Capital expenditure - A business organization’s spending on the purchase or acquisition of fixed assets, e.g. spending on buildings (premises), machinery, equipment and tools.

• Capital intensive production - This refers to the manufacturing of a good or provision of a service that relies mainly on the use of machinery and capital equipment, e.g., conveyer belts and automated production systems.

• Capital productivity - This measures how efficiently an organization’s fixed assets are used to generate output for the business.

• Cash - This refers to the money an organization has either “in hand” (at its premises) and/or “at bank” (i.e., in its bank account). It is the most liquid type of current assets.

• Cash flow - The movement of an organization’s cash inflows (cash received from the sale of goods and services) and cash outflows (used to pay for the costs of running the business).

• Cash flow forecasting - A quantitative technique used to predict how cash is likely to flow into and out of the business for a particular period of time.

• Cash flow problems - These are liquidity issues that arise when an organization has insufficient funds to run its business, i.e., when net cash flow is negative.

• Cash inflow - Refers to the money coming into a business from earnings (sales revenue) and other sources of finance, such as crowdfunding.

• Cash outflow - Refers to the money going out of a business to pay for its costs, such as the purchase of raw materials or the payment of wages and salaries.

• Centralization - The situation where decision-making is predominantly made by a very small group of senior managers at the top of the organizational hierarchy.

• Chain of command - The formal lines of authority in an organization. It can be seen via an organizational chart, which shows the formal path through which commands and decisions are communicated from senior managers to subordinates.

• Change management - Refers to processes and techniques used to plan, implement, and evaluate changes in business operations.

• Cloud computing - This is a virtual, computer generated online space that enables businesses to store, organize, manage, process, and retrieve data in safe and efficient ways.

• Closure - This occurs when employers temporarily shut the business in response to extreme industrial action of its employee (such as strike action).

• Closing balance - Found in a cash flow forecast, this refers to the value of cash held by a business at the end of a trading period (usually on the last trading day of the month).

• Clustering - This occurs when businesses choose to locate near other firms operating in related industries in order to benefit from passing trade and demand for products in complementary markets.

• Cost centre - A section or division of a business that has responsibility for its own operational costs. It is held accountable for its departmental expenditure.

• Cost to buy (CTB) - In a ‘make or buy decision’, this method calculates the total cost of subcontracting production to a third-party supplier.

• Cost of living - This is a measure of how expensive it is for people to live in a particular geographical location.

• Cost to make (CTM) - In a ‘make or buy decision’, this method calculates the total cost of producing the product in-house, instead of using a third-party provider.

• Collateral - Refers to the financial guarantee, using a firm’s fixed assets, for the purpose of securing loan capital.

• Collective bargaining - The process of negotiation of working conditions and pay between employer and employees, or their representatives (such as a trade union and a senior management team).

• Communication - The transfer of information from one entity to another. It is vital to how a business operates.

• Competitive pricing - This pricing method involves a business setting the price of its products at the same or similar level charged by competitors in the market.

• Conciliation - This is the process of using a mediator to help facilitate negotiations during the conflict resolution process.

• Consumer goods - These are products bought for personal consumption, rather than for business use, e.g., home appliances, furniture, food and drink, and house plants.

• Continuous market research - A type of market research that is conducted on an ongoing basis, rather than a one-off basis.

• Contribution pricing - A pricing method that involves setting the price of a product at a level higher than the direct costs. Hence, the sale of each product earn the firm a positive contribution towards paying its indirect costs.

• Convenience sampling - Sampling method that refers to the practice of using people that are within easy reach, in an unplanned way, to conduct market research.

• Consumer panel - A focus group comprised of people who belong to the firm’s target segment(s), referred to in order to gather their expert feedback.

• Consumer profiles - The demographic and psychographic characteristics of consumers in different market segments.

• Copyrights - These intangible assets give the registered owner the legal rights to creative pieces of work, such as the works of authors, musicians, conductors, playwrights (scriptwriters) and directors.

• Conflict - This is a situation of friction or mutually exclusive goals between two or more parties, because the needs and interests of workers are ignored or because the organization cannot meet the needs of all its stakeholders at the same time.

• Conflict resolution - The approaches or methods taken by employers and employees to oversee and handle conflict in the workplace.

• Consumers - The individuals or organizations that actually use a product.

• Companies (corporations) - This refers to any business organisation that is owned by its shareholders, who have limited liability. They comprise of privately held companies and publicly held companies.

• Correlation - The relationship between two sets of numbers or variables, such as sales revenue at different times of the year.

• Corporate social responsibility (CSR) - This is an organization’s decisions and actions that impact society in a positive way.

• Competitors - These are the firm’s rivals, which operate in the same industry and contest for the same customers.

• Conciliation - Method of stakeholder conflict resolution which aims to align the incompatible interests of different stakeholder groups by helping different parties to better understand each other’s interests.

• Conglomerate - This form of external growth occurs when two or more businesses in unrelated industries integrate through a merger, acquisition, or takeover.

• Commission - Type of financial payment system that rewards workers a certain percentage of the sales of each good or service that they are responsible for completing.

• Cooperatives - These are for-profit social enterprises owned and run by their members (usually employees, managers or customers). Their primary goal is to create value for their member-owners.

• Corporate culture (organizational culture) - Refers to an organization’s set of core values and beliefs, which shape the firm’s attitudes, behaviour, and norms.

• Costs - The charges that an organization incurs from its operations, e.g., rent, wages, salaries, and insurance.

• Cost-plus pricing (or mark-up pricing) - Adds a profit margin to the costs of production, thereby ensuring that each unit sold contributes towards the profits of the firm.

• Costs of sales (COS) - These are the direct costs of production, such as the cost of raw materials, component parts, and direct labour.

• Cowboy products - Goods or services that are perceived by customers to be of low quality but high price.

• Cradle to cradle (C2C) - This lean approach to waste management involves design and manufacturing that is sustainable and waste-free. All material inputs can be recycled or reused or are consumable or compostable.

• Creditor days ratio - The efficiency ratio that measures the average number of days an organization takes to repay its creditors (suppliers who the business has bought products from using trade credit, so have yet to pay for these).

• Crowdfunding - Rising finance for a business venture or project by getting small amounts of money from a large number of people, usually through online platforms.

• Creditors - Also known as trade creditors, this refers to the suppliers that allow a business to purchase goods and/or services on trade credit.

• Credit control - The process of monitoring and management of debtors, such as ensuring only suitable customers are given trade credit and that customers do not exceed the credit period.

• Crisis - Any unpredicted event that has widespread negative consequences, causing major disruptions to the normal operations of an organization.

• Crisis management - The management process of responding to an actual crisis facing an organization.

• Critical infrastructures - This refers to the crucial computer systems, structures, networks, and facilities required for the effective functioning of an organization in the modern and digital corporate world.

• Culture - Concept referring to the norms, attitudes, values, goals, and practices that characterises an organization, a country, or a region of the world.

• Culture clash - A situation that exists when two or more cultures exist within the same organization, with wide-ranging differences in the values held by different individuals, thereby causing internal conflict.

• Cultural exports - This refers to the extensive availability and consumption of traditionally domestic products in overseas markets.

• Culture gap - The difference between an organization’s desired culture and its actual culture.

• Cultural intelligence (cultural quotient) - This is a measure of a person’s ability to adapt and integrate to different occupational, organizational, and national cultures. It signifies a person’s ability to manage change.

• Cumulative net cash flow - The sum of an investment project’s net cash flows for a particular year plus the net cash flows of all previous years.

• Current assets - Short-term assets belonging to an organization which will last in the business for up to 12 months, e.g., cash, debtors, and stock (inventory).

• Current ratio - A short-term liquidity ratio used to calculate the ability of an organization to meet its short-term debts (within the next twelve months of the balance sheet date).

• Current liabilities - These are the short-term debts of a business, which need to be repaid within twelve months of the balance sheet date. Examples include bank overdrafts, trade creditors, and other short-term loans.

• Customers - The individuals or organizations that purchase a product.

• Customer loyalty - This measures the extent to which customers consistently repurchase products from the same business.

• Customer loyalty programmes - These are marketing strategies designed to retain customers by using a rewards programme that give loyal customers direct benefits, such as reward points that can be redeemed for purchases at discounted prices.

• Customer loyalty schemes - These are marketing strategies used to attract customers to remain devoted to a brand or business by offering rewards and other incentives for repeat purchases.

• Customer retention - This is a measure of customer loyalty by determining the extent to which existing customers will stick to the same brand when making future purchasing rather than switching to a rival brand.

• Cybercrime - This refers to any form of illegal activity carried out using electronic methods to deliberately and maliciously attack computer hardware or software, including computer networks, devices, and critical infrastructures.

• Cybersecurity - This refers to a firm’s policies, processes, and procedures used to safeguard its computer systems and networks from unwarranted attacks, such as information disclosure, data theft, or physical damage.

• Cyclical variations - The recurring fluctuations in sales revenues due to the trade cycle (or business cycle).

• E-commerce - This refers to the buying and selling of goods and services via electronic means, most notably the Internet.

• Economy brands - Goods or services that are perceived by customers to be of low quality and sold at a low price.

• Economies of scale - These are cost-saving benefits enjoyed by a business as it increases the size of its operations, i.e. lower average costs (the cost per unit).

• Efficiency - This means using resources more productively, in order to generate more output.

• Efficiency ratio - Financial planning and decision-making tool to measure how well the resources of a business are used in order to generate income from the firm’s capital.

• Entrepreneurs - The individuals who take risks in overseeing a business organization or business venture, usually in pursuit of profit.

• Entrepreneurship - The knowledge, skills and experiences of individuals who have the capability to manage the overall production process.

• Enterprise zones - Also known as assisted areas, these are geographical areas that receive direct government financial assistance for economic regeneration and development.

• Employees - These are the workers within an organization. Their interests include: job security, a competitive remuneration package, a safe working environment, and opportunities for career development.

• Employee participation - This means that workers are given responsibilities and autonomy to do their jobs.

• Employee representatives - The individuals or groups of individuals who are elected to act on behalf of their worker members. For example, trade unions represent their members in the negotiation process with employer representatives.

• Employee share ownership scheme - Type of financial payment system that involves giving workers shares in the company they work for, either free of charge or at a discounted price.

• Empowerment - The delegation of decision-making power to workers, granting them the autonomy and authority to be in charge of their own jobs and to execute their own ideas.

• Equity theory - J.S. Adams’ theory of motivation suggests that people make social comparisons of fairness in the workplace (based on the ratio of their input (effort) to output (rewards).

• Esteem needs - In Maslow’s hierarchy of needs, this refers to the desire of people to feel respected, having value and having self-respect.

• Ethical code of practice - The formal documented philosophies and values of a business, so that stakeholders know what is considered acceptable or not acceptable within the organization.

• Ethical objectives - Organizational goals based on moral guidelines that determine decision-making.

• Ethics - These are moral guidelines or codes of practice which govern good organizational behaviour.

• Equity - Refers to the value of the owners' stake in the business, i.e., what the business is worth at the time of reporting the balance sheet.

• External sources of finance - Finance that comes from outside the organization, usually with the help of a third-party provider, such as a bank, business angel, venture capitalist or government.

• External communication - Refers to communications conducted between stakeholders of one organization and another organization.

• External recruitment - The approach or process of hiring people from outside the organization to fill job vacancies.

• Expectancy theory - V. Vroom’s theory of motivation suggests people only put in the amount of effort to do a job or task if they expect their performance to be recognized and rewarded.

• Expenses - These are a firm’s indirect costs of production, e.g., rent, management salaries, marketing campaigns, accountancy fees, bank interest charges, travel expenses, utilities, repairs and maintenance, and general insurance.

• Extension strategies - Marketing approaches used to prolong or lengthen a product’s life cycle, e.g., price reductions or new promotional strategies.

• External stakeholders - Stakeholder groups that are not directly involved in the running of an organization but have a direct interest in its operations.

• External economies of scale - Category of economies of scale that occurs when a firm’s average cost of production falls as the industry grows, i.e., all firms in the industry benefit.

• External diseconomies of scale - This occurs when an individual firm has higher cost per unit of output due to factors beyond its control as the industry as a whole grows.

• External factors - The issues or factors that are beyond the control of the organization, e.g., national minimum wage legislation.

• External growth - Also known as inorganic growth, this takes place when an organization requires the support of a partner organizations for its growth.

• Extrapolation - A forecasting technique that identifies the trend from using past data and then extending this trend line to predict future sales.

• Exporting - This method of entering international markets involves a business selling its products to overseas customers without having to physically establish production or distribution facilities abroad.

• Factors of production - The collective term for the resources used in the production process, i.e. land, labour, capital and entrepreneurship.

• Favourable variance - This discrepancy in the budget occurs when profits are higher than expected, due to lower than expected costs and/or higher than predicted revenues.

• Finance - Refers to the various available money that an organization has to fund its business activities.

• Finance and accounts - Function of an organization responsible for ensuring that the business has sufficient funds in order to conduct its daily operations.

• Financiers - Financial institutions (such as banks) and individual investors who provide source of finance for businesses. They are interested in the organization’s ability to generate profits and to repay debts.

• Financial economies of scale - Banks and other lenders charge lower interest to larger businesses for overdrafts, loans and mortgages as they represent lower risk.

• Final accounts - These are the published accounts of an organization, made available to and used by different stakeholders, e.g., managers, employees, shareholders, sponsors, financiers, and investors.

• Finished goods - Completed final products of a business that are ready to be sold to consumers.

• Fixed assets - The long-term assets (possessions) of an organization that have a monetary value and are used repeatedly but are not intended for resale within the next twelve months, e.g. property and equipment.

• Fixed costs - Costs that do not change with the level of output, e.g., loan repayments and management salaries.

• Flat organization - Also known as a horizontal structure, this type of organizational structure has only a few layers of management.

• Flat structure - Type of organizational structure that has few levels in the organizational hierarchy.

• Flexitime - A form of flexible work practice that enables employees to work a set number of core hours each week, often at the office during peak periods of the day and/or week.

• Focus groups - Small groups of targeted customers with similar characteristics and/or similar interests.

• Footloose organizations - These businesses do not have to locate in any particular area, i.e. they can choose to locate almost anywhere as there are no cost advantages of any particular location.

• Forward vertical integration - This external growth method occurs when one company buys another business that is closer to the consumer in the chain of production.

• Foreign direct investment (FDI) - This refers to cross-border investment in which a foreign company establishes an ongoing and significant stake (financial interest and degree of influence) in its operations in another economy.

• Formative appraisals - Type of appraisal that takes place on a continual basis in order to allow workers to improve their performance and effectiveness.

• Franchise - This growth strategy involves the right to trade using another company’s products, brand name and corporate logo.

• Franchising - A growth method that involves two parties, with the franchisor giving the licensing rights to a franchisee to sell goods and services using the franchisor’s brands and products.

• Fringe benefits - Also known as perks, these are financial benefits of a job in excess of the basic pay (wage or salary).

• Functions of management - The various roles and responsibilities of managers, i.e., coordinating, commanding, and controlling business operations.

• Geographical mobility - The ability and willingness of employees to relocate to another location or country for work reasons.

• Geographic segmentation - The marketing process that involves characterising consumers according to their different geographical locations.

• Gearing ratio - The efficiency ratio that measures the extent to which an organization is financed by external sources of finance (i.e. loan capital as a percentage of the firm’s total capital employed).

• Genericized brands - These are brand names that become synonymous with the name of the product itself due to their popularity, e.g., AstroTurf, Band-Aid, Frisbee, Sellotape, and Yo-Yo.

• Gig economy - Labour markets in which people are on short-term, impromptu, temporary contracts. This includes freelance worker and independent contractors.

• Global brands - These are highly recognized brands in overseas markets. Firms use a unified approach to their global brand strategy to increase its brand recognition as well as to support its brand awareness and brand development in new markets.

• Global supply chains - This refers to the network between a firm and its suppliers and consumers that incorporates all transactions on an international level, from sourcing raw materials to supplying finished goods and services to customers.

• Globalization - Refers to the process of greater integration and interdependence of businesses and economies throughout the world.

• Gods of management - Charles Handy’s theory of the different types of organizational culture. His theory identified four ‘gods’ or types of culture: power, task, role, and person cultures.

• Goods - These are physical (tangible) products, such as cars, clothes, flowers, food, furniture, smartphones, and toys.

• Goodwill - The reputation and established networks (know-how) of an organization, which adds to a firm’s monetary value.

• Government - The ruling authority within a state or nation. The government, as an external stakeholder, is interested in businesses complying with the laws of the country, such as employment legislation.

• Government incentives - Financial motivators offered by the state to businesses to locate in a particular area or regions, perhaps due to high unemployment. Examples of such incentives include grants, subsidies, tax allowances and interest-free loans.

• Gross domestic product (GDP) - GDP is a measure of the monetary value of a country’s annual output or its national income. MNCs contribute to the host country's GDP.

• Gross profit - This refers to the profit from a firm’s everyday trading activities. It is calculated by the formula: Sales revenue – Cost of sales.

• Gross profit margin (GPM) - A profitability ratio that measures an organization’s gross profit expressed as a percentage of its sales revenue. It is also an indicator of how well a business can manage its direct costs of production.

• Gratuity pay - Financial reward for long-term service or for the completion of a fixed-term contract.

• Government publications - These are official documents released by governments and government agencies.

• Hierarchical (hierarchy) - A type of organizational structure that is tall/vertical, with many levels in terms of ranks.

• Hierarchy of needs - A. Maslow’s theory of motivation that people are motivated by different levels of needs: physiological, safety, social (love and beginning), esteem and self-actualization.

• Horizontal integration - This external growth strategy occurs when a merger, acquisition, or takeover takes place between two or more companies operating within the same industry (thereby reducing competition).

• Host country - This is any nation that allows a multinational company to set up in its country.

• Homeworking - Also referred to as work from home (WFH), this is an aspect of flexitime that involves people using their homes to conduct their jobs.

• Human resources (HR) - The business function that handles all aspects relate to the workforce, involving all aspects of a firm's operations related to staff (personnel) within an organization.

• Human resource management - HRM is a broad term used to describe the overall management of an organization's workforce, e.g. attracting, selecting, training, assessing, rewarding and retaining workers.

• Human resource planning - Also known as workforce planning, this is the management process of anticipating the organization’s current and future human resource needs.

• Hygiene factors - Also known as maintenance factors, these are the factors that F. Herzberg argued cause dissatisfaction in the workplace (rather than motivation), so must be addressed.

• Impulse buying - Refers to the unplanned or unintentional purchases of customers due to them being attractive by promotional campaigns (sales promotions).

• Incremental creativity - A type of innovation that refers to small but continual adjustments or developments to a product or process that already exists.

• Industrial inertia - This exists when a business chooses to remain in the same location although there are no cost advantages in doing so.

• Infrastructure - Refers to the physical and organizational structures and systems necessary for society to function, such as transportation facilities, motorways (highways), road networks, and communications networks.

• Informative promotion - Describes one of the purposes of promotion in the marketing mix, which is used to notify or tell customers about a firm’s products.

• Innovators - The name given to the group of consumers who are the first to own a certain product, usually due to the prestige associated with being first and/or customer loyalty to a particular brand or product.

• Insourcing - This refers to the use of an organization’s own resources in order to fulfil a specific job, function, or project instead of it being outsourced to a third-party provider.

• Illiquid assets - These items of value, owned by the business, cannot be sold quickly, are difficult to sell, and/or cannot be sold easily without incurring a significant loss in value.

• Incorporation (incorporated) - This means that there is a legal difference between the owners of a company (the shareholders) and the business entity itself. This ensures that the owners are protected by limited liability.

• Indirect costs - Also known as overhead costs, these costs are not easily identifiable with the sale or output of a specific good, service or business operation.

• Information - Refers to the organization and interpretation of facts or statistics from the given data.

• Initial public offering (IPO) - An IPO occurs when an organization sells all or part of its business to shareholders on a public stock exchange for the first time. This changes the legal status of the business to a publicly held company.

• Innovation - The commercialization of a new idea in order to fulfil existing customer needs or to create an unmet customer wants (desires).

• Intellectual property (IP) - This refers to the intangible assets of a business through its creativity and capital expenditure.

• International marketing - This refers to the marketing of an organization’s goods and services in overseas markets.

• Internal stakeholders - These stakeholders are part of the organization, such as employees, managers, directors, and shareholders.

• Internal diseconomies of scale - Higher unit costs of production that occur due to internal problems of mismanagement as a business organization grows.

• Internal economies of scale - Category of economies of scale that occurs for and within a particular organization (rather than the industry in which it operates) as it grows in size.

• Interviews - Market research method that involves dialogue between the interviewer (the market researcher) and the interviewees (respondents to the market research).

• Insolvency - Refers to the situation where a person or a business is unable to meet their bill and other debt obligations. The debts (liabilities) of the individual or organization exceed their assets.

• Intangible assets - Non-physical fixed assets that are valuable to a firm’s survival and success, such as brand value, goodwill, copyrights, trademarks, and patents.

• Intellectual property rights - Abbreviated as IPRs, and also known as intellectual property protection, these are a firm's fixed, intangible assets with a monetary value, comprised of goodwill, patents, copyrights and trademarks.

• Intellectual property protection - Also known as intellectual property rights (IPRs), this refers to the lawful and private ownership of certain creations, inventions, or works, namely copyrights, patents, and trademarks.
• Internal sources of finance - Finance that come from within the organization, from its own resources and assets without the help of a third-party provider.
• Intermediary - A third-party person or business that offers distribution services as part of a channel of distribution, such as agents, wholesalers, and retailers.
• Intermediation - The marketing process of using a middle person or distributor as channels of distribution between the producer and consumers.
• Investment - Capital expenditure with the intention of a financial return on this spending at some point in the future.
• Investment appraisal - The formal process of quantifying the financial risks of an investment decision, in order to establish whether the expenditure can be justified from a financial perspective.
• ISO 9000 - This is the world’s most widely recognized quality standard. It is endorsed by the ISO to firms that use quality management systems to meet the needs of customers.

• Jargon - Specialist or technical language used in different fields or professions in order to improve communications.

• Just-in-case (JIC) - This is a stock control system that requires businesses to have large quantities of stock, in the event that it is needed for an unexpected order or in case there is a problem with the supply chain.

• Just-in-time (JIT) - This is a lean method of stock control whereby materials and components are scheduled to arrive precisely when they are needed in the production process.

• Joint venture - An external growth method that involves two or more organizations agreeing to create a new business entity, usually for a finite period of time.

• Job analysis - The process of examining what a particular job involves, thereby enabling the HR department to determine the roles, tasks, duties, responsibilities, and skills required to do the job.

• Job description - Document containing the particulars of a job, e.g., the job title, roles and responsibilities, and other duties.

• Job enlargement - A type of non-financial motivation that takes place when more tasks or activities are added to a worker’s job description.

• Job enrichment - Type of non-financial reward, involving enhancing the experiences of workers, giving workers a wide range of challenging tasks and more responsibility at work.

• Job evaluation - An assessment of the value of a job in relation to other jobs in the organization, so that the remuneration and other rewards can be determined in an objective, transparent and fair manner.

• Job production - Operations method that involves the output of a customized or one-off good or service which meets the specific needs of a specific customer.

• Job rotation - Type of non-financial motivation that involves workers switching between jobs (tasks) for a period of time.

• Job security - The assurance given to employees that they will keep their current job for the foreseeable future, usually stated in an employment contract.

• Kaizen - The Japanese process and philosophy of lean production that involves making continuous improvements in small, incremental steps to in order to achieve greater efficiency.

• Labour turnover (HL only) - The amount of people who leave an organization, expressed as a percentage of the workforce, per time period (usually one year).

• Labour intensive production - This refers to the manufacturing of a good or provision of a service that relies mainly on the use of labour inputs (physical and intellectual effort), e.g. bespoke tailors and management consultants. so the cost of labour accounts for the largest proportion of a firm’s overall production costs. It is most apparent in

• Labour productivity - This measures the average output per worker, for a given period of time.

• Laissez-faire leadership (management) - A hands-off approach to leadership by devolving decision-making power to the workforce.

• Language barriers to communication - These obstacles to effective communications stem from miscommunications and misunderstandings due to language issues such as tones, jargon, slang, dialects, and accents.

• Lateral integration - An external growth method that involves two or more firms in a merger, acquisition, or takeover that have similar operations but do not directly compete with each other.

• Lateral integration - An external growth method that involves two or more firms in a merger, acquisition, or takeover that have similar operations but do not directly compete with each other.

• Lean production - This is a philosophy, approach, or organizational culture about streamlining production processes in order to increase efficiency and reduce waste.

• Leadership - The art of inspiring and motivating other people towards achieving a common organizational aim or vision.

• Lead time - The timeframe (or time lag) from when a business places an order for stock and the firm receiving delivery of the stock.

• Leasing - This financial service enables businesses to have access to fixed assets, by hiring these assets, but without the high costs of capital expenditure.

• Leadership style - Refers to the way in which managers and leaders provide direction for others.

• Legal constraints - These rules and regulations of a country set the permissible parameters that international marketers can operate within, such as consumer protection laws.

• Levels of hierarchy - The number of layers of formal authority in an organization. It is represented in an organizational chart.

• Liabilities - The debts of a business, i.e., the money owed to others, e.g., money owed to financiers, trade creditors, and the government (for tax).

• Line manager - The person directly above an employee in the organizational structure of a business.

• Limited liability - This legal status of a business enables its shareholders (business owners) not to be liable for more than the original amount of money invested in the business.

• Limited partnership - This is a special type of partnership where one or more partners contribute capital and enjoy a share of the profits but do not participate in the running of the business. However, at least one partner must still have unlimited liability.

• Liquidity - Refers to the ease with which a business can convert its assets into cash without affecting its market value, i.e., it measures a firm’s ability to repay short-term liabilities without having to use external sources of finance.

• Liquidity crisis - A situation that arises when a business is unable to pay its short-term debts. This can eventually lead to bankruptcy.

• Liquidity position - This is a measure of the extent to which a business has sufficient liquidity to continue its operations and activities.

• Liquidity problem - Also known as a cash flow problem, this issue occurs when there is a lack of cash in the organization because its cash inflows are less than its cash outflows, i.e., it experiences negative net cash flow.

• Liquidity ratios - These are financial ratios that examine an organization’s ability to pay its short-term liabilities and debts, namely the current and acid test ratios.

• Loan capital - Also known as debt capital, this refers to borrowed funds from financial lenders, such as commercial banks.

• Local community - The general public and local businesses that have a direct interest in the activities of the organization. They are interested in the firm’s ability to create jobs and to operate in a socially responsible way.

• Location - This refers to the geographical place or position of a business.

• Lock-out - This occurs when, during an industrial dispute, employers shut out their employees. Locks may be changed and/or added security is used to prevent employees from entering the workplace.

• Logo - A form of branding that uses a visual symbol to represent a business, brand, or product.

• Long-term finance - Refers to sources of finance of more than five years, for the purchase of long-term fixed assets or to fund the growth of a business in overseas markets.

• Loss leader pricing - Pricing a product below its cost of production so as to attract customers to also buy other items (with a higher profit margin).

• Management information systems (MIS) - A collective term used to describe the advanced computer technologies and technological innovations that influence business decision-making and stakeholders of a business.

• Machine learning - This is the use of computer systems, algorithms, and statistical models to enable electronic devices to memorize and adapt on their own, thereby imitating intelligent human behaviour and decision making.

• Mail order - A form of distribution channel that enables customers to receive their goods via postal services.

• Make or buy decision - The choice of managers whether to manufacture a product in-house (make) or to purchase it (buy) from a third-party subcontractor.

• Manager - Someone with decision-making authority in an organization and has responsibility for problem-solving in order to achieve specific organizational goals.

• Management - The art of getting things done through others by setting clear objectives and organising organizational resources.

• Matrix structure - A flexible type of organizational structure that uses teams of employees with suitable skills and qualifications drawn from different departments or divisions of the business.

• Mass customization - Operations method that combines the benefits of mass production with the personalization of job production in order to meet the individual needs and preferences of customers.

• Mass markets - A marketing approach that focuses on supplying to wide-ranging groups of customers in a market, without having split them into separate market segments, such as the markets for bottled water or breakfast cereal.

• Mass production - Also referred to as flow production, this operations method involves different production processes continuously and progressively carried out in sequence, with a high volume of output of standardized products.

• Managerial economies of scale - Larger businesses can afford to hire specialist functional managers, thus improving the organization’s efficiency and productivity.

• Market - A market is the collective term for the buyers and sellers of a particular good or service.

• Market analysis - A form of secondary market research that shows the characteristics, trends, and outlook for a particular product or market, e.g., market size, market share, market growth rate, trends, and forecasts.

• Market growth - Refers to an increase in the size of a market, usually measured by the rise in total sales revenue of the market or industry.

• Market leader - Refers to the business with the largest market share in a given industry.

• Marketing - Business function of identifying the needs and wants of customers so that the organization can provide goods and services to meet these requirements and desires, usually in a profitable way.

• Marketing economies of scale - Larger businesses can spread their fixed costs of marketing by promoting and advertising a greater range of brands and products.

• Marketing mix - The key elements of a marketing strategy to ensure its success in meeting the needs and wants of the organization’s customers and the firm’s marketing objectives.

• Marketing myopia - This exists when a business becomes complacent about its product strategy, thereby failing to keep up with market changes

• Marketing objectives - These are the goals or targets that help to give marketing teams (or marketing departments) a sense of purpose and direction.

• Market orientation - This is an approach to marketing that focuses on meeting the specific demands (desires and needs) of customers and potential customers.

• Marketing plan - A document that shows the marketing objectives and marketing strategy of a particular business.

• Marketing planning - The structured process of formulating marketing objectives and appropriate marketing strategies to achieve these goals.

• Market research - Refers to the range of marketing activities designed to determine the opinions, beliefs, and feelings of existing and potential customers.

• Market size - The total number of individual customers or the total value of sales revenue in a certain market.

• Market share - Refers to the sales revenue that an organization accounts for within a given market or industry. It is measured by expressing the firm’s sales revenue as a percentage of the whole industry’s sales revenue.

• Market segment - A distinct group of customers with similar characteristics, tastes, and preferences.

• Market segmentation - The process of dividing a market for a product into smaller or distinct groups of customers in an effort to meet their specific desired needs and wants.

• Marketing strategies - The different long-term actions used by an organization to achieve its marketing goals.

• Mark-up (or the profit margin) - The difference between the price and the cost per unit.

• Maximum stock level - The most amount of stock that a firm wants to hold at any point in time, given its storage facilities and capacity.

• Media articles - Professional documents or articles in print or online media. Unlike academic journals, media articles are written by trained journalists and authors, rather than by academics at university.

• Merchandise - Refers to a retailer’s range of goods that are available for sale, often used for promotional purposes, e.g., Disney toys sold at their theme parks.

• Merger - This form of external growth involves two or more companies agreeing to form a single, larger company thereby benefiting from operating on a larger scale.

• Mentoring - The training process of pairing, or attaching, an employee (the trainee or mentee) with a more experienced colleague (the mentor) who acts as a coach, trainer, or advisor.

• Microfinance - An external source of finance provided by financier who support entrepreneurs of small businesses, especially females and those on low incomes who are ordinarily unable to secure loans from commercial banks.

• Microfinance providers - Refers to the financiers or organizations that lend small amounts of money to entrepreneurs of small businesses, especially females and business owners on very low incomes.

• Minimum stock level - Also known as the buffer stock, this refers to the lowest amount of stocks that a firm chooses to hold as a precautionary measure for production purposes.

• Mission statement - A succinct and motivating declaration of an organization’s purpose of existence, who they are, and what they do.

• Migrant workers - People who move to other countries in search of better job opportunities.

• Motivation - The intrinsic desire to do something, which exists when workers do something because they actually want to, rather than because they have to.

• Motivators - Also known as growth factors, these factors address the higher-level needs in Herzberg’s motivation theory and are based around the job itself, e.g., achievement, purpose, and responsibility.

• Multi-brand strategy - This marketing strategy involves a business developing more than one brand as part of its overall product strategy.

• Multi-channel distribution strategy - This refers to a firm’s use of a different distribution channels to get its products to customers.

• Needs - The basic necessities that an individual must have in order to survive, such as food, water, and shelter.

• Non-governmental organizations (NGOs) - A type of non-profit organization (NPO) operating in the private sector of the economy for the benefit of others in society (rather than for shareholders).

• Non-sampling error - When an inappropriate sampling methodology is used, i.e., mistakes not attributed to human errors in market research design.

• Net assets - Refers to the overall value of an organization’s assets after all its liabilities are deducted. It is calculated by the formula: total assets minus current liabilities minus non-current liabilities.

• Net cash flow - The numerical difference between an organization’s total cash inflows and its total cash outflows, per time period. The formula to calculate this is: Cash inflows – Cash outflows.

• Net current assets - Also known as working capital, this is shown on a balance sheet to reveal the liquidity position of a business, this is found by using the formula: Current assets – Current liabilities.

• Niche markets - Marketing approach that focuses on supplying highly specialised products to cater for a small and select target market.

• Non-current assets - Also known as fixed assets, this refers to the long-term assets or possessions of an organization with a monetary value but are not intended for resale within the next twelve months of the balance sheet date.

• Non-current liability - Also known as long-term liability, this refers to debt owed by a business which will take longer than a year (from the balance sheet date) to repay.

• Net migration - This measures the difference between the number of people from abroad who enter a country (immigration) and the number of people who leave (emigration), usually for employment purposes.

• Net present value (NPV) - A method of investment appraisal that calculates the real value (rather than the absolute value) of an investment project by discounting (adjusting) the actual value of money received in the future.

• Non-verbal communication - Refers to any form of communication other than oral (verbal) communication, such as email, letters, and body language.

• No-strike agreement - This is a promise from the employee representatives that its members will use resort to strike action as a method of industrial action.

• Objective - An objective is a target or goal a business organization strives to achieve.

• Observations - A form of primary market research that involve researchers watching, monitoring, and recording how customers behave or react to certain situations.

• Offshoring - This is an extension of outsourcing but involves relocating part of or all of an organization’s functions and processes overseas.

• On the job training - Type of training that takes place within the organization, so employees are performing tasks at the place of work.

• One-channel distribution network - This method of distribution involves the use of a single intermediary, such as an agent or retailers.

• Online secondary market - A form of secondary market research, referring to sources available on the Internet in digital format, e.g., real-time media articles, government publications, academic journals, and market analyses.

• Off the job training - Type of training led by external specialists and takes place away from the place of work.

• Opening balance - Found in a cash flow forecast, this refers to the value of cash held by a business at the start of a trading period (usually the beginning of the month).

• Open channels of communication - Refers to any method of communication when information is not confidential and can be shared by and with anyone.

• Operations (or operations management) - The business function referring to the process of making goods and providing services from the available resources of a business to meet the needs and wants of its customers.

• Operating leverage - This is a measure of a firm’s total fixed costs as a proportion of its total variable costs. Hence, a business with relatively high fixed costs has high operating leverage.

• Optimal output level - The level of output where the average cost of production is at its lowest value, so at this level of output, profit is maximized.

• Opportunities - These are factors in the external business environment that create prospects or openings for a firm’s growth and development.

• Occupational mobility - The ability and willingness of employees to do another job or pursue a different career.

• Organization by function - Structuring a workforce according to business functions, i.e., specialised roles or tasks.

• Organization by geography - Arranging the different cost centres of a business based on the location of its operations domestically and/or overseas.

• Organization by product - Arranging the different cost centres of a business based on what it produces, i.e. its range of different goods and/or services.

• Oral communication - Also known as verbal communication, this refers to communication via the use of speech, such as appraisals, interviews, and meetings.

• Organizational barriers to communication - These obstacles are caused by a lack of understanding of the internal functions and structures of the business, as well as the individual roles within the organization.

• Organization by product - Structuring a workforce according to the goods or services sold. Each department focuses on a different product within the organization’s overall product portfolio.

• Organization by region - Structuring a workforce according to different geographical areas based on where the firm’s operations are.

• Organizational chart - A diagrammatic representation of an organization’s formal organizational structure.

• Organizational structure - The formal interrelationships and hierarchical arrangements within a firm.

• Outsourcing - This is the use of third-party subcontractors for carrying out non-core activities of an organization in order to improve operational efficiency and reduce production costs.

• Outsourced workers - Also known as outsourced vendors or the contractual fringe, these are the individuals or other organizations hired on a contract basis to carry out a specific but non-core role in Charles Handy’s Shamrock organization.

• Overdraft - A banking service that enables customers (personal and business customers) to withdraw more money from their account than exists in the account.

• Partnership - A business alliance consisting of between 2 and 20 individual owners who are jointly responsible for the business (although this number can vary between countries).

• Patents - The official rights given to a business to exploit an invention or process for commercial purposes.

• Paternalistic management (leadership) - Management style that involves treating workers as family members, so managers make decisions believed to be in the best interest of the workforce

• Payback period (PBP) - The investment appraisal method that considers the time it takes for the amount of money invested in a project to be repaid using the proceeds generated from the investment.

• Peripheral workers - According to Charles Handy, these are the contingent workers, consisting of part-time and temporary staff hired by the organization.

• Performance-related pay (PRP) - Type of financial payment system used to pay people a bonus for reaching or exceeding a set target.

• People - In the extended marketing mix, this refers to an organization’s employees who are vital as they are the ones who interact with customers and deliver the service.

• Person culture - One of Charles Handy’s types of culture, where people regard themselves or their skills set as being more important than the organization itself.

• Person specification (HL only) - Document containing details of the attributes and qualities of the ideal person for a particular job, such as preferred qualifications, experiences, knowledge, skills, and personality.

• Personal funds - Internal source of finance, with entrepreneurs using their own savings, usually to finance their start-up business.

• Personal selling - The use of sales personnel to sell goods and services with customers on a face-to-face basis.

• Persuasive promotion - Describes one of the purposes of promotion in the marketing mix, which is used to encourage or convince customers to make a purchase and to improve customer loyalty.

• Penetration pricing - A pricing method that involves a firm setting low prices so as to gain entry in a new market. The firm will then raise the price once the product or brand has established itself in the industry.

• Physical evidence - In the extended marketing mix, this refers to the tangible aspects of a service, e.g., the physical appearance or tangible aspects of a restaurant, hotel, school, or coffee shop.

• Physiological needs - Also known as basic needs, these are the requirements for human survival in Maslow’s hierarchy of needs.

• Piece rate payment - Financial reward system that pays workers based on their output or productivity, e.g., $8 per unit of output.

• Point of sale (POS) - The promotion of products in retail outlets where customers can buy the goods.

• Population - Refers to all members of a particular group or market.

• Portfolio workers - People who carry out several different jobs, often for different contractors, at the same time and usually on a temporary basis.

• Power culture - One of Charles Handy’s types of culture, where an individual (such as the founder or a figurehead), or a small group of senior staff, makes decisions for the organization.

• Premium products - Goods or services that are perceived by customers to be of high quality and high price.

• Premium pricing - A pricing method that involves a firm charging significantly higher prices than similar or competing products in the market. This is usually due to the prestige or quality associated with the product or brand.

• Pressure groups - Individuals who come together or organizations that are set up for a common concern. They aim to influence government and public opinion in order to create the desired social change.

• Predatory pricing - A strategy that involves charging a low price, sometimes even below the cost, so as to damage the sales of rivals.

• Price - Also known as average revenue, this is the amount of money a product is sold for.

• Price elasticity of demand - PED measures the extent to which the demand for a good or service is responsive to changes in the price of that product.

• Price leadership - A strategy of following the price set by the dominant firm in the industry (the firm with the largest market share).

• Price wars - The process of rival businesses competing by continually reducing prices so as to threaten the competitiveness of rivals in the market.

• Pricing methods - This refers to the various ways a business can set a price for its goods and services. The price of a good or service is paid by customers. 

• Primary research - Also known as field research, this refers to process of conducting market research to collect new (original) data to gain more insight into the issue being investigated, e.g. questionnaires, interviews, observations, and focus groups.

• Primary sector - Business activity involved with the extraction of natural resources, e.g. fishing, mining and agriculture.

• Principal - The principal refers to the capital outlay or the original amount spent on an investment project.

• Privately held company - This is a business owned by shareholders with limited liability, but the shares cannot be traded on a public Stock Exchange.

• Process - In the extended marketing mix, this refers to the way in which a service is provided or delivered to customers.

• Producer goods - These are products purchased by a business for its commercial use, rather than for private consumption, e.g., machinery, equipment, tools, fixtures and fittings, and office stationery.

• Product - This refers to both physical (goods) and non-physical (services) items sold by a business or purchased by a customer.

• Product differentiation - Refers to the process by which firms attempt to make their goods and services different from those provided by other firms in the market in order to increase their own sales revenue.

• Product life cycle (PLC) - Marketing theory showing the different stages that most products go through from their research and development (R&D) stage to their final removal from the market.

• Product orientation - This is an approach to marketing that focuses on making products a business knows how to make well, rather than primarily concentrating on the needs and desires of potential customers.

• Product portfolio - The range and mix of products sold by a business, including the various brands of all the products it owns.

• Product position map - Also known as a perception map, this is a graphical illustration of customer perceptions of a business, its products, and/or brands in comparison to other firms in the industry.

• Productivity - Refers to the level of efficiency in the production process. The more productive resources are, the more output they generate.

• Productive capacity - The maximum level that a firm is able to operate at, given the resources it has.

• Production planning - This is the management process of ensuring a business has the right resources at the right time to produce goods and supply services to meet the demands of its customers.

• Productivity rate - This measures the extent to which a firm uses its resources in the production process, such as output per worker or output per machine hour.

• Profit - Refers to the positive difference between a firm’s total revenues and its total costs for any given period of time.

• Profit - The financial surplus after all costs, including expenses, have been paid (formerly referred to as "net profit").

• Profit and loss account - Also known as the income statement, this shows a firm’s profit (or loss) after all production costs have been subtracted from the organization’s revenues, each year. It is also known as the statement of profit or loss or income statement.

• Profit margin ratio - A profitability ratio that measures a firm’s overall profit (after all costs of production have been deducted) as a percentage of its sales revenue. It is also an indicator of how well a business can manage its indirect costs (overhead expenses).

• Profit after interest and tax - This section of the P&L account shows the actual value of profit earned by the business after all costs have been accounted for.

• Profit before interest and tax - This section of the P&L account shows the value of a firm’s profit (or loss) before deducting interest payments on loans and taxes on corporate profits.

• Production - The process of creating goods and/or services using the factors of production available to the business.

• Productivity - Refers to the operational efficiency of employees by calculating levels of output per worker. The more motivated employees are, the more productive they will be.

• Professional core - According to Charles Handy, these are the core workers consisting of full-time specialists who are vital for the organization’s operations and survival.

• Project-based organization - This flexible organizational structure is based on the specific needs of a particular short-term or temporary project.

• Profit-related pay - Type of financial reward system which remunerates workers a certain percentage of the annual profits that the business earns.

• Profit centre - A section or division of a business that has responsibility for both costs and revenues generated within the department. It is held accountable for the amount of profit generated.

• Promotion - The various marketing processes used to inform customers about a product and persuading them to purchase the product.

• Promotion (HL only) - The career advancement

• Promotional mix - The range of above and below the line methods used to promote a product as part of a larger marketing mix.

• Prototype - This is a trial product, used during the pre-launch stage of the product life cycle, to evaluate the potential commercial success of the product. of an employee in terms of their hierarchical ranking and professional responsibilities.

• Psychological barriers to communication - Also referred to as emotional barriers to communication, these obstacles are caused by individuals with contrasting and conflicting mindsets, opinions, or priorities.

• Psychographic segmentation - Segmentation that involves characterising consumers according to people’s lifestyle choices and personal values.

• Purchasing economies of scale - Larger firms can gain huge cost savings by buying vast quantities of stocks (raw materials, components, semi-finished goods and finished goods).

• Purpose - An intrinsic, non-financial type of motivation involving people doing genuinely meaningful work, making a difference on a personal, professional or social level.

• Public relations - The management function overseeing public attitudes and opinions of an organization to gain public understanding and support.

• Public sector - Businesses in this section of the economy are run and owned by the government in order to provide essential services for society as a whole, e.g., education and healthcare services.

• Publicly held company - A joint-stock company owned by shareholders. The shares in a publicly held company can be bought and sold by the general public, without prior approval of existing owners.

• Quality - This means that a product is fit for purpose, i.e., the good or service meets or exceeds the needs of its customers.

• Quality assurance (QA) - This is a lean approach to quality management as it involves all employees in the quality process.

• Quality circles - Small groups of employees who meet on a regular basis to discuss quality issues and make recommendations to improve quality standards.

• Quality control (QC) - The most traditional form of quality management in which a supervisor or inspector periodically checks and examines output for possible defects, usually at the end of the production process. 

• Quality standards - These are national and international benchmarks use for certifying quality assurance, verifying that the product has met certain minimum standards to meet the needs of customers.

• Qualitative data - Refers to data in descriptive (non-numerical) form.

• Qualitative research - A category of market research based on the opinions of participants. It creates detailed and non-numerical information.

• Quantitative data - Refers to data in numerical form.

• Quantitative research - A category of market research based on gathering facts and figures, i.e. quantifiable data.

• Qualitative investment appraisal - Method of investment appraisal used to determine whether a project is worth investing in by using non-numerical techniques, e.g., whether the project aligns with the organization’s mission.

• Quantifiable risks - These are measureable threats to the operations of a business so are insurable risks, e.g., the probability of fire to the premises or theft of the firm’s inventories (stocks).

• Quantitative investment appraisal - Method of investment appraisal used to determine whether an investment project is worthwhile based on financial analysis, namely, PBP, ARR, and NPV.

• Quaternary sector - Business activity involving the creation or sharing of knowledge and information.

• Quota sampling - A form of sampling in which the researcher selects a certain number of people from each market segment and then grouped according to characteristics (such as age or gender).

• Random sampling - Sampling method that selects anyone in the population for market research, allowing all respondents the same equal chance of being selected.

• Random variations - Irregular, erratic, or unexpected fluctuations in sales revenues, caused by unexpected and unpredictable factors.

• Range - The difference between the highest and the lowest values in a data set.

• Ratio analysis - A quantitative management planning and decision-making tool, used to analyse and evaluate the financial performance of a business. These can be further categorised as profitability, liquidity, and efficiency ratio analysis.

• Raw materials - These are the natural resources used in the production process to create goods and provide services to customers.

• Recruitment - The process of hiring a suitable worker. This would typically involve a thorough job analysis in order to attract suitable candidates and then to selecting (hiring) the one(s) most suited to the job.

• Recruitment process - A major and vital aspect of human resource management, this refers to the procedures involved in the hiring of the right employees, with the right aptitudes and attitudes.

• Redundancies - Also known as layoffs, this is the process of employers cutting back on its staffing, as certain job roles are no longer required, i.e. the job roles cease to exist.

• Remuneration - The overall financial package of a person, e.g., salaries, commission, profit-related pay, performance-related pay, share ownership schemes, and fringe benefits.

• Reorder level - The level of inventory when a firm is required to reorder its stock.

• Reorder quantity - The amount of new stock that is ordered for production.

• Research and development (R&D) - The process of creating new products (goods and services) and processes (how things are down), in order to meet market needs.

• Residual value - Also known as the scrap value, this is the value of a fixed asset at the end of its useful life before it is replaced.

• Reshoring - Sometimes referred to as onshoring, this is the practice of bringing back business functions to the domestic country from overseas.

• Responsibility - Refers to a line manager’s level of concern in term of the people they are in charge of. An organization chart shows the breadth and depth of a person’s roles and responsibilities in the business.

• Restricted channels of communication - Also known as closed channels of communication, this refers to when information is confidential so need to be communicated formally to only those who need to know.

• Retained profit - Also referred to as retained earnings, this refers to the value of a firm’s earnings after all costs are paid (including interest and tax) and shareholders have been compensated (dividends).

• Retailers - These are commercial businesses that sell a manufacturer’s products directly to consumers.

• Retention - The opposite of labour turnover, this measures the ability of an organization to keep its employees at the firm.

• Return on capital employed (ROCE) - A profitability ratio that measures a firm’s efficiency and profitability in relation to its size (as measured by the value of the organization’s capital employed).

• Risk bearing economies of scale - Large businesses can bear greater risks than smaller ones due to a greater product portfolio. Hence, inefficiencies will harm smaller firms to a greater extent.

• Role culture - One of Charles Handy’s types of culture, where operations and organizational norms are underpinned by formal and hierarchical structures, and clear policies and procedures.

• Revenue - The money (income) received by a business from the sale of goods and/or services.

• Revenue expenditure - Refers to business spending on its everyday and regular operations.

• Revenue stream - The different sources of revenue (or income) for a business, e.g., revenue from sponsorship deals, merchandise sales, membership fees and royalties.

• Tactic - The short-term methods, often on a daily basis, used to implement business strategy.

• Tactical objectives - The relatively short-term and specific goals of a business. These targets are used to guide the daily functioning of the organization.

• Takeover - Also referred to as hostile takeover) occurs when a company buys a controlling interest in another firm without the prior agreement or approval of the target company’s Board of Directors.

• Tall organization - Also known as a vertical structure, this type of organizational structure has many layers in the organizational hierarchy.

• Targeting - Targeting is the marketing practice of creating and using an appropriate marketing mix and marketing strategies to cater for different market segments.

• Target company - The business that is the focus of being bought out by the purchasing company in an acquisition or takeover.

• Target market - The group of customers that an organization focuses on selling its products to.

• Target price - This is the amount customers need to pay per unit in order for the firm to break-even or to reach a particular target profit

• Target profit - This is the amount of profit that a firm aims to earn within a given time period.

• Target profit output - Also known as the target profit quantity, this refers to the quantity of sales required to reach the firm’s target profit. 

• Task culture - One of Charles Handy’s types of culture, involving teams of experts who are empowered to complete a project or tackle a problem with their particular skills.

• Tax - Refers to the compulsory deductions paid to the government as a proportion of a firm’s profits.

• Tall structure - Type of organizational structure that has many levels of hierarchy, so the span of control is likely to be narrow.

• Teamwork - A form of non-financial motivation, involving the combined efforts of a group of workers to achieve of an organizational goal.

• Test marketing - This is part of the pre-launch stage in a product’s life cycle, when a business trials a new product with a small number of customers, usually in a specific geographical location prior to the official launch.

• Technological innovation - This refers to the partial or full replacement of an existing technology by one that improves a firm’s productivity, its product quality, and competitiveness in the market.

• Technical economies of scale - Cost savings by greater use of large-scale mechanical processes and specialist machinery, e.g., mass production techniques.

• Teleworking - Flexible working practice that involves employees being away from the office as they rely on the use of telecommunications technologies, e.g. Internet and mobile technologies.

• Telemarketing - A direct promotional marketing strategy that involves salespeople using the telephone to call existing and potential customers about a firm’s latest product offerings.

• Tertiary sector - Business activity that involves providing services to customers, i.e. consumers and business clients.

• Transparency - One of the factors that affects the effectiveness of crisis management, about being open and honest with all stakeholders during a crisis. It is about disclosing the truth, such as the scale or severity of the crisis.

• The 7 Ps model - Refers to the marketing of services which includes three additional Ps (people, processes, and physical evidence) in addition the tradition 4 Ps in the marketing mix (product, price, promotion, and place).

• The internet of things (IoT) - This refers to any Internet-enabled device that enables people to store, share, and transfer data with other electronic devices that can connect to the Internet.

• Threats - These are the external factors that create challenges for an organization wishing to expand in overseas markets.

• Threats of redundancies - An approach to conflict in the workplace by employers who pressurise workers with the fear to losing their jobs if they do not cooperate in an industrial dispute.

• Three-channel distribution network - This type of distribution channel uses three intermediaries. It often involves an agent who sells the goods to wholesalers on behalf of the producer. In turn, wholesalers sell to retailers.

• Two-channel distribution network - This method of distribution involves the use of two intermediaries, usually wholesalers and retailers.

• Through the line (TTL) promotion - TTL refers to the promotional strategies that involve both above the line (ATL) and below the line (BTL) promotional methods. It enables customers to engage with the product and/or brand in different ways.

• Time-rate payment - Financial reward system that pays workers based on their time input in the production process, e.g., $10 per hour.

• Time series analysis - A statistical technique used to identify trends in historical data, such as the figures for a firm’s monthly sales revenues.

• Total revenue (TR) - This is the sum of income received by a business from its trading activities. It is calculated using the formula: TR = P × Q.

• Total assets - The sum of a firm’s non-current assets and its current assets.

• Total costs (TC) - This refers to the aggregate amount of money spent on the output of a business. The formula is: TC = TFC + TVC where: TC = Total costs TFC = Total fixed cost, and TVC = Total variable cost.

• Total liabilities - These are simply the sum of current liabilities and non-current liabilities, i.e., the sum of all the monies owed by the business.

• Total quality management (TQM) - An approach to quality management that involves all workers having responsibility for maintaining quality standards throughout the production process.

• Trademarks - The sole right to the owner to use a particular sign or symbol that belongs to the organization, such as brand names and business logos.

• Trade union - Also known as a labour union, this form of employee representative is set up to serve and protect the interests of its worker members. Its primary role is to uphold and improve the welfare of its members.

• Trade credit - Financial service that enables a business customer to purchase and obtain goods and services but to pay for these at a later date.

• Trade creditors - Suppliers may give trade credit, which needs to be repaid at a future date (typically 30 to 60 days).

• Trademark - A form of legal protection for the intellectual property (IP) of a business by giving the owner of the IP to have exclusive use of the brand name.

• Trademarks - A form of intellectual property or intangible asset which gives the listed owner the legal and exclusive commercial use of the registered brands, logos, and/or slogans (corporate catchphrases).

• Trade shows - Also known as trade fairs, these are promotional events where firms exhibit and sell their goods and services to potential customers in attendance.

• Training - This is the provision of work-related education, either on-the-job or off-the-job, such as instructing and teaching (or mentoring) employees how to perform certain tasks in their job.

• Transmission mechanism - The medium of communication or the method by which one party communicates with another.

• Units of production method - Method of depreciation that apportions an equivalent value of depreciation to a non-current asset based on each physical unit of output. Depreciation is based on the units of usage rather than time (as used for the straight-line method).

• Unique selling point (USP) - An exclusive feature or aspect of a business, its products or brands that makes it distinct from others in the same industry.

• Unquantifiable risks - These are immeasurable and unpredictable threats to the operations of a business, so are uninsurable risks, e.g., the COVID-19 pandemic.

• Unlimited liability - This means the owner(s) of a business (such as a sole trader or partner) is personally liable for any business debts, even if this requires the debts to be settled by selling off personal assets.Second item

• Usage rate - This shows the speed (rate) at which stocks are used in the production process.

• Variance - Refers to a discrepancy between the planned (budgeted) item of expenditure or revenue and the actual amount.

• Variance analysis - This is the management process of comparing planned and actual costs and revenues, in order to measure and compare the degree of budgetary success.

• Value added - The numerical difference between the cost of factor inputs in the production process and the price that the final output is sold for.

• Values - The organization’s beliefs and moral standards, which form an essential part of its organizational culture.

• Variable costs - Costs that change with the level of output - they rise when output or sales increase, e.g., raw materials and packaging costs.

• Vertical integration - When an acquisition or takeover occurs between two companies operating in different industries.

• Virtual reality (VR) - This is an artificial, computer-generated environment or world accessible to the consumer in a seemingly real world way, such as interactive simulations using highly sophisticated computer equipment.

• Vision - The overall purpose of an organization’s existence, which forms a major element of its corporate culture.

• Vision statement - An inspiring declaration of what an organization ultimately strives to be, or to achieve, in the distant future.

• Visual communication - A method of communication that relies on the use of visual stimuli to communicate information or ideas, such as infographics, charts, and images.

• Wants - These are the desires of individual customers, i.e., the goods and services that they would like to have (rather than things they need to survive), such as a new smartphone, a family holiday in an overseas location, fresh flowers, or jewellery.

• Wages - Type of financial reward payment system based on time or output. Wages are paid as time rate (hours) or piece rate (output).

• Waste - Anything that prevents an organization from being efficient or lean, such as defected products, stockpiling, and overproduction.

• Wholesalers - These are intermediaries that buy products from a manufacturer and sell these in smaller quantities to retailers.

• Window dressing - Also known as creative accounting, this is the legal manipulation of financial statements based on the accounting principles and rules in the country in order to make the figures look more flattering (in the same way that people clean and tidy their homes before guest are due to arrive).

• Work-in-progress - Also referred to as semi-finished goods, these are parts and components used in the production process.

• Workforce - The total number of employees in a business organization at any particular point in time.

• Work-to-rule - The form of industrial action involves all employees being instructed by their representatives to follow all the rules, regulations and policies of the organization, word for word.

• Workforce planning - Also known as human resource planning, this refers to the ongoing process through which the current and future human resource needs of a business are identified and anticipated.

• Working capital - The money available for the day-to-day running of a business. It is calculated by subtracting current liabilities from current assets.

• Working capital cycle - Also referred to as net current assets, this refers to the duration between a business paying for its production costs of a good or service and receiving the cash from customers purchasing the product.

• Written communication - A method of communication that relies on the use of texts, such as emails, letters, executive summaries, abstracts, notices, and reports.

• Zero budgeting - A method of budgeting that requires all budget holders to justify each dollar of spending subject to management approved before the funds are released.

• Zero-channel distribution network - Also known as direct distribution, this method does not use any intermediaries, i.e., the producer sells directly to the consumer.

• Zero defects - An aspect of lean production that focuses on preventing mistakes being made by getting things done right, first time round.