Key revision terms for the Leaving Cert Business course

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Entrepreneur
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Terms in this set (132)
Entrepreneur
is a person who takes the risk to set up a new business in the hope of making a profit.
Interest group
is not an elected organisation but have strength in numbers. Their aims are to influence decisions made by organisations like the government.
Co-operative
exists when stakeholders combine their efforts for their mutual benefit. Win-win
Competitive relationship
exists with stakeholders when they are competing for the same thing. e.g. sales, selling prices. Won-lose
Contract
is a legally binding agreement that is enforceable by law.
Conciliation
is an attempt by a third party to resolve a dispute by listening to the submissions of both sides and suggesting a solution.
Arbitration
is when both parties request a third party to investigate the issues and make a recommendation. Both parties may agree in advance to accept the
Caveat emptor
means let the buyer beware.
Trade
is defined as any dispute between employers and workers which is connected with the employment or non-employment or the terms or conditions of employment of any person.
Industrial action
is defined as steps such as a strike or work to rule that workers of a firm may take to enforce their demands or to make management aware of their concerns or issues.
Discriminationis the treatment of one person in a less favourable way than another person is, has or would be treated.Harassmentis defined as any act or conduct which is unwelcome or offensive, humiliating or intimidating, including acts of physical intimacy, spoken words, gestures, or the display or circulation of written material, pictures or requests for sexual favours.Enterpriseinvolves people using their initiative to come up with ideas that they can turn into a business. When they take the risk to set up the business, they become an entrepreneur.Reality perceptionensures that common sense prevails when solving a problem and making a decision. This involves being realistic and unemotional when making a decision.Innovationis coming up with new ideas and making suggestions that should be considered by the business.Networkingis defined as creating a group of acquaintances and associates and keeping it active through regular communication for mutual benefit.Managementis an operational process which involves analysing the essential managerial functions of planning, organisation, staffing, directing and controlling.Time managementinvolves making the most effective use of the time available to effectively complete a task.Leadershiphas been defined as the means by which individuals or groups of people are persuaded to work towards the achievement of agreed objectives.Delegationis the passing on of work and responsibility to subordinates. A manager can delegate authority but not ultimate responsibility.Motivationis the set of forces that cause people to behave in certain ways.Communicationis a two way process which involves the transferring of information from one person to another in a manner which ensures that the recipient will understand the message from the sender.A meetingis defined as the coming together of at least two people for a lawful purpose.Mission statementis the reason why an organisation exists, i.e. why a business was set up, what it hopes to achieve and the future direction for the business.Planningis the process of deciding the objectives of the business and how they are going to be effectively achieved.Organisinginvolves ensuring that there is a clear structure within the firm to facilitate the smooth running of the business, e.g. a simple organisation structure should be in place.Controllingis a management activity that involves measuring performances to make sure the required standards are being reached.Span of controlis the number of subordinates that report to one manager.Lead timeis the normal delivery time by the supplier. It is important to know how reliable it is.Just-In-Time (JIT)is ordering goods just before they are required. Avoids the cost of storing stock but a short lead time is required.Reservation of titlemeans that the seller owns the goods sold on credit until they are paid for.Qualityis a degree of excellence that meets the customer's requirements on all issues except price.Budgetis a financial plan for a specified period which is agreed in advance. It shows how much money is required for spending and where this money is going to come from.Information technology (IT)is defined as the computer hardware and software used to store, analyse and communicate business data.Internetis a global network of computers used to share information across the world.Intranetis the internet service operating within a business. It provides internal e-mail and internal services which can only be accessed by company employees.Risk managementis an organised approach to assessing and managing all the potential risks that a business or individual can face.Average clauseapplies when a partial loss occurs and the risk is under-insured. If when the loss occurs, the market value of the loss suffered is greater that the amount for which it was insured, the insured will suffer from a partial loss.Factoringis the selling of trade debts to a factoring firm, i.e. a finance company. The debts are sold for less than their full value.Tax creditsare the part of your income on which you are not liable for tax. Tax credits are deducted from gross tax to find tax payable.Form 12is filled by an employee in order to obtain a Tax Credit Certificate (TCC) from the tax office. This shows what the employees tax credits are.Form P45is given by an employer to an employee who leaves employment during the tax year. It shows the gross income paid to the employee and the amount of tax deducted from their earnings.Form P60is given by an employer to an employee at the end of each tax year. It shows the gross income paid to the employee and the amount of tax and PRSI deducted from their earnings.Form P21is issued by the Revenue Commissioner to the tax payer on request. It shows the taxpayers total income, tax credits and PAYE tax paid at the different rates for the year.Human resource managementinvolves dealing with the concerns of staff in the workplace.Manpower planninginvolves liaising with the manager of each department to forecast the number of employees and skills required for the business.Job descriptionis a statement of the purpose, scope, duties, and responsibilities attached to the job being advertised.Trainingis the planned acquisition of knowledge, skills and ability required to enable employees to perform their tasks effectively.Induction trainingis the training that is necessary for new employees. It helps them get off to a good start.Trade unionis an association of workers whose main objective is to regulate the working relationship between employer and employee. (SIPTU)Collective bargaininginvolves the negotiation of wages, hours and working conditions between employers and employees represented by unions.Performance Appraisalis to identify areas where an employee's performance can improve.A teamis a group of employees working together to achieve the same goal.Empowermentmeans placing decision making responsibility in the hands of those employees who are closest to the customer.Total quality management (TQM)is a process of continuous improvement, which aims to prevent rather than to detect defects. The main aim of TQM is to focus businesses on the requirements of their customers and the relationship between suppliers and customers.Trading accountis prepared to calculate the gross profit.Profit and loss accountis prepared to calculate the net profit.Balance sheetis a financial statement that shows the value of the assets and liabilities on a certain date.Ratio analysisinvolves examining the relationships between financial figures in the accounts and expressing them as ratios or percentages.Liquidityis a measure of the ability of a business to pay its short term debts.Overtradingis when current liabilities are greater than current assets, it means the firm would not be able to pay all its debts in full if payment was due or demanded, i.e. it has a liquidity problem.Gearingis the ratio by which the capital of a company is split between debt capital and equity capital.Public procurementis the right of firms to tender for Government contracts, which must be put to tender.Market researchis defined as the gathering, recording and analysing of all the facts and data concerned with the transfer of goods from the producer to the consumer.Brainstormingis the process for generating creative ideas and solutions through intensive and freewheeling group discussion. Every participant is encouraged to think aloud and suggest as many ideas as possible.Benchmarkingmeasurement of the quality of a firm's products, services, programs, strategies, etc, against the best performing competitor.Feasibility studyis an investigation of a proposal in order to assess its technical and financial viability.Test marketingdetermines the reaction of potential customers to the prototype. Based on consumer reaction certain aspects may be modified.Marketingis the management process responsible for identifying, anticipating and satisfying customer requirements profitably.5482Marketing processis the process that takes the product through the different stages from the potential customer to the satisfied customer.Marketing strategyis a marketing plan which outlines how the policies relating to product, price, promotion and place are carried out.Marketing planwill help determine future decision making in relation to trading, financial requirements and the direction the business should take.Marketing mixis the ingredients for the successful marketing of a product, i.e. product, price, promotion and place.Niche marketis a small but specific and well defined segment of a bigger market. It is a specialist market with few suppliers.Brandingis the entire process involved in creating a unique name and image for a product or service in the consumers mind through advertising campaigns with a consistent theme.The product life cycleis made up of four distinct stages every product goes through from its introduction to withdrawal from the market.Cost plus pricingis where goods are sold at the cost of production plus a profit mark-up.Skimmingis where a firm charges a high price in the short term for a product in demand.Channels of distributionare the means used by a manufacturer to get its products to the final customer.Promotioninvolves communicating with customers about products or services to encourage them to buy.Advertisingis the paid form of publication of information regarding a firm's goods or services through newspapers, magazines, radio and TV which is designed to inform customers and persuade them to buy the advertised item.Sales promotionhas been defined as the marketing techniques used on a temporary basis to make goods more attractive to consumers by providing some extra benefit, e.g. a free gift.Merchandisingis where the manufacturer provides point of sale material to ensure that products are sold quickly and profitably.Public relationsis the planned and sustained effort to establish and maintain goodwill and mutual understanding between a business and the public.Personal sellingoccurs when the seller tries to verbally persuade the customer to buy a product.Business development cycleevery business passes through four distinct stages of growth, each one involving different problems and solutions.Opportunity costis defined as the cost of not being able to do something else with the sum of money in question.Sole traderis someone who owns and runs a business. In law the sole trader and the business are the same.Partnershipis the relation which exists between at least two and not more than 20 persons carrying on a business, with a view to making a profit. The business is jointly owned by all the partners.Private limited company Ltd/Teois a business that is set up under the Companies Act 1963-1999 and is owned by a minimum of 1 and a maximum of 50 shareholders. All the shareholders have limited liability and the share price is not quoted on the stock exchange.Job productionis the production of a single product to specific requirements. Each operation is a specific job which might not be required again.Batch productionis when goods are produced for stock in anticipation of their being sold in the normal course of events.Mass productioninvolves producing large quantities of the same product, thus achieving a saving in production.A business planis a document that sets out how the business will operate and succeed.Organic growthinvolves increasing the size of the business by increasing sales and reinvesting the profits.Inorganic growthinvolves increasing the size of the business by merging with or taking over another business.Economies of scaleare the cost savings which arise from doing things on a bigger scale rather than on a smaller scale.Synergyis the idea that 2 + 2 = 5, i.e. the combined effect or two firms merging will give a greater overall benefit than if the two firms remained separate.Agri-Businessis the term used to describe the business of agriculture plus related industries.A companyis a separate legal entity formed under the companies acts 1963-1999 for the purpose of carrying out business activity. It is owned by shareholders, who contribute money to a common fund called share capital. Profits are distributed to shareholders in the form of dividends.Limited liabilitymeans that if the business goes bankrupt, a shareholders only loss would be the amount invested.Memorandum of Associationsets out the relationship that exists between the company and the public. Contains the objectives of the business and amount of authorized share capital.Articles of Associationset out the internal rules for the running of the organisation. It sets out the rights and duties of directors.Certificate of Incorporationis a registered firm's 'birth certificate' showing its legal name and date of incorporation.Director of Corporate Enforcement'smain aim is to encourage compliance with Company Law and to take appropriate action where suspected breaches of the Companies Acts take place.Business allianceis a business agreement between two non-competing firms to promote business interests which will be profitable to both.Franchisingis a method of marketing goods/services via a proven business formula, licensed by the franchiser to the franchisee to copy within an agreed geographical area.Transnational (multinational) company) TNCis a firm that has its headquarters in one country, but owns and operates business in many countries.Indigenous firmsare Irish owned firms, they are established and operating in Ireland.An economycan be defined as the legal, political and social framework within which business is conducted.Free market economyoccurs when there is private ownership of the factors of production and the means of distributing goods and services to consumers.Controlled economy (Centrally planned economy, Socialism)exists when the government tries to control economic activity by owning all the factors of production.Mixed economyoccurs when private enterprise provides some goods and the state provides some goods.Factors of productionare the resources which are available to produce goods required by consumers.Interest ratesare the amount of interest charged by a financial institution for giving a loan. It is the price that the borrower has to pay for the use of the money.Inflationhas been defined as a sustained increase in the level of selling prices over a specified period as measured by the Consumer Price Index (CPI).Exchange rateof a currency is the price for which that currency can be exchanged for another countries currency.Fiscal policyrelates to Government policy in relation to financial receipts and expenditure.Monetary policyrelates to Government policy that affects the amount of money in circulation for spending.Privatisationoccurs when a state-owned firm is sold to a private enterprise by means of a share floatation.Business ethicshas been defined as a Code of Behaviour of people in business that is accepted as morally correct. It is based on the assertion of what is right, wrong, honest and fair.Balance of tradeis when the total value of all goods exported (visible) is measured against the total value of all goods imported (visible) during the same period of time.Balance of paymentsis the total exports less the total imports of a country.Trading blocis a set of countries which engage in international trade together. Usually related through a free trade agreement.European Union (EU)is the new regional European block of countries, which provides for closer unification of the economic, social and political systems of the member states.Deregulationmeans the revision, reduction, or elimination of laws and regulations that hinder free competition in supply of goods and services, thus allowing market forces to drive the economy.Globalisationmeans that the business world is becoming one huge single trading bloc.An EU directiverequires member states to change their national laws to allow for the implementation of EU rules.Economic and monetary union (EMU)is the union in Europe which succeeded the European Monetary System. The first step abolished individual member exchange rate control, the second step established the European Central Bank, and the third step created the Euro as the common currency.Global businessis a business that views the world as its market.Global marketinginvolves marketing a firm's products throughout the world as if it in one market. e.g. Coca Cola.Global marketing mixis the ability of a business to develop a standardised product that can be sold worldwide.