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24 Cards in this Set
- Front
- Back
Define: Business Objectives
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Goals that must be achieved in order to realise the stated aims of an organisation, department or individual team. Tend to be medium length. Either corporate or functional objectives.
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Define: Corporate Objectives
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Goals of the whole organisation rather than of different elements of the organisation. Are set in order to co-ordinate the activities of, guide the actions of, and give a sense of direction to the whole organisation. Dictated by the mission or corporate aims of the organisation.
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Define: Functional Objectives
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Goals of each of the functional areas of the organisation (eg: marketing, finance, operations, HR). Designed to ensure the business achieves its corporate objectives, overall aims or mission. Are set in order to co-ordinate the activities of, guide the actions of, and give a sense of direction to a department.
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Define: Mission
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An organisation's aims or long-term intentions.
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Define: Mission Statement |
A qualitative statement of an organisation's aims that uses language intended to motivate employees and convince customers and suppliers of their sincerity.
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Define: Strategy |
The medium to long-term plans through which a business intends to achieve its objectives. |
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Define: Cash Flow
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The amounts of money flowing into and out of a business over a period of time.
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Define: Price |
The amount paid by a customer to purchase one unit of product.
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Define: Total Revenue
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The income received from an organisation's activities. Total revenue = Price per unit x quantity of units sold. |
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Name 3 names for Total Revenue
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Income Revenue Sales Revenue Sales Turnover Turnover |
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Define: Profit
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The difference between the income of a business and its total costs Profit = Total revenue - total costs |
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Name 2 reasons why business exist |
To provide goods and services To make a profit |
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Name 5 common business objectives (8)
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* Profit * Growth * Survival * Cash Flow * Social and Ethical objectives * Diversification * Market Standing * Meeting the needs of other stakeholders |
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Define SMART objectives
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Specific Measurable Achievable Realistic Timed |
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Define: Fixed Costs
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Costs that do not vary directly with output |
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Define: Variable Costs |
Costs that vary directly with output |
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Define: Total costs |
The sum of fixed costs and variable costs
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Define the relationship between sales volume and total revenue
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Selling price stays the same: Direct. If sales volume doubles, total revenue doubles |
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Name 5 fixed costs (7)
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* Machinery * Rent * Salaries * Administration * Vehicles * Marketing * Lighting and Heating |
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Name 3 variable costs
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* Raw materials * Wages of direct labour * Power |
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Differentiate: wages and salary |
Wages = paid to those who make the product Salary = paid to staff not directly involved in production |
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Define the relationship between output and costs
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Total variable costs change by the same percentage as output. Eg: If output doubles, variable costs double Fixed costs stay the same |
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Define the relationship between costs and price
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Generally, if costs rise, prices rise too. This is because they try to maintain the profit margin. |
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Name 4 reasons as to why profit is important (6) |
* As a reward * As a motivator * As a measure of success * As a guide for future investment * As a source of finance * Attractive to stakeholders |