Business & ManagementCambridge IGCSE

Business Studies – References

When it comes to referencing in business studies, there are several citation styles you can use. Here are a few commonly used ones....
  1. What is meant by ‘Quality Assurance’?
    Quality Assurance is the checking for quality standards throughout the production process.

  2. What is meant by ‘Multinational Company’?
    A business with factories, production or service operations in more than one country

  3. What is meant by ‘Brand’?
    A unique name, feature, design or logo or image of a product or service or business which distinguishes it from other businesses or products or services

  4. Identify ways a business could ‘Build Good Customer Relationships’?

    • Offer Personal Service

    • Find out customer preferences

    • Ask for feedback and suggestions

    • Extra services like delivery, after sales assistance

    • Communicate with customers to maintain customer loyalty

  5. What is meant by ‘Secondary Market Research’?
    Collecting information about the market, customer needs, competitors, etc., which is already available or collated by other companies and agencies.

  6. What is meant by a ‘Focus Group’?
    A selected group of people who have similar characteristics towards a target market who give their opinions on a product or service.

  7. What is meant by a ‘Business Plan’?
    A document containing the business aims and objectives and also important details about the operations, finance, and workers of a business.

  8. What is meant by a ‘Balance Sheet’?
    A sheet which shows the value of a business assets and liabilities at a particular point in time

  9. What is meant by ‘Flow Production’?
    Flow Production is where large quantities of a product are produced in a continuous process

  10. What is meant by an ‘Economic Boom’? A strong rise in level of economic activity

  11. Identify stages of the Business Cycle

    • Slump or Trough

    • Growth or Recovery or Expansion

    • Recession or Depression or Contraction

  1. What is meant by ‘Revenue’?
    Revenue is the income or money made by the business from the sale of goods or services Quantity Sold * Price per unit

  2. What is meant by a ‘Variable Cost’?
    Costs that change with the level of output produced or sales made

  3. Identify stages of recruitment process

    • Job Analysis

    • Job Description

    • Person Specification

    • Advertising

    • Shortlisting

    • Interviewing

    • Selection

  4. What is meant by a ‘Partnership’?
    Partnership is when two or more people agree to own and run a business together

  5. Methods of Market Research

    • Questionnaires

    • Surveys

    • Interview

    • Consumer Panel

    • Observing Target Market

    • Focus Groups

  6. Advantages of having a ‘Business Plan’.

    • Supports Loan Applications

    • Clears guidance for business

    • Helps decision making processes

    • Provides an estimate of costs

  7. What is meant by ‘Batch Production’?
    A type of production where products are made in group or blocks followed by another grp or block.

  8. What is meant by ‘Market Segment’?
    An identifiable subgroup of a whole market in which consumers have similar characteristics or preferences.

  1. Ways to measure the size of a business

    • Employees working

    • Sales Value or Value of Output or Revenue

    • Capital Employed

    • Value of Balance Sheet

    • Market Share

  2. Characteristics of a successful entrepreneur

    • Risk taker

    • Innovator

    • Creative

    • Self-Confident

    • Optimistic

    • Hardworking

    • Independent

    • Effective Communicator

    • Leadership Style

    • Self-Motivating

    • Determined

    • Results Driven

    • Good at Networking

    • Multi-Skilled

  3. What is meant by ‘Specialization’?
    A way in which work is divided so each worker concentrates on a specific task so the worker can become an expert at it.

  4. Ways a Business can measure its success

    • Achievement of Objectives

    • Growth

    • Increase in market share

    • Sales Revenue

    • Survival

  5. Reasons why cash flow is important

    • Day to Day expenses

    • To avoid cash flow problems

    • To avoid liquidation

  6. What is meant by ‘Import Quota’?
    Quota refers to a limit on the flow of goods that are allowed into a country

  1. What is meant by ‘Inventory (Stock)’?
    The amount of raw materials, work in progress and finished goods held by a business intended for sale

  2. What is meant by ‘Average Cost’?
    Total cost divided by the total number of units produced

  3. How to calculate output per employee Total Output/Number of Employees

  4. Advantages of using Batch Production-

    • Variety in workers jobs, which motivates workers

    • Allows more variety of products to be produced

    • Could improve productivity and efficiency

    • Work Flexibility

    • More output

  5. What is meant by a ‘Private Limited Company’?
    A business whose shares cannot be sold to general public and only owned by family and friends

  6. Causes of Business Failure

    • Lack of management skills

    • Actions of competitors

    • Change in government laws

    • Lack of Demand

    • Recession

    • Poor Market Research

    • Lack of Finance

    • Cash Flow Problems

    • Diseconomies of Scale

  7. What is meant by ‘Mass Market’?
    Where there are a large number of potential customers willing to buy the product

  8. What is meant by ‘Market Share’?
    Percentage of the total market sales held by one brand or business

  9. What is meant by ‘Made Redundant’?
    The worker is no longer required through no fault of their own

  10. What is meant by ‘Tertiary Sector’?
    An industry which provides or sells services to consumers and other sectors of the economy

  1. What is meant by ‘Span of Control’?
    The number of subordinates working directly under an individual or a manager
  2. What is meant by ‘Delegation’?
    To give a subordinate the authority to perform a particular task and make decisions
  3. Reasons why delegating tasks is important for a business
    • Managers or Individuals can’t do all the jobs
    • Managers get time to focus on other issues
    • Employees can be motivated and retained
    • Could be a way to train employees who might be on managerial roles in the future
  4. What is meant by the ‘Private Sector’?

    When a business activities are owned by individuals or group of individuals

  5. What is meant by ‘Customer Loyalty’?
    A customer who returns and buys the product from the same shop or supplier multiple times. The customer keeps buying the same brand no matter what the price is.
  6. Business Activities in the Primary Sector Farming, Mining, Fishing, Forestry, Oil Extraction
  7. What is meant by ‘Cost of Sales’?
    Money spent on producing or buying in the goods sold by the business Cost per unit * Number of Output
  8. What is meant by ‘Sole Trader’?
    Ownership of business in the hands on one individual or person
  9. Possible ways to show that the economy is growing
    • Rise in GDP
    • Fall in unemployment rate
    • Shortage of skilled workers
    • Higher living standards
    • Rise in Business Profits
    • Increase in demands
    • Rise in investments
  10. What is meant by ‘Financial Bonus’?
    Extra money for the performance that reachers target over and above basic pay
  1. Motivational Theories

    • Herzberg’s Theory

    • Taylor’s Scientific Theory (Money is the main motivator)

    • Maslow Hierarchy of needs

    • Mayo’s Human Relations

    • Fayol Management

  2. What is meant by the ‘Primary Sector’?
    Involves extraction or production of raw materials using natural resources which is used by other businesses

  3. What is meant by ‘Non-Current Assets’?
    Assets that are owned by a business for more than one year

  4. What is meant by ‘Break Even’?
    Level of output where total costs equal total revenue

  5. What is meant by ‘Primary Market Research’?
    Collection of new data about potential and existing customers.

  6. What is meant by ‘Globalization’?
    The growth in worldwide trade, Free movement of people and capital between countries, Process of countries becoming more interconnected.

  7. Possible threats due to Globalization

    • Increased competition

    • Exchange Rates

    • Loss of individualized products

    • Unable to meet demand

    • Increasing investment from multinationals

    • Increase in expenses as worker wage must be increased to match multinational wage rates

  8. What is meant by ‘Return on Capital Employed’?
    ROCE means the profit of the business expressed as % of capital invested in the business Profit/Capital Employed * 100

  9. What is meant by a ‘Recession’?
    A sustained reduction over a period of time in the GDP or national income or output.

  10. Reasons why governments support business start-ups

    • Reduce Unemployment

    • Increase Competition and Output

    • Benefit Society

  1. Functions of Management

    • Planning

    • Organizing

    • Coorenating

    • Commanding

    • Controlling

    • Supervising

    • Decision Making

    • Problem Solving

    • Recruiting

  2. What is meant by ‘Redundancy’?
    A job position has gone and hence a person is no longer required.

  3. What is meant by ‘Added Value’?
    A difference between prince of a finished product and the cost of the inputs involved in making it or the difference between the selling price of a product and the cost of bought in materials

  4. What is meant by a ‘Social Enterprise’?
    A business with both social objectives as well as aim to make profits

  5. Possible stakeholder groups

    • Governments

    • Suppliers

    • Local Community

    • Customers

    • Bands

    • Pressure groups

  6. What is meant by a ‘Joint Venture’?
    When two or more businesses agree to start a new project together so they share risks, capital, profits and resources

  7. Advantages of having objectives

    • Target to work towards

    • A sense of direction

    • Measure of success to judge performance

    • Help budgeting, planning and decision making

    • A mode of motivation

  1. Reasons or Advantages of entering new markets

    • Economies of scale

    • Increase Sales, Market Share, Target Market

    • Brand Awareness

    • Access to cheaper labor and resources

    • Fewer trade restrictions

  2. What is meant by ‘Trade Receivables’?
    Amount of money owed by customers for goods bought on credit terms

  3. Ethical issues for businesses

    • Paying for wages to workers

    • Not price fixing

    • Charging fair price to customers

    • No child labour

    • Environment Friendly Products

  4. What is meant by ‘Chain of Command’?
    A structure within an organization through which orders are passed from senior management to the lower levels.

  5. What is meant by ‘Liquidity’?
    The ability of a business to pay back its short-term or day to day debts

  6. Methods of Pricing

    • Competitive Pricing

    • Cost Plus Pricing

    • Penetration Pricing

    • Price Skimming

    • Promotional Pricing

  7. What is meant by an ‘Overdraft’? A loan repayable within 12 months

  8. What is meant by the ‘Business Cycle’?
    Fluctuations in economic activity that an economy experiences over a period of time

  9. Advantages of Flow Production

    • Increased Output

    • Economies of scale

    • Low average costs

    • Quicker and Continuous (24/7) Production

    • Allows Specialization, Capital Intensive Production and greater use of unskilled labor

  1. What is meant by ‘Productivity’?
    A measure of the output of a business in relation to its inputs or effective utilization of resources in a time period.

  2. Reasons why a business might need working capital

    • Day to Day Expenses

    • Paying wages, salaries, rent, utilities

    • Repayment of short term debts

    • Emergency Bail Out Funds

  3. What is meant by ‘Economies of Scale’?
    Factors that lead to lower average costs as a business increases in size

  4. What is meant by ‘Autocratic Leadership Style’?
    Managers expect to be in charge of business, expecting orders to be followed. Decisions are made without consulting workers.

  5. Advantages of Specialization

    • Increased output < Quicker Production < Increased Productivity and Efficiency

    • Lower unit cost

    • Workers become more skilled

    • Improved Accuracy

    • Help improve competitiveness

  6. What is meant by ‘External Cost’?
    Impact paid for by the rest of the society as a result of business actions

  7. Parts of a Business Plan

    • Executive Summary

    • Business Aims

    • Marketing

    • Market Research

    • Human Resources

    • Finance

    • Production Details and Break Even

    • Organizational and Management Details

  8. Reasons why markets become more competitive

    • Globalization

    • Tech developments

    • Lower barriers to entry

    • Improvement in transport links

    • More businesses enter market

  1. Methods of training that a business might use

    • On-the-job training

    • Off-the-job training

    • Induction

  2. What is meant by ‘Market Share’?
    A percentage or proportion of the total market sales held by one brand or business Business Sales/Total Market Sales * 100

  3. Aims of promotion

    • Attract Customers to Increase Sales

    • Create brand image

    • Compete in the market

    • Introduce new products

  4. Features of a Sole Trader

    • Keeps all profits

    • Unlimited Liability

    • No separate legal identity

    • Takes all decision on his/her own

    • Has total ownership of the business

    • Few legal requirements

  5. What is meant by ‘Cash Flow Forecast’?
    An estimate of the cash inflows and outflows of a business usually on a month by month basis.

  6. Ways to measure success of a business

    • Market Share

    • Sales Revenue

    • Survival

    • Profits

    • Customer Satisfaction

    • Reputation

    • Share price or Dividends

    • Productivity, Efficiency, Number of Output

    • Number of Employees

    • Employee Loyalty

    • Customer Loyalty

    • Environmental Targets

    • Ethical Targets

  7. What is meant by ‘Niche Market’?
    Highly specialized sub part of a large market

  1. What is meant by ‘Micro Finance’? Small amounts of capital loaned to entrepreneurs in countries where finance is difficult to obtain.
  2. What is meant by ‘Net Cash Flow’? DIfference between cash inflows and cash outflows every month
  3. What is meant by a ‘Franchise’? An agreement that allows one business to trade under the name of another business to sell the other company’s products or services.
  4. What is meant by ‘Break-Even Output’? Level of Sales/Output at which total costs are the same as total revenue
  5. What is meant by “Off-the-Job Training’? Trained away from the workplace by specialist trainers
  6. What is meant by ‘Total Cost’? Sum of total fixed costs + Total Variable Costs Or Sum of Total Direct Costs + Total Indirect Costs
  7. What is meant by ‘Job Enrichment’? Involves looking at jobs and adding tasks that require higher skill or more responsibility.
  8. What is meant by ‘Gross Domestic Product’? The total value of output of goods and services in a country in one year or a given time period.
  9. What is meant by ‘Quality Control’? Checking that a product meets the required standard
  10. What is meant by ‘Wholesaler’? Someone or an organization that buys and stores large quantities of several producers’ goods and then breaks into bulk deliveries to supply retailers with smaller quantities.
  11. What is meant by ‘Pressure Group’? People who have common interests and take actions to change or influence business or government’s decisions.
  12. Define ‘Crowdfunding’ Asking a large number of people for a small amount of money to raise finance for a project.
  13. State few Economies of Scale
    • Bulk Purchase
    • Marketing
    • Technical
    • Financial
    • Risk Bearing
    • Managerial
  1. Ways of Motivating employees
    • Bonuses
    • Performance related pay
    • Profit share
    • Provide opportunities for promotion
    • Job rotation
    • Job enrichment
    • Job enlargement
    • Training opportunities
    • Increase rate of pay
    • Awards
  2. Factors that affect leadership style
    • Personality
    • Skills and Task assigned
    • Size of Business
    • Organizational Structure
  3. Define ‘Profit’
    Amount of money that a business makes once costs have been subtracted from the revenue
  4. Define ‘Induction Training’
    Introduction given to a new employee explaining the business activities and processes and allow them to meet other employees.
  5. Ways to Advertise Job Vacancy
    JobCentre, Trade Magazines, Recruitment Agencies, Websites, News Papers and TV
  6. Define ‘Margin of Safety’
    Difference between current level of output and break-even output
  7. Stages of Product Life Cycle
    Development, Introduction, Growth, Maturity, Decline
  8. Define ‘Opportunity Cost’
    The benefit that could have been gained from an alternative use of the same resource.
  1. Define ‘Job Rotation’ Employes swapping around and doing each specific task for only a limited time
  2. Define ‘Cost Plus Pricing’ The price is based on the cost making a product and the addition of a fixed percentage for profit
  1. Define ‘Marketing Mix’ Involves all activities that go into the marketing of a product or services. These activities are brought down as the 4 P’s – Product, Promotion, Plan, and Price.
  2. Define ‘Opening Balance’ Amount of cash held by a business at the start of the month or training period
  3. Ways a business can increase productivity
    • Improve labor skills
    • Increase motivation
    • Automation
    • Improve Quality of Materials
    • Introduce Quality Control and Quality Assurance
    • Introduce Inventory Control
  4. Sources of Internal Finance
    • Retained profit
    • Sale of non-current assets
    • Sale of inventories
    • Owner’s savings
    • Reduce trade receivables
  5. How to calculate Margin of Safety Current Output – Break Even Output
  6. Define ‘Ethical Business’ An organization that takes decisions based on moral code.
  7. Define ‘Externalities’ Third party effects arising from production or consumption of goods and services for which no appropriate compensation is paid.
  8. Define ‘Secondary Sector’ Firms that process and manufacture goods from natural resources.
  9. Define ’Unemployment’ When people want to work but cannot find a job.
  10. Cash Flow Forecasting:
    • Cash In-Flow = Sum of Sources of Revenue
    • Cash Out-Flow = Sum of Total Expenses
    • Net Flow = Cash In-Flow – Cash Out-Flow
    • *If Net Flow value comes in negative, add brackets for the value, no minus sign Eg: 20-100 = -80 ; So, (80)
    • Closing Balance = Net Flow – Opening Balance
    • Month 1’s closing balance is Month 2’s Opening Balance
January February
Net Flow 30 50
Opening Balance 15 15
Closing Balance 30 – 15 = 15 50 – 15 = 35
  1. Gross Profit = Revenue – Cost of Sales
  2. Net Profit = Gross Profit – Expenses
  3. Retained Profit = Net Profit – Dividends

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