Definitions Unit 3
Stakeholders: stakeholders are groups or individuals that have an interest in the business.
There are two types of shareholders the one who are in the business are internal
stakeholders and the one who are outside the business are external stakeholders.
Mission Statement: mission statement defines the organization’s purpose or primary aim.
Its prime function is to define the key measures of the organisation’s success to
stakeholders.
Ansoff Matrix: ansoff matrix is a decision making tool to grow if business markets new or
existing products in a new or existing market.
Market Penetration: is a growth strategy where business focuses on selling existing
product into existing market. It is one of the strategy of Ansoff Matrix.
Market Development: is a growth strategy where business focuses on selling existing
product into new market. It is one of the strategy of Ansoff Matrix.
Product Development: is a growth strategy where business focuses on selling new
product into existing market. It is one of the strategy of Ansoff Matrix.
Diversification: is a growth strategy where business markets new product into new
market. It is one of the strategy of Ansoff Matrix.
Pestle: pestle are those external factors which will influence business decisions. One of the
factors of PESTLE is…(according to the question)
Porters Five Forces Model: Porter’s five forces model is a framework for analysing the
nature of competition within an industry. It can be used to identify the potential outcome
of a strategic decision ( or just mention the five factors).
Organic Growth: Organic growth is when business grows on its own using retained profit,
bank loan etc without purchasing or merging with other business. This happens to be a
less risky growth strategy compared to inorganic growth.
Inorganic Growth: inorganic growth involves two or more business joining together to
form a much larger corporation either through merger or takeover.
Merger: merger occurs when two or more businesses join together and operate as one. It
is a form of inorganic growth.
Takeover: takeover or acquisition is the process of one business buying another business.
It is a form of inorganic growth.
Decision Tree Analysis: DTA is a mathematical model used to help managers make
decision using estimates and probabilities to calculate likely outcomes.
Critical Path Analysis: is a process of breaking down a project into individual activities
placing them in sequence in order to identify the most effective route to completion of the
project.
Corporation Culture: corporate culture is the values attitudes beliefs meaning and norm
that are shared by people and groups. There are two approaches of corporate culture
strong culture or weak culture. (or state the type of cultures according to the question).
Strong Culture: strong culture is one which is deeply embedded into the ways business or
organisation does things. It is one of the approaches of corporate culture and the other is
weak culture.
Weak culture: weak culture can arise when the core values are not clearly defined,
communicated or widely accepted. It is one of the approaches of corporate culture and
the other is strong culture.
Power culture: central source of power which is responsible for decision making. There are
few rules and procedures within the business and individuals who holds power override
these.
Role Culture: Power is associated with role rather than individuals and decisions are
made through well established rules and procedures.
Task Culture: power is given to those who can accomplish tasks. Power therefore lies with
those expertise rather than someone based on roles.
Person Culture: are developed when individuals with similar training and backgrounds are
encouraged to form groups to enhance their expertise and share knowledge.
Environmental impact: Environmental impact refers to the negative impact occurring to
the environment due to business activity such as carbon emission, waste disposal etc.
Consumers are well concerned about the amount of carbon emission a flight is going to
generate.
Ethics: ethics are the moral rights and wrongs of decisions made by the business.
Trade off: trade off exists when the selection of one choice results in the loss of another.
(refer to the trade off in the question).
Transformative leadership: transformative leadership is a leadership style that aims to
change the way things are done within a business towards a dynamic management style.
It occurs when the senior management is changed of the business.
Employee Retention: is the ability of a firm to convince its employees to remain with the
business. It is measured by the labour turnover by the business.
Contingency planning: A contingency plan is a course of action designed to help a
business to manage crisis. A well executed contingency can reduce the impact of the
crisis on business.
Succession Planning: identifying current employees who have the potential to play key
roles in the future and helping them develop their skills.
Average Rate of Return: the average rate of return looks at the total accounting return
for a project to see if it meets the target return. It is a method of investment appraisal.
Payback Period: is the time taken for a project to repay its initial investment. It is a
method of investment appraisal.
Net Present Value: npv recognizes that there is a difference in the value of money
overtime. It is a method of investment appraisal.
Business Continuity: this shows how a business will operate after a serious incident and
how it expects to return to normal in the quickest time possible.
Porters Generic Matrix: strategies to gain competitive advantage in a narrow or broad
market. It involves cost leadership cost focus differentiation leadership differentiation
focus.
Boston Matrix: boston matrix can be used to analyse the product portfolio by
categorizing products into four groups based on market share and market growth. The
product with highest market share and growth is star….(explain the rest)
Competitive Advantage: competitive advantage is a clear performance differential over
the rivals.
Corporate social responsibility: is a management concept where companies integrate
social and environmental concerns in their business operations and interactions with their
stakeholders.
Risk Mitigation: plans identify assess and prioritise risks. It also plans response to deal
with the impact of these risks to business operations.
SWOT analysis: Swot involves looking at the internal strength weaknesses of a business
and external opportunities and threats that it faces.