Page 366 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Glossary

Franchise a business system where entrepreneurs buy the right Infl ation the price increase of goods and services over time.
to use the name, logo and product of an existing business. Infrastructure the basic facilities, services and installations
Free trade no barriers exist that might prevent trade between needed for a business to function, for example water, power
diff erent countries. and transport links.

Fringe benefi ts non-cash rewards often used to recruit or retain Interest rate the cost to a person or business of borrowing
workers and to recognise the status of certain employees. money from a lender such as a bank.
Functional departments the main activities of business: Internal recruitment filling a vacant post with someone already

finance, marketing, operations, human resources and employed in the business.
research and development.
Inventories the stock of raw materials, work-in-progress and
Geographic segmentation dividing consumers in the market by finished goods held by a business.

geographic area.
Job description a list of the key points about a job, job title, key
Globalisation the process by which countries are connected duties, responsibility and accountability.
with each other because of the trade of goods and services.
Job dissatisfaction how unhappy and discontent a person is
Government incentives usually finance such as interest free with their job.

loans, or grants provided to businesses to help when locating
Job enlargement increasing or widening tasks to increase
in a country or area of a country.
variety for workers.
Gross domestic product (GDP) the value of all goods and
Job enrichment organising work so that workers are
services produced by a country in a year.
encouraged to use their full abilities.

Gross profi t the difference between revenue and cost of sales.
Job production the production of items one at a time.

Gross profit margin % ratio between gross profit and revenue.

Job rotation increasing variety in the workplace by allowing
Hierarchy the number of levels in an organisational structure.
workers to switch from one task to another.

Hire purchase the purchase of an asset by paying fixed
Job satisfaction how happy and content a person is with
repayment amounts per time period over an agreed period their job.

364 of time. The asset is owned by the purchasing company on Joint ventures two or more businesses agree to work together
completion of the fi nal repayment.
on a project and set up a separate business for this purpose.
Home country the domestic country where a multinational

Labour productivity a measure of the efficiency of workers by
starts/first establishes its operations.

calculating the output per worker.
Host country the foreign country where a multinational sets up
Labour turnover the rate at which workers leave a business.
its operations.
Laissez-faire leadership a leadership style where most of the

Hourly wage rate payment to workers based on a fixed amount for
decisions are left to the workers.

each hour worked.
Lean production the production of goods and services with the
Hygiene factors the factors that must be present in the
minimum waste of resources.
workplace to prevent job dissatisfaction.
Leasing obtaining the use of a non-current asset by paying a fi xed
Income statement financial statement which records the

amount per time period for a fixed period of time. Ownership

revenue, costs and profits of a business for a given period
remains with the leasing company.
of time.
Legal controls laws that control the activity of businesses.
Indirect tax the tax charged on the price of goods and services,
which is added to the price of goods and services before they Level of unemployment the proportion/percentage of the
are bought. population that are capable of working but are unable to fi nd
a job.
Induction training a training programme to help new recruits
become familiar with their workplace, the people they work Liabilities debts of the business that will have to be paid
with and the procedures they need to follow. sometime in the future.
Industrial action measures taken by a trade union or a group of Limited liability the shareholders in a limited liability company
workers aimed at getting management to settle a dispute in which fails only risk losing the amount they have invested in
the employees’ favour. the company and not any of their personal wealth.
Industrial markets markets for goods and services bought by Liquidity the ability of a business to pay its short-term debts.
other businesses to use in their production process. Long-term fi nance debt or equity used to finance the purchase

Informative advertising information about the product is of non-current assets or finance expansion plans. Long-term

communicated to consumers to create product awareness debt is borrowing a business does not expect to repay in less
and attract their interest. than fi ve years.