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Caie Igcse: Business STUDIES (0450)
Caie Igcse: Business STUDIES (0450)
ORG
CAIE IGCSE
BUSINESS
STUDIES (0450)
SUMMARIZED NOTES ON THE SYLLABUS
CAIE IGCSE BUSINESS STUDIES (0450)
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CAIE IGCSE BUSINESS STUDIES (0450)
42. A social enterprise has social objectives as well as an 24. Staff managers are specialists who provide support,
aim to make a profit to reinvest back into the business information and assistance to line managers.
43. A stakeholder is any person or group with direct 25. Delegation means giving a subordinate the authority
interest in the performance and activities of a to perform particular tasks
business 26. Leadership styles are the different approaches to
dealing with people and making decisions when in
1.2. People in business apposition of authority - autocratic, democratic and
laissez-faire
1. Motivation is the reason why employees want to work 27. Autocratic leadership is where the manager expects
hard and work effectively for the business to be in charge of the business and to have their
2. Wage is a payment for work, usually paid weekly orders followed
3. Time rate is the amount paid to an employee for one 28. Democratic leadership gets other employees involved
hour of work in the decision-making process
4. Piece rate is an amount paid for each unit of output 29. Laissez-faire leadership makes the broad objectives of
5. Salary is payment for work, usually paid monthly. the business known to employees, but then they are
6. Bonus is an additional amount of payment above basic left to make their own decisions and organise their
pay as a reward for good work own work
7. Commission is payment relating to the number of 30. Recruitment is the process from identifying that the
sales made business needs to employ someone up to the point at
8. Profit sharing is a system whereby a proportion of the which applications have arrived at the business
company's profits are paid out to employees 31. Job analysis identifies and records the responsibilities
9. Job satisfaction is the enjoyment derived from feeling and tasks relating to a job
that you have done a good job 32. Job description outlines the responsibilities and duties
10. Job rotation involves workers swapping around and to be carried out by someone employed to do a
doing each specific task for only a limited time and specific job
then changing around again 33. Job specification is a document which outlines the
11. Job enrichment involves looking at jobs and adding requirements, qualifications, expertise, physical
tasks that require more and/or responsibility characteristics, etc., for a specified job
12. Team-working involves using groups of workers and 34. Internal recruitment is when a vacancy is filled by
allocating specific tasks and responsibilities to them someone who is an existing employee of the business
13. Training is the process of improving a worker's skills 35. External recruitment is when a vacancy is filled by
14. Promotion is the advancement of an employee in an someone who is not an existing employee and will be
organisation, for example, to a higher job/managerial new to the business
level 36. induction training is an introduction given to a new
15. Organisational structure refers to the levels of employee, explaining the business's activities,
management and division of responsibilities within an customs and procedures and introducing them to their
organisation fellow workers
16. Organisational chart refers to a diagram that outlines 37. On-the-job training occurs by watching a more
the internal management structure experienced worker doing the job
17. Hierarchy refers to the levels of management in any 38. Off-the-job training involves being trained away from
organisation, from the highest to the lowest. the workplace, usually by specialist trainers.
18. A level of hierarchy refers to 39. Workforce planning is establishing the workforce
managers/supervisors/other employees who are needed by the business for the foreseeable future in
given a similar level of responsibility in an terms of the number and skills of employees required
organisation 40. Dismissal is when employment is ended against the
19. Chain of command is the structure in an organisation will of the employee, usually for not working according
which allows instructions to be passed down from to the employment contract
senior management to lower levels of management 41. Redundancy is when the employee is no longer
20. The span of control is the number of subordinates needed and so loses their job. It is not due to any
working directly under a manger aspect of their work being unsatisfactory
21. Directors are senior managers who lead a particular 42. A contract of employment is a legal agreement
department or a division of a business between an employer and an employee, listing the
22. Line managers have direct responsibility for people rights and responsibilities of workers
below them in the hierarchy of an organisation 43. Communication is the transferring of a message from
23. Supervisors are junior managers who have direct the sender to the receiver, who understands the
control over the employees below them in the message
organisational structure 44. A message is the information or instructions being
passed by the sender to the receiver
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CAIE IGCSE BUSINESS STUDIES (0450)
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CAIE IGCSE BUSINESS STUDIES (0450)
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CAIE IGCSE BUSINESS STUDIES (0450)
3. Capital expenditure is money spent on non-current 26. Net profit is the profit made by a business after all
assets which will last for more than one year costs have been deducted from revenue. It is
4. Revenue expenditure is money spent on day-to-day calculated by subtracting overhead costs from gross
expenses which do not involve the purchase of a long- profits
term asset, for example, wages or rent 27. Depreciation is the fall in the value of a fixed asset
5. Internal finance is obtained from within the business over time
itself 28. Retained profit is the net profit reinvested back into
6. External finance is obtained from sources outside of the company, after deducting tax and payments to
and separate from the business owners, such as dividends
7. Micro-finance is providing financial services - including 29. The statement of financial position shows the value of
small loans - to poor people not served by traditional a business's assets and liabilities at a particular time
banks 30. Assets are those items of value which are owned by
8. Crowdfunding is funding a project or venture by the business. They may be non- current (fixed) assets
raising money from a large number of people who or currents assets
each contribute a relatively small amount, typically via 31. Liabilities are debts owed by the business. They may
the internet be non-current liabilities or currents liabilities
9. The cash flow of a business is the cash inflows and 32. Non-current assets are items owned by the business
outflows over a period of time for more than one year
10. Cash inflows are the sums of money received by a 33. Current assets are owned by the business and used
business during a period of time within one year
11. Cash outflows are the sums of money paid out by a 34. Non-current liabilities are long-term debts owed by
business during a period of time the business, repaid over more than one year
12. A cash flow cycle shows the stages between paying 35. Current liabilities are short-term debts owed by the
out cash for labour, materials, and so on, and business, repaid in less than one year
receiving cash from the sale of goods 36. Capital employed is shareholders' equity + non-
13. Profit is the surplus after total costs have been current liabilities and is the total long-term and
subtracted from revenue permanent capital invested in a business
14. A cash flow forecast is an estimate of future cash 37. Liquidity is the ability of a business to pay back its
inflows and outflows of a business, usually on a short-term debts
month-by-month basis. This then shows the expected 38. Profitability is the measurement of the profit made
cash balance at the end of each month relative to either the value of sales achieved or the
15. Net cash flow is the difference, each month, between capital invested in the business
inflows and outflows. 39. Illiquid means that assets are not easily convertible
16. Closing cash (or bank balance) is the amount of cash into cash
held by the business at the end of each month. This
becomes next month's opening cash balance. 1.6. External influences on business
17. Opening cash (or bank balance) is the amount of cash
held by the business at the start of the month activity
18. Working capital is the finance needed by a business to
pay for its day-to-day expenses 1. Gross Domestic Product (GDP) is the total value of
19. Accounts are the financial records of a firm's output of goods and services in acountry in one year
transactions 2. Recession is when there is a period of falling GDP
20. Final accounts are produced at the end of the financial 3. Inflation is the increase in the average price level of
year and give details of the profit or loss made over goods and services over time
the year and the worth of the business 4. Unemployment exists when the people who are willing
21. An income statement is a financial statement that and able to work cannot find a job
records the income of a business and all costs 5. Economic growth is when a country's GDP increases-
incurred to earn that income over a period of time. It is more goods and services are produced than in the
also known as a profit and loss account previous year
22. The revenue is the income to a business during a 6. Balance of payments records the difference between
period of time from the sale of goods and services a country's exports and imports
23. The cost of sales is the cost of producing or buying in 7. Real income is the value of income and it falls when
the goods actually sold by the business during a time prices rise faster than money income
period 8. Exports are goods and services sold from one country
24. A gross profit is made when revenue is greater than to other countries
the cost of sales 9. imports are goods and services bought in by one
25. A trading accounts shows how the gross profit of a country from other countries
business is calculated
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CAIE IGCSE BUSINESS STUDIES (0450)
10. Exchange rate is the price of one currency in terms of 22. Private benefits of an activity are the gains to a
another business or the consumer of the product
11. Exchange rate appreciation is the rise in the value of a 23. External costs are costs paid for by the rest of society,
currency compared with other currencies other than the business, as a result of business activity
12. Exchange rate depreciation is the fall in value of a 24. External benefits are the gains to the rest of society,
currency compared with other currencies other than the business, as a result of business activity
13. Fiscal policy is any change by the government in tax 25. Social cost = external costs + private costs
rates or public sector spending 26. Social benefit = external benefits + private benefits
14. Direct taxes are paid directly from incomes, eg- 27. Globalization is the term used to describe increases in
income tax or profits tax worldwide trade and movement of people and capital
15. indirect taxes are added to the prices of goods and between countries
taxpayers pay the tax as they purchase the goods, eg- 28. Free trade agreements exist when countries agree to
VAT trade imports/exports with no barriers such as tariffs
16. Disposable income is the level of income a taxpayer or quotas
has after paying income tax 29. An import tariff is a tax placed on imported goods
17. Import tariff is a tax on an imported product when they arrive into the country
18. Import quota is a physical limit on the quantity of a 30. An import quota is a restriction on the quantity of a
product that can be imported product that can be imported
19. Monetary policy is a change in rates by the 31. Protectionism is when a government protects
government or central bank domestic businesses from foreign competition using
20. Supply-side policies aim to increase supply and make tariffs and quotas
the economy more efficient 32. Multinational businesses are those with factories,
21. Private costs of an activity are the costs paid for by a production or service operations in more than one
business or the consumer of the product country
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CAIE IGCSE
Business Studies (0450)