• Informal communication


  The use of non-approved channels when communicating
• Formal communication


  The use of recognised channels when communicating
• Communication channels


  Routes along which information might travel in a business
• Communication barriers

  Things that get in the way of effective communication
• Communication


  The sending and receiving of messages
• Department


  A section of a business where all employees have similar skills and specialise in particular activities
• Subordinates


  People in the hierarchy who work under the control of a senior worker
• Span of control


  The number of people a person is directly responsible for in a business
• Organisational chart


  A diagram that shows the different job roles in a business and how they relate to each other
• Hierarchy


  The order or levels of responsibility in an organisation from the lowest to the highest
• Formal organisation


  The internal structure of a business as shown by an organisational chart
• Delegation

  Authority to pass down from superior to subordinate
• Chain of command


  The route through which orders are passed down in the hierarchy
• Authority


  The right to command and make decisions
• Total Quality Management (TQM)


  A whole-business approach which focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business
• Quality assurance


  Making sure that quality problems are avoided in the first place rather than being corrected after they occur
• Quality control


  Making sure that the quality of a product meets specified standards by testing it at the end of the production process
• Quality


  Features of a product that allow it to satisfy consumers' needs
• Multi-skilled


  Workers being trained in more than one skill, enabling them to do a range of jobs
• Lean production


  An approach to production aimed at reducing the amount of resources used and eliminating waste
• Lead time


  The time between receiving an order and making delivery
• Kaizen


  A Japanese term which means continuous improvement
• Just-in-time


  A production technique which is highly responsive to customer orders and aims to eliminate the need to hold stock
• Cell production


  Producing a 'family' of products in a small self-contained unit within a factory
• Work study


  A process which identifies the best possible way to carry out a task
• Outsourcing


  The contracting out of work to other businesses that would otherwise have been performed within the business
• Downsizing


  The process of reducing capacity through redundancy of staff
• Capital


  The amount of output produced per unit of capital employed by the firm. Calculated by dividing output by the amount of capital
• Labour productivity


  The amount of output produced per worker employed by the firm. Calculated by dividing output by the number of workers
• Productivity


  The amount of output produced in relation to the resources used
• Job production


  A method which involves employing all factors to complete one unit of output at a time
• Flow production

  Large-scale production of a standard product. Each operation is performed one after another on a production line
• Batch production


  A method which involves completing one operation at a time on all units before performing the next
• Control and Co-ordination (diseconomy of scale)

  An increase in average cost as it becomes complicated to manage such a large business and communication errors start to occur
• Labour relations (diseconomy of scale)


  An increase in average cost as the workers for a large business become less motivated
• Bureaucracy (diseconomy of scale)


  An increase in average cost as the growing business spends too much time completing paperwork and reports which require additional administration
• Co-operation (external economy of scale)


  Reductions in average costs arising from the ability to share complex and expensive projects between firms
• Ancillary services (external economy of scale)


  Reductions in average costs arising from the suppliers to a particular industry locating in the same area
• Infrastructure (external economy of scale)


  Reductions in average cost due to transport and communication links becoming specialised for an industry which dominates the area
• Skilled labour (external economy of scale)


  Reductions in average cost as a result of a large number of skilled workers in the same area which reduces recruitment and training costs