IB Business Management Key Definitions

Academic journals publish research-based articles written by experts.

The Acid Test Ratio, also known as the Quick Ratio, measures a company's ability to meet short-term liabilities using its most liquid assets (excluding inventory).

Agents act as intermediaries between producers and buyers but do not take ownership of the goods.

Amortization refers to the process of writing off the cost of an intangible asset (e.g., patents, trademarks, goodwill) over its useful life. This expense is spread out evenly over the asset's estimated lifespan.

The Ansoff Matrix is a strategic tool used to analyze and plan business growth strategies based on market and product development.

Appraisals are formal evaluations of an employee's performance over a specific period.

A process where a neutral third party makes a binding decision to resolve a dispute.

Artificial Intelligence (AI) AI refers to computer systems that analyze data, predict outcomes, and perform tasks traditionally requiring human intelligence.

Artificial neural networks (ANNs) are computing systems inspired by the human brain.

A leadership style where the leader makes all decisions with little or no input from employees. Authority is centralized, and employees are expected to follow orders.

The Average Rate of Return (ARR) measures the profitability of an investment as a percentage of the initial or average investment cost. It helps businesses compare the potential returns of different investment projects.

A bank loan is a sum of money provided by a bank to a business, which is repaid with interest over an agreed period.

A legal process where an individual or business declares they are unable to repay outstanding debts. This can result in asset liquidation to pay creditors or a structured repayment plan under court supervision.

Barriers to communication are obstacles that prevent the effective exchange of information.

Batch production is a manufacturing method where a group of identical products is produced together in stages before moving on to the next batch.

Comparing your organization’s processes or performance against industry leaders or best practices, then applying the lessons learned.

Big data refers to large and complex datasets that traditional methods cannot process effectively.

Substances that naturally decompose over time without harming the environment.

The value of an asset as recorded in a company's financial statements, usually the original cost minus depreciation, amortization, or impairment costs.

The BCG Matrix (Boston Consulting Group Matrix) is a strategic tool used in business management to analyze a company’s product portfolio and help with investment decisions. It categorizes products or business units based on market growth rate and relative market share.

A brand is a name, term, sign, symbol, or design (or a combination of these) that identifies the goods or services of a seller and differentiates them from competitors.

Brand awareness measures how well consumers recognize and recall a brand.

Brand development involves creating and refining a brand's identity to resonate with its target audience.

Brand loyalty measures the extent to which customers repeatedly choose a brand over competitors.