Business Dictionary – L

Labour Intensive

    A job requiring a lot of work, and often a lot of workers, in comparison to the costs of materials, equipment, etc.

Lading

    Freight or cargo carried by a large vehicle. The act of loading cargo onto a ship.

Laid-Off

    In industry, etc., when workers lose their jobs, sometimes temporarily, because there is no work for them.

Laity

    Usage is typically ‘the laity’ (‘lay-ity’), an old traditional alternative word for lay people/members, typically used in relation to church organization and council, but applicable widely to ordinary people, as distinct from professional or qualified folk.

Landed Costs

    Costs of goods that have been delivered to a port, unloaded, and passed through customs.

Landing Page

    On the Internet, the first page that visitors to a website arrive at after they’ve clicked on a link to the site.

Larceny

    The crime of unlawfully taking someone else’s property or money. Theft.

Large Cap

    On the Stock Exchange, a company that has a large market capitalisation, i.e., a high total value of shares.

Large-Sized Business

    An organization that has grown beyond the limits of a medium-sized business and has 250 or more employees.

Launder

    To pass the profits of illegal activities such as tax evasion into the normal banking system via apparently legitimate businesses.

Law Of One Price

    The rule that without trade barriers and transportations costs, identical products would cost the same worldwide using the appropriate exchange rate of currency.

Lay (people/person/member)

    Also layman, or laywoman – Lay means non-professional, non-expert – ordinary member(s), of the public or of an organization, typically referring to religious communities, often relating to professions such as law and medicine, but potentially in any situation where non-professionals/experts are differentiated from qualified/professionals. The term may have an arrogant or patronising implication where expert, qualified, learned professionals discuss the general public or members who lack expertise.

Layaway

    Often referred to as Lay-By. A means of purchasing an item by paying a small deposit to reserve it and then paying the balance in installments. When the total purchase price has been paid the customer can then take delivery of the goods.

Lay-By

    The reservation of a product for purchase by the payment of an initial deposit followed by regular interest-free installments, on completion of which the article is claimed by the buyer.

Leadership

    The capacity to establish direction and to influence and align others toward a common goal, motivating and committing them to action and making them responsible for their performance. Leadership theory is one of the most discussed areas of management, and many different approaches are taken to the topic. Some notions of leadership are related to types of authority delineated by Max Weber. It is often suggested that leaders possess innate personal qualities that distinguish them from others.

    Other theories, such as Behaviorist theories of leadership, suggest that leadership is defined by action and behavior, rather than by personality. A related idea is that leadership style is not fixed but should be adapted to different situations, and this is explored in contingency theory. Perhaps the most simple model of leadership is action-centered leadership, which focuses on what an effective leader actually does.

    These many approaches and differences of opinion illustrate the complexity of the leadership role and the intangibility of the essence of good leadership.

Leading Edge

    Situated at the forefront of innovation. A leading edge company is ahead of others in such areas as inventing or implementing new technologies, and in entering new markets.

Leading Indicator

    A particular measure of a country’s economic activity, used to predict near future economic trends.

Lead User

    Term introduced by economist Eric von Hippel in 1986. Lead users are individuals or companies who greatly benefit from being the first to use or adapt a product for a particular need, often months or years before the general public or other businesses are aware of the need for the product.

Lean

    Also known as the Toyota Production System or Just-In-Time Production. A system used in management, production, manufacturing, etc., to decrease waste and increase efficiency, especially with the use of automated assembly lines in the motor industry.

Learning Curve

    A graph depicting the rate at which a person learns a new skill. A steep learning curve shows that a person is learning quickly, and a shallow learning curve means that a person is slower and taking more time to learn.

Leaseback

    An arrangement between a purchaser of a property and the vendor in which the vendor immediately leases the property back from the purchaser.

Leave Of Absence

    The period of time which a person is permitted by their employer to be absent from their job.

Lease Purchase

    A finance agreement in which an item, usually a car, is leased for a certain period of time with an option to purchase at the end of the contract.

Legacy

    Gift of personal property through a will by the writer of the will (the ‘testator’) to an individual or organization (the ‘legatee’).

Legal Entity

    An individual or organisation who has the legal right to enter into a contract or an agreement, is responsuble for its actions, and can sue or be sued if the terms of the contract are broken.

Legal Reserve

    The minimum amount of money, required by law, that a bank, insurance company, etc., must set aside in order to be able to operate.

Lemon

    A defective product which is poor quality and fails to function as promised.

Lender Of Last Resort

    A country’s central bank which loans money to other banks or financial institutions which cannot borrow money from anywhere else and do not have enough reserves to cover cash withdrawals by their customers.

Letter Of Comfort

    A letter of approval written to a bank by a parent company on behalf of a subsidiary company which needs financial backing.

Letter Of Indemnity

    A document in which an individual, company, etc., guarantees to protect another from costs, liability, etc., as a result of certain actions which may be carried out.

Leverage

    The ability to influence a system, or an environment, in a way that multiplies the outcome of one’s efforts without a corresponding increase in the consumption of resources. In other words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns.

Liaison

A link of communication between two entities usually in a corporate setting.

Lien

    A legal right to take and keep another persons property until a debt has been paid by the property owner.

(in) Lieu

    The word lieu rarely appears outside of the expression ‘in lieu of’, which means ‘instead of’, or ‘in place of’. For example, ‘time off in lieu’ means (and is a shortening of) time given off work instead of payment for extra hours worked. The word lieu is from French, ‘lieu’ and earlier ‘leu’, place, which came into English in the 1500s, originally from Latin locum/locus, place.

Lifeboat

    An emergency loan offered to a company or bank which is in financial trouble.

Lifestyle Business

    A business set up and run so as to fit with the wider life needs of the business owner(s) which might be called ‘life balance’, or happiness or wellbeing. Typically this will mean that the business can be established and operated with very simple, relatively small-scale, and easily manageable: infrastructure, overheads, inbound supply-chain (if any), premises (typically in a home), legal issues, administration products/services range, ambition, marketing and advertising, technology and ICT, staffing, and demands on workload, time, and generally work pressures.

    Given these criteria, certain types of businesses do not make naturally good lifestyle businesses, because they imply/require a more burdensome degree for one or a number of the features listed above. Businesses that do not naturally make good lifestyle businesses would be for example: manufacturing (other than boutique or ‘hand-made’ type products); warehousing and distribution; FMCG (fast-moving consumer goods)

Life Tables

    Also called Mortality Tables. Tables which show peoples life expectancy, depending on their age, lifestyle, etc., often used by insurance companies.

Lifetime Customer Value

    A measure of the total value to a supplier of a customer’s business over the duration of their transactions.

    In a consumer business, customer lifetime value is calculated by analyzing the behavior of a group of customers who have the same recruitment date. The revenue and cost for this group of customers is recorded, by campaign or season, and the overall contribution for that period can then be worked out. Industry experience has shown that the benefits to a business of increasing lifetime value can be enormous. A 5% increase in customer retention can create a 125% increase in profits; a 10% increase in retailer retention can translate to a 20% increase in sales; and extending customer life cycles by three years can treble profits per customer.

Lightning Strike

    A sudden strike by workers, with little or no warning. These strikes are often short in duration and usually without official union backing.

Limited Legal Tender

    In some jurisdictions, low denomination bills and all coins that may only be submitted up to a specific sum as legal tender in any one transaction.

Limited Liability

    In law, the owners and/or shareholders of a limited company only lose the amount they have invested if the company gets into debt.

Linchpin

    The most important person or thing in a business or organisation.

Linear Programming

    A mathematical technique used to identify an optimal solution for the deployment of resources to meet organizational objectives. Linear programming uses graphic and algebraic means to calculate which combination of resources, subject to predicted constraints, is most likely to fulfill a given objective.

Line Authority

    In business, the power given to management allowing them to give orders and to control subordinates.

Line Management

    A hierarchical chain of command from executive to front-line level. Line management is the oldest and least complex management structure, in which top management have total and direct authority and employees report to only one supervisor. Managers in this type of organizational structure have direct responsibility for giving orders to their subordinates.

    Line management structures are usually organized along functional lines, although they increasingly undertake a variety of cross-functional duties such as employee development or strategic direction. The lowest managerial level in an organization following a line management structure is supervisory management.

Line Manager

    An employee’s immediate superior, who oversees and has responsibility for the employee’s work. A line manager at the lowest level of a large organization is a supervisor, but a manager at any level with direct responsibility for employees’ work can be described as a line manager.

Liquidate

    The closing down of a business by selling its assets to pay its debts.

Liquidated Damages

    The fixed amount agreed upon by parties to a contract, to be paid to one party in the case of a breach of contract by the other party.

Listed Company

    A company whose stock is quoted on a recognized stock exchange.

List Price

    Known as ‘Sticker Price’ in the US. The advertised or recommended retail price (RRP) of a product.

List Rental

    The renting, from an organisation, of a mailing list which has potential customer names and addresses, for a one-off mailing.

Litigant

    A person or party who is involved in a court action or lawsuit.

Litigate

    To legally settle a dispute in, or take a claim to, a court of law.

Litigious

    To routinely or enthusiastically take legal action to settle disputes.

Litotes

    A language term referring to understatement, used for emphasis, often ironically, in which the negative-opposite is used instead of the positive expression, for example, "It wasn’t the best presentation I’ve ever given," when the peaker means that they considered it to have been a particularly poor one. Another example is the commonly used "Not bad," or "Not half Bad," when referring to something very good. The word litotes comes from Greek, litos, meaning single, simple or meagre.

Living Trust

    A trust created in which assets can be transferred to someone while the grantor (the person who owns the assets) is still alive. Living Trusts avoid dealing with the legalities of a will.

Loan Shark

    Someone who offers unsecured loans at excessive rates of interest.

Local Content Measure

    Where a business or investor is required to purchase a certain amount of locally sourced materials to be used in the manufacturing, etc., of their product.

Lockout

    A term used during an industrial dispute, when management closes down a workplace and bars employees from entering until they agree to certain terms and conditions.

Locus Standi

    (Latin – place of standing) The right or capacity of a litigant to be heard or to bring an action in court.

Long Grass

    To ‘Kick something into the long grass’ means to push a problem aside in the hope that it will be ignored or forgotten.

Long Position

    A situation in which an investor or dealer holds onto shares, etc., which they have purchased, expecting them to rise in value in the future.

Loophole

    An unintentional mistake in a contract or a law which allows people to evade an obligation in the contract, or to get round the law without actually breaking it.

Loss Leader

    In retail, a product which is offered at a very low price to attract customers who will then buy other goods which will produce more profit for the retailer.

Low Hanging Fruit

    A term used in business for something which is easily obtainable and highly visible, and provides a quick easy way to making a profit.

Low Yield

    A term used to describe investments which are low risk and do not produce a high level of income.

Loyalty Card

    A card given to customers by a retailer which gives the customer points, etc., every time they shop there. These points convert into vouchers which the customer can spend at the store at a later date.

Luddite

    A derogatory term for someone who opposes or disapproves of new technology and/or new methods of working, often because the changes threaten jobs. From the Luddite rioters of 1811-16, who in defence of labourers’ jobs in early industrial Britain wrecked new manufacturing machinery. See Luddite in the words origins page.