The opportunity of giving up the second best choice when making a decision.
The benefit a country has in a given industry when it can pmake products at a lower opportunity cost than other countries.
Balance of Trade
A basic measure of the difference in value of a nation's export and imports, including both goods and services.
Overage that occurs when the total value of a nation's exports is higher than the total value of its imports.
Shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports.
Balance of Payments
A measure of the total flow of money into or out of a country.
Balance of Payments Surplus
Overage that occurs when more money flows into a nation than out of that nation.
Balance of Payments Deficit
Shortfall that occurs when more money flows out of a nation than into a nation.
A measurement of the value of ones nation's currency relative to the currency of other nations.
International trade that involves the barter of products for products than for currency.
Contracting with foreign suppliers to produce products usually at a fraction of the cost of domestic production.
Buying products domestically that have been produced or grown in foreign nations.
Selling products in foreign nations that have been produced or grown domestically.
Authority granted by a domestic firm to a foreign firm for the rights to produce and market its products or to use its trademark/patent rights in a defined geographical area.
A specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements.
When firms either acquire foreign fimrs or develop new facilities from the ground up in foreign countries.
When two or more companies join forces- sharing resources, risks and profits, but not actually merging companies- to pursue specific opportunities.
A voluntary agreement under which two or more people act as co-owners of a business for profit.
An agreement btw two or more firms to jointly pursue a specific opportunity without actually merging their business. Typically involve less formal, less encompassing agreements than partnerships.
Differences among cultures in language, attitudes, and values.
A country's physical facilities that support economic activity
National policies designed to restrict international trade, usually with the goal of protecting domestic businesses.
Taxes levied against imports.
Limitations on the amount of specific products that may be imported from certain countries during a given time period.
Voluntary Export Restraints (VER)
limitations on the amount of specific products that one nation will export to another nation.
A complete ban on international trade of a certain item, or a total halt in trade with a particular nation.
The unrestricted movement of goods and services across international borders.
General Agreement on Tariffs and Trade (GATT)
An international trade treaty designed to encourage worldwide trade among its members.
World Trade Organization (WTO)
A permanent global institution to promote international trade and to settle international trade disputes.
An international cooperative of 186 member countries, working together to reduce poverty in the developing world.
International Monetary Fund (IMF)
An international organization of 186 members nations that promote international ecomonic cooperation and stable growth.
A group of countries that has reduced or even elimanted tariffs, allowing for the free flow of goods among the member nations.
A group of countries that has eliminated tariffs and harmonized trading rule to faciliate the free flow of goods among the member nations.
NAFTA (North American Free Trade Agreement)
the treaty among the US, Mexico, and Canada elimated trade barriers and investment restrictions over a 15 year period since 1994.
The worlds largest common market, composed of 27 countries.
A set of beliefs about right and wrong, good and bad.
Universal Ethical Standards
Ethical norms that apply to all people across a broad spectrum of situations.
The application of right and wrong, good and bad in a business setting.
A decision that involves a conflict of values; every potential course of action has some significant negative consequences.
Code of Ethics
A formal, written document that defines the ethical standards of an organization and give employees the information they need to make ethical decisions across a range of situations.
Employees who report their employer's illegal or unethical behavior to either the authorities or the media.
The obligation of a business to contribute to society.
Any groups that have a stake or a personal interest in the performance and actions of an organization.
A social movement that focuses on four key consumer rights:
1. The right to be safe.
2. The right to be informed.
3. The right to choose.
4. The right to be heard.
The strategy of deliberately designing products to fail in order to shorten the time between purchases.
Sarbanes-Oxley Act of 2002
Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict of interest issues and require financial officers and CEO's to certify the validity of their finacial statements.
Sarbanes Oxley Act of 2002
Federal legisilation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict of interest issues and require financial offiers and CEO's to certify the validity of theri financial statements.
All business donations to nonprofit groups, including money, products, and employee time.
Marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.
Business contributions to the community through the actions of the business itself rather than donations and time.
Doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs.
Refers to the amount of harmful greenhouse gases that a firm emits throught its operations, both directly and indirectly.
Developing and promoting environmentally sound products and practices to gain a competitive edge.
A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals.
Human Resource Management
The management function foucsed on maximizing the effectiveness of the workforce by recruiting word-class talent, promoting career development, and determinging workforce startegies to boost organizational effectiveness.
The examination of tasks that are assigned to each poisiton, independent of who might be holding the job at any specific time.
An explanation of the responsibilites for a specific position.
The specific qualifitcations necessary to hold a particular position.
The process of seeking employeers who are currently within the firm to fill open positions.
The process of seeking new employees from outside the firm.
An interviewing apporach that involves developing a list of questiosn beforehand and asking the same questions in the same order to each candidate.
A specific timeframe ( typically 3-6 months) during which a new hire can prove his or her worth on the job before the hire becomes permanent.
Employees who do not expect regular, full time jobs including temporary full-time workers, independent contract agency workers.
The first step in the training and development process, designed to introduce empoyees to the company culture, and provide key administrative information.
A trainign approach that requires employees to simply beging their job- sometimes guidedby more experienced employees- and to learn as they go.
Structured training programs that mandate that each beginner serve as an assistant to a fully trained worker before gaining full credentials to work in the field.
Programs that help current and potential executives develop the skilsl they need to move into leadership positions.
A formal feedback process that requires managers to give their subordinates feed back on a one-to-one basis, typically by comparing actual results to expected results.
The combination of pay and benefits that employees receive in exchange for their work.
The pay that employees receive in exchange for the number of hours or days that they work.
Noncash compensation, including programs such as health insurnace, vacation, and child care.
Cafeteria Style Benefits
An apporach to employee benefits that gives all employees a set dollar amount that they spend on company benefits, allocated however they wish within broad limitations.
A scheduling option that allows workers to choos when they start and finish their workdays, as long as they complete the required number of hours.
A version of flextime scheduling that allows employees to work a fulltime number of hours in less than the standard workweek.
Working remotely, most often from home, and connecting to the office via phone lines, fax machines, and broadband networks.
Civil Rights Act of 1964
Federal Legislation that prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privleges of employment based on race, color, religion, sex, or national origin.
A portion of the Civil Rights Act of 1964 that prohibits discrimination in hiring, firing, compensationg, apprenticeships, training, terms, conditions, or priviliges of employment based on race, religion, color, sex, or national origin for employers with 15 or more workers.
Equal Employment Opportunity Commission (EEOC)
A federal agency designed to regulate and enforce the provisions of Title VII.
Policies meant to increase employment and educational opportunities for minority gorups defined by race, ethinciy, or gender.
Workplace discrimination against a person based on his or her gender.
A form of business ownership with a single owner who usually actively manages the company.
A voluntary agreement under which two or more people act as co-owners of a business for profit.
A partnership in which all partners can take an active role in managing the business and have unlimited liability for any claims against the firm.
A form of business ownership in which the business is considered a legal entity that is seperate and distinct from its owners.
Articles of Incorporation
The document filed with a state government to establish the existence of a new corporation.
When owners are not personally liable for claims against their firm. Owners
may lose their investment in the company, but their personal assets are protected.
Limited Liability Company (LLC)
A form of business ownership that offers both limited liabiliity to its owners and flexible time treatment.
A partnership that includes at least one general partner who actively manages the company and accpets unlimited liability and one limited partner who gives up the right to activley manage the company in exchange for limited liability.
Limited Liability Company
A form of business ownership that offers both limited liability to its owners and flexible tax treatment.
The most common type of business corporation, where ownership offers limited liability to all of its owners, also called stockholders.
The basic rules governing how a corporation conducts its business
An owner of a corporation.
An organization that pools contributions from investors, clients, or depositors and uses these funds to buy stocks and other securities.
Board of Directors
The individiuals who are elected by stock holders of a corporation to represent their interest.
A form of corporation that avoids double taxation by having its income taxed as if it were a partnership.
Statutory Close Corporation
A corporation that does not seek to earn a profit and differs in several fundamental respects from C corporations.
A corporate restructuing in which one firm buys another.
A corporate restructuring that occurs when two formerly independent business entities combin to form a new organization.
The transfer of total or partial ownership of some of a firm's assets to investors or to another company
A combination of two firms that are in the same industry
A combination of firms at different stages in the production of a good or service.
A combination of two firms that are in unrelated industries.
A licensing arrangement whereby a franchisor allows franchisees to use its name, trademark, products, business methods, and other property in exchange for monetary payments and other considerations.
The business entity in a franchise relationship that allows others to operate their business using resources it supplies in exchange for money and other considerations.
The party in a franchise relationship that pays for the right to use resources supplied by the franchisor.
A type of franchising agreement in which the franchisor makes a product and licenses the franchisee to sell it.
The contractual arrangement between a franchisor and a franchisee that spells out the duties and responsiblities of both parties.
Franchise Disclosure Document (FDD)
A detailed description of all aspects of a franchise that the franchisor must provide to the franchisee at least 14 calendar days before the franchise agrreement is signed.
People who risk their time, money, and other resources to start and manage a business.
Internal Locus of Control
A deep seated sense that the individual is personally responsible for what happens in his or her life.
External Locus of Control
A deep seated sense that forces other than the individual are responsible for what happens in his or her life.
Individuals who invest in start up companies with high growth potential in exchange for a share of ownership.
Venture Capital Firms
Companies that invest in start up businesses with high growth potential in exchange for a share of ownership.
A small segment of a market with fewer competitors than the market as a whole, attrative to small firms.
Small Business Administration (SBA)
An agency of the federal government designed to maintain and strengthen the nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses.
Small Business Development Centers (SBDCs)
Local offices, affiliated with the Small Business Administration, that provide comprehensive management assistance to current prospective small business owners.
SCORE (Service Corps of Retired Executives)
An organization, affiliated with Small Business Administration, that provides free, comprehensive business counseling for small business owners from qualified volunteers.
A formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.