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Baby boom

refers to the high birth rate period from 1945-1965

Baby bust

refers to the low birth rate period following the baby boom period


an organization that produces or distributes a good or service for a profit

Business ethics

a collection of principles and rules of conduct based on what is right and wrong for an organization

Capital goods

buildings tools machines and other equipment that are used to produce other goods but do not directly satisfy human wants


an economic political system in which private citizens are free to go into business for themselves to produce whatever they choose to produce and to distribute what they produce as they please

Command economy

an economic system in which the method for determining what, how, and for whom goods and services are produced is decided by a central planning authority

Commercial business

firms engaged in marketing in finance and in furnishing services


forced socialism where all or almost all the productive resources of a nation are owned by the government

Comparable worth

paying workers equally for jobs with similar but not identical job requirements


rivalry among sellers for consumers' dollars

Consumer goods

products produced for sale to individuals and families for person use


refers to the number of similar products that will be bought at a given time at a given price

Domestic goods

products made by firms in the United States


cutting back on the goods and services provided and thereby shrinking the size of a firm and the number of employees

Economic system

an organized way for a country to decide how to use its productive resources

Economic want

the desire for scarce material goods and services


the body of knowledge that relates to producing and using goods and services that satisfy human wants


occurs when an organization makes the right decisions in deciding what products or services to offer customers or other users


occurs when an organization produces needed goods or services quickly at low cost


(1) letting workers decide how to perform their work tasks and offer ideas on how to improve the work process; (2) the authority given to individual employees to solve problems on the job with available resources


a person who starts manages and owns a business

Factors of production

land labor capital goods and management—the four basic resources that are combined to create useful goods and services


deals with all money matters related to running a business

Foreign good

products made by firms in other countries


a legal agreement between a company and a distributor to sell a product or service under special conditions


the distributor of a franchised product or service


the parent company of a franchise agreement that provides the product or service

Glass ceiling

an invisible barrier to job advancement

Global competition

the ability of profit-making organizations to compete with other businesses in other countries

Gross Domestic Product (GDP)

the total market value of all goods produced and services provided in a country in a year

Industrial business

firms that produce good that are often used by other businesses or organizations to make things


an employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product process or service


the human effort either physical or mental that goes into the production of goods and services

Labor force

most people aged 16 or over who are available for work whether employed or unemployed

Labor participation rate

the percentage of the labor force either employed or actively seeking employment

Manufacturing firm

businesses that produce goods


the process of planning and executing the conception pricing promotion and distribution of ideas goods and services to create exchanges that satisfy individual and organizational objectives

Market economy

an economic system that determines what how and for whom goods and services are produced by coordinating individual choices through arrangements that aid buying selling goods and services

Mass production

an assembly process in which a large number of products is produced each of which is identical to the next

Mixed economy

an economic system in which a combination of a market and a command economy is blended together to make decisions about what how and for whom goods and services are produced


exists when competition is lacking for a product or service or when producers are in a position to control the supply and price of goods or services


the quantity or amount produced within a given time


when a state or country transfers its authority to provide a good or service to individuals or businesses

Service firm

business that provide assistance to satisfy specialized needs through skilled workers

Social responsibility

the duty of a business to contribute to the well-being of society


an economic-political system in which the government controls and regulates the means of production


the owners customers suppliers employees creditors government the general public and other groups who are affected by a firm's action


refers to the number of similar products that will be offered for sale at a particular time and at a particular price

Total Quality Management (TQM)

a commitment to excellence that is accomplished by teamwork and continual improvement

Underground economy

income that escapes being recorded in the GDP


the ability of a good or service to satisfy a want

Assessed valuation

the value of property determined by tax officials


a legal process that allows selling assets to pay off debts

Business plan

a written description of the business and its operations with an analysis of the opportunities and risks it faces


an official document granted by a state giving power to run a corporation


a business owned and operated by its user-members for the purpose of supplying themselves with goods and service


similar to a patent in that the federal government gives an author the sole right to reproduce, publish, and sell literary or artistic work for the life of the author plus 70 years


a business owned by a group of people and authorized by the state in which it is located to act as though it were a single person


those to whom money is owed


profits distributed to stockholders on a per-share basis

Excise tax

a sales tax that applies only to selected goods and services such as gasoline

Income tax

a tax levied against the profits of business firms and against earning of individuals

Interstate commerce

business operations and transactions that cross over state lines

Intrastate commerce

business transacted within a state


a way to limit and control those who plan to enter certain types of businesses


a business owned by two or more persons


an agreement in which the federal government gives an inventor the sole right for 20 years to make use and sell an invention

Progressive tax

tax based on the ability to pay

Property tax

a levy on material goods owned

Proportional tax

tax rate remains the same regardless of the amount on which the tax is imposed


a written authorization for someone to vote in behalf of the person signing the proxy

Regressive tax

taxation wherein the actual tax rate decreases as the taxable amount increases

Sales tax

a tax levied on the retail price of goods and services at the time they are sold


equal parts of the division of ownership of a corporation

Sole proprietorship

a business owned and managed by one person


owners of a corporation


a distinguishing name symbol or special mark placed on a good or service that is legally reserved for the sole use of the owner

Bricks-and-mortar business

businesses that complete most of their business activities at a physical location rather than through the Internet Browser - a program that permits you to navigate and view Web pages

Channel of communication

the means by which a message is conveyed

Chief information officer (CIO)

the top computer executive


refers to the sharing of information which results in a high degree of understanding between the message sender and receiver

Communication network

a structure through which information flows in a business


a situation that develops when one person interferes with the achievement of another's goals


evaluating results to determine if the company's objectives have been accomplished as planned

Decision support system (DSS)

a system that helps managers consider alternatives in making specific decisions


a science of adapting equipment to the work and health needs of people

Executive information system (EIS)

combines and summarizes ongoing transactions within the company to provide top-level executives with information needed to make decisions about company goals and direction


a system using special software that screens people who enter or exit a network by requesting passwords

Internet service provider (ISP)

a service that provides Internet access


a person who completes all four management functions on a regular basis and has authority over other jobs and people


the process of accomplishing the goals of an organization through the effective use of people and other resources

Management information system (MIS)

integrates data from various departments to make it available to help managers with daily business operations

Personal digital assistant (PDA)

a small computer-like device that can send and receive messages wirelessly

Search engine

a program that assists in locating information on the Internet


allowing employees to work at home using computers rather than at the business


the obligation to accept responsibility for the outcomes of assigned tasks

Achievement need

take personal responsibility for work; set personal goals; want immediate feedback on work

Affiliation need

concerned about relationships with others; work to get along well and fit in with a group

Autocratic leader

one who gives direct clear and precise orders with detailed instructions as to what when and how work is to be done

Centralized organization

all major planning and decision making is done by a group of top managers in the business

Decentralized organization

a business is divided into smaller operating units and managers are given almost total responsibility

Democratic leader

one who encourages workers to share in making decisions about work-related problems


letting workers decide how to perform their work tasks and offer ideas on how to improve the work process


a top-level manager who spends almost all of his or her time on management functions

Flattened organization

one with fewer levels of management than traditional structures

Human relations

how well people get along with each other when working together


helping employees to work effectively


the ability to influence individuals and groups to achieve organizational goals

Leadership style

the general way a manager treats and directs employees

Line organization

all authority and responsibility may be traced in a direct line from the top executive down to the lowest employee level in the organization

Matrix organization

combines workers into temporary work teams to complete specific projects

Mission statement

a short specific statement of the purpose and direction of the business


the set of factors that cause a person to act in a certain way


factors that increase job satisfaction

Open leader

a manager who gives little or no direction to workers

Operational planning

short -term planning that identifies specific activities for each area of the business

Organization chart

a visual device that shows the structure of an organization and the relationships among workers and divisions of work


determining how plans can most effectively be accomplished; arranging resources to complete work


analyzing information and making decisions about what needs to be done


guidelines used in making decisions regarding specific recurring situations

Power need

desire to influence and control others and to be responsible for a group's activities


a list of steps to be followed for a performing certain work

Process improvement

efforts to increase the effectiveness and efficiency of specific business operations

Situational leader

one who understands employees and job requirements and matches actions and decisions to the circumstances

Span of control

the number of employees who are directly supervised by one person


a specific measure by which something is judged

Strategic planning

long-term planning that provides broad goals and directions for the entire business


a manager whose main job is to direct the work of employees

SWOT analysis

an examination of an organization's internal strengths and weaknesses as well as opportunities and threats from its external environment

Unity of command

means that no employee has more than one supervisor at a time


the difference between current performance and the standard

Work team

a group of individuals who cooperate to achieve a common goal


A systematic process of recording and reporting the financial information resulting from business transactions

Accounting equation

Asset's = Liabilities + Capital

Accounts payable

Money owed for credit purchases

Accounts receivable

the amount owed by customers


persons who calculate insurance rates


things owned, such as cash and buildings

Balance sheet

a financial statement that lists the assets, liabilities, and capital of a business


an institution that accepts demand deposits and makes commercial loans


persons who receive a life insurance payment on the death of an insured person


a long-term written promise to pay a definite sum of money at a specified time


provides payment of damages to people who have losses resulting from the negligence or dishonesty of an employee or from the failure of the business to complete a contract

Book value

the value of a share of stock that is found by dividing the net worth (assets minus liabilities) of the corporation by the total number of shares outstanding


a financial plan extending usually for one year


earning power


what a business is worth after subtracting liabilities from assets

Certificate of Deposit (CD)

a savings account that requires an investor to deposit a specified sum for a fixed period at a fixed interest rate

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