Understanding Business (terms)
Glossary from Understanding Business
Terms in this set (519)
401 (k) plan
A savings plan that allows you to deposit pretax dollars and whose earnings compound tax free until withdrawal, when the money is taxed at ordinary income tax rates.
A special price or some other benefit that not all people get.
The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions.
A six-step procedure that results in the preparation and analysis of the major financial statements.
One company's purchase of the property and obligations of another company.
The people who calculate the chance of loss and the premiums necessary to cover losses.
administered distribution system
A distribution system in which producers manage all of the marketing functions at the retail level.
Federal or state institutions and other government organizations created by Congress or state legislatures with delegated power to pass rules and regulations within their mandated area of authority.
Paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message.
Employment activities designed to "right past wrongs" by increasing opportunities for minorities and women.
agency shop agreement
Clause in a labor-management agreement that says employers may hire nonunion workers; employees are not required to join the union but must pay a union fee.
Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods.
American Federation of Labor (AFL)
An organization of craft unions that championed fundamental labor issues; founded in 1886.
A yearly statement of the financial condition, progress, and expectations of an organization.
A contract to make regular payment to a person for life or for a fixed period.
Training programs involving a period during which a learner works alongside an experienced employee to master the skills and procedures of a craft.
The agreement to bring in an impartial third party (a single arbitrator or a panel of arbitrators) to render a binding decision in a labor dispute.
That part of the production process that puts together components.
Economic resources (things of value) owned by a firm.
The job of reviewing and evaluating the records used to prepare a company's financial statements.
Leadership style that involves making managerial decisions without consulting others.
automatically fed to a computer
Standard procedure of inputting specific information into a computer on a regular basis.
balance of payments
The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
balance of trade
A nation's ratio of exports to imports.
The financial statement that reports a firm's financial condition at a specific time.
Talked about in an exaggerated way.
A promise that the bank will pay some specified amount at a particular time.
The legal process by which a person, business, or government entity unable to meet financial obligations is relieved of those among creditors, allowing creditors to get at least part of their money and freeing the debtor to begin anew.
Range of options between the initial and final offer that each party will consider before negotiations dissolve or reach an impasse.
The trading of goods and services for other goods and services directly.
Situation where the stock market is declining in value and investors feel it will continue to decline.
been there, done that
Comparing an organization's practices, processes, and products against the world's best.
Dividing the market by determining which benefits of the product to talk about.
A corporate certificate indicating that a person has lent money to a firm.
The recording of business transactions.
The last line in a profit and loss statement; it refers to net profit.
Net income or loss a firm incurred from operations.
The loss of the best and brightest people to other countries.
Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas.
A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.
The linking of a brand to other favorable images.
How quickly or easily a given brand name comes to mind when a product category is mentioned.
The combination of factors-such as awareness, loyalty, perceived quality, images, and emotions-that people associate with a given brand name.
The degree to which customers are satisfied, like the brand, and are committed to further purchase.
A manager who has direct responsibility for one brand or one product line; called a product manager in some firms.
A word, letter, or group of words or letters that differentiates one seller's goods and services.
That part of the brand consisting of a word, letter, or group of words or letters comprising a name that differentiates a seller's goods or services from those of competitors.
breach of contract
When one party fails to follow the terms of a contract.
The process used to determine profitability at various levels of sales.
The best of times for a person or organization.
Technology that offers users a continuous connection to the Internet and allows them to send and receive mammoth files that include voice, video, and data much faster than ever before.
A financial plan that sets forth management's expectations, and, on the basis of those expectations, allocates the uses of specific resources throughout the firm.
Situation where the stock market is increasing in value and investors feel it will continue to grow.
Grouping two or more products together and pricing them as a unit.
An organization with many layers of managers who set rules and regulations and oversee all decisions.
Any activity that seeks to provide goods and services to others while operating at a profit.
The periodic rises and falls that occur in all economies over time.
The surrounding factors that either help or hinder the development of businesses.
Rules, statutes, codes, and regulations that are established to provide a legal framework within which business may be conducted and that are enforceable by court action.
A detailed written statement that describes the nature of the business will have in relation to competition, and the resources and qualifications of the owner(s).
business-to-business (B2B) market
All the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others.
buying stock on margin
Purchasing stocks by borrowing some of the purchase cost from the brokerage firm.
cafeteria-style fringe benefits
Fringe benefits plan that allows employees to choose the benefits they want up to a certain dollar amount.
cannibalize a business
One franchise pulls business away from another franchise.
A budget that highlights a firm's spending plans for major asset purchases that often require large sums of money.
Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.
The positive difference between the purchase price of a stock and its sale price.
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
A budget that estimates a firm's projected cash inflows and outflows that the firm can use to plan for any cash shortages or surpluses during a given period.
The difference between cash coming in and cash going out of a business.
cash flow forecast
Forecast that predicts the cash inflows and outflows in future periods, usually months or quarters.
Wholesalers that serve mostly smaller retailers with a limited assortment of products.
Customers who attend the opening of a new business hoping to see or meet a celebrity.
A very important position.
An organization structure in which decision-making authority is maintained at the top level of management at the company's headquarters.
certificate of deposit (CD)
A time-deposit (savings) account that earns interest to be delivered at the end of the certificate's maturity date.
Formal process whereby a union is recognized by the National Labor Relations Board (NLRB) as the bargaining agent for a group of employees.
certified internal auditor (CIA)
An accountant who has a bachelor's degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors.
certified management accountant (CMA)
A professional accountant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the the Institute of Certified Management Accountants.
certified public accountant (CPA)
An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants.
chain of command
The line of authority that moves from the top of a hierarchy to the lowest level.
channel of distribution
A whole set of marketing intermediaries, such as wholesalers and retailers that join together to transport and store goods in their path (or channel) from producers to consumers.
climbed the ladder
Promoted to higher-level jobs.
closed shop agreement
Clause in a labor-management agreement that specified workers had to be members of a union before being hired (was outlawed by the Taft-Hartley Act in 1947).
The process whereby union and management representatives form a labor-management agreement, or contract, for workers.
Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow.
A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.
commercial finance companies
Organizations that make short-term loans to borrowers who offer tangible assets as collateral.
Unsecured promissory notes of $100,000 and up that mature (come due) in 270 days or less.
Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers.
A securities exchange that specializes in the buying and selling of precious metals and minerals (e.g., silver, foreign currencies, gasoline) and agricultural goods (e.g., wheat, cattle, sugar).
The body of law that comes from decisions handed down by judges; also referred to as unwritten law.
A regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. An example is the European Union.
The most basic form of ownership in a firm; it confers voting rights and the right to share in the firm's profits through dividends, if offered by the firm's board of directors.
An economic and political system in which the state (the government) makes all economic decisions and owns almost all the major factors of production.
The concept that people in jobs that require similar levels of education, training, or skills should receive equal pay.
comparative advantage theory
Theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently.
competing in time
Being as fast as or faster than competition in responding to consumer wants and needs and getting goods and services to prices.
A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors' prices.
compliance-based ethics codes
Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.
Work schedule that allows an employee to work a full number of hours per week but in fewer days.
computer-aided design (CAD)
The use of computers in the design of products.
computer-aided manufacturing (CAM)
The use of computers in the manufacturing of products.
computer-integrated manufacturing (CIM)
The uniting of computer-aided design with computer-aided manufacturing.
Taking a product idea to consumers to test their reactions.
Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.
The joining of firms in completely unrelated industries.
Congress of Industrial Organizations (CIO)
Union organization of unskilled workers; broke away from the American Federation of Labor (AFL) in 1935 and rejoined it in 1955.
Something of value; consideration is one of the requirements of a legal contract.
A salesperson who begins by analyzing customer needs and then comes up with solutions to those needs.
All the individuals or households that want goods and services for personal consumption or use.
consumer price index (CPI)
Monthly statistics that measure the pace of inflation or deflation.
A plan where you have a fixed "spending account," funded by your employer, which you can use to pay for office visits, prescription drugs, and routine medical procedures.
A social movement that seeks to increase and strengthen the rights and powers of buyers in relation to sellers.
The process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives.
Workers who do not have the expectation of regular, full-time employment.
A production process in which long production runs turn out finished goods over time.
A legally enforceable agreement between two or more parties.
Set of laws that specify what constitutes a legally enforceable agreement.
A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trademark; also called outsourcing.
contractual distribution system
A distribution system in which members are bound to cooperate through contractual agreements.
Buying stock when everyone else is selling or vice versa.
A management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not.
convenience goods and services
Products that the consumer wants to purchase frequently and with a minimum of effort.
conventional (C) corporation
A state-chartered legal entity with authority to act and have liability separate from its owners.
Pieces of information, such as registration data or user preferences, sent by a website over the Internet to a Web browser that the browser software is expected to save and send back to the server whenever the user returns to that website.
cooking the books
Making accounting information look better than it actually is to outside observers and users of financial information of a company.
When workers in a critical industry return to their jobs while the union and management continue negotiations.
A business owned and controlled by the people who use it-producers, consumers, or workers with similar needs who pool their resources for mutual gain.
A document that protects a creator's rights to materials such as books, articles, photos, and cartoons.
Those functions that the organization can do as well as or better than any other organization in the world.
In a flextime plan, the period when all employees are expected to be at their job stations.
corporate distribution system
A distribution system in which all of the organizations in the channel of distribution are owned by one firm.
Dimension of social responsibility that includes charitable donations.
Dimension of social responsibility that refers to the position a firm takes on social and political issues.
Dimension of social responsibility that includes everything from hiring minority workers to making safe products.
corporate social responsibility
A business's concern for the welfare of society.
A legal entity with authority to act and have liability separate from its owners.
cost of capital
The rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders.
cost of goods sold
A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.
People who sit and watch TV for hours at a time.
A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services.
counting on it
An organization of skilled specialists in a particular craft or trade.
Nonprofit, member-owned financial cooperatives that offer the full variety of banking services to their members.
In a PERT network, the sequence of tasks that takes the longest time to complete.
cross-functional self-managed teams
Groups of employees from different departments who work together on a long-term basis.
Items that can or will be converted into cash within one year.
customer relationship management (CRM)
The process of learning as much as possible about customers and doing everything you can to satisfy them-or even exceed their expectations-with goods and services over time.
The monetary settlement awarded to a person who is injured by a breach of contract.
data processing (DP)
Name for business technology in the 1970s; included technology that supported an existing business and was primarily used to improve the flow of financial information.
An electronic storage file where information is kept; one use of databases is to store vast amounts of information about consumers.
dealer (private-label) brands
Products that don't carry the manufacturer's name but carry a distributor or retailer's name instead.
Bonds that are unsecured (i.e., not backed by any collateral such as equipment).
An electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account.
Funds raised through various forms of borrowing that must be repaid.
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.
The process by which workers take away a union's right to represent them.
Choosing among two or more alternatives.
A situation in which prices are declining.
The quantity of products that people are willing to buy at different prices at a specific time.
The technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from the depositor.
Dividing the market by age, income, and education level.
The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.
The dividing of organizational functions into separate units.
The systematic write-off of the cost of a tangible asset over its estimated useful life.
A severe recession.
Government withdrawal of certain laws and regulations that seem to hinder competition.
Lowering the value of a nation's currency relative to other currencies.
Any activity that directly links manufacturers or intermediaries with the ultimate consumer.
Selling to consumers in their homes or where they work.
Insurance that pays part of the cost of a long-term sickness or an accident.
The interest rate that the Fed charges for loans to member banks.
A situation in which price increases are slowing (the inflation rate is declining).
Buying several different investment alternatives to spread the risk of investing.
Part of a firm's profits that may be distributed to stockholders as either cash payments or additional shares of stock.
The concept of writing every business transaction in two places.
Dow Jones Industrial Average (the Dow)
The average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time.
Wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.
Selling products in a foreign country at lower prices than those charged in the producing country.
The buying and selling of goods and services over the Internet.
When someone other than the addressee reads e-mail messages.
The money available in the economy.
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
economies of scale
The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.
electronic check conversion (ECC)
An electronic funds transfer tool that converts a traditional paper check into an electronic transaction at the cash register and processes it through the Federal Reserve's Automated Clearing House.
electronic funds transfer (EFT) system
A computerized system that electronically performs financial transactions such as making purchases, paying bills, and receiving paychecks.
Selling goods and services to ultimate customers (e.g., you and me) over the Internet.
A complete ban on the import or export of a certain product or stopping all trade with a particular country.
The activity that introduces new employees to the organization; to fellow employees; to their immediate supervisors; and to the policies, practices, and objectives of the firm.
employee stock ownership plans (ESOPs)
Programs that enable employees to buy part or total ownership of the firm.
Giving frontline workers the responsibility, authority, and freedom to respond quickly to customer requests.
Giving workers the education and tools they need to make decisions.
enterprise resource planning (ERP)
A computer application that enables multiple firms to manage all of their operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data.
Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.
A person who risks time and money to start and manage a business.
A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.
Accepting the risk of starting and running a business.
The process of identifying the factors that can affect marketing success.
Funds raised from operations within the firm or through the sales of ownership in the firm.
The idea that employees try to maintain equity between inputs and outputs compared to others in similar positions.
Standards of moral behavior, that is, behavior that is accepted by society as right versus wrong.
everyday low pricing (EDLP)
Setting prices lower than competitors and then not having any special sales.
The value of one nation's currency relative to the currencies of other countries.
Distribution that sends products to only one retail outlet in a given geographic area.
A person who assembles and values your estate, files income and other taxes, and distributes assets.
Victor Vroom's theory that the amount of effort employees exert on a specific task depends on their expectations of the outcome.
Selling products to another country.
Specific representations by the seller that buyers rely on regarding the goods they purchase.
Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use.
A semiprivate network that uses Internet technology and allows more than one company to access the same information or allows people on different servers to collaborate.
Something given to you by someone else as recognition for good work; extrinsic rewards include pay increase, praise, and promotions.
The physical arrangement of resources (including people) in the production process.
The process of selecting a geographic location for a company's operations.
The process of selling accounts receivable for cash.
factors of production
The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge.
Federal Deposit Insurance Corporation (FDIC)
An independent agency of the U.S. government that insures bank deposits.
The function in a business that acquires funds for the firm and manages those funds within the firm.
Accounting information and analyses prepared for people outside the organization.
A process in which a firm periodically compares its actual revenues, costs, and expenses with its projected ones.
The job of managing a firm's resources so it can meet its goals and objectives.
Managers who make recommendations to top executives regarding strategies for improving the financial strength of a firm.
A summary of all the transactions that have occurred over a particular period.
first in, first out (FIFO)
An accounting method for calculating cost of inventory; it assumes that the first goods to come in are the first to go out.
The federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending.
Assets that are relatively permanent, such as land, buildings, and equipment.
flat organization structure
An organization structure that has few layers of management and a broad span of control.
Designing machines to do multiple tasks so that they can produce a variety of products.
Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours.
A small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues.
foreign direct investment
The buying of permanent property and businesses in foreign nations.
A company owned in a foreign country by another company (called the parent company).
The value added by the creation of finished goods and services, such as the value added by taking silicon and making computer chips or putting service together to create a vacation package.
The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.
The right to use a specific business's name and sell its products or services in a given territory.
An arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory.
A person who buys a franchise.
A company that develops a product concept and sells others the rights to make and sell the products.
The movement of goods and services among nations without political or economic obstruction.
A situation where all order seems to be lost in conducting business.
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows.
Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.
An organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination.
Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation to employees beyond base wages.
From the beginning.
fundamental accounting equation
Assets = liabilities + owners' equity; this is the basis for the balance sheet.
Commodities markets that involve the purchase and sale of goods for delivery sometime in the future.
Bar graph showing production managers what projects are being worked on and what stage they are in at any given time.
General Agreement on Tariffs and Trade (GATT)
A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions.
An owner (partner) who has unlimited liability and is active in managing the firm.
A partnership in which all owners share in operating the business and in assuming liability for the business's debts.
Nonbranded products that usually sell at a sizable discount compared to national or private-label brands.
Dividing the market by geographic area.
get in on the dough
Take the opportunity to make some money.
Popular film of the 1980s in which characters chase and capture ghosts. Inspired the song "Who You Going to Call? Ghostbusters!"
Concessions made by union members to management; gains from labor negotiations are given back to management to help employers remain competitive and thereby save jobs.
go for the gold
To work to be the very best (figuratively winning a gold medal).
go out with me
Go with me to dinner or to a movie or some other entertainment.
The broad, long-term accomplishments an organization wishes to attain.
The idea that setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions.
gone off the deep end
Doing something risky, almost crazy-like jumping into the deep end of a swimming pool when you can't swim.
Tangible products such as computers, food, clothing, cars, and appliances.
Doing things at work not associated with the job, such as talking with others at the drinking fountain.
government and not-for-profit accounting
Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, and others according to a duly approved budget.
A product whose production, use, and disposal don't damage to a duly approved budget.
A charge by employees that management is not abiding by the terms of the negotiated labor-management agreement.
gross domestic product (GDP)
The total value of goods and services produced in a country in a given year.
How much a firm earned by buying (or making) and selling merchandise.
Copy printed on paper.
The tendency for people to behave differently when they know they are being studied.
health maintenance organizations (HMOs)
Health care organizations that require members to choose from a restricted list of doctors.
He most important part of something; the central force or idea.
helped turn around
Helped reverse the downward trend.
A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.
high-low pricing strategy
Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors'.
The joining of two firms in the same industry.
human relation skills
Skills that involve communication and motivation; they enable managers to work through and with people.
human resource management
The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals.
In Herzberg's theory of motivating factors, job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.
If it isn't broken, don't fix it
Don't risk making things worse by changing things that don't need to be changed.
Guarantees legally imposed on the seller.
A limit on the number of products in certain categories that a nation can import.
Buying products from another country.
The area of logistics that involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers.
The financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, and the resulting net income.
Centers that offer new business low-cost offices with basic business services.
The terms of agreement in a bond issue.
An evaluation and unbiased opinion about the accuracy of a company's financial statements.
individual retirement account (IRA)
A taxderred investment plan that enables you (and your spouse, if you are married) to save part of your income for retirement; a traditional IRA allows people who quality to deduct from their reported income the money they put into an account.
Products used in the production of other products. Sometimes called business goods or B2B goods.
Labor organizations of unskilled and semiskilled workers in mass-production industries such as automobiles and mining.
A general rise in the prices of goods and services over time.
A full-length TV program devoted exclusively to promoting goods or services.
The system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that does not appear on any organization chart.
Technology that helps companies do business; includes such tools as automated teller machines (ATMs) and voice mail.
information technology (IT)
Technology that helps companies change business by allowing them to use new methods.
Adding value to products by opening two-way flows of information between marketing participants.
initial public offering (IPO)
The first public offering of a corporation's stock.
A court order directing someone to do something or to refrain from doing something.
An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.
Large organizations-such as pension funds, mutual funds, insurance companies, and banks-that invest their own funds or the funds of others.
The possibility of the policyholder to suffer a loss.
A risk that the typical insurance company will cover.
A written contract between the insured and an insurance company that promises to pay for all or part of a loss.
Long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value.
integrated marketing communication (IMC)
A technique that combines all the promotional tools into one comprehensive and unified promotional strategy.
integrity-based ethics codes
Ethical standards that define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
Distribution that puts products into as many retail outlets as possible.
interactive marketing program
A system in which consumers can access company information on their own and supply information about themselves in an ongoing dialogue.
Promotion process that allows marketers to go beyond a monologue, where sellers try to persuade buyers to buy things, to a dialogue in which buyers and sellers work together to create mutually beneficial exchange relationships.
The payment the issuer of the bond makes to the bondholders for use of the borrowed money.
A production process in which the production run is short and the machines are changed frequently to make different products.
The use of multiple modes of transportation to complete a single long-distance movement of freight.
Individuals and units within the firm that receive services from other individuals or units.
International Monetary Fund (IMF)
Organization that assists the smooth flow of money among nations.
The new Internet system that links government supercomputer centers and a select group of universities; it runs more than 22,000 times faster than today's public infrastructure and supports heavy-duty applications.
A companywide network, closed to public access, that uses Internet-type technology.
Creative people who work as entrepreneurs within corporations.
The personal satisfaction you feel when you perform well and complete goals.
An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart.
Specialists who assist in the issue and sale of new securities.
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social an economic benefits for all.
Bankruptcy procedures filed by a debtor's creditors.
Debt; abbreviation for "I own you."
A collection of the best practices for managing an organizations' impact on the environment.
The common name given to quality management and assurance standards.
A study of what is done by employees who hold various job titles.
A summary of the objectives of a job, the type of work to be done, the responsibilities and duties, the working conditions, and the relationship of the job to other functions.
A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment.
A motivational strategy that emphasizes motivating the worker through the job itself.
A job enrichment strategy that involves moving employees from one job to another.
An arrangement whereby two part-time employees share one full-time job.
The use of equipment that duplicates job conditions and tasks so that trainees can learn skills before attempting them on the job.
A written summary of the minimum qualifications required of workers to do a particular job.
A partnership in which two or more companies (often from different countries) join to undertake a major project.
The record book or computer program where accounting data are first entered.
The branch of government chosen to oversee the legal system through the court system.
Began quickly and eagerly without hesitation.
High-risk, high-interest bonds.
just-in-time (JIT) inventory control
A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line.
kick back and relax
To take a rest.
Knights of Labor
The first national labor union; formed in 1869.
Illegal copies of national brand-name goods.
A level of specific expertise.
Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm.
last in, first out (LIFO)
An accounting method for calculating cost of inventory; it assumes that the last goods to come in are the first to go out.
School-age children who come home to empty houses since all of the adults are at work.
law of large numbers
Principle that if a large number of people are exposed to the same risk, a predictable number of losses will occur during a given period of time.
Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives.
The production of goods using less of everything compared to mass production.
A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place.
letter of credit
A promise by the bank to pay the seller a given amount if certain conditions are met.
leave playing field
Treating everyone equally
Raising needed funds through borrowing to increase a firm's rate of return.
An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.
What the business owes to others (debts).
A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty).
The responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.
limited liability company (LLC)
A company similar to an S corporation but without the special eligibility requirements.
limited liability partnership (LLP)
A partnership that limits partners' risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision.
An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.
A partnership with one or more general partners and one or more limited partners.
line of credit
A given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily available.
An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.
Employees who are part of the chain of command that is responsible for achieving organizational goals.
How fast an asset can be converted into cash.
An attempt by management to put pressure on unions by temporarily closing the business.
The marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information form points of origin to points of consumption to meet customer requirements at a profit.
Borrowed capital that will be repaid over a specific period longer than one year.
Forecast that predicts revenues, costs, and expenses for a period longer than 1 year, and sometimes as far as 5 or 10 years into the future.
When a business's expenses are more than its revenues.
Money that can be accessed quickly and easily (coins and paper money, checks, traveler's checks, etc.).
Money included in M-1 plus money that may take a little more time to obtain (savings accounts, money market accounts mutual funds, certificates of deposit, etc.).
The part of economics study that looks at the operation of a nation's economy as a whole.
The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.
management by objectives (MBO)
A system of goal setting and implementation that involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.
The process of training and educating employees to become good managers and then monitoring the progress of their managerial skills over time.
Accounting used to provide information and analyses to managers within the organization to assist them in decision making.
Building systems and a climate that unite different people in a common pursuit without undermining their individual strengths.
manufacturers' brand names
The brand names of manufacturers that distribute products nationally.
People with unsatisfied wants and needs who have both the resources and the willingness to buy.
The price determined by supply and demand.
The process of dividing the total market into groups whose members have similar characteristics.
The process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives.
A three-part business philosophy: (1) a customer orientation, (2) a service orientation, and (3) a profit orientation.
Organizations that assist in moving goods and services from producers to industrial and consumer users.
The ingredients that go into a marketing program: product, price, place, and promotion.
The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions.
marriage of software, hardware, etc.
Combination of various technologies.
Maslow's hierarchy of needs
Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs.
Tailoring products to meet the needs of individual customers.
Developing products and promotions to please large groups of people.
master limited partnership (MLP)
A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax.
The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.
materials requirement planning (MRP)
A computer-based production management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place.
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure.
The exact date the issuer of a bond must pay the principal to the bondholder.
Tool used to evaluate or compare something.
The use of a third party, called a mediator, who encourages both sides in a dispute to continue negotiating and often makes suggestions for resolving the dispute.
An experienced employee who supervises, coaches, and guides lower-level employees by introducing them to the right people and generally being their organizational sponsor.
Independently owned firms that take title to (own) the goods they handle.
The result of two firms forming one company.
Nickname for McDonald's.
The part of economics study that looks at the behavior of people and organizations in particular markets.
Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.
The level of management that includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.
mine the knowledge
Make maximum use of the knowledge employees have.
An outline of the fundamental purposes of an organization.
Economic systems in which some allocation of resources is made by the market and some by the government.
The management of the money supply and interest rates.
Anything that people generally accept as payment for goods and services.
The amount of money the Federal Reserve Bank makes available for people to buy goods and services.
The market situation in which a large number of sellers produce products that are very similar but that are perceived by buyers as different.
A market in which there is only one seller for a product or service.
more than meets the eye
More than one can see with his or her own eyes; much is happening that is not visible.
In Herzberg's theory of motivating factors, job factors that cause employees to be productive and that give them satisfaction.
Ease of doing something by using the computer or Internet
muddy the water
Making things even more difficult than they currently are.
An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management.
An organization that buys stocks and bonds and then sells shares in those securities to the public.
mutual insurance company
A type of insurance company owned by its policyholders.
National Association of Securities Dealers Automated Quotations (NASDAQ)
A nationwide electronic system that communicates over-the-counter trades to brokers.
The sum of government deficits over time.
In tort law, behavior that causes unintentional harm or injury.
Forms of commercial paper (such as checks) that are transferable among businesses and individuals and represent a promise to pay a specified amount.
negotiated labor-management agreement (labor contract)
Agreement that sets the tone and clarifies the terms under which management and labor agree to function over a period of time.
net income or net loss
Revenue left over after all costs and expenses, including taxes, are paid.
network computing system (client/server computing)
Computer systems that allow personal computers (clients) to obtain needed information from huge databases in a central computer (the server).
Using communications technology and other means to link organizations and allow them to work together on common objectives.
The process of establishing and maintaining contacts with key managers in one's own organization and other organizations and using those contacts to weave strong relationships that serve as informal development systems.
The process of finding small but profitable market segments and designing or finding products for them.
Financial organizations that accept no deposits but offer many of the services provided by regular banks (pension funds, insurance companies, commercial finance companies, consumer finance companies, and brokerage houses).
An organization whose goals do not include making a personal profit for its owners or organizers.
North American Free Trade Agreement (NAFTA)
Agreement that created a free-trade area among the United States, Canada, and Mexico.
Specific, short-term statements detailing how to achieve the organization's goals.
Training that occurs away from the workplace and consists of internal or external programs to develop any of a variety of skills or to foster personal development.
A form of competition in which just a few sellers dominate the market.
Developing a unique mix of goods and services for each individual customer.
Training programs in which employees "attend" classes via the Internet.
on-the job training
Training in which the employee immediately begins his or her tasks and learns by doing, or watches others for a while and then imitates them, all right at the workplace.
open shop agreement
Agreement in right-to-work states that gives workers the option to join or not join a union, if one exists in their workplace.
The buying and selling of U.S. government bonds by the Fed with the goal of regulating the money supply.
operating (master) budget
The budget that ties together all of a firm's other budgets; it is the projection of dollar allocations to various costs and expenses needed to run or operate the business, given projected revenues.
Costs involved in operating a business, such as rent, utilities, and salaries.
The process of setting work standards and schedules necessary to implement the company's tactical objectives.
A specialized area in management that converts or transforms resources (including human resources) into goods and services.
A visual device that shows relationships among people and divides the organization's work; it shows who is accountable for the completion of specific work and who reports to whom.
organization (or corporate) culture
Widely shared values within an organization that provide unity and cooperation to achieve common goals.
A management function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives.
out of the office loop
Out of the line of communication that occurs in the workplace.
The area of logistics that involves managing the flow of finished products and information to business buyers and ultimate consumers (people like you and me).
Assigning various functions, such as accounting, production, security, maintenance, and legal work, to outside organizations.
over-the-counter (OTV) market
Exchange that provides a means to trade stocks not listed on the national exchanges.
The amount of the business that belongs to the owners minus any liabilities owed by the business.
participative (democratic) leadership
Leadership style that consists of managers and employees working together to make decisions.
A legal form of business with two or more owners.
A document that gives inventors exclusive rights to their inventions for 20 years.
pave the way
Process of making a task easier.
peanut butter and jelly
Popular combination for sandwich; the two are seen as perfect complementary products.
Strategy in which a product is priced low to attract many customers and discourage competition.
Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire.
Short for perquisites; compensation in addition to salary, such as day care or a company car.
The market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.
An evaluation in which the performance level of employees is measured against established standards to make decisions about promotions, compensation, additional training, or firing.
The face-to-face presentation and promotion of goods and services.
Adding value to products by having them where people want them.
A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.
piece of the action
A share in the opportunity.
A notice that you've lost your job.
To help as needed.
Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.
Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow-up service.
Decisions judges have made in earlier cases that guide the handling of new cases.
preferred provider organizations (PPOs)
Health care organizations similar to HMOs except that they allow members to choose their own physicians (for a fee).
Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold.
The fee charged by an insurance company for an insurance policy.
The procedure by which one or more dominant firms set the pricing practices that all competitors in an industry follow.
When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute.
Data that you gather yourself (not from secondary sources such as books and magazines).
principle of motion economy
Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions.
Accountants who work for a single firm, government agency, or nonprofit organization.
The process of solving the everyday problems that occur. Problem solving is less formal than decision making and usually calls for quicker action.
That part of the production process that physically or chemically changes materials.
producer price index (PPI)
An index that measures prices at the wholesale level.
Any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers, such as the brand.
Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.
The creation of real or perceived product differences.
Part of tort law that holds businesses liable for harm that results from the production, design, sale, or use of products they market.
product life cycle
A theoretical model of what happens to sales and profits for a product class over time.
A group of products that are physically similar or are intended for a similar market.
The combination of product lines offered by a manufacturer.
Putting products into TV shows and movie where they will be seen.
A process designed to reduce the number of new-product ideas being worked on at any one time.
The creation of finished goods and services using the factors of production: land, labor, capital, entrepreneurship, and knowledge.
The term used to describe all the activities managers do to help their firms create goods.
The amount of output you generate given the amount of input.
The amount of money a business earns above and beyond what it spends for salaries and other expenses.
program evaluation and review technique (PERT)
A method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project.
Giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid potential losses.
A written contract with a promise to pay a supplier a specific sum of money at a definite time.
All the techniques sellers use to motivate people to buy their products or services.
An effort by marketers to inform and remind people in the target market about products and to persuade them to participate in an exchange.
The combination of promotional tools an organization uses.
pros and cons
Arguments for and against something.
A person with the means to buy a product, the authority to buy, and the willingness to listen to a sales message.
Researching potential buyers and choosing those most likely to buy.
A condensed version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.
provided the spark
Supplied the energy that motivated others.
Dividing the market using the group's value, attitudes, and interests.
Pricing goods and services at price points that make the product appear less expensive than it is.
An accountant who provides his or her accounting services to individuals or businesses on a fee basis.
public domain software (freeware)
Software that is free for the taking.
public relations (PR)
The management function that evaluates public attitudes, changes policies and procedures in response to the public's requests, and executes a program of action and information to earn public understanding and acceptance.
Any information about an individual, product, or organization that's distributed to the public through the media and that's not paid for or controlled by the seller.