Understanding Business by Nickels (11e)

General Agreement on Tariffs and Trade (GATT)

A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions,

small business administration (SBA)

A U.S. governemnt agency that advises and assists small businesses by providing management training and financial advice and loans.

unsecured bond

A bond backed only by the reputation of the issuer; also called a debenture bond.

secured bond

A bond issued with some form of collateral.

trademark

A brand has exclusive legal protection for both its brand name and its design.

umbrella policy

A broadly based insurance policy that saves you money because you but all your insurance from one company.

cash budget

A budget that estimates cash inflows and outflows during a particular period like a month or a quarter.

capital budget

A budget that highlights a firm's spending plans for major asset purchases that often require large sums of money.

cooperative

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.

small business

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts.

sole proprietorship

A business that is owned, and usually managed by one person.

corporate social responsibility (CSR)

A business's concern for the welfare of society.

speculative risk

A chance of either profit or loss.

grievance

A charge by employees that management is not abiding by the terms of the negotiated labor-management agreement.

ISO 14000

A collection of the best practices for managing an organization's for managing an organization's impact on the environment.

state capitalism

A combination of freer markets and some governemnt control.

Web 3.0

A combination of technologies that adds intelligence and changes how people interact with the web, and vice versa (consists of the semantic web, mobile web, and immersive Internet).

foreign subsidiary

A company owned in a foreign country by another country, called the parent company.

limited liability company (LLC)

A company similar to an S corporation but without the special eligibility requirements.

franchisor

A company that develops a product concept and sells others the rights to make and sell the products.

intranet

A company-wide network, closed to public access, that uses Internet-type technology.

embargo

A complete ban on the import or export of a certain product, or the stopping of all trade with a particular country.

counter-trading

A complex form of bartering in which several countries may be involved, each trading goods for goods or service for services.

Uniform Commercial Code (UCC)

A comprehensive commercial law adopted by every state in the United States that covers sales laws and other commercial laws.

materials requirement (MRP)

A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place.

electronic funds transfer (EFT) system

A computerized system that electronically performs financial transactions such as making purchases, paying bills, and receiving paychecks.

prospectus

A condensed version of economic and financial information that a company must file with the SEC before issuing; the prospectus must be sent to prospective investors.

annuity

A contract to make regular payments to a person for life or for a fixed period.

bond

A corporate certificate indicating that a person has lent money to a firm (or a governemnt).

injunction

A court order directing someone to do something or to refrain from doing something.

oligopoly

A degree of competition in which just a few sellers dominate the market.

monopoly

A degree of competition in which only one seller controls the total supply of a product or service, and sets the price.

business plan

A detailed written statement that describes the natures of the business, the target market, the advantages the business will ave in relation to competition, and qualifications of the owner(s).

corporate distribution system

A distribution system in which all of the organizations in the channel of distribution are owned by one firm.

contractual distribution system

A distribution system in which members are bound to coopeate through contractual agreements.

administered distribution system

A distribution system in which members are bound to cooperate through contractual agreements.

patent

A document that gives investors exclusive rights to their inventions for 20 years.

will

A document that names the guardian for your children, states how you want your assets distributed, and names the executor for you estate.

copyright

A document that protects a creator's rights to materials such as books, articles, photos, paintings, and cartoons.

trade surplus

A favorable balance of trade; occurs when the value of a country's exports exceeds that of its imports.

savings and loan association (S&L)

A financial institution that accepts both savings and checking deposits and provides home mortgage loans.

budget

A financial plan that sets forth managements's expectations and on, the basis of those expectations, allocates the use of specific resources throughout the firm.

contract manufacturing

A foreign company's production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing.

social commerce

A form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services.

cloud computing

A form of virtualization in which a company's data and applications are stored at offsite data centers that are accessed over the Internet (the cloud).

infomercial

A full-length TV program devoted exclusively to promoting goods or services.

inflation

A general rise of the prices of goods and services over time.

line of credit

A given amount of unsecured short-termed funds a bank will lend to a business, provided the funds available.

licensing

A global strategy in which a firm (the licencor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty).

entrepreneurial team

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.

entrepreneurial term

A group of experienced people from different areas of business who join together to form a managerial term with the skills needed to develop, make, and market a new product.

product line

A group of products that are physically similar or are intended for a similar market.

job enlargement

A job enrichment strategy that involves combining a series of task into one challenging and interesting assignment.

corporation

A legal entity with authority to act and have liability apart from its owners.

partnership

A legal form of business with two or more owners.

contract

A legally enforceable agreement between tow or more parties.

import quota

A limit on the number of products in certain categories that a nation can import.

revolving credit agreement

A line of credit that's guaranteed but usually comes with a fee.

secured loan

A loan backed by collateral, something valuable such as property.

unsecured loan

A loan that doesn't require any collateral.

strategic alliance

A long-term partnership between two or more companies established to help each company build competitive market advantages.

planning

A management function that includes anticipiating trends and determining the vbest strategies and tactics to achieve organizational goals and objectives.

organizing

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.

staffing

A management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives.

controlling

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.

brand manager

A manager who had direct responsibility for one brand or one product line; called a product manager in some firms.

wholesale

A marketing intermediary that sells to other organzations.

podcasting

A meas of distributing multimedia digital files on the Internet for downloading to a portable media player.

cost of goods sold (or cost of goods manufactured)

A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.

gross output (GO)

A measure of total sales volume at all stages of productions.

program evaluation and review technique (PERT)

A method for analyzing the tasks involved in completing a given project, estimating the time needed to coplete each task, and identifying the minimum time needed to complete the total project.

job enrichment

A motivational strategy that emphasizes motivating the worker through the job itself.

brand

A name, symbol, or design (or combination thereof) that identifies the goods or services of one sellers and distinguishes them from the goods and services of competitors.

NASDAQ

A nationwide electronic system that links dealers across the nation so they can buy and sell securities electronically.

enterprise resources planning (ERP)

A newer version of materials requirement planning (MRP) that combines the computerized functions of all the divisions and subsidiaries of the firm - such as finance, human resources, and order fulfillment - into a single integrated software program that uses a single database.

general partnership

A partnership in which all owners share in operating the business and in assuming liability for the business's debts.

joint venture

A partnership in which two or more companies (often from different countries) join to undertake a major project.

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.

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.

limited partnership

A partnership with one or more general partners and one or more limited partners.

reserve requirement

A percentage of commercial banks' checking and saving accounts that must be physically kept in the bank.

entrepreneur

A person who RISKS time and money to start and manage a business.

executor

A person who assembles and values your estate, files income and other taxes, and distributes assets.

franchisee

A person who buys a franchise.

prospect

A person with the means to buy a product, the authority to buy, and the willingness to listen to a sales message.

invisible hand

A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all.

virus

A piece of programming code inserted unto other programming to cause some unexpected and, for the victim, usually undesirable event.

SWOT analysis

A planning tool used to analyze an organization's strengths, weakness, opportunities, and threats.

virtual private network (VPN)

A private data network that creates secure connections, or 'tunnels," over regular Internet lines.

product screening

A process designing to reduce the number of new-product ideas being worked on at any one time.

financial control

A process in which a firm periodically compares its actual revenues, costs, and expenses with its budget.

virtual networking

A process that allows software-based networked computers to run multiple operating systems and programs, and share storage.

just-in-time (JIT) inventory control

A production process in which a minimum process in which a minimum of inventory is kept on the premises ad parts, supplies, and other needs are delivered just in time to go on the assembly line.

continuous process

A production process in which long production runs turn out finished goods over time.

intermittent process

A production process in which the production run is short and the machines are changed frequently to make different products.

certified management account (CMA)

A professional accountant who has met certain educational and experience requirements, passes a qualifying exam, and been certified by the Institute of Certified Management Accounts.

commercial bank

A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and saving accounts and then uses some these funds to make loans.

small business investment company (SBIC) program

A program through which private investment companies licensed by the Small Business Administration lend money to small business.

letter of credit

A promise by the bank to pay the seller a given amount if certain conditions are met.

banker's acceptance

A promise that the bank will pay some specified amount at a particular time.

term-loan agreement

A promissory note that requites the borrower to repay the loan in specified installments.

sampling

A promotional tool in which a company lets consumers have a small sample for no charge.

word-of-mouth promotion

A promotional tool that involves people telling other people about products they've purchased.

Six Sigma quality

A quality measure that allows only 3.4 defects per million opportunities.

common market

A regional group countries that have a common external tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. An example is the European Union.

stockbroker

A registered representative who works as a market intermediary to buy and sell securities for clients.

sinking fund

A reserve account in which the issue of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.

un-insurable risk

A risk that no insurance company will cover.

insurable risk

A risk that the typical insurance company will cover.

401(k) plan

A savings plan that allows you to deposit pretax dollars and whose earning compound tax-free until withdrawal, when the money is taxed at ordinary income tax rates.

extravagant

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.

depression

A severe recession, usually accompanied by deflation.

disinflation

A situation in which price increases are slowing (the inflation rate is declining).

deflation

A situation in which prices are declining.

stagflation

A situation when the economy is slowing but prices are going up anyhow.

accounting cycle

A six-step procedure that results in the preparation and analysis of the major financial statements.

focus group

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.

comsumerism

A social movement that seeks to increase and strengthen the rights and powers of buyers in relation to sellers.

ledger

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 .

operations management

A specialized are in management that converts or transforms resources (including human resources) into goods and services.

conventional (C) corporation

A state-chartered legal entity with authority to act and have liability separate from its owners.

claim

A statement of loss that the insured sends to the insurance company to request payment.

trail close

A step in the selling process that consists of a question or statement that moves the selling process toward the actual close.

job analysis

A study of what employees do who hold various job titles.

financial statement

A summary of all financial transactions that have occurred over a particular period.

trial balance

A summary of all the financial data in the account ledgers that ensures the figures are correct and balanced.

job description

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.

hierarchy

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.

management by objectives (MBO)

A system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.

social audit

A systematic evaluation of an organization's progress onward implementing socially responsible and responsible and responsive programs.

tariff

A tax imposed on imports.

individual retirement account (IRA)

A tax-deferred 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 qualify to deduct from their reported income the money they put into an account.

integrated marketing communication (IMC)

A technique that combines all the promotional tools into one comprehensive, unified promotional strategy.

virtual corporation

A temporary networked organization made up of replaceable firms that join and leave as needed.

product life cycle

A theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline.

marketing concept

A three-part business philosophy: 1. a customer orientation 2. a service orientation 3. a profit orientation

certificate of deposit (CD)

A time-deposit (savings) account that earns interest to be delivered at the end of the certificate's maturity date.

yellow-dog contract

A type of contract that required employees to agree as a condition of employment not to join; prohibited by the Norris-LaGuardia Act in 1932.

mutual insurance company

A type of insurance company owned by its policyholders.

stock insurance company

A type of insurance company owned by stockholders.

strike

A union strategy in which workers refuse to go to work; the purpose is to further workers' objectives after an impasse in collective bargaining.

S corporation

A unique government creation that looks like a corporation but is taxes like sole proprietorship and partnerships.

organization chart

A visual device that shows relationships among people and divides the organization's work; it shows who reports to whom.

channel of distribution

A whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to retailers and store goods in their path (or channel) from producers to consumers.

brand name

A word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors.

insurance police

A written contract between the insured and an insurance company that promises to pay for all or part of a loss.

promissory note

A written contract with a promise to pay a supplier a specific sum of money at a definite time.

job specifications

A written summary of the minimum qualifications required of workers to do a particular job.

tort

A wrongful act that causes injury to another person's body, property, or reputation.

annual report

A yearly statement of the financial condition, progress, and expectations of an organization.

entrepreneurship

Accepting the risk of starting and running a business.

financial accounting

Accounting information and analyses prepared for people outside the organization.

government and not-for-profit accounting

Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and other according to a duly approved budget.

managerial accounting

Accounting used to provide information and analyses to managers inside the organization to assist them in decision making.

service utility

Adding value by providing fast, friendly service during and after the scale and by teaching customers how to best use products over time.

place utility

Adding value to products by having them where people want them.

time utility

Adding value to products by making them available when they're needed.

information utility

Adding value to products by opening two-way flows of information between marketing participants.

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.

North American Free Trade (NAFTA)

Agreement that created a free-trade area among the United States, Canada, and Mexico.

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.

training and development

All attempts to improve productivity by increasing an employee's ability to perform. Training focuses on short-term skills, whereas development focuses on long-term abilities.

promotion

All techniques sellers use to inform people about and motivate them to buy their products or services.

business-to-business (B2B) market

All the individuals and organizations that want goods ans services to use in producing other goods and producing other goods and services or toe sell, rent, or supply goods to others.

consumer market

All the individuals or households that want goods and services for personal consumption or use.

stakeholders

All the people who stand to gain or loose by the policies and activities of a business and whose concerns the business needs to address.

total fixed costs

All the remain the same no matter how many products are made or sold.

pension funds

Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire.

Roth IRA

An IRA where you don't get up-front deductions on your taxes as you would with a traditional IRA, but the earnings grow tax-free and are also tax-free when they are withdrawn.

Service Corps of Retired Executives (SCORE)

An SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses).

tax accountant

An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies.

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 public accountant (CPA)

An accountant who passes a series of examinations established by the American Institute of Certified Public Accounts (AICPA)

public accountant

An accountant who provides accounting services to individuals or businesses on a fee basis.

private accountant

An accountant who works for a single firm, governemnt agency, or nonprofit organization.

stock splits

An action by an company that gives stockholder two or more shares of stock for each one they own.

franchise agreement

An arrangement whereby someone with a good idea for a business sells the right to use the business name and sell a product or service to others in a given territory.

job sharing

An arrangement whereby two part-time employees share one full-time job.

leveraged buyout (LBO)

An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.

secondary boycott

An attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott; prohibited by the Taft-Hartly Act.

lockout

An attempt by management to put pressure on unions by temporarily closing the business.

communism

An economic and political system in which the governemnt makes almost all economic decisions and owns almost all the major factors of production.

socialism

An economic system based on the premise that some, if not most, basic business should be owned by the government so that profits can be more evenly distributed among the people.

captialism

An economic system in which all or most of the factors of production ad distribution are privately owned and operated for profit.

smart card

An electronic funds transfer tool that is a combination credit card, debit care, phone cared, driver's license care, and more.

debit card

An electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account.

database

An electronic storage file for information.

union

An employee organization whose main goal is representing its members in employee-management negotiation of job-related issues.

vision

An encompassing explanation of why the organization exists and where it's tying to head.

performance appraisal

An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination.

independent audit

An evolution and unbiased opinion about the accuracy of the company's financial statements.

mentor

An experienced employee who supervises, coaches, and guides lower-level employees by introducing them to the right people and generally being their organizational sponsor.

Federal Deposit Insurance Corporation (FDIC)

An independent agency of the U.S. governemnt that insures bank deposit.

producer price index (PPI)

An index that measures prices at the wholesale level.

affiliate marketing

An online marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website.

matrix organization

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.

American Federation of Labor (SFL)

An organization of craft unions that championed fundamental labor issues; founded in 1886.

craft union

An organization of skilled specialists in a particular craft or trade.

centralized authority

An organization structure in which decision-making authority is maintained at the top level of management.

flat organization structure

An organization structure that has a few layers of management and broad span of control.

mutual bonds

An organization that buys stocks and bonds and other investments, then sells shares in those securities to the public.

line organization

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of organization, with all people reporting to only one supervisor.

inverted organization

An organization that have contact people at the top and the chief executive officer at the bottom of the organization.

multinational corporation

An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management.

freight forwarder

An organization that puts many small shipments together to create a single lager shipment that can be transported cost-effectively to the final destination.

retailer

An organization that sells to ultimate consumers.

nonprofit organization

An organization whose goals do not include making a personal profit for its owners or organizers.

stock exchange

An organization whose members can but and sell (exchange) securities for companies and individual investors.

bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions.

decentralized authority

An organizational structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

tall organization strucutre

An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management.

mission statement

An outline of the fundamental purposes of organization.

general partner

An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.

insider trading

An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.

direct marketing

Any activity that directly links manufactures or intermediaries with the ultimate consumer.

business

Any activity that seeks to provide goods and services to others while operating at a profit.

publicity

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.

product

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.

viral marketing

Any strategy that encourages people to pass on a marketing message to others, creating exponential growth in the message's influence as the message reaches thousands, to millions.

money

Anything that people generally accept as payment for goods and services.

fundamental accounting equation

Assets = Liabilities + owners' equity this is the basis for the balance sheet

fixed assets

Assets that are relatively permanent, such as land, buildings, and equipment.

involuntary bankruptcy

Bankruptcy procedures files by a debtor's creditors.

Gantt chart

Bar graph showing production managers what projects are being worked on and what stage they are in at any given time.

fringe benefits

Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation beyond base wages.

debenture bonds

Bonds that are unsecured (i.e. not backed by any collateral such as equipment).

Bonus Chapters

Bonus Chapters

importing

Buying products from another country.

diversification

Buying several different investment alternatives to spread the risk of investing.

contrarian approach

Buying stock approach when everyone is selling or vice versa.

core inflation

CPI minus food and energy costs.

incubators

Centers that offer new business low-cost offices with basic business services.

Chapter 1

Chapter 1

Chapter 10

Chapter 10

Chapter 11

Chapter 11

Chapter 12

Chapter 12

Chapter 13

Chapter 13

Chapter 14

Chapter 14

Chapter 15

Chapter 15

Chapter 16

Chapter 16

Chapter 17

Chapter 17

Chapter 18

Chapter 18

Chapter 19

Chapter 19

Chapter 2

Chapter 2

Chapter 20

Chapter 20

Chapter 3

Chapter 3

Chapter 4

Chapter 4

Chapter 5

Chapter 5

Chapter 6

Chapter 6

Chapter 7

Chapter 7

Chapter 8

Chapter 8

Chapter 9

Chapter 9

Chapter A

Chapter A

Chapter B

Chapter B

Chapter C

Chapter C

Chapter D

Chapter D

decision making

Choosing among two or more alternatives.

union shop agreement

Clause in a labor- management agreement that says workers do not have to be members of a union to be hired, but must agree to join the union within a prescribed period.

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).

agency shop agreement

Clause in a labor-management that says employers may hire non-union workers; employees are not required to join the union but must pay a union fee.

exchange-traded funds (ETFs)

Collections of stocks, bonds, and other investments that are traded on exchanges but are traded more like individual stocks than like mutual funds.

brainstorming

Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas.

benchmarking

Comparing an organization's practices, process, and products against the world's best.

givebacks

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.

quality

Consistently producing what the customer wants while reducing errors before and after delivery to the customer.

specialty goods and services

Consumer products with unique characteristics and brand identity. Because these products are perceived a having no reasonable substitute, the consumer puts forth a special effort to purchase them.

outsourcing

Contracting with other companies (often in other countries) to do some or all of the function of a firm, like its production or accounting tasks.

operating expenses

Costs involved in operating a business, such as rent, utilities, and salaries.

variable costs

Costs that change according to the level of production.

leading

Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives.

intrapreneurs

Creative people who work as entrepreneurs within corporations.

accounts payable

Current liabilities or bills the company owes to others for merchandise or services pruchased on credit but not yet paid for.

primary data

Data taht you gather yourself (not from secondary sources such as books and magazines).

external customers

Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use.

precedent

Decisions judges have made in earlier cases that guide the handling of new cases.

target costing

Designing a products so that it satisfies customers and meets the profit margins desired by the firm.

flexible manufacturing

Designing machines to do multiple tasks so that they can produce a variety of products.

one-to-one marketing

Developing a unique mix of goods and services for each individual customer.

mass marketing

Developing products and promotions to please large groups of people.

reverse discrimination

Discrimination against members of dominant or majority group (e.g. whites or males) usually as a result of policies designed to correct previous discrimination against minority or disadvantaged groups.

intensive distribution

Distribution that puts products into as many retail outlets as possible.

selective distribution

Distribution that sends products to only a preferred group of retailers in an area.

exclusive distribution

Distribution that sends products to only one retail outlet in a given geographic area.

geographic segmentation

Dividing a market by cities, countries, states, or regions.

demographic segmentation

Dividing a market using groups' values, attitudes, and interests.

benefit segmentation

Dividing the market by determining which benefits of the product to talk about.

volume (or usage) segmentation

Dividing the market by usage (volume of use).

possession utility

Doing whatever is necessary to transfer ownership from one party another, including providing credit, delivery, installation, guarantees, and follow-up service.

assets

Economic resources (things of value) owned by a firm.

mixed economies

Economic systems in which some allocation of resources is made by the market and some by the government.

command economics

Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows.

free-market economics

Economics systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows.

contingent workers

Employees that include part-time workers, temporary workers, seasonal workers, independent contractors, interns, and co-op students.

staff personnel

Employees who advise and assist line personnel in meeting their goals.

line personnel

Employees who are part of the chain of cmand that is responsible for achieving organizational gaols

affirmative action

Employment activities designed to "right past wrongs" by increasing opportunities for minorities and women.

corporate social initiatives

Enhanced forms of corporate philanthropy directly related to the company's competencies.

micropreneurs

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.

integrity-based ethic codes

Ethical standards that defines the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.

compliance-based ethics

Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.

technology

Everything from phones and copiers to computers, mobile devices, medical imaging machines, and the various software programs and apps that make business processes more effective, efficient, and productive.

total product offer

Everything that consumers evaluate when deciding whether to buy something; also called a value package.

stock certificate

Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.

over-the-counter (OTC) market

Exchange that provides a means to trade stocks not listed on the national exchanges.

administrative agencies

Federal or state institutions and other government organizations created by Congress or state legislatures with delegated power to create rules and regulations within their mandated area of authority.

nonbanks

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).

balance sheet

Financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners' equity.

statements of cash flows

Financial statements that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing.

knowledge management

Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm.

long-term forecast

Forecast that predicts revenues, costs, and expenses for a period longer than 1 year, and sometimes as far as 5 or 10 years in the future.

short-term forecast

Forecast that predicts revenues, costs, and expenses for a period of one year or less.

cash flow forecast

Forecast that predicts the cash inflows and outflows in future periods, usually months or quarters.

certification

Formal process whereby a union is recognized by the National Labor Relations Board (NLRB) as the bargaining agent for he group of employees.

cafeteria-style fringe benefits

Fringe benefits plan that allows employees to choose the benefits they want up to a certain dollar amount.

short-term financing

Funds needed for a year or less.

long-term financing

Funds needed for more than a year (usually 2 to 10 years).

debt financing

Funds raised through various forms of borrowing that must be repaid.

empowerment

Giving front-line workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests.

program trading

Giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid potential losses.

enabling

Giving workers the education and tools they need to make decisions.

value

Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs.

deregulation

Government withdrawal of certain laws and regulations that seem to hinder competition.

bungling

Grouping two or more products together and pricing them as a unit.

cross-funtional self-amged teams

Groups of employees from different departments who work together on long-term basis.

implied warranties

Guarantees concerning products legally imposed on the seller.

distributed product development

Handing off various parts of your innovation process - often to companies in other countries.

junk bonds

High-risk, high-interest bonds.

gross profit (or gross margin)

How much a firm earned by buying (or making) and selling merchandise.

brand awareness

How quickly or easily a given brand name comes to mind when a product category is mentioned.

taxes

How the governemnt (federal, state, and local) raises money.

knockoff brands

Illegal copies of national brand-name goods.

hygiene factors

In Herzberg's tehory of motivating fators, job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.

motivators

In Herzberg's theory of motivating factors, job factors that cause employees to be productive and that give them satisfaction.

critical path

In a PERT network, the sequence of tasks that takes the longest time to complete.

core time

In a flextime plan, the period when all employees are expected to be at their job stations.

utility

In economies, the want-satisfying ability, or value, that organizations add to goods or services.

qualifying

In the selling process, making sure that people have a need for the product, the authority to buy, and the willingness to listen to a sales message.

negligence

In tort law, behavior that causes unintentional harm or injury.

merchant wholesalers

Independently owned firms that take title to the goods they handle.

internal customers

Individuals and units within the firm that receive services for their own personal use.

venture capitalists

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

secondary data

Information that has already been compiled by others and published in journals and books or made available online.

whistle-blowers

Insiders who report illegal or unethical behavior.

disability insurance

Insurance that pays part of the cost of a long-term sickness or an accident.

services

Intangible products (i.e. products that con't be held in our hand) such as education, health care, insurance, recreation, and travel and tourism.

off-the-job training

Internal or external training programs away from the workplace that develop any of a variety of skills or foster personal development.

sovereign wealth funds (SWFs)

Investment funds controlled by governments holding investment stakes in foreign companies.

current assets

Items that can or will be converted into cash within one year.

industrial unions

Labor organizations of unskilled and semi-skilled workers in mass-production industries such as automobiles and mining .

institutional investors

Large organizations - such as pension funds, mutual funds, and insurance companies - that invest their own funds or the finds of others.

participate (democratic) leadership

Leadership style that consists of managers and employees working together to make decisions.

autocratic leadership

Leadership style that invokes making managerial decisions without consulting others.

free-rein leadership

Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.

voluntary bankruptcy

Legal procedures initiated by a debtor.

strict product liability

Legal responsibility for harm or injury caused by a product regardless of fault.

right-to-work laws

Legislation that gives workers the right, under an open shop agreement, to join or not join a union if it is present.

whole life insurance

Life insurance that combines pure insurances and savings.

PMI

Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.

intangible assets

Long-term assets (e.g. patents, trademarks copyrights that have no real physical form but do have value.

bonds payable

Long-term liabilities that represent money lent to the firm that must be paid back.

devaluation

Lowering the value of a nation's currency relative to other currencies.

M3

M2 plus big deposits like institutional money market funds.

capital expenditures

Major investments in either tangible long-term assets such land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.

product analysis

Making cost estimates and sales forecasts to get a felling for profitability of new-product ideas.

financial managers

Managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm.

targeting marketing

Marketing directed toward those groups (market segments) an organization decides it can serve profitably.

agents / brokers

Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods.

relationship marketing

Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meed their requirements.

M2

Money included in M1 plus money that may take a little more time to obtain (savings accounts, money market accounts, mutual funds, certificates of deposit, etc.)

equity financing

Money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital).

M1

Money that can be accessed quickly and easily (coins and paper money, checks, traveler's checks, etc.)

venture capital

Money that is invested in new or emerging companies that are perceived as having great profit potential.

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.

generic goods

Non-branded products that usually sell at a sizable discount compared to national or private-label brands.

credit unions

Nonprofit, member-owned financial cooperatives that offer the full variety of banking services to their members.

acquisition

One company's purchase of the property and obligations of another company.

International monetary Fund (IMF)

Organization that assists the smooth flow of money among nations.

marketing intermediaries

Organizations that assist in moving goods and services from producers to business (B2B) and from business to consumers (B2C).

commercial fiance companies

Organizations that make short-term loans to borrowers who offer tangible assets as collateral.

advertising

Paid, non-personal communication through various and individuals who are in some way identified in the advertising message.

dividends

Part of a firm's profits that the firm may distribute to stockholders as either cash payments or additional shares of stock.

product liability

Part of tort law that holds businesses liable for harm that results from the production, design, or the use of products they market.

market

People with unsatisfied wants and needs who have both the resources and the willingness to buy.

cookies

Pieces of information, such as registration data or user preferences, set 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.

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.

unsought goods and services

Products that consumers are unaware of, haven;t necessarily thought to buying, or find that they need to solve an unexpected problem.

dealer (private-label) brands

Products that don't carry the manufacture's name but carry a distributor or retailer's name instead.

conveniences goods and services

Products that the consumer wants to purchase frequently and with the minimum of effort.

industrial goods

Products used in the production of other products. Sometimes called business goods or B2B goods.

commercialization

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.

interactive promotion

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.

pull strategy

Promotional strategy in which heavy advertising and sales promotion efforts are are directed toward consumers so that they'll request the products from retailers.

push strategy

Promotional strategy in which the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise.

buying stock on margin

Purchasing stocks by borrowing some of the purchase cost from the brokerage firm.

term insirance

Pure insurance protection ofr a given number of years.

product placement

Putting product into TV shows, movies, and other media where they will be seen.

leverage

Raising needed funds through borrowing to increase a firm's rate of return.

restructuring

Redesigning an organization so that it can more effectively serve its customers.

prospecting

Reserching potential buyers and choosing those most likely to buy.

tax-deferred contributions

Retirement account deposits for which you apy no current taxes, but the earnings gained are taxes as regular income when they are withdrawn at retirement.

net income or net loss

Revenue left over or depleted after all costs and expenses, including taxes, are paid.

rule of indemnity

Rule saying that an insured person or organization cannot collect more than the actual loss from an insurable risk.

electronic retailing

Selling goods and services to customers (e.g. you and me) over the internet.

dumping

Selling products in a foreign country at lower prices than those changed in the producing country.

exporting

Selling products to another country.

direct selling

Selling to consumers in their homes or where they work.

contract law

Set of laws that specify what constitutes a legally enforceable agreement.

everyday low pricing (EDLP)

Setting prices lower than competitors and then not having any special sales.

high-low pricing strategy

Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors' prices.

stocks

Shares of ownership in a company.

notes payable

Short-term or long-term liabilities that a business promises to repay by a certain date.

human relations skills

Skills that involve communication and motivation; they enable managers to work through and with people.

technical skills

Skills that involve the ability to perform tasks in a specific discipline or department.

conceptual skills

Skills that involve the ability to picture the organization as a whole and the relationships among its various parts.

extrinsic reward

Something given to you by someone else as recognition for good work; extrinsic rewards include pay increases, praise, and promotions.

consideration

Something of value; consideration is one of the requirements of legal contract.

investment bankers

Specialists who assist in the issue and sale of new securities.

enterprise zones

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other governemnt support.

express warranties

Specific representations by the seller that buyers rely on regarding the goods they purchase.

objectives

Specific, short-term statements detailing how to achieve the organization's goals.

ethics

Standards of moral behavior, that is, behavior accepted by society as right versus wrong.

statutory law

State and federal constitutions, legislative enactments, treaties of the federal governemnt, and ordinances - in short, written law.

preferred stock

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.

skimming price strategy

Strategy in which a new product is priced high to make optimum profit while there's little competition.

penetration strategy

Strategy in which a product is priced low to attract many customers and discourage competition.

time-motion studies

Studies, began by Frederick Taylor, of which tasks must be performed to complete a job and the time needed to do each task.

scientific management

Studying workers to find the most efficient ways of doing things and then teaching people those techniques.

mass customization

Tailoring products to meet the needs of individual customers.

concept testing

Taking a product idea to consumers to test their reactions.

goods

Tangible products such as computers, food, clothing, cars, and appliances.

health savings accounts (HSAs)

Tax-deferred savings accounts linked to low-cost, high-deductible health insurance policies.

information systems (IS)

Technology that helps companies do business; includes such tools are automated teller machines (ATMs) and voice mail

broadband technology

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.

information technology (IT)

Technology used to store, retrieve, and send information efficiently.

process manufacturing

That part of the production process that physically or chemically changes materials.

assembly process

That part of the production process that puts together compnents.

Social Security

The Term used to describe the Old-Age, Survivors, and Disability Insurance program established by the Social Security Act of 1935.

retained earning

The accumulated earnings from a firm's profitable operations that were reinvested in the business and not paid out to stockholders in dividends.

marketing

The activity set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

orientation

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.

absolute advantage

The advantage that exists when a country produces a specific product more efficiently than other other countries.

arbitration

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.

standard of living

The amount of goods and services people can buy with the money they have.

profit

The amount of money a business earns above and beyond what it spends for salaries and other expenses.

productivity

The amount of output you generate given the amount of input (e.g. hours worked).

owners' equity

The amount of the business that belongs to the owners minus any liabilities owed by the business.

money supply

The amount the Federal Reserve Bank makes available for people to buy goods and services.

marketing research

The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions.

reverse logistics

The area of logistics that involves bringing goods back to the manufacturer because of defects or for recycling materials.

inbound logistics

The area of logistics that involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers.

outbound logistics

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).

ratio analysis

The assessment of a firm's financial condition using calculation using calculations and interpretations of financial statements.

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.

World Bank

The bank primarily responsible for financing economic development; also known as the International Bank for Reconstruction and Development.

common law

The body of law that comes from decisions handed down by courts; also referred to unwritten law/

judiciary

The branch of governemnt chosen to oversee the legal system through a system of courts.

manufactures' brands

The brand names of manufactures that distribute products nationally.

goals

The broad, long-term accomplishments and organization wishes to attain.

operating (or master) budget

The budget that ties together the firm's other budgets and summarizes it proposed financial activities.

e-commerce

The buying and selling of goods over the Internet.

foreign direct investment (FDI)

The buying of permanent property and business in foreign nations.

risk

The chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

rish

The chance of loos, the degree of probability of loss, and the amount of possible loss.

product mix

The combination of product line offered by a manufacturer.

promotion mix

The combination of promotional tools an organization uses.

ISO 9000

The common name given to quality management and assurance standards.

production

The creation of finished goods and services using the factors of production: land, labor, capital, entrepreneurship, and knowledge.

product differentiation

The creation of real or perceived product differences.

monopolistic competition

The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different.

perfect competition

The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product.

brand loyalty

The degree to which customers are satisfied, like the brand, and are committed to further purchases.

cash flow

The difference between cash coming in and cash going out of the business.

balance of payments

The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows form other factors such as tourism, foreign aid, military expenditures, and foreign investment.

corporate philanthropy

The dimension of social responsibility that includes charitable donations.

corporate responsibility

The dimension of social responsibility that includes everything from hiring minority workers to making safe products.

corporate policy

The dimension of social responsibility that refers to the position a firm takes on social and political issues.

barter

The direct trading of goods or services for other goods or services.

departmentalization

The dividing of organizational functions into separate units.

liquidity

The ease with which an asset can be converted into cash.

maturity date

The exact date the issuer of a bond must pay the principal to the bondholder.

personal selling

The face-to-face presentation and promotion of goods and services.

Securities and Exchange Commission (SEC)

The federal agency that has responsibility for regulating the various stock exchanges.

fiscal policy

The federal government's efforts to keep the economy stable by increasing or decreasing taxes or governemnt spending.

premium

The fee charged by an insurance company for an insurance policy.

income statement

The financial statement that shows a firm's profit after costs, expenses, and taxes; it summarized all the resources that have left the firm (expenses), and the resulting net income or net loss.

Knights of Labor

The first national labor union; formed in 1869.

initial public offering (IPO)

The first public offering of a corporation's stock.

fiance

The function in a business that acquires funds for the firm and manages those funds within the firm.

purchasing

The function in a firm that searches for high-quality material resources, finds the best suppliers, and negotiates the best price of goods and services.

public relations (PR)

The 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.

quality of life

The general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide.

top management

The highest level of management, consisting of the president and other key company executives who develop strategic plans.

equity theory

The idea that employees try to maintain equity between imputs and outputs compared to others in similar positions.

goal-setting theory

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 organization conditions.

marketing mix

The ingredients that go into a marketing program: product, price, place, and promotion.

discount rate

The interest rate that the Fed charges for loans to member banks.

World Trade Organizations (WTO)

The international organization that replaced the General Agreement ii Tariffs and Trade and was assigned the duty to mediate trade disputes among nations.

financial management

The job of managing a firm's resources so it can meet its goals and objectives.

auditing

The job of reviewing and evaluating the information used to prepare a company's financial statements.

conglomerate merger

The joining of firms in completely unrelated industries.

vertical merger

The joining of two companies involved in different stages of related businesses.

horizontal merger

The joining of two firms in the same industry.

bankruptcy

The legal process by which a person, business, or governemnt entity, unable to meet financial obligations, is relieved of those obligations by the court that divides any assets among creditors, allowing creditors to get at least part of their money and freeing the debtor to being anew.

middle management

The level of management that includes general managers, division managers, and branch and play managers who are are responsible for tactical planning and controlling.

brand association

The linking of a brand to other favorable images.

brain drain

The loss of the best and brightest people to other countries.

monetary policy

The management of the money supply and interest rates by the Federal Reserve.

logistics

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.

free trade

The moment of goods and services among nations without political or economic barriers.

damages

The monetary settlement awarded to a person who is injured by a breach of contract.

common stock

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 approved by the firm's board of directors.

materials handling

The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor, and from the factory floor to various workstations.

climate change

The movement of the temperature of the planet up or down over time.

unemployment rate

The number of civilians at least 16 years old are unemployed and tried to find a job within the prior four weeks.

identity theft

The obtaining of individuals' personal information, such as Social Security and credit card numbers, for illegal purposes.

span of control

The optimal number of subordinates a manager supervises or should supervise.

macroeconomics

The part of economics study that looks at the operation of a nation's economy as a whole.

Saving Association Insurance Fund (SAIF)

The part of the FDIC that insures holders of accounts in savings and loan associations.

microeconomics

The part of the economics study that looks at the behavior of people and organizations in particular markets.

interest

The payment the issuer of the bond makes to the bondholders for use of the borrowed money.

business cycles

The periodic rises and falls that occur in economies over time.

intrinsic reward

The personal satisfaction you feel when you perform well and complete goals.

facility layout

The physical arrangement of resources (including people) in the production process.

capital gains

The positive difference between the purchase price of a stock and its sale price.

insurable interest

The possibility of the policyholder to suffer a loss.

trade credit

The practice of buying goods and services now and paying for them later.

self-insurance

The practice of setting aside money to cover routine claims ad buying only "catastrophe" policies to cover big losses.

double-entry bookkeeping

The practice of writing every business transaction in two places.

real time

The present moment or the actual time in which something takes place.

transparency

The presentation of a company's facts and figures in a way that is clear and apparent to all stakeholders.

market prices

The price determined by supply and demand.

risk / return trade-off

The principle that the greater the risk a lender takes in making a loan, the higher the interest rate required.

Internet2

The private Internet system that links governemnt 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 application.s

decertification

The process by which workers take away a union's right to represent them.

data analytics

The process of collecting, organizing, storing, and analyzing large sets of data ("big data") in order to identify patterns and other information that is most useful to the business now and for making future decisions.

human resource management (HRM)

The process of determining human resource needs and the recruiting, selecting, developing, motivating, evaluating, compensating, and schedule employees to achieve organizational goals.

strategic planning

The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

tactical planning

The process of developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done.

market segmentation

The process of dividing the total market into groups whose members have similar characteristics.

networking

The process of establishing and maintaining contacts with key managers in and outside the organization and using those contacts to weave strong relationships that serve as informal development systems.

niche marketing

The process of finding small but profitable market segments and designing or finding products for them.

selection

The process of gathering information and deciding who should be hied, under legal guidelines, to serve the best interests of the individual and the organization.

environmental scanning

The process of identifying the factors that can affect marketing success.

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.

supply-chain management

The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate.

contingency planning

The process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives.

problem solving

The process of salving the everyday problems that occur. Problem solving is less formal than decision making and usually calls for quicker action.

facility location

The process of selecting a geographic location for a company's operations.

factoring

The process of selling accounts receivable for cash.

operational planning

The process of setting work standards and schedules necessary to implement the company's tactical objectives.

statistical process control (SPC)

The process of test statistical samples of product components at each stag of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards.

test marketing

The process of testing products among potential users.

management development

The process of training and educating employees to become good managers, then monitoring the progress of their managerial skills over time.

statistical quality control (SQC)

The process some managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning.

management

The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.

break-even analysis

The process used to determine profitability at various levels of sales.

collective bargaining

The process whereby union and management representatives form a labor-management agreement, or contract, for workers.

lean manufacturing

The production of goods using less of everything compared to mass production.

sales promotion

The promotional tool that stimulates consumer purchasing and deal interest by means of short-term activities.

supply

The quantity of products that manufactures or owners are willing to sell at different prices at a specific time.

demand

The quantity of products that people are willing to buy at different prices at a specific time.

bargaining zone

The range of options between the initial and final offer that each party will consider before negotiations dissolve or reach an impasse.

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.

journal

The record book or computer program where accounting data are first entered.

bookkeeping

The recording of business transactions.

accounting

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.

factors of production

The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge.

limited liability

The responsibility of a business's owners for losses only up the amount they invest; limited partners and shareholders (stockolders) have limited liability.

unlimited liability

The responsibility of business owners for all the debts of the business.

merger

The result of two firms forming one company.

franchise

The right to use a specific business's name and sell its products or services in a given territory.

business law

The rule, statutes, codes, and regulations that provide a legal framework for the conduct pf business and that are enforceable by court action.

telemarketing

The sale of goods and services by telephone.

supply chain (value chain)

The sequence of liked activities that must be preformed by various organizations to move goods from the sources of raw materials to ultimate consumers.

recruitment

The set of activities used to obtain a sufficient number of the right employees at the right time.

Web 2.0

The set of tools that allow people to build social and business connections, share information, and collaborate on projects online (including blogs, wikis, social networking sites and other online communities, and virtual worlds).

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.

demography

The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.

price leadership

The strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors' prices.

formal organization

The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.

economics

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.

resource development

The study of how to increase resources and to create the conditions that will make better use of those resources.

national debt

The sum of government deficits over time.

business environment

The surrounding factors that either help or hinder the development of business.

informal organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization.

depreciation

The system write-off of the cost of a tangible asset over its estimated useful life.

demand deposit

The technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from the depositor.

time depositor

The technical name for a savings account; the bank can require prior notice before the owner withdraws money from a time deposit.

Hawthorne effect

The tendency for people to behave differently when the know they are being studied.

production management

The term used to describe all the activities managers do to help their firms create goods.

indenture terms

The terms of agreement in a bond issue.

Keynesian economic theory

The theory that a governemnt policy of increasing spending could stimulate the economy in a recession.

pure risk

The threat of loos with not chance for profit.

revenue

The total amount of money a business takes in during a given period b selling goods and services.

balance of trade

The total value of a nation's exports compared to its imports measured over a particular period.

gross domestic product (GDP)

The total value of final goods and services produced in a country in a given year.

greening

The trend of saving energy and producing products that cause less harm to the environment.

business intelligent (BI) or analytics

The use of data analytic tools to analyze an organization's raw data and derive useful insights from it.

trade production

The use of governemnt regulations to limit the import of goods and services.

inter-modal shipping

The use of multiple modes of transportation to complete a sing long-distance movement of freight.

computer-aided manufacturing (CAM)

The used of computers in the manufacturing of products.

exchange rate

The value of one nation's currency relative to the currencies of other countries.

brand equity

The value of the brand name and associated symbols.

form utility

The value producers add to materials in the creation of finished goods and services.

principle of motion economy

Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions.

Maslow's hierarchy of needs

Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs.

reinforcement theory

Theory that positive and negative reinforcers motivate a person to behave in certain ways.

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.

open-market operations

They buying and selling of U.S. governemnt bonds by the Fed wit the goal of regulating the money supply.

core competencies

Those functions that the organization can do as well as or better than any other organization in the world.

shopping goods and services

Those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers.

on-the-job training

Training at the workplace that lets the employee learn by doing or by watching others for a while and then imitating them.

vestibule training

Training done in schools where employees are taught on equipment similar to that used on the job.

apprentice programs

Training programs during which a learner works alongside an experiences employee to master the skills and procedures of a craft.

online training

Training programs in which employees complete classes via the internet.

recession

Two or more consecutive quarters of decline in the GDP.

shop stewards

Union officials who work permanently in an organization and represent employee interests on a daily basis.

Congress of Industrial Organization (CIO)

Union organization of unskilled workers; broke away from the American Federation of Labor (AFL) in 1935 and rejoined it in 1955.

commercial paper

Unsecured promissory notes of $100,000 and up that mature (come due) in 270 days or less.

sexual harassment

Unwelcome sexual advances for sexual favors, and other conduct (verbal or physical) of a sexual nature that creates a hostile work environment.

networking

Using communications technology and other means to link organizations and allow them to work together on common objectives.

expectancy theory

Victor Vroom's theory that the amount of effort employees exert on a specific task depends on their expectations of the outcome.

liabilities

What the business owes to others (debts).

loss

When a business's expenses are more than its revenues.

primary boycott

When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute.

breech of contract

When one part fails to follow the terms of a contract.

cool-off period

When workers in a critical industry return to their jobs while the union and management continue negotiations.

variable life insurance

Whole life insurance that invests the cash value of the policy in stocks or other high-yielding securities.

rack jobbers

Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.

cash-and-carry wholesalers

Wholesalers that serve mostly smaller retailers with a limited assortment of products.

drop shippers

Wholesalers that solicit order from retailers and other wholesalers and have the merchandise shipped directly from producer to buyer.

organizational (or corporate) culture

Widely shared values within an organization that provide unity and cooperation to achieve common goals.

compressed workweek

Work schedule that allows an employee to work a full number of hours per week but in fewer days.

flextime plan

Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours or complete their assigned tasks.

strikebreakers

Workers hired to do the jobs of striking workers until the labor dispute is resolved.

telecommuting

Working from home via computer.

digital natvies

Young people who have grown up using the Internet and social networking.

supervisory management

managers who are directly responsible for supervising workers and evaluating their daily performance.

psychological pricing

pricing goods and services at price points that make the product appear less expensive than it is.

union security clause

provision in a negotiated labor-management agreement that stipulates that employees who beenfit from a union must either officially join or at least pay dues to the union.

computer-integrated manufacturing (CIM)

the uniting of computer-aided design with computer-aided manufacturing.

computor-aided design (CAD)

the used of computers in the design of products.