BUS 101 Terms

Fiduciary

A person that exercises power on behalf of another - acts as the others agent i.e. managers

Business Survival

Ability to adapt effectively to changing conditions

Stakeholder Power

Ability to use resources to make an event happen or to secure a desired outcome; voting, economics, politics, legality

Proxy

Absentee ballot

General Systems Theory

All organisms are open to, and interact with, their external environment

Stakeholder

All those that affect or are affected by the actions of the firm

Business

Any organization that is engaged in making a product or providing a service for a profit

Nonmarket Stakeholders

Communites, Governments, Non-govermental organizations, Media, Business Support Groups, General Public

Stakeholder Theory

Corporations serve a broad public purpose to create value for society and all of its stakeholders

Market Stakeholders

Employees, Stockholders, Creditors, Suppliers, Customers, Distributors

Legitimacy

Extent to which a stakeholder's actions are seen as proper or appropriate by the broader society

Securities and Exchange Commission

Government regulatory agency that protects stockholders rights by making sure stock markets are run fairly and that investment info is fully disclosed

Stakeholder Map

Graphical representation of the relationship of stakeholder salience to a particular issue; horizontal axis: against for, vertical axis: how salient

Board of Directors

Group of individuals who have legal duty to establish corporate objectives, develop broad policies, and select top level personnel to carry out these objectives and policies.

Nonmarket Stakeholders

Groups who don't engage in economic transactions but are still affected by or can affect the actions of the company

Systems Theory

Help managers conceptualize the relationship between their companies and their external environments. Helps us understand business and society taken together form an interactive social system

Society

Human beings and the social structures they collectively create, segments of humankind such as members of a particular community, nation, or interest group

Stakeholder Analysis

Identifying the relevant stakeholders and understand both their interests and the power they may have to assert these interests

Stockholder

Individuals or organizations that own shares of a company's stock

Boundary Spanning Departments

Offices within an organization that reach across the dividing line that separates the company from groups and people in society

Executive Compensation

One of the most important functions of the board of directors, owners no longer managed it on a day to day basis

Institutions

Own stock; pensions, mutual funds, insurance companies, university endowments

Individual Stockholder

People who directly own shares of stock issued by companies usually purchased through a stockbroker

Clawback

Process by which executives of failed firms would have to pay back some of their earnings

Corporate Governance

Process by which the company is controlled or governed

Owners Theory

Purpose of the firm is to maximize profit and make the most money it can for its shareholders who own stock

Audit Committee

Required by U.S. law to be composed entirely of outside directors and to be financially literate, it reviews the company's financial reports, recommends the appointment of outside auditors and oversees the integrity of internal financial controls

Instrumental Argument

States that stakeholder management is more efficient as a corporate strategy

Normative Argument

States that stakeholder management is simply the right thing to do

Descriptive Argument

States that the stakeholder theory is simply a more realistic view of how companies really work

Stakeholder Coalition

Temporary alliance to pursue common interest

Market Stakeholders

Those who engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services

Social Investment

Use of stock ownership as a strategy for promoting social objectives through selecting stocks according to various social criteria and by using the corporate governance process to raise issues of concern

Insider Trading

When a person gains access to confidential info about a company's financial condition and then uses that info, before it becomes public knowledge, to buy or sell the company's stock. illegal under SEC

Salience

When something stands out from the background and is seen as important or draws attention; power, legitimacy, urgency