Principles of Business, Marketing and Finance ALL UNITS

Lesson 4.6

► advocacy - public or individual support for a cause or policy ► civil liberties - personal guarantees in a society that government or other individuals cannot remove ► fair trade - the social movement whose stated goal is ensuring that international producers of goods and services receive fair and adequate compensation for their work ► labor standards - a desired set of ideals to be upheld by businesses and governments within which labor is conducted ► precedence - to precede or come before in order of importance or rank ► rights infringement - when an individual's designated rights are violated or removed by another entity ► World Trade Organization (WTO) - an intergovernmental organization established to regulate international trade

Lesson 3

► competition - when businesses of the same industry fight to sell to the same customer ► equilibrium - the point in the supply/demand curve in which the quantity demanded is equal to the quantity supplied ► market forces - any variables within an economy that cause a change in price, or supply or demand, of a good or service ► profit motive - the incentive of starting a business for the sake of earning money ► supply/demand curve - a line graph depicting the relation of supply and demand to price ► supply and demand - how the supply of available goods and demand for those goods by consumers work together to determine the average prices of goods in a market

Lesson 4.4

► distribution channel - a chain of businesses or intermediaries through which a good or service passes to an end consumer ► end consumer - the final individual who consumes a product ► goodwill - a friendly and helpful attitude toward an individual or group ► infrastructure - basic organizational structure and facilities needed to continue operations of an enterprise ► international entrepreneur - a professional who uses his or her global understanding to identify cross-cultural opportunities to sell goods and services multinationally ► international marketing agency - an organization specializing in assisting businesses in finding end consumers and delivering a company's products to them ► sustainability - the concept of a system's ability to be sustained, upheld, and supported over an indefinite period

5 Protections

1 -Protection of the company Governments must ensure that firms work fairly with one another. A legally-binding document outlining the terms and conditions of a business transaction is a contract. However, what good is a contract if there is no entity able to enforce or punish those who do not uphold the terms set forth? Because of this need, contract enforcement becomes a key responsibility of the government so those in an economy can trust in fair business. 2 -Protection of the consumer The government's role in business includes protecting the customer, or consumer. This is accomplished in many ways. For example, when a company fails to honor the guarantee of a product, the consumer can take legal recourse. Such is the case when a company violates the guarantee of a product, or warranty. A warranty is a written guarantee from a company to a purchaser of a product, promising to repair or replace a defective or unwanted product for a specified period of time. Similarly, products must be made reasonably safe for use by the consumer. While it is impossible for no harm to come to a consumer through the use of a product, minimum standards must be upheld. For example, labeling is a requirement the government imposes on food manufacturers, typically displaying the nutritional content on the packaging. 3 -Protection of the employee Over time, the government has formed numerous laws, regulations, and agencies to help protect the rights of workers. Labor laws, or laws regulating workers' rights and working conditions, arose in parallel to the industrial revolution. As worker-employer relationships changed from small-scale shops to large-scale factory labor during the Industrial Revolution, working conditions became more strenuous. Soon, regulations followed providing workers with fair working conditions, compensation, and time off. 4 -Protection of the investor Investors are individuals or organizations who put money into financial assets with the expectation of a return. A return is a gain or loss in an investment over a particular period. The government regulates investment practices by guaranteeing various rights to investors. For example, the government mandates that public companies make financial information available to investors for the sake of complete transparency, and options for future investments. Periodic reporting to investors is also a requirement 5 -Protection of the government While a government does not exist to serve itself but to serve its people, a government must still be concerned with efficiency and sustainability. If a government is not making enough income through taxation to sustain itself, it will not be able to provide necessary services to its citizens, such as national defense, interstate systems, and providing services to sustain the free-market economy.

Copyright vs. Trademark vs. Patent

Governments have found it increasingly difficult to enforce intellectual property rights with the advent of the digital age. Intellectual property is a work of creativity, such as a logo, design, song, or piece of literature that one might copyright, patent, or trademark. - A copyright is a legal right granted to a firm or individual to use a given work of intellectual property. - A trademark is a symbol, word, or words legally registered for exclusive use by a company. - A patent is a government-issued license for a company to exclusively use for a set period for a product or invention. Music is typically copyrighted. A logo is often trademarked. Pharmaceutical recipes are almost always patented. Notice the correlation to the constitutional article granting "authors and inventors the exclusive right to their respective writings and discoveries." Intellectual property, however, has become increasingly challenging for the government to enforce. The digital era, with the ability to convert intellectual content into code, has allowed for easy copying and sharing of

Outshoring Pros and Cons

PROS •increased economic wealth in a country •forces source country to innovate •increases in revenue •lower labor cost •increase in knowledge base for greater innovation •frees up management time •increase in production speed CONS •temporary domestic job loss •potential quality control issues •possible loss of business process control •challenges in cultural differences •dissonance in performance versus expectations

Lesson 5

accounting - the recording of transactions of money in a business and the summarizing and reporting of those transactions to the leaders of the business, government, and other stakeholders ► accounts receivable - a business asset that includes sales with other companies that still owe payments to the business ► assets - resources of value that a company or individual owns ► creditor - either a person or institution who gives money to someone else with the intention of being paid back ► current assets - resources owned by a company that are expected to become cash within one year ► embezzlement - the intentional movement of a company's funds into one's own possession as an act of theft ► finance - the science and practice of managing, creating, and investing an organization's money ► liability - financial obligation a company might have during its business operations ► liquidity - ease of which an asset can convert to cash ► long-term assets - resources owned by company that are expected to convert into cash in over one year ► lucrative - to produce or take in a great deal of profit ► net profit - one's total profits after removing expenses ► net value - the overall value of a company, measured by total assets minus total liabilities ► revenue - what a company financially made before expenses are removed ► shareholders' equity - a dollar value that represents the total net value of a company ► stakeholders - any organizations or individuals that are impacted by the actions of a business

Lesson 1

acumen [uh-KYOO-muhn] - having a keen or knowledgeable insight into a subject matter ► business - the entire process involved in developing and exchanging products ► consumer - an individual who purchases a good or service for personal use ► customer - groups or individuals who purchase products ► finance - the field of business that involves the use of money ► ideation - the formation of ideas and concepts ► management - how a business is controlled and the decisions made to keep it functioning ► marketing - the part of business consisting of all activities involved in understanding and communicating to the customer ► market - any place buyers and sellers come together to exchange goods and services ► need - a product a consumer must have in order to survive ► production - the process and activity of making a product ► profit - the amount of income a business or person has earned, minus expenses ► standard of living - the level of material comfort a society enjoys as measured by goods and services ► want - a product the consumer desires but can live without

Lesson 5.6

advocate [AD-vuh-keyt] (verb) - to publicly support or recommend a particular policy or cause ► blue-collar jobs - jobs in an industrial setting, usually making a wage ► employee turnover - the rate at which workers gain and lose jobs in an organization ► job security - the assurance an employee will keep his or her job without the fear of termination ► public sector jobs - jobs within a government agency, such as postal workers or teachers ► white-collar jobs - jobs within the professional field, usually making a salary

Lesson 3.6

aggregate - a whole formed by combining several parts ► cyclical unemployment - unemployment occurring when a country is facing a recessionary period ► frictional unemployment - unemployment occurring when an individual is changing jobs ► international free trade - an approach to trade in which a laissez-faire approach is taken ► international trade - the exchange of goods and services between countries ► laissez-faire - French for "allow to do," a hands-off approach to economics, implying that greater economic prosperity will occur with less government intervention ► macroeconomics - the field of economics devoted to the study of the performance and decision-making of the aggregate economy ► protectionism - an approach to international trade suggesting that regulation is important to ensure that markets function properly ► quotas - a government-imposed trade restriction that limits the number of goods or services that can be imported or exported during a period of time, usually in the form of monetary value ► recession - a period of temporary economic decline when trade, production, and consumption are reduced ► structural unemployment - unemployment occurring when jobs are replaced because of advances in technology, such as machinery replacing manual labor ► subsidies - some kind of benefit, often in the form of tax breaks, given by the government to encourage a type of behavior, such as tax incentives to increase exports ► systemic - relating to a system as a whole, such as an entire economy ► unemployment - an individual economic status that occurs when someone who is actively looking for a job is unable to find work

Lesson 3.3

agrarian culture - a culture that centers on cultivating land and selling crops ► capitalism - a form of market economy that allows economic resources to be privately owned as opposed to owned by the government ► command economies - a nation's government makes all the economic decisions for its people, deciding the three economic questions for itself ► comparative advantage - the ability of a country to produce a good or service at a lower opportunity cost than another country ► competitive advantage - a country's ability to "beat" competitors at producing a particular product, typically either by price or value ► economic system - an organized way in which a nation's government chooses to use its resources to produce goods and services in an economy ► market economy - an economic system based on the principle that individuals are free to make their own economic decisions ► mixed economy - an economic system in which both the government and individuals make decisions about how economic resources are to be produced and distributed ► opportunity cost - the potential profit that is lost by NOT producing a particular good or service ► socialism - a political and economic theory that advocates for the idea that economies should be controlled by the government ► traditional economy - one in which a culture's economic practices are rooted in the historical values and customs of the country in question ► tyranny - cruel or oppressive rule by government ► underdeveloped country - a nation that lags behind developed countries on the basis of infrastructure, industrialization, education, standard of living, GDP, and technology

Lesson 3.4

altruism - the belief in or practice of selfless concern for the well-being of others or the greater society ► tragedy of the commons - the idea that when land and property are equally owned and shared by the general public, they are quickly depleted and spoiled 1 -Private property In a free market economy, individuals are allowed to own property. This not only includes land, but also goods purchased. The government exists to enforce private property rights through the use of law enforcement and court systems. 2 -Profit Individuals and businesses have the right and incentive to produce a profit. At an individual level, it means you have the right to earn money and build savings. 3 -Economic freedom Individuals have the right to decide what to buy, when to buy it, and how to use it. 4 -Voluntary exchange Individuals have the right to trade in their own markets with prices freely established by the laws of supply and demand. 5 -Competition Businesses can freely compete in an open market and decide what to produce and when to produce it.

Lesson 5.3

arbitrary - basing a decision on random choice rather than reason or a system ► autocratic - complete rule by one person with absolute power ► creditor - a person or organization that is owed a sum of money ► debtor - a person or organization that owes a sum of money ► legal system - a process and authoritative structure for interpreting and enforcing the law ► rule of law - the restriction of the arbitrary authority of individuals by placing them under the authority of well-defined and enforceable laws

Lesson 5.5

arbitration - the process of settling disputes through negotiations and outside of the courts ► collective bargaining - the process of negotiating terms of employment between an employer and a group of workers ► Committee of Industrial Organizations - a federation of unions formed as a response to malicious methods and demands of other labor federations ► Commonwealth v. Hunt - a Supreme Court case in Massachusetts that ruled that labor unions were legal provided their actions and reasons for forming were legal ► National Labor Relations Act - a set of United States labor statutes that gave more specific rights to labor unions ► National Labor Union - a national labor federation designed to bring together all local trade unions to push for the same goals ► organized labor - a collection of workers united as a single, representative entity with the purpose of improving economic status and working conditions in the workplace ► strike - an organized work stoppage intended to force an employer to address worker demands ► trade unions - united groups of workers with the intention of seeking rights and demands

Lesson 4.1

archaic globalization - a period in human history when globalization began among the earliest civilizations ► balance of payments - the total amount of money that enters a country, minus the total amount of money leaving a country over a specific period of time ► balance of trade - the calculated difference between a nation's imports and exports ► extreme poverty - the population of the world living on less than 1.25 USD per day ► globalization - the process by which individuals and organizations begin operating on an international scale ► international trade - the buying and selling of goods across borders in the form of imports and exports ► measures of trade - methods of measuring the wealth produced by international business ► multinational - the inclusion or involvement of several countries ► Silk Road - an ancient network of international trade routes that connected regions of Asia and Europe for several centuries ► standard of living - the degree of wealth and material comfort available to a group of people ► total trade - the total currency value of imports and exports between two countries over a given period of time, typically a year

Lesson 2

asset - a piece of property or investment owned by an individual or organization ► barter system - when consumers exchange services and goods for other services and goods ► capital - wealth in the form of money possessed by a person or organization ► corporation - a business structure in which the business is established as a legal entity, separate from the owners themselves ► for-profit business - a business that exists for the sake of making a profit and then uses that profit to grow the business ► limited liability corporation (LLC) - a business structure that combines the benefits of both a corporation and a sole proprietorship ► manufacturing business - businesses responsible for producing goods from raw materials ► merchandising business - businesses that specifically buy tangible goods and resell them to turn a profit ► not-for-profit business - a business whose primary role is to provide for society's needs and specifically has no owners ► partnership - a business structure in which the business is owned by two or more individuals ► retailers - another term for businesses specializing in buying tangible goods and reselling them for a profit ► retail price - the price at which the retailer sells to the direct consumer ► service business - a type of business that provides a customer with a nonphysical, or intangible, product ► shareholders - individuals who own pieces, or shares, of a company ► sole proprietorship - a business structure in which the business is owned by a single person ► tax exemption - being free from the responsibility of paying taxes ► wholesale price - the price at which the manufacturer sells goods to a retailer

Lesson 5.4

attorney - an individual who practices or studies law ► business law - the study of the legal parameters dealing with issues that arise when businesses interact with other companies, the general public, and the government ► compliance - to act in accordance with a person, organization, or government ► contract law - the body of law dealing with written agreements within the exchange of goods, services, and money ► contract - a legally binding document outlining the terms and conditions of a business transaction ► corporations - businesses that are formed as legal entities separate from the owners or employees ► employment law - the body of law encompassing all legal areas of the employer/employee relationship ► intellectual property law - the body of law seeking to define and protect the legal work of artists, inventors, developers, and designers ► legal disciplines - branches of knowledge in the study of law, typically explored in higher education ► piracy - the illegal trading and acquisition of digital work ► securities law - the body of law dealing with the fair exchange and regulation of securities ► security - a tradable financial asset of any kind like stocks, bonds, or bank notes ► tax law - the body of law dealing with regulating, maintaining, and enforcing laws associated with taxation

Lesson 2.5

benefits - non-cash compensation to employees beyond that of a salary or wage ► bonus - extra money added to an employee's base compensation ► compensation - what employees earn in exchange for the service of the labor they provide to the organization ► human resource management (HRM) - the process of hiring, developing, and training employees ► human resources (HR) - the division of business that exists primarily to manage the employees of a company ► incentives - a form of compensation based on performance ► job descriptions - written documents that define the roles, responsibilities, and expectations of a given position ► orientation - training specifically designed to educate new employees about the culture, vision, mission, and policies within an organization ► promotion - employee advancement toward a position of greater responsibility ► salary - a fixed payment to an employee but on an annual basis and is typically paid out weekly, biweekly (every two weeks), or monthly ► wage - monetary payment to an employee for his or her work but is calculated usually on an hourly basis

Lesson 2.2

breach of contract - when a contractual agreement is broken ► business laws - the laws that dictate how businesses are formed and run ► conglomeration - the formation of several businesses into one ► Consumer Bill of Rights - established by John F. Kennedy in 1962; this document established basic rights the consumer has from a company ► contract - a legally-binding agreement between two parties ► filing suit - when a plaintiff, or someone who has suffered financial or emotional injury of some kind, files an official complaint against a defendant, or the party responsible for the damages ► monopoly - when an organization holds exclusive control over a single commodity or service ► price gouging - when a seller spikes the prices of a good higher than is considered reasonable or fair ► recall - when a good is taken out of circulation or sent back by a customer to the business because the product is deemed defective or unsafe for use ► securities - investments such as stocks, bonds, or mutual funds

Lesson 2.1

business ethics - the study of business practices and policies that relate to the governance of people, a company, and other controversial issues common in the business world ► code of ethics - a list of ethical practices as defined by a specific business ► confidentiality - a business approach requiring specific information about a business or its people to be held in secret unless someone has clearance to know it ► corporate culture - beliefs and practices that determine employees' and managements' behavior toward one another; typically develops over time ► corporate social responsibility - a business approach in which a company acts in the best interest of stakeholders socially, environmentally, and economically ► ethical dilemma - a conflict between a person or organization's beliefs and values ► ethics - moral principles that govern a person's behavior or help determine how an activity ought to be performed ► mutual benefit - a business context in which two parties both gain from a single action ► patron - an individual who financially supports a person or organization ► philanthropy - taking action to promote the welfare and betterment of others ► proprietary information - work produced by employees and owned by a company ► worldview - the perception of the world from a specific viewpoint

lesson 4.2

buying power - the capacity to purchase goods or services ► currency - a system of money in general use by one particular country ► floating currency - the economic principle that a currency's exchange rate is determined by private market forces ► foreign exchange rate - the rate at which one currency can be exchanged for another ► foreign exchange - an even transfer between foreign currencies ► purchasing power parity (PPP) - the theory suggesting that rates between two currencies are truly equal when their buying power is the same

Lesson 3.2

capital goods - all the tools, equipment, and machinery required to turn raw materials into finished products ► command economy - an economic system in which prices for goods and services are determined and regulated by the government ► entrepreneurship - the act of starting a new business from the very beginning ► entrepreneurs - individuals who conceive of and start businesses from the very beginning ► factors of production - the natural resources a nation uses to produce goods and services for domestic and international sale ► Federal Reserve - the central bank of the United States that serves to protect and regulate the economy ► free market - an economic system in which the prices for goods and services are determined by the open market, free from the restrictions and regulations of the government ► interest rate - a portion of a loan charged to the borrower in exchange for receiving the loan ► labor - the physical work performed by workers within an organization ► land - the natural resource materials pulled from the Earth that lead to the production of goods ► rebut - to claim that a suggestion or idea is false ► scarcity - the fundamental idea that resources are limited

Lesson 4.5

collectivism - a state of culture in which individuals see themselves as part of a greater whole, or group ► corporate culture - the beliefs and practices held by a company's employees and management ► culture - an integrated pattern of human knowledge, belief, and behavior derived over time from history and forms of belief ► high-context cultures - a cultural variation that relies heavily on context to communicate an idea ► homogeneous - the state of being completely alike ► individualism - a state of culture in which the individual is considered a free-thinking, personal actor on society while ties with the norms and thoughts of others are loose ► low-context cultures - a cultural variation that relies little on context and more on specific meaning of words ► popular culture - the activities of culture based on what is normative, particularly in the arts ► power distance - the extent to which employees view superiors as having true authority ► societal culture - the beliefs, practices, and social perspectives of society as a whole ► time orientation - a culture's perspective on the importance and function of time ► turnover - the rate at which employees in a company are replaced

Lesson 5.1

continuum [kuhn-TIN-yoo-uhm] - a variation of elements that are not perceptively different on a small scale, but quite distinct on a large scale ► contract - the legally-binding document outlining the terms and conditions of a business transaction ► investors - individuals or organizations who put money into financial assets with the expectation of a return ► Laffer Curve - a graph illustrating the relationship between taxation rates and government revenue ► public company - an organization whose shares are freely traded in the stock exchange and can be owned by the public ► return - in finance, this is a gain or loss in an investment over a particular period ► shares - also known as stocks, these are pieces of ownership in a company and are represented in a dollar value ► warranty - a written guarantee from a company to a purchaser of a product, promising to repair or replace a defective or unwanted product for a specified period of time

Lesson 2.6

conversion - the principle that the value of a product is worth more than the sum of its parts ► division of labor - the concept of different workers specializing in different tasks ► inventory management - the process involved in sourcing, keeping track of the stock of, and distributing inventory ► inventory - a collection of items owned by a business and that are available when needed ► manufacturing - the creation of a good on a large scale utilizing machinery ► procurement - the process of acquiring the materials needed to manufacture a product ► production process - all phases of production that contribute to the creation of a good or service ► quality control - the process of ensuring products meet government and customer standards ► raw materials - the basic materials from which a product is made ► sourcing - finding the necessary suppliers to acquire the raw materials needed for production ► supplier - a business vendor who sells materials to another business that then converts those materials into a consumable good

Lesson 6

cost of goods sold (COGS) - an accounting term describing the expenses related to producing a good or service ► depreciation - the accounting method of spreading the cost of a tangible asset over time ► gross margin - sales revenue less (minus) cost of goods sold ► income statement - a financial statement that reports a company's financial performance over a specific accounting period ► net earnings before interest and tax (NEBIT) - gross margin minus your total expenses ► net income - a company's total earnings after all expenses have been removed ► non-operating expenses - expenses a business incurs not related to core operations ► operating expenses - expenses a business incurs through its normal operation of business to deliver its good or service ► publicly traded organizations - organizations that are publicly open for trade and ownership of shares in the business ► quarterly report - a set of financial statements, including an income statement, released by a company every three months

Lesson 4.3

dissonance - a tension or clash between two elements that ought to be harmonious ► enterprise - a business or company of considerable size ► multinational enterprise - a company that produces goods and services in one or more countries other than its home country ► offshoring - the process of assigning some of a company's business processes overseas, typically to take advantage of lower costs ► outsourcing - the process of assigning some of a company's business processes to an external agency, typically for the sake of efficiency and cost effectiveness

Lesson 3.1

economics - the branch of study concerned with the production, consumption, and the transfer of wealth ► exports - manufactured goods or services that are sold to another country ► fiscal - relating to government revenue, especially taxes ► globalization - the process of businesses and organizations operating on an international scale ► imports - manufactured goods or services that are purchased from another country ► incentivize - the act of creating incentives, or motivators, to perform a particular action or task ► international economics - the study of the effects and relationships between international economies based on resources, trade, and consumer preferences ► International Monetary Fund - an international organization of 189 countries that helps facilitate trade by housing almost $670 billion USD for the sake of providing swift and accurate financial transfers between countries ► nationalization - when a government seizes a private business and claims it for its own ► sanctions - trade penalties imposed by one nation onto another ► tariff - a tax or "duty" placed on the exports or imports of a good from another country ► U.S. Department of the Treasury - a department within the executive branch established to manage the financial activities of the federal government

Lesson 4

good - a physical, tangible product that can be touched, felt, and produced, ready for delivery ► gross domestic product (GDP) - the total value of goods produced and services provided in a country over one year ► intangible - objects that cannot be touched, do not have a physical presence, or cannot be easily measured ► inventory - a quantity of goods held in stock ► service - an intangible product that is often expressed in the provision of space, time, and intellectual energy ► tangible - objects that can be handled, felt, and easily measured ► transfer of ownership - the capability of a product to be transferred from one owner to another ► warehousing - the process of storing goods in a warehouse

Lesson 2.3

humility - having the quality of thinking you are not greater than those around you ► integrity - the quality of being honest and having strong moral principles, or being morally upright

Lesson 3.5

inflation - the general increase in prices and fall in the purchasing value of money ► microeconomics - the study of the decision-making of individuals and firms over the allocation and use of scarce resources ► minimum wage - set by both federal and state governments, the lowest hourly wage companies may pay by law ► perfect competition - a market scenario in which no single company is large enough to have exclusive market power over a single product ► scarce resources - the economic problem of having more human desires than there are available resources to meet those desires; scarcity

Lesson 2.4

superficial - appearing to be true until examined more closely ► vision casting - when leadership works to plant a vision in an organization's culture ► vision statement - a written vision representing where the company wants to go and what initiatives must exist to get it there ► vision - the ability to see and know the direction an organization is going and deciphering how to get there

Lesson 5.2

► Bureau of Consumer Protection - a subdivision of the Federal Trade Commission that helps prevent unfair, deceptive, and fraudulent business practices ► copyright - a legal right granted to a firm or individual to use a given work of intellectual property ► Department of Labor - the primary federal department that is responsible for the regulation of employee treatment such as occupational safety and wage and hour standards ► Department of Transportation - a federal organization dedicated to regulating transportation law in the United States ► Food and Drug Administration - a federal agency in the United States responsible for promoting and protecting public health ► intellectual property - a work of creativity, such as a logo, design, song, or piece of literature that one might copyright, patent, or trademark ► negligence - the failure to take proper care to ensure the safety of customers or employees ► occupational safety - the field concerned with the health, safety, and wellbeing of employees in the workplace ► patent - a government-issued license for a company to exclusively use for a set period for a product or invention ► proprietary - the relationship of content to its owner ► trademark - a symbol, word, or words legally registered for exclusive use by a company