| 401(k) plan | Savings plan that allows you to deposit pretax dollars and whose earnings compound tax free until withdrawal, when the money is taxed at ordinary income tax rates.
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| 4Ps | The ingredients that go into a marketing program: product, price, place, and promotion.
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| absolute advantage | Occurs when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
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| accounting | Recording, classifying, summarizing, and interpreting financial events and transactions to provide management and other interested parties the information they need to make good decisions.
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| account receivable | An amount of money owed to the firm that it expects to be paid within one year.
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| acquisition | One company's purchase of the property and obligations of another company.
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| affirmative action | Activities designed to "right past wrongs" by increasing opportunities for minorities and women.
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| agents/brokers | Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange, but don't take title to the goods (don't own the goods at any point in the process).
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| American Federation of Labor (AFL) | An organization of craft unions that championed fundamental labor issues; founded in 1886.
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| amortization | The gradual elimination of a liability.
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| angel investors | Individuals, usually wealthy, who invest their own money in a business for a share of the company.
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| annual report | Yearly statement of the financial condition, progress, and expectations of an organization.
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| annuity | A contract to make regular payments to a person for life or for a fixed period.
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| apprentice programs | Involve a period during which a learner works alongside an experienced employee to master the skills and procedures of a craft.
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| arbitration | Occurs when both parties agree on an unbiased third party to make a decision about the disagreement.
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| assets | Economic resources (things of value) owned by a firm.
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| auditing | The job of reviewing and evaluating the records used to prepare a company's financial statements.
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| autocratic leadership | Making managerial decisions without consulting others.
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| balance of payments | The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows coming into or leaving a country from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
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| balance of trade | Ratio of a country's exports to imports.
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| balance sheet | The financial statement that reports a firm's financial condition at a specific time.
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| barter | The trading of goods and services for other goods and services directly.
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| bartering | The exchange of merchandise for merchandise or service for service with no money involved.
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| benefit segmentation | Determining which benefits are preferred and using those benefits to promote a product.
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| board of directors | A group that oversees the activities of a corporation. Generally represents a mix—a small number of company executives and a greater number of outsiders. The group ultimately responsible for the decisions of a business.
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| bond | A corporate certificate indicating that a person has lent money to a firm.
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| bookkeeping | The recording of business transactions.
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| boycott | Occurs when organized labor encourages both its members and the general public not to buy the products of a firm involved in a labor dispute.
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| brain drain | The loss of the best and brightest people to other countries.
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| brand | The name and symbol that identify the product of one seller over another.
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| brand equity | Refers to the combination of factors that people associate with a given brand name, such as image and perceived quality.
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| brand loyalty | The extent to which a customer will choose one product over another on a continual basis.
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| bundling | Grouping two or more products together and pricing them as a unit.
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| business | An individual or organization that seeks to provide goods and services to others while operating at a profit.
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| business cycle | The periodic rises and falls that occur in all economies over time.
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| business plan | Detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s).
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| business-to-business (B2B) | A business that produces products to sell to another business.
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| business-to-consumer (B2C) | A business that produces products to sell directly to the consumer.
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| capitalist system | Companies and businesses are owned by citizens instead of government.
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| cash-and-carry wholesalers | Serve mostly smaller retailers with a limited assortment of products. Office Depot would be an example.
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| category killer | Stores that offer a wide selection of goods in a specific category (such as Toys "R" Us), at competitive prices.
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| certified financial planner (CFP) | A licensed person who manages investments.
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| certified management accountant (CMA) | A professional accountant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accountants.
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| certified public accountant (CPA) | An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (AICPA) and does accounting work for no one particular firm.
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| channel of distribution | The whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.
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| command economies | The government largely decides what goods and services get produced, who gets them, and how the economy grows.
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| common market | Regional group of countries that have a common external tariff, no internal tariffs, and the coordination of laws to facilitate exchange among member countries (also called a trading bloc).
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| common stock | The most basic form of ownership in a firm.
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| communism | An economic and political system in which the state (the government) makes almost all economic decisions and owns almost all the major factors of production.
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| company stores | A store owned by a chain that owns and franchises stores.
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| comparable worth | The concept that people in jobs that require similar levels of education, training, or skills should receive equal pay.
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| comparative advantage theory | The theory that a country should sell to other countries those products that it produces most effectively and efficiently and buy from other countries those products it cannot produce as effectively or efficiently.
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| compensation | The combination of salary, vacation time, paid health care, and other benefits.
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| compliance-based ethics codes | Prevent unlawful behavior by increasing control and penalizing violations.
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| compressed workweek | When an employee works a full number of hours in less than the standard number of days.
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| conceptual skills | Ability to see the "big" picture.
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| conglomerate merger | Unites firms in completely unrelated industries.
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| Congress of Industrial Organizations (CIO) | Union organization of unskilled workers; broke away from AFL in 1935 and rejoined it in 1955.
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| consumer price index (CPI) | Consists of monthly statistics that measure the pace of inflation or deflation. It tracks the price of 400 goods.
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| contingency planning | Planning for "what if" scenarios and secondary plans in case the original ones do not work.
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| contingent workers | Workers who do not have the expectation of regular, full-time employment.
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| contract manufacturing | When one country produces goods with another country's company label on it.
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| contrarian approach | Purchasing stock when others are selling.
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| controlling | Establishing clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not.
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| conventional (C) corporation | A form of business ownership that provides limited liability.
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| cookies | Pieces of information, such as registration data or user preferences, sent by a Web site over the Internet to your Web browser that the browser is expected to save and send back to the server whenever the user returns to that Web site.
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| 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.
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| co-payment | An amount paid by the insured party when medical services are rendered.
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| core time | Refers to the period when all employees are expected to be at their job stations, when referring to a flextime plan.
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| corporate governance | The processes, customs, policies, laws, and institutions affecting the way in which a corporation is directed, administered, or controlled.
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| corporate philanthropy | An indicator of social responsibility that includes charitable donations.
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| corporate policy | The position a firm takes on social and political issues.
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| corporate responsibility | An indicator of social responsibility that includes the actions the company takes that could affect others.
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| corporate social responsibility | The level of concern a business has for the welfare of society.
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| cost of goods sold (cost of goods manufactured) | A measure of the cost of merchandise sold, or the cost of the raw materials and supplies used for producing items for sale.
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| countertrading | A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services with the others.
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| cross-functional teams | A group of people with different expertise working together to achieve a common goal.
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| culture | The set of values, beliefs, rules, and institutions held to by a specific group of people.
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| data | Raw, unanalyzed, and unorganized facts and figures.
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| data mining | Looking for hidden patterns in the data in a data warehouse and discovering relationships among the data.
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| data processing (DP) | The name for business technology in the 1970s. Its primary purpose was to improve the flow of financial information.
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| data warehouse | An electronic storage place for data on a specific subject (such as sales) over a period of time.
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| database | An electronic storage file where information is kept.
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| deductible | The amount that must be spent on health care before insurance companies will cover the remaining expenses.
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| deflation | Prices are actually declining. It occurs when countries produce so many goods that people cannot afford to buy them all.
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| demand | The quantity of goods that buyers will purchase at a particular price.
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| demographic segmentation | Segmentation by age, income, and education level, race, profession, or religion.
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| depreciation | The systematic write-off of the cost of a tangible asset over its estimated useful life.
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| depression | A severe recession, when the GDP falls for several quarters, and recovery is a long time off.
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| direct selling | Selling to consumers in their homes or where they work.
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| disability insurance | A type of insurance that pays part of the cost of a long-term sickness or an accident.
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| discount rate | The interest rate that the Fed charges for loans to member banks.
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| diversity | Broad differences among people (ethnicity, gender, color, sexual orientation, body size, age).
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| dividend | Part of a firm's profits that may be distributed to stockholders as either cash payments or additional shares of stock.
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| double-entry bookkeeping | The concept of writing (or typing) every transaction in two places.
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| double taxation | Occurs when the owners of the corporation are taxed twice—once when the corporation itself gets taxed and a second time when the dividends are taxed.
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| downsizing (rightsizing) | Elimination of many management jobs, and other types of jobs, by using cost-cutting methods and technology, such as computers.
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| drop shippers | Solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.
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| dumping | The practice of selling products in a foreign country at lower prices than those charged in the producing country.
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| e-business | Any electronic business data exchange using any electronic device.
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| e-commerce | Business conducted electronically over the Internet selling products or services online through e-business.
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| 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.
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| effectiveness | Producing the desired results.
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| efficiency | The ability to produce using the least amount of resources.
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| embargo | Complete ban on goods to or from a country.
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| employee orientation | The activity that initiates new employees to the organization; to fellow employees; to their immediate supervisors; and to the policies, practices, and objectives of the firm.
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| empower | Giving employees as much freedom as possible to become self-directed and self-motivated.
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| empowerment | To give power or authority; allowing employees the ability and trust to make decisions.
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| entrepreneur | A person who owns and operates his or her own business.
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| equity theory | The idea that employees try to maintain equity between inputs and outputs compared to others in similar positions.
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| ethics | The standards of moral behavior; that is, behavior that is accepted by society as right versus wrong.
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| ethnocentricity | Attitude that one's own culture is superior to all others.
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| European Union (EU) | An agreement among European member countries to eventually reduce all barriers to trade and become unified both economically and politically.
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| event marketing | Sponsoring events such as rock concerts or being at various events to promote your products.
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| everyday low pricing (EDLP) | A pricing strategy where a store sets prices lower than other stores and does not have many special sales.
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| exchange rate | The value of one nation's currency relative to the currencies of other countries.
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| exclusive distribution | Distribution that sends products to only one retail outlet in a given geographic area.
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| executor | A person who assembles and values your estate, files income and other taxes, and distributes assets.
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| exporting | Selling products to another country.
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| expropriation | When a host government takes over a foreign subsidiary in a country.
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| external candidates | People who are not currently working within the company.
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| extranet | 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.
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| extrinsic reward | A reward given to an employee, such as a promotion or pay raise.
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| factors of production | The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge.
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| Family and Medical Leave Act (FMLA) | Passed in 1993, stipulates that companies with more than 50 employees must provide up to 12 weeks of unpaid leave to an employee upon birth or adoption of a child or upon serious illness of a parent, spouse, or child.
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| Federal Open Market Committee (FOMC) | The group that oversees the entire Federal Reserve process.
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| Federal Reserve | The organization that oversees the money supply of the United States.
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| FICO | This is a credit score assigned by the three major credit reporting bureaus.
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| financial accounting | Generates information for use outside the organization.
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| Financial Accounting Standards Board (FASB) | The group that oversees accounting practices.
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| financial statement | A summary of all the transactions that have occurred over a particular period.
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| firewall | Can consist of hardware or software; prevents outsiders from accessing information the user does not want others to see.
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| fiscal policy | The federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending.
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| flextime plan | A type of scheduling that gives employees some freedom to choose when to work, as long as they work the required number of hours.
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| focus group | A small group of people who meet under the direction of a discussion leader who tries to discover their opinions about a product.
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| foreign direct investment (FDI) | The buying of permanent property and businesses in foreign nations.
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| foreign subsidiary | A company that is owned in a foreign country by another company (called the parent company).
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| formal leadership | Someone has been given authority to make decisions or lead a group.
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| franchise agreement | An arrangement where by someone with a good idea for a business sells the rights to use the business name and sell a product or a service to others in a given territory.
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| franchisee | A person who buys a franchise.
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| franchisor | A company that develops a product concept and sells others the rights to make and sell the product.
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| free market | A system in which decisions about what to produce and in what quantities are made by the market.
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| free market economies | The market largely determines what goods and services get produced, who gets them, and how the economy grows.
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| free-rein (laissez-faire) leadership | Managers setting objectives and then employees being relatively free to do whatever it takes to accomplish those objectives.
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| free trade | The reduction of barriers to trade, such as elimination of tariffs (or taxes) on goods brought into another country; the movement of goods and services among nations without political or economic trade barriers.
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| future value | The value of an investment at some future point in time.
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| General Agreement on Tariffs and Trade (GATT) | An agreement signed by many countries to reduce the restrictions on trade with one another. It is overseen by the WTO.
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| generally accepted accounting principles (GAAP) | A set of principles followed by accountants in preparing reports.
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| general partner | An owner (partner) who has unlimited liability and is active in managing the firm.
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| general partnership | A partnership in which all owners share in operating the business and in assuming liability for the business's debts.
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| geographic segmentation | Dividing the market by geographic area (cities, counties, states, regions, etc.).
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| global business | Any activity that seeks to provide goods and services to others across national borders while operating at a profit.
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| global marketing | The term used to describe selling the same product in essentially the same way everywhere in the world.
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| global trade | The exchange of goods and services across national borders.
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| goals | The broad, long-term accomplishments an organization wishes to attain.
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| goal setting theory | The idea that setting ambitious but attainable goals can motivate workers and improve performance.
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| golden parachute | Aptly refers to the massive amount of bonuses received by upper-level executives upon leaving a company.
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| Governmental Accounting Standards Board (GASB) | This group sets standards for governmental agencies accounting practices.
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| gray market | The flow of goods in a distribution channel other than those intended by the manufacturer.
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| Greenfield investment | When a company decides to enter a country and build offices and production facilities.
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| gross domestic product (GDP) | The total value of final goods and services produced in a country in a given year.
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| gross national product (GNP) | Similar to GDP, but only counts Americans producing products in the country, not other foreign nationals.
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| gross profit (gross margin) | How much a firm earned by buying (or making) and selling merchandise, without expenses.
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| gross sales | Total of all sales the firm completed.
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| hackers | People who unlawfully break into computer systems.
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| Harmonized Tariff Schedule | A publication by the U.S. government that lists the tariffs and quotas for every imported good.
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| Hawthorne effect | The tendency for people to behave differently when they know they are being studied.
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| high-low pricing strategy | With this strategy, a store's regular prices are higher than those at stores using EDLP, but it has many special sales in which the prices are lower.
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| horizontal merger | Joins two firms in the same industry and allows them to diversify or expand their products.
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| hostile takeover | Attempts by the bidder to acquire a firm against the interest of the latter's management.
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| hostile work environment | An environment created as a result of sexual harassment.
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| human relations skills | The ability to communicate and work with others.
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| human resource management | The process of determining human resource needs and then recruiting, selecting, training and developing, compensating, appraising, and scheduling employees to achieve organizational goals.
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| hygiene factors | Job factors that can cause dissatisfaction if missing but do not necessarily motivate employees if increased.
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| hyperinflation | When inflation increases beyond 50 percent in a given time period.
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| illegal | An action for which you could be fined or imprisoned.
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| importing | Buying products from another country.
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| import quota | Limits the number of products in certain categories that a nation can import.
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| income statement | The income statement summarizes all of the resources (called revenue) that have come into the firm from operating activities, the money resources that were used up, the expenses incurred in doing business, and what resources were left after all costs and expenses, including taxes, were paid out.
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| independent audit | An evaluation and unbiased opinion about the accuracy of a company's financial statements.
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| index fund | A fund that invests in stocks that follow the Standard & Poor's 500 (S&P 500) or other similar index.
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| individual retirement account (IRA) | Allows a person to save a percentage of income tax free.
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| industrial good | A product that is used to produce or as a component of other products.
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| industrial unions | Labor organizations of unskilled and semiskilled workers in mass-production industries such as automobiles and mining.
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| inflation | A general rise in the prices of goods and services over time.
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| infoglut | The phenomenon of information overload in business.
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| informal leadership | Someone does not have "official" authority but is recognized as a leader by the group.
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| information | The processed and organized data that can be used for managerial decision making.
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| information systems | The name for business technology in the 1980s. Its role changed from supporting the business to doing business. Technology such as ATMs and voice mail are examples.
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| information technology (IT) | The name given to business technology in the 1990s. Its role became the way of doing business, rather than just using technology to help with business functions.
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| initial public offering (IPO) | The first public offering of a corporation's stock.
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| injunction | A court order directing someone to do, or to refrain from doing, certain acts.
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| insider trading | Insiders of a company (such as employees) using private company information to further their own financial situation. The use of knowledge or information that individuals gain through their position that allows them to benefit unfairly from fluctuations in security prices.
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| instant messaging (IM) | Allows businesses to communicate in real time, for free, via computer.
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| insurance | A written contract between the party being insured and the insurer where the financial responsibility for losses transfers to the insurer up to a specified limit.
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| integrated marketing communication (IMC) | Combines all the promotional tools into one comprehensive and unified promotional strategy.
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| integrity-based ethics codes | Define the organization's guiding values and create an environment that supports ethically sound behavior.
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| intensive distribution | Distribution that puts products into as many retail outlets as possible.
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| internal candidates | Employees who are already within the firm.
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| intranet | A companywide network, closed to public access, that uses Internet-type technology.
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| intrapreneuring | The process of continuing to innovate a small business.
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| intrinsic reward | The personal satisfaction you feel when you perform well and achieve goals.
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| invisible hand | A theory developed by Adam Smith that says that self-directed gain turns into social and economic benefits for all.
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| job analysis | A study of what is done by employees who hold various job titles.
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| job description | Specifies the objectives of the job, the type of work to be done, the responsibilities and duties, the working conditions, and the relationship of the job to other functions.
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| job enlargement | A motivation technique that involves combining a series of tasks into one challenging assignment.
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| job enrichment | A motivational strategy that involves making the job more interesting in order to motivate employees.
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| job rotation | A motivation technique that involves moving employees from one job to another.
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| job sharing | An arrangement whereby two part-time employees share one full-time job.
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| job simulation | The use of equipment that duplicates job conditions and tasks so that trainees can learn skills before attempting them on the job.
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| job specifications | A written summary of the minimum qualifications (education, skills, etc.) required of workers to do a particular job.
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| joint venture | A partnership in which two or more companies (often from different countries) join to undertake a major project for a specified time period.
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| journal | Record book in accounting (can also be a computer program).
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| Keogh | Similar to an IRA but designed for entrepreneurs with higher maximum contributions.
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| Knights of Labor | The first national labor union; formed in 1869.
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| labor intensive& | A type of business where the primary cost of operations is the cost of labor.
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| leadership | The process of offering guidance or direction.
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| leading | Creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives.
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| ledger | A specialized accounting book or computer program in which information from accounting journals is recorded into specific categories.
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| leveraged buyout (LBO) | An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.
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| liabilities | What the business owes to others (debts).
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| licensing | Selling the right to manufacture a product or use a trademark to a foreign company (the licensee) for a fee (a royalty).
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| limited liability | Means limited partners are not responsible for the debts of the business beyond the amount of their investment—their liability is limited to the amount they put into the company; their personal assets are not at risk.
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| limited liability partnership (LLP) | LLPs limit 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.
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| limited partner | An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.
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| limited partnership | A partnership with one or more general partners and one or more limited partners.
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| liquidity | Refers to how fast an asset can be converted into cash.
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| lockout | An attempt by managers to put pressure on union workers by temporarily closing the business.
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| logistics | Planning, implementing, and controlling the physical flow of materials, goods, and related information from points of origin to points of consumption.
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| loss | This occurs when a business's expenses are more than its revenues.
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| loss leader | When a store advertises certain products at or below cost to attract people to the store.
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| M-1 | Coins and paper bills, money that's available by writing checks, and money that's held in traveler's checks.
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| M-2 | Everything in M-1 plus money in savings accounts, money market accounts, mutual funds, and certificates of deposit.
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| M-3 | M-2 plus big deposits, which would include agreements among banks.
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| macroeconomics | The study of the operation of a nation's economy as a whole.
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| management | The process of planning, organizing, leading, and controlling people and other available resources to accomplish organizational goals and objectives.
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| management buyout | When employees of the company get together to purchase the business.
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| management by objectives (MBO) | A system of goal setting and implementation that involves a cycle of discussion, review, and evaluation of objectives among top and mid-level managers, supervisors, and employees.
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| management development | The process of training and educating employees to become good managers and then monitoring the progress of their managerial skills over time.
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| managerial accounting | Provides information and analysis to managers within the organization to assist them in decision making.
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| market | Consists of people with unsatisfied wants and needs who have both the resources and the willingness to buy.
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| market segmentation | The process of dividing the total market into several groups whose members have similar characteristics.
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| marketing | The process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives.
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| marketing intermediaries | Organizations that assist in moving goods and services from producers to business and consumer users.
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| marketing management | The process of overseeing all of the aspects of marketing a particular product or service for the purpose of attracting and retaining customers.
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| marketing research | The analysis of markets to determine opportunities and challenges, and to find the information needed to make good marketing decisions.
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| Maslow's hierarchy of needs | Theory of motivation based on unmet human needs from basic physiological needs to safety, social, esteem, and self-actualization needs.
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| master limited partnership (MLP) | Structured much like a corporation in that it acts like a corporation and is traded on the stock exchanges like a corporation, but taxed like a partnership and thus avoids the corporate income tax.
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| maturity date | The date that a bond can be cashed in.
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| mediation | The use of a third party who encourages both sides in a dispute to come to an agreement.
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| merchant wholesalers | Independently owned firms that take title to the goods they handle.
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| merger | The result of two firms forming one company.
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| microeconomics | The study of the behavior of people and organizations in particular markets.
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| middle management | General managers, division managers, district managers, and plant managers or supervisors.
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| mission statement | An outline of the fundamental purposes of an organization.
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| mixed economies | Economies where some allocation of resources is made by the market and some by the government.
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| monetary policy | Policies used by the Federal Reserve to control factors such as inflation, deflation, exchange rates, and economic growth. The management of the money supply and interest rates.
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| money | Anything that people generally accept as payment for goods and services.
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| money supply | The amount of money the Federal Reserve Bank makes available for people to buy goods and services with.
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| monopolistic competition | Exists when a large number of sellers produce products that are very similar but are perceived by buyers as different.
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| monopoly | Occurs when there is only one seller for a product or service.
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| motivation | The drive to satisfy a need.
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| motivators | Job factors that cause employees to be productive and give them satisfaction.
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| multinational corporation | An organization that manufactures and markets products in many different countries; it has multinational stock ownership and multinational management.
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| mutual fund | Like an investment company, it pools investors' money and then buys stocks or bonds in many companies.
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| NASDAQ | Completely electronic securities market.
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| national debt | The sum of government deficits over time.
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| negotiated labor-management agreement | An agreement signed between unions and management for agreed-upon working conditions, benefits, and pay.
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| net sales | Gross sales minus returns, discounts, and allowances.
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| New York Stock Exchange (NYSE) | A securities market.
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| niche marketing | The process of finding small but profitable market segments and designing or finding products for them.
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| nonprofit organization | An organization whose goals do not include making a personal profit for its owners and organizers but rather the alleviation of some social problem.
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| nontariff barriers | Restrictive standards that detail exactly how a product must be sold in a country.
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| North American Free Trade Agreement (NAFTA) | An agreement signed by the United States, Mexico, and Canada to reduce or eliminate tariffs on goods and to encourage trade between the countries.
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| objectives | Specific, short-term statements detailing how to achieve the organization's goals.
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| off-the-job training | It occurs away from the workplace and consists of internal or external programs to develop any of a variety of skills or to foster personal development, such as health or stress management classes.
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| oligopoly | A form of competition in which just a few sellers dominate a market.
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| online training | Employees "attend" classes via the Internet to get the necessary training.
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| on-the-job training | This type of training immediately begins with the new employee learning by doing, or watching others for a while and then imitating them.
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| OPEC | An organization, consisting of 12 oil-producing countries, to work collectively for oil interests.
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| open-market operations | Another tool commonly used by the Fed consisting of buying and selling government bonds.
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| operating expenses | The costs involved in operating a business.
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| operational planning | Scheduling, budgeting, and any other necessary plans used to meet the tactical objectives.
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| organization chart | Visual diagram that shows relationships among people and divides the organization's work.
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| organizing | 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.
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| over-the-counter (OTC) market | Provides companies and investors with a means to trade stocks not listed on the national securities exchanges.
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| owners' equity | The amount of the business that belongs to the owners minus any liabilities owed by the business.
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| participative (democratic) leadership | Managers and employees work together to make decisions.
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| partnership | Legal form of business with two or more owners.
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| par value | The dollar amount assigned to each stock certificate on the corporation's charter.
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| penetration strategy | A pricing strategy in which a product is priced low to attract more customers and discourage competitors.
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| pension | A promise made by a company to pay a monthly dollar amount to employees who have worked a minimum number of years.
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| perfect competition | Exists when there are many sellers in a market, no seller is large enough to dictate the price of a product, and the products are similar.
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| performance appraisal | An evaluation in which the performance level of employees is measured against established standards to make decisions about promotions, compensation, additional training, or firing.
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| performance improvement plan (PIP) | A detailed document explaining what the employee needs to change and detailed steps on how to accomplish the change.
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| personal selling | Face-to-face presentation and promotion of goods and services.
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| PEST analysis | An analysis of outside factors that could affect a business: political, economic, social, and technological.
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| place | The process of getting products to the places where they will be sold, or distribution, and to how the actual locations where the products are sold is determined.
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| planning | Anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.
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| portal | An entry point into a Web site.
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| power of attorney | A contract that gives signing power from one person to another to make decisions.
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| preferred stock | A preference (hence the term preferred) in the payment of dividends.
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| present value | The worth of an investment right now.
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| price indexes | Indexes of the changes in goods and prices of goods and services based on the prices of the same goods and services from a previous period.
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| price leadership | The procedure by which one or more dominant firms set the pricing practices that all competitors in an industry follow.
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| primary research | Research that a marketer creates and implements.
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| principle of motion economy | Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions.
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| private accountant | Accountant who works for a single firm, government agency, or nonprofit organization, on the payroll of the company or organization.
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| producer price index (PPI) | Similar to the consumer price index, but measures prices at the wholesale level.
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| product differentiation | The creation of real or perceived product differences.
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| product life cycle | A theoretical model of what happens to sales and profits for a product class over time.
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| product line | A group of products that are physically similar or intended for a similar market.
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| product placement | Paying to put products into TV shows and movies where they will be seen.
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| productivity | The amount of output you generate given the amount of input (e.g., hours worked).
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| profit | The amount of money a business earns above and beyond what it pays out for salaries and other expenses.
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| promotion mix | The combination of tools a marketer uses: advertising, personal selling, public relations, and sales promotion.
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| prospecting | Researching potential buyers and choosing those most likely to buy.
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| prospectus | A document that provides information about a company to investors. Required to be sent out at least once per year.
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| psychographic segmentation | Segmentation by lifestyle, values, attitudes, and interests.
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| psychological pricing (odd pricing) | Pricing goods and services at price points that make them appear less expensive than they are.
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| public accountant | Accountant who does not work for a specific company.
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| public domain software (freeware) | Software that is free for the taking.
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| 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.
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| public relations (PR) | The management function that evaluates public attitudes, changes policies and procedures accordingly, and executes a program of action and information to earn public understanding and acceptance.
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| quid pro quo | An employee's submission to sexual harassment is made either explicitly or implicitly a term or condition of employment, or an employee's submission to or rejection of such conduct is used as the basis for employment decisions affecting the worker's status.
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| rack jobbers | Furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.
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| ratio analysis | The assessment of a firm's financial condition and performance through calculations and interpretation of financial ratios developed from the firm's financial statements.
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| reasonable accommodation | An adjustment to the work environment that does not have high costs.
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| recession | When the GDP falls for two consecutive quarters.
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| recovery | An improvement in the economy, marking the end of a recession or decline.
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| recruitment | The set of activities used to obtain a sufficient number of the right people at the right time; its purpose is to select those who best meet the needs of the organization.
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| reinforcement theory | The idea that positive and negative reinforcement motivate a person to behave in certain ways.
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| relationship marketing | A marketing strategy with a goal to keep individual customers over time by offering them new products that exactly meet their requirements.
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| reserve | An amount of money that must be kept on hand and not lent to individuals or institutions.
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| reserve requirement | Percentage of commercial banks' checking and savings accounts that must be physically kept in the banks.
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| resource | Something used in the production of goods.
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| resource development | The study of how to increase resources and to create the conditions that will make better use of those resources.
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| retailer | Organization that sells ultimately to consumers.
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| return on investment (ROI) | The money gained from taking a business venture risk. In addition to money, investment of time is also an important consideration for businesspeople.
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| revenue | The total amount of money a business takes in during a given period by selling goods and services.
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| revenue | The value of what is received from goods sold, services rendered, and other financial sources.
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| reward | The gratification as a result of some action.
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| rider | Supplemental insurance; also means an amendment to a contract.
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| risk | Exposure to the chance of a financial or time loss due to something that is not successful.
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| Roth IRA | An investment that does not get up-front deductions on taxes, but the earnings grow tax free and are tax free when they are withdrawn.
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| sales promotion | Promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.
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| sampling | Letting consumers have a small sample of the product for no charge.
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| Sarbanes-Oxley Act | Signed into law in 2002 after many accounting scandals, the act requires higher standards of accounting practices and auditing firms; set new standards for ethical codes of conduct within organizations.
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| scientific management | Studying workers to find the most efficient processes and then teaching people those techniques.
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| S-corporation | A type of legal entity in which the biggest advantage is that it is taxed like a sole proprietorship.
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| secondary research | Data already available to the marketer, such as in government publications and journal articles.
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| securities | Stocks and bonds that are traded.
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| Securities and Exchange Commission (SEC) | A governmental organization that has responsibility at the federal level for regulating activities in the various exchanges.
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| securities market | A place where stocks and bonds are traded.
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| selection | The process of gathering information and deciding who should be hired, under legal guidelines, for the best interests of the individual and the organization.
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| selective distribution | Distribution that sends products to only a preferred group of retailers in an area.
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| services | Intangible products (i.e., products that can't be held in your hand) such as education, health care, insurance, recreation, and travel and tourism.
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| sexual harassment | Unwelcome sexual advances, requests for sexual favors, and other conduct (verbal or physical) of a sexual nature.
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| shareholder | A person who actually owns stock in a company.
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| shareware& | Software that is copyrighted but distributed to potential customers free of charge.
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| skimming price strategy | A pricing strategy in which a new product is priced high to make optimum profit while there's little competition.
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| Small Business Administration (SBA) | U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans.
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| social audit | A systematic evaluation of a company's progress toward implementing programs that are socially responsible.
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| socialism | An economic system based on the premise that some, if not most, basic businesses— such as steel mills, coal mines, and utilities— should be owned by the government so that profits can be evenly distributed among the people.
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| social leader | A leader who ensures everyone in the group is getting along and agrees with the direction the group is going.
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| Social Security | The common name for the Old-Age, Survivors, and Disability Insurance Program established by the Social Security Act of 1935.
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| software | The product that tells your computer what to do.
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| sole proprietor | The name given to a person who owns a sole proprietorship.
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| sole proprietorship | A form of ownership that involves one individual.
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| span of control | The optimal number of subordinates (employees) a manager supervises.
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| staffing | Recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives.
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| stagflation | When unemployment rates and inflation rates are high.
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| stakeholders | All the people who stand to gain or lose from the policies and activities of a business.
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| standard of living | A grade or level of subsistence (basic needs) and comfort in everyday life enjoyed by a community, class, or individual.
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| statement of cash flows | Reports cash receipts and disbursements related to the three major activities of a firm.
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| stock | Share of ownership in a company.
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| stock exchange | An organization whose members can buy and sell (exchange) securities for companies and investors.
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| strategic alliance | An agreement between two or more companies to work together to achieve competitive market advantages.
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| strategic planning | Setting of long-term goals for the company.
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| strike | A tactic by unions to negotiate a labor contract. It occurs when workers collectively refuse to go to work.
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| supervisory (first-line) management | Those who are directly responsible for supervising workers and evaluating their daily performance.
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| supply | The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.
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| supply chain management | The process of moving goods and materials from one place to another.
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| SWOT analysis | An analysis of the organization's strengths, weaknesses, opportunities, and threats.
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| tactical planning | The development of several objectives for each goal. These are the short-term goals that must be achieved to attain long-term goals.
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| target costing | Means to price based upon demand. A product is designed so it satisfies needs and meets the profit margins desired by the company.
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| target marketing | Choosing the market segment for a marketer to focus its efforts on.
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| tariff | A tax on imported goods.
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| task leader | A leader who plans activities and helps keep the group on task.
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| technical skills | The skills required to do a specific job.
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| telecommuting | Scheduling workers and work arrangements from home.
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| telemarketing | The sale of goods and services by telephone.
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| term insurance | Pure insurance protection with no savings feature for a given number of years that typically costs less the younger you buy it.
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| Theory X | Managers believe the average person dislikes work, has relatively little ambition, and wishes to avoid responsibility, so workers must be forcefully directed or threatened with punishment. Primary motivators are fear and money.
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| Theory Y | Managers believe most people like work and naturally work toward goals to which they are committed. People are capable of using imagination and creativity to solve problems. Each worker is stimulated by rewards unique to that worker.
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| Theory Z | Management theory that focuses on trust and intimacy within the work group.
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| time and motion studies | Studies of the tasks performed to complete a job and the time needed to do each task.
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| Title VII | Prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges of employment based on race, religion, creed, sex, or national origin.
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| top management | It is the highest level of management and consists of the president and other key company executives.
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| total product offer | Consists of everything that consumers evaluate when deciding whether to buy something.
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| total quality management (TQM) | A management strategy where quality is reviewed at every phase of the production process, even in service organizations.
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| tradable currency | Money that is allowed to be exchanged for another country's money.
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| trade deficit | Occurs when a country imports more than it exports.
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| trade protectionism | The use of government regulations to limit the import of goods and services.
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| trade surplus | When a country exports more than it imports.
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| training and development | Include 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.
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| transactional leader | A leader who gets people to do things by providing structure and guidelines based on the exchange process.
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| transformational leader | A leader who can transform the ideas of employees through inspiration, charisma, and a shared vision.
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| trial balance | A summary of all the financial data in the account ledgers to check whether the figures are correct and balanced.
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| unemployment rate | The number of civilians at least 16 years old who are unemployed and who have tried to find a job within the prior four weeks.
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| unencrypted | An encryption is a secret code given to information when it is passing through the Internet. An unencrypted piece of data means anyone can see it and it is less secure.
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| Uniform Commercial Code (UCC) | A comprehensive set of commercial laws, adopted by every state in the United States, that covers sales laws and other commercial laws.
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| Uniform Product Code (UPC) | A series of lines and numbers that you see on most consumer packaged goods. The UPC identifies the type of product.
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| union | An employee organization that has the main goal of representing members in employee- management bargaining over job-related issues.
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| universal life | A permanent insurance plan that allows flexibility in your insurance and savings amounts.
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| unlimited liability | The responsibility of business owners for all of the debts of the business.
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| value | The relative worth, merit, or importance.
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| variable life insurance | A form of whole life insurance that invests the cash value of the policy in stocks or other high-yielding securities.
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| variable pay | Pay based on employees earning some percentage of sales.
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| venture capitalists | A company that has money to invest in small and large businesses, and in return for its investment will generally take a stake in the business.
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| vertical merger | The joining of two firms involved in different stages of related businesses.
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| vestibule training | Also called near-the-job training, is done in classrooms where employees are taught on equipment similar to that used on the job.
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| viral marketing | The term now used to describe everything from paying people to say positive things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific Web sites.
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| virtualization | Accessibility through technology that allows business to be conducted independent of location.
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| virtual private network (VPN) | A private data network that creates secure connections, or "tunnels," over regular Internet lines.
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| virus | Programming codes inserted into other programming to cause unexpected events.
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| vision | A forward-looking statement that provides an encompassing explanation of why the organization exists and where it is headed in the future.
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| volume (usage) segmentation | Separating the market by usage (volume of product use) or how often a product is used.
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| whistleblowers | People who report illegal or unethical behavior.
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| whole life insurance | Life insurance where some part of the money you pay goes toward pure insurance and another part goes toward savings, so you are buying both insurance and a savings plan.
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| wholesaler | Marketing intermediary that sells to other organizations.
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| will | Document that names the guardian for your children, states how you want your assets distributed, and names the executor for your estate.
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| wireless fidelity (Wi-Fi) | The technology used to obtain an Internet connection without having to connect to a phone line or cable line.
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| wireless networking | Refers to the ability of a computer or device to transport signals through the air.
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| word-of-mouth promotion | A promotional tool that involves people telling other people about products that they've purchased.
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| work-life balance | The idea that an individual should have control over interactions between work and home.
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| World Trade Organization (WTO) | An organization that mediates trade disputes between countries and also sets policies in place to encourage trade.
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