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BTO1

Vocabulary for intermediate business class

Terms

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Market Share/ Market Growth Matrix
Framework that places SBU's on a chart that plots market share against market growth potential.
Relativism
Bases ethical behavior on the opinions and behaviors of relevant other people.
World Trade Organization (WTO)
Organization that replaces GATT, overseeing GATT agreements, making binding decisions in mediating disputes, and reducing trade barriers.
Avoidable Expense
Expense (or cost) that is relevant for decision making; expense that is not incurred if a department, product, or service is eliminated.
Sales Journal
Journal normally used to record sales of goods on credit.
Informing
A team strategy that entails making decisions with the team and then informing outsiders of its intentions.
Niche Marketing
Marketing strategy that focuses on profitably satisfying a single market segment. Also called Concentrated Marketing.
Discount Rate
The rate used to calculate the present value of future cash flows.
Internal Rate of Return (IRR)
Rate used to evaluate the acceptability of an investment; equals the rate that yields a net present value of zero for an investment.
SWOT Analysis
A comparison of Strengths, Weaknesses, Opportunities, and Threats that helps executives formulate strategy.
Containerization
Process of combining several unitized loads into a single, well-protected load for shipment.
Premium
Item given free or at reduced cost with purchases of other products.
Inflation
Rising prices caused by some combination of excess consumer demand and increases in the costs of one or more factors of production.
Validity
The degree to which a selection test predicts or correlates with job performance.
Security Market Line (SML)
A positively sloped straight line displaying the relationship between expected return and beta.
Product Life Cycle
Progression of a product through introduction, growth, maturity, and decline stages.
Autocratic Leadership
Leadership style where others are simply told what to do. "My way or the highway"
Failure Rate
The number of expatriate managers of an overseas operation who come home early.
Betterments
Expenditures to make a plant asset more efficient or productive. Also called Improvements.
Safety Stock
Quantity of inventory or materials over the minimum needed to satisfy budgeted demand.
Declining-Balance Method
Method that determines depreciation charge for the period by multiplying a depreciation rate (often twice the straight-line rate) by the asset's beginning-period book value.
Equity
Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called Net Assets.
Computer Software
Programs that direct operations of computer hardware.
Product Strategy
Decisions about what goods or services a firm will offer its customers; also includes decisions about customer service, packaging, brand names, and the like.
Legal Responsibilities
To obey local, state, federal, and relevant international laws.
Accounts Receivable Ledger
Subsidiary ledger listing individual customer accounts.
Leasehold
Rights the lessor grants to a lessee under the terms of a lease.
Owner Withdrawals
Payment of cash or other assets from a proprietorship to its owner or owners.
Intermediate Consumer
A customer who purchases raw materials or wholesale products before selling them to final customers.
Sole Proprietorship
Business owned by one person that is not organized as a corporation. Also called Proprietorship.
Product Placement
Form of promotion in which a marketer pays a motion picture or television program owner a fee to display a product prominently in the film or show.
S Corporation
A corporation that is not a taxable entity.
Encoding
Translating a message into understandable terms.
Privacy Act
A federal statute prohibiting federal agencies from divulging to other agencies or organizations information about private citizens.
Partnership
Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Legislative History
Used by courts to interpret the meaning of a statute, this is the record of hearings, speeches, and explanations that accompanied a statute as it made its way from newly proposed bill to final law.
Promotional Mix
Subset of the marketing mix in which marketers attempt to achieve the optimal blending of the elements of personal and non-personal selling to achieve promotional objectives.
Compliance-Based Ethics Programs
Company mechanisms typically designed by corporate counsel to prevent, detect, and punish legal violations.
Systematic Risk
A risk that influences a large number of assets. Also called Market Risk.
Constitution
The supreme law of a political entity. The United States Constitution is the highest law in the country.
Interest on Interest
Interest earned on the reinvestment of previous interest payments.
Line Authority
A manager's right to give direct orders to subordinates and appraise, reward, and discipline those who receive those orders.
Owner Investment
Assets put into the business by the owner.
Radio Frequency Identification (RFID)
Technology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distance.
Dishonor
An obligor refuses to pay an instrument that is due.
Exporting
Marketing domestically produced goods and services in foreign countries.
Utilitarianism
An ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.
Antitrust
Laws designed to prevent restraints on trade such as business monopolies.
Principles of Internal Control
Principles requiring management to establish responsibility, maintain records, insure assets, separate recordkeeping from custody of assets, divide responsibility for related transactions, apply technological controls, and perform reviews.
Subcontracting
Contractual agreements that assign the production of goods or services to local or smaller firms.
Core Competencies
The unique skills and/or knowledge an organization possesses that give it an edge over competitors.
Impulse Goods and Services
Products purchased on the spur of the moment.
Electronic Funds Transfer (EFT)
Use of electronic communication to transfer cash from one party to another.
Default Judgment
Court order awarding one party everything it requested because the opposing party failed to respond in time.
Joint Venture
A partnership for a limited purpose.
Life-Cycle Analysis (LCA)
A process of analyzing all inputs and outputs, through the entire "cradle-to-grave" life of a product, to determine total environmental impact.
Cultural Diversity
The co-existence of two or more cultural groups within an organization. The vast array of differences created by cultural phenomena such as history, economic conditions, personality characteristics, language, norms, and more.
Deposits in Transit
Deposits recorded by the company but not yet by its bank.
Contingency Plans
Alternative courses of action that can be implemented based on how the future unfolds.
Middle-level Managers
Managers located in the middle layers of the organizational hierarchy, reporting to top-level executives.
Equity Ratio
Portion of total assets provided by equity, computed as total equity divided by total assets.
Input Device
Means of capturing information from source documents that enables its transfer to information processors.
Stare Decisis
"Let the decision stand." A basic principle of the common law, it means that precedent is usually binding.
Executive Order
An order by a president or governor, having the full force of law.
Framing Effects
A psychological bias influenced by the way in which a problem or decision alternative is phrased or presented.
Business Strategy
The major actions by which a business competes in a particular industry or market.
Assignment
The act by which a party transfers contract rights to a third person.
Expenses
Outflows or using up of assets as part of operations of a business to generate sales.
Jurisdiction
The power of a court to hear a particular dispute, civil or criminal, and to make a binding decision.
Preemption
The doctrine, based on the Supremacy Clause, by which any federal statute takes priority whenever (1) a state statute conflicts or (2) there is not conflict but Congress indicated an intention to control the issue involved.
Procedural Law
The rules establishing how the legal system itself is to operate in a particular kind of case.
Business Services
Intangible products that firms buy to facilitate their production and operating processes.
Pleadings
The documents that begin a lawsuit: the complaint, the answer, the counter-claim and reply.
Management Teams
Teams that coordinate and provide direction to the subunits under their jurisdiction and integrate work among subunits.
Cash Equivalents
Short-term, investment assets that are readily convertible to a known cash amount or sufficiently close to their maturity date (usually within 90 days) so that market value is not sensitive to interest rate changes.
Nearshoring
Moving jobs to vendors in countries close to the business's home country.
Public Relations
Firm's communications and relationships with its various publics.
Expert Witness
A witness in court case who has special training or qualifications to discuss a specific issue, and who is generally permitted to state an opinion.
General Journal
All-purpose journal for recording the debits and credits of transactions and events.
Account Balance
Difference in an account between total debits and total credits (including the beginning balance).
Legal Positivism
The legal philosophy holding that law is what the sovereign says it is, regardless of its moral content.
Specialty Products
Products that offer unique characteristics that cause buyers to prize those particular brands.
Fish Boning
A total quality technique that places the problem statement on a horizontal line, with key words on lines drawn at a 45 degree angle to the right, above and below it (so it resembles the backbone and ribs of a fish).
Planning
The management function of systematically making decisions about the goals and activities that an individual, a group, a work unit, or the overall organization will pursue.
Behavioral Approach
A leadership perspective that attempts to identify what good leaders do - that is, what behaviors they exhibit.
Vertical Marketing System (VMS)
Planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain.
Efficiency
Company's productivity in using its assets; usually measured relative to how much revenue a certain level of assets generates.
Place Marketing
Marketing efforts to attract people and organizations to a particular geographic area.
Geographic Information Systems (GISs)
Software packages that assemble, store, manipulate, and display data by their location.
Global Sourcing
Purchasing goods and services from suppliers worldwide.
Quality
The excellence of your product (goods or services).
Law of Effect
A law formulated by Edward Thorndike in 1911 stating that behavior that is followed by positive consequences will likely be repeated.
Business
One or more individuals selling products and/or services for profit
Manufacturer's Brand
Brand name owned by a manufacturer or other producer.
Formal Rulemaking
The process whereby an administrative agency notifies the public of a proposed new rule and then permits a formal hearing, with opportunity for evidence and cross-examination, before promulgating the final rule.
Economies of Scope
Economies in which materials and processes employed in one product can be used to make other, related products.
Promulgate
To issue a new rule.
Guerrilla Marketing
Unconventional, innovative, and low-cost marketing techniques designed to get consumers' attention in unusual ways.
Civil Law
The large body of law concerning the rights and duties between parties. It is distinguished from criminal law, which concerns behavior outlawed by a government.
Derived Demand
Demand for a resource that results from demand for the goods and services that are produced by that resource.
AIDA Concept
Steps through which an individual reaches a purchase decision: Attention, Interest, Desire, and Action.
Ecology
Relationship between organisms and their natural environment.
Prepaid Expenses
Items paid for in advance of receiving their benefits; Classified as Assets.
Income
Amount earned after subtracting all expenses necessary for and matched with sales for a period. Also called Profit or Earnings.
Business Entity Principle
Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
North American Industry Classification System (NAICS)
Classification used by NAFTA countries to categorize the business marketplace into detailed market segments.
Globalization - Ethical Dilemmas
Companies have discovered that there is no single standard of ethical behavior applying to all business decisions in the international arena. Practices that are illegal in one country may be perfectly acceptable, even expected, in another.
Principal of a Note
Amount that the signer of a note agrees to pay back when it matures, not including interest.
Bank Statement
Bank report on the depositor's beginning and ending cash balances, and a listing of its changes, for a period.
Consolidated Metropolitan Statistical Area (CMSA)
Urban area that includes two or more PMSAs.
Units-of-Production Depreciation
Method that charges a varying amount to depreciation expense for each period of an asset's useful life depending on its usage.
Balance Column Account
Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Managerial Accounting
Area of accounting mainly aimed at serving the decision-making needs of internal users.
Withdrawal (CS)
Payment of cash or other assets from a proprietorship or partnership to its owner or owners.
Certified Check
A check that the drawee bank has signed. This signature is a promise that the bank will pay the check out of its own funds.
New-Task Buying
First-time or unique purchase situation that requires considerable effort by decision makers.
Financial Statement Analysis
Application of analytical tools to general-purpose financial statements and related data for making business decisions.
Product Differentiation
Occurs when consumers regard a firm's products as different in some way from those of competitors.
Debit
Recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, equity, and revenue accounts. Abbreviated: Dr
Efficiency Variance
Difference between the actual quantity of an input and the standard quantity of that input.
Motion
A formal request that a court take some specified step during litigation. A motion to compel discovery is a request that a trial judge order the other party to respond to discovery.
Priority Setting
Putting activities in order of importance to you, the group, or the business.
Cash Flow to Stockholders
Dividends paid out by a firm less net new equity raised.
Reliability
The consistency of test scores over time and across alternative measurements.
Deponent
The person being questioned in a deposition.
Integrated Marketing Communications (IMC)
Coordination of all promotional activities to produce a unified customer-focused promotional message.
Accrued Expenses
Costs incurred in a period, that are both unpaid and unrecorded; adjusting entries for recording accrued expenses involve increasing expenses and increasing liabilities.
Legal Realism
The legal philosophy holding that what really influences law is who makes and enforces it, not what is put in writing.
Installment Note
Liability requiring a series of periodic payments to the lender.
Transnational Model
An organization model characterized by centralization of certain functions in locations that best achieve cost economies; basing of other functions in the company's national subsidiaries to facilitate greater local responsiveness; and fostering of communication among subsidiaries to permit transfer of technological expertise and skills.
Maturity Date of a Note
Date when a note's principal and interest are due.
Callable Bonds
Bonds that give the issuer the option to retire them at a stated amount prior to maturity.
Voucher
Internal file used to store documents and information to control cash disbursements and to ensure that a transaction is properly authorized and recorded.
Reciprocity
Buying from suppliers that are also customers.
Trade Show
Product exhibition organized by industry trade associations to showcase goods and services.
Deposit Ticket
Lists items such as currency, coins, and checks deposited and their corresponding dollar amounts.
Concept Testing
Method for subjecting a product idea to additional study before actual development by involving consumers through focus groups, surveys, in-store polling, and the like.
Objectives
Goals that support a firm's overall mission.
Glass Ceiling
An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the organizational hierarchy.
Goods-Services Continuum
Spectrum along which goods and services fall according to their attributes, from pure good to pure service.
Sales Promotion
Marketing activities other than personal selling, advertising, guerilla marketing, and public relations that stimulate consumer purchasing and dealer effectiveness.
Collective Bargaining
The process of negotiating a union agreement that covers wages, hours, and working conditions.
Brainstorming
Generating ideas without concern for their feasibility. A process in which group members generate as many ideas about a problem as they can; criticism is withheld until all ideas have been proposed.
Quality Circles
Voluntary groups of people drawn from various production teams who make suggestions about quality.
Unfair Labor Practice
An act, committed by either a union or an employer, that violates the National Labor Relations Act, such as failing to bargain in good faith.
Income Summary
Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred; its balance is transferred to the capital account.
Amortization
Process of allocating the cost of an intangible asset to expense over its estimated useful life.
Return on Total Assets
Ratio reflecting operating efficiency; defined as net income divided by average total assets. Also called Return on Assets or Return on Investment.
Ratio Analysis
Determination of key relations between financial statement items as reflected in numerical measures.
Goal Setting
The process of developing, negotiating, and formalizing the targets or objectives that an employee or group is responsible for accomplishing.
Time Period Principle
Assumption that an organization's activities can be divided into specific time periods such as months, quarters, or years.
Rolling Budget
New set of budgets a firm adds for the next period (with revisions) to replace the ones that have lapsed.
Integrated Marketing Communications (IMC)
Coordination of all promotional activities to produce a unified, customer-focused promotional message.
Continuous Quality Improvement
A philosophy and attitude for analyzing capabilities and processes and improving them repeatedly to achieve the objective of customer satisfaction.
Net Method
Method of recording purchases at the full invoice price less any cash discounts.
Scenario
A narrative that describes a particular set of future conditions.
Administered Marketing System
VMS that achieves channel coordination when a dominant channel member exercises its power.
Diversity Training
Programs that focus on identifying and reducing hidden biases against people with differences and developing the skills needed to manage a diversified workforce.
Brand Name
Part of a brand consisting of words or letters that form a name that identifies and distinguishes a firm's offerings from those of its competitors.
Extinction
Withdrawing or failure to provide a reinforcing consequence.
Pluralistic Organization
An organization that has a relatively diverse employee population and makes an effort to involve employees from different gender, racial, or cultural backgrounds.
Job Enlargement
Increasing the number of tasks or the quantity of output required for a job.
Team
Groups of two or more members who interact ad influence and are mutually accountable for common objectives within an organization.
National Accounts Organization
Promotional effort in which a dedicated sales team is assigned to a firm's major customers to provide sales and service needs.
Financial Accounting Standards Board (FASB)
Independent group of full-time members responsible for setting accounting rules.
Relationship Selling
Regular contacts between sales representatives and customers over an extended period to establish a sustained buyer-seller relationship
Affirmative Action
Special efforts to recruit and hire qualified members of groups that have been discriminated against in the past.
Competitive Environment
Interactive process that occurs in the marketplace among marketers of directly competitive products, marketers of products that can be substituted for one another, and marketers competing for the consumer's purchasing power.
Individual Brand
Single brand that uniquely identifies a product.
Over-the-Counter Selling
Personal selling conducted in retail and some wholesale locations in which customers come to the seller's place of business.
Pushing Strategy
Promotional effort by the seller directed to members of the marketing channel rather than final users.
Inpatriate
A foreign national brought in to work at the parent company.
Exchange Functions
Buying and selling functions of marketing.
Net Income
Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Controlling
The management function of monitoring performance and making needed changes.
Follow-up
Postsale activities that often determine whether an individual who has made a recent purchase will become a repeat customer.
Objectivity Principle
Principle that prescribes independent, unbiased evidence to support financial statement information.
Current Liability
Obligation due to be paid or settled within one year or the company's operating cycle, whichever is longer.
Private Carriers
Transporters that provide service solely for internally generated freight.
Undifferentiated Marketing
Strategy that focuses on producing a single product and marketing it to all customers. Also called Mass Marketing.
Patent
Exclusive right granted to its owner to produce and sell an item or use a process for 17 years.
Wholesalers
Channel intermediary that takes title to goods it handles and then distributes these goods to retailers, other distributors, or B2B customers.
Punishment
Administering an aversive consequence.
External Users
Persons using accounting information who are not directly involved in running the organization.
Writ
An order from a government compelling someone to do a particular thing.
Shares
Equity of a corporation divided into units. Also called Stock.
Obligee
The party to a contract who is entitled to receive performance from the other party.
Non-sufficient Funds (NSF) Check
Maker's bank account has insufficient money to pay the check. Also called Hot Check.
Media Richness
The degree to which a communication channel conveys information.
Product Liability
Responsibility of manufacturers and marketers for injuries and damages caused by their products.
Peremptory Challenge
During voir dire, a request by one attorney that a prospective juror be excused for an unstated reason.
Average Tax Rate
Total taxes paid divided by total taxable income.
VoIP
Voice over Internet protocol - a phone connection through a personal computer with any type of broadband Internet connection.
Speed
Fast and timely execution, response, and delivery of results.
Egoism
An ethical system defining acceptable behavior as that which maximizes consequences for the individual.
Three-Fifths Clause
A clause in Article 1, section 2 of the United States Constitution, now void and regarded as racist, which required that for purposes of taxation and representation, a slave should be counted as three-fifths of a person.
Supremacy Clause
From Article VI of the Constitution, it declares that federal statutes and treaties take priority over any state law, if there is a conflict between the two or, even absent a conflict, if Congress manifests an intent to preempt the field.
Stockholders
Owners of a corporation. Also called Shareholders.
Value of Bonds
Net amount at which bonds are reported on the balance sheet; equals the par value of the bonds less any unamortized discount or plus any unamortized premium. Also called Carrying Amount or Book Value.
Demographic Segmentation
Division of an overall market into homogeneous groups based on variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family life cycle. Also called Socioeconomic Segmentation.
Vigilance
A process in which a decision maker carefully executes all stages of decision making.
Stakeholders for Non-Profits
The various groups and individuals who affect and are affected by the company. Examples of stakeholders include suppliers, workers, customers, investors, and the community where it operates, etc.
Market Risk Premium
The slope of the SML, the difference between the expected return on a market portfolio and the risk-free rate.
Ordinary Repairs
Repairs to keep a plant asset in normal, good operating condition; treated as a revenue expenditure and immediately expensed.
General-purpose Financial Statements
Statements published periodically for use by a variety of interested parties; includes the income statement, balance sheet, statement of owner's equity (or statement of retained earnings for a corporation), statement of cash flows, and notes to these statements.
Revenue Expenditures
Expenditures reported on the current income statement as an expense because they do not provide benefits in future periods.
Business-to-Business (B2B) Marketing
Organizational sales and purchases of goods and services to support production of other products, to facilitate daily company operations, or for resale.
Instructions or Charge
The explanation given by a judge to a jury, outlining the jury's task in deciding a lawsuit and the underlying rules of law the jury should use in reaching its decision.
Non-personal Selling
Promotion that includes advertising, product placement, sales promotion, direct marketing, public relations, and guerilla marketing - all conducted without being face-to-face with the buyer.
Follower Support
Followers must 1) know what to do, 2) know how to do it, 3) understand why they are doing it, 4) want to do it, 5) have the right resources, and 6) believe they have the proper leadership.
Strategic Alliance
Partnerships in which two or more companies combine resources and capital to create competitive advantages in a new market.
Production Orientation
Business philosophy stressing efficiency in producing a quality product, with the attitude toward marketing that "a good product will sell itself."
Securities and Exchange Commission (SEC)
Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Merchandisers
Trade sector buyers who secure needed products at the best possible prices.
Plans
The actions or means managers intend to use to achieve organizational goals.
Portfolio Weight
A percentage of a portfolio's total value that is in a particular asset.
Cross-Examination
During a hearing, for a lawyer to question an opposing witness.
Payee of the Note
Entity to whom a note is made payable.
Cause Marketing
Identification and marketing of a social issue, cause, or idea to selected target markets.
Marginal Tax Rate
Amount of tax payable on the next dollar earned.
Flexible Benefit Programs
Benefit programs in which employees are given credits to spend on benefits that fit their unique needs.
Pseudotransformational Leaders
Leaders who talk about positive change but allow their self interest to take precedence over followers' needs.
Induction
A program developed to introduce a new employee to his or her job, working environment, supervisor or peers. Also sometimes called orientation.
Flexible Factories
Manufacturing plants that have short production rounds, are organized around products, and use decentralized scheduling.
Transcendent Education
An education with five higher goals that balance self-interest with responsibility to others.
Federalism
A form of national government in which power is shared between one central authority and numerous local authorities.
Customer Relationship Management (CRM)
A multifaceted process focusing on creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns.
Hybrid Rulemaking
A method of administrative agency procedure incorporating some elements of formal and some elements of informal rulemaking, typically involving a limited public hearing with restricted rights of testimony and cross-examination.
Resources
Inputs to a system that can enhance performance.
Freedom of Information Act (FOIA)
A federal statute giving private citizens and corporations access to many of the documents possessed by an administrative agency.
Domain Selection
Entering a new market or industry with an existing expertise.
Business Plan
Formal document that outlines a company's objectives, how they will be met, how the business will obtain financing, and how much money the company expects to earn.
Variance Analysis
Process of examining differences between actual and budgeted revenues or costs and describing them in terms of price and quantity differences.
Date of Declaration
Date the directors vote to pay a dividend.
Unsystematic Risk
A risk that affects at most a small number of assets. Also called Unique or Asset-specific Risk.
Budgeted Income Statement
Accounting report that presents predicted amounts of the company's revenues and expenses for the budget period.
Check Register
Another name for a cash disbursements journal when the journal has a column for check numbers.
Team Facilitator
A supervisor in charge of teams, but who works outside of them.
Arbitration
The use of a neutral third party to resolve a labor dispute.
Tying Agreement
Arrangement that requires a marketing intermediary to carry items other than those they want to sell.
Signature Card
Includes the signatures of each person authorized to sign checks on the bank account.
Online Processing
Approach to inputting data from source documents as soon as the information is available.
Buzz Marketing
Marketing that gathers volunteers to try products and then relies on them to talk about their experiences with their friends and colleagues.
Cost-benefit Principle
Information system principle that requires the benefits from an activity in an accounting system to outweigh the costs of that activity.
Brief
The written legal argument that an attorney files with an appeal court.
Demarketing
Process of reducing consumer demand for a good or service to a level that the firm can supply.
De Novo
The power of an appellate court or appellate agency to make a new decision in a matter under appeal, entirely ignoring the findings and conclusions of the lower court or agency official.
Statement of Owner's Equity
Report of changes in equity over a period; adjusted for increases (owner investment and net income) and for (withdrawals and net loss).
Term Bonds
Bonds scheduled for payment (maturity) at a single specified date.
Free Cash Flow
Another name for cash flow from assets.
Gatekeeping
Controlling access to another person or the flow of information.
Goal
A target or end that management desires to reach.
Power
The ability to influence others.
Request for Admission
A form of discovery in which one party demands that the opposing party either admit or deny particular factual or legal allegations.
Sales
Gross increase in equity from a company's business activities that earn income. Also called Revenues.
Sampling
In market research, the process of selecting survey respondents or research participants; in sales promotion, free distribution of a product in an attempt to obtain future sales.
Incremental Cost
Additional cost incurred only if a company pursues a specific course of action.
Total Asset Turnover
Measure of a company's ability to use its assets to generate sales; Computed by dividing net sales by average total assets.
Virtual Teams
Teams that are physically disbursed and communicate electronically more than face-to-face.
Third-country Nationals
Natives of a country other than the home country or the host country of an overseas subsidiary.
Columnar Journal
Journal with more than one column.
Cost Principle
Accounting principle that requires financial statement information to be based on actual costs incurred in business transactions.
Exclusive Dealing Agreement
Arrangement between a manufacturer and a marketing intermediary that prohibits the intermediary from handling competing product lines.
Trade Promotion
Sales promotion that appeals to marketing intermediaries rather than to consumers.
Brand Extension
Strategy of attaching a popular brand name to a new product in an unrelated product category.
Vertical Integration
The acquisition or development of new businesses that produce parts or components of the organization's product.
Group Norms
Standards shared by the members of a group.
Portfolio Analysis
Evaluation of a company's products and divisions to determine which are strongest and which are weakest.
Two-Way Communication
A process in which information flows in two directions: the receiver provides feedback, and the sender is receptive to the feedback.
Motivation
Forces that energize, direct, and sustain a person's efforts.
Network Marketing
Personal selling that relies on lists of family members and friends of the salesperson, who organizes a gathering of potential customers for a demonstration of products.
Buyer Partnership
Relationship in which a firm purchases goods or services from one or more providers.
Small Batch
Technologies that produce goods and services in low volume.
Self-Designing Teams
Teams with the responsibilities of autonomous work groups, plus control over hiring, firing, and what tasks members perform.
Transaction
Exchange of economic consideration affecting an entity's financial position that can be reliably measured.
Lessor
Party to a lease who grants another party (the lessee) the right to process and use its property.
Appellee
The party opposing an appeal from a lower court to a higher court.
Going-Concern Principle
Principle that requires financial statements to reflect the assumption that the business will continue operating.
Charismatic Leader
A person who is dominant, self-confident, convinced of the moral righteousness of his or her beliefs, and able to arouse a sense of excitement and adventure in followers.
Value Chain
The sequence of activities that flow from raw materials to the delivery of a product or service, with additional value created at each step.
Information Storage
Component of an accounting system that keeps data in a form accessible to information processors.
Systems Integration
Centralization of the procurement function within an internal division or as a service of an external supplier.
Coupon
Sales promotion technique that offers a discount on the purchase price of goods or services.
Multinational Corporation
Firm with significant operations and marketing activities outside its home country.
Sexual Harassment
Conduct of a sexual nature that has negative consequences for employment.
Operational Planning
The process of identifying the specific procedures and processes required at lower levels of the organization.
Managing Diversity
Managing a culturally diverse workforce by recognizing the characteristics common to specific groups of employees while dealing with such employees as individuals and supporting, nurturing, and utilizing their differences to the organization's advantage.
Social Responsibility
Being accountable for the impact that one's actions might have on society.
Economic Environment
Factors that influence consumer buying power and marketing strategies, including stage of the business cycle, inflation and deflation, unemployment, income, and resource availability.
Avoidance
A reaction to conflict that involves ignoring the problem by doing nothing at all, or deemphasizing the disagreement.
Appellate Court
Any court in a state or federal system that reviews cases that have already been tried.
Overhead Cost Variance
Difference between the total overhead cost applied to products and the total overhead cost actually incurred.
Commercial Market
Individuals and firms that acquire products to support, directly or indirectly, production of other goods and services.
Expanded Accounting Equation
Assets = Liabilities + Equity where Equity = [Owner Capital - Owner Withdrawals + Revenues - Expenses].
Growth Need Strength
The degree to which individuals want personal and psychological development.
Organizational Behavior Method (OB Mod)
The application of reinforcement theory in organizational settings.
Philanthropic Responsibilities
Additional behaviors and activities that society finds desirable and that the values of the business support.
Outbound Telemarketing
Sales method in which sales representatives place phone calls to prospects and try to conclude the sale over the phone.
Direct Marketing
Direct communications, other than personal sales contacts, between buyer and seller, designed to generate sales, information requests, or store Web site visits.
Adjusted Trial Balance
List of accounts and balances prepared after adjustments are recorded and posted.
Baby Boomers
People born between 1946 and 1965.
Collaboration
A style of dealing with conflict emphasizing both cooperation and assertiveness in order to maximize both parties' satisfaction.
Discovery
A stage in litigation, after all pleadings have been served, in which each party seeks as much relevant information as possible about the opposing party's case.
Petty Cash
Small amount of cash in a fund to pay minor expenses.
Collective Bargaining Unit
The precisely defined group of employees who are represented by a particular union.
Push Money
Financial incentive that gives retail salespeople cash rewards for every unit of a product they sell.
Statement of Financial Accounting Standards (SFAS)
FASB publications that establish U.S. GAAP.
Summary Judgment
The power of a trial court to terminate a lawsuit before a trial has begun, on the grounds that no essential facts are in dispute.
Non-programmed Decisions
New, novel, complex decisions having no proven answers.
Role Ambiguity
The situation that exists whenever a manager is uncertain about the role they are expected to play due to a lack of clarity regarding duties, responsibilities, and/or authority. Role ambiguity may be due to the complexity of the job.
Assignee
The party who receives an assignment of contract rights from a party to the contract.
Common Carriers
Businesses that provide transportation services as for-hire carriers to the general public.
Universalism
The ethical system stating that all people should uphold certain values that society needs to function.
Uncertainty
The state that exists when decision makers have insufficient information.
Flexible Budget
Budget prepared (using actual volume) after a period is complete that helps managers evaluate past performance; uses fixed and variable costs in determining total costs.
Mediator
A third party who intervenes to help others manage their conflict.
Commerce Clause
One of the powers granted by Article I, §8 of the Constitution, it gives Congress exclusive power to regulate international commerce and concurrent power with the states to regulate domestic commerce.
Account
Record within an accounting system in which increases and decreases in a specific asset, liability, equity, revenue, or expense are entered and stored.
Primary Metropolitan Statistical Area (PMSA)
Urbanized county or set of counties with social and economic ties to nearby areas.
Message
Communication of information, advice, or a request by the sender to the receiver.
Limited Partnership
A partnership with two types of partners: (1) limited partners who have no personal liability for the debts of the enterprise nor any right to manage the business, and (2) general partners who are responsible for management and personally liable for all debts.
Salary
Fixed compensation payment made periodically to an employee.
Dialectic
A structured debate comparing two conflicting courses of action.
Technology
Business application or knowledge based on scientific discoveries inventions, and innovations.
Business Products
Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale.
Marketing Planning
Implementing planning activities devoted to achieving marketing objectives.
Mission
An organization's basic purpose and scope of operations.
Accrual Basis Accounting
Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
End-Use Application Segmentation
Segmenting a business-to-business market based on how industrial purchasers will use the product.
Cost per Response
(Also called click-throughs) Direct marketing technique that relates the cost of an ad to the number of people who click it.
Executive Agency
An administrative agency within the executive branch of government.
Litigation
The process of resolving disputes through formal court proceedings.
Professional Corporation
A form of organization that permits professionals (such as doctors, lawyers, and accountants) to incorporate. Shareholders are not personally liable for the torts of other shareholders, or for the contract debts of the organization.
Brand Preference
Consumer reliance on previous experiences with a product to choose that product again.
Parallel Teams
Teams that operate separately from the regular work structure and exist temporarily.
Selective Demand
Desire for a specific brand within a product category.
Unadjusted Trial Balance
List of accounts and balances prepared before adjustments are recorded and posted.
Missionary Selling
Indirect type of selling in which specialized salespeople promote the firm's goodwill among indirect customers, often by helping customers use products.
Compounding
The process of accumulating interest on an investment over time to earn more interest.
Budget
Formal statement of future plans, usually expressed in monetary terms.
Paid-in Capital
Contributed Capital.
Reinforcers
Positive consequences that motivate behavior.
Product Mix
Assortment of product lines and individual product offerings that a company sells.
Classified Balance Sheet
Balance sheet that presents assets and liabilities in relevant subgroups, including current and non-current classifications.
Generally Accepted Accounting Principles (GAAP)
Rules that specify acceptable accounting practices.
Utility
Want-satisfying power of a good or service.
Voir Dire
The process of selecting a jury. Attorneys for the parties and the judge may inquire of prospective jurors whether they are biased or incapable of rendering a fair and impartial verdict.
Global Model
An organization model consisting of a company's overseas subsidiaries and characterized by centralized decision making and tight control by the parent company over most aspects of worldwide operations. Typically adopted by organizations that base their global competitive strategy on low cost.
Functional Strategies
Strategies implemented by each functional area of the organization to support the organization's business strategy.
Franchise
An arrangement in which the franchisee buys from a franchisers the right to establish a business using the franchiser's trade name and selling the franchiser's products. Typically the franchiser also trains the franchise in the proper operation of the business.
Trademark
Brand for which the owner claims exclusive legal protection.
Supervisory Leadership
Behavior that provides guidance, support, and corrective feedback for day-to-day activities.
Wireless Technology
Technology that allows communications connections without cables or wires.
Bottom Line
Business jargon referring to the overall profitability of an organization.
Strategic Vision
The long-term direction and strategic intent of a company.
Downstream Management
Controlling part of the supply chain that involves finished product storage, outbound logistics, marketing and sales, and customer service.
Autonomous Work Groups
Groups that control decisions about and execution of a complete range of tasks.
Influencer
Typically, technical staff such as engineers who affect the buying decision by supplying information to guide evaluation of alternatives or by setting buying specifications.
Purchases Journal
Journal normally used to record all purchases on credit.
Intermodal Operations
Combination of transport modes such as rail and highway carriers (piggyback), air and highway carriers (birdyback), and water and air carriers (fishyback) to improve customer service and achieve cost advantages.
Budget Report
Report comparing actual results to planned objectives; sometimes used as a progress report.
Cold Calling
Contacting a prospect without a prior appointment.
Return
Monies received from an investment; often in percent form.
Noise
Any stimulus that distracts a receiver from receiving a message.
Exchange Process
Activity in which two or more parties give something of value to each other to satisfy perceived needs.
Control Principle
Information system principle that requires an accounting system to aid managers in controlling and monitoring business activities.
Days' Sales Uncollected
Measure of the liquidity of receivables computed by dividing the current balances of receivables by the annual credit (or net) sales and then multiplying by 365. Also called Days' Sales in Receivables.
Positioning Map
Tool that helps marketers place products in a market by graphically illustrating consumers' perceptions of competing products within an industry.
Vendee
Buyer or purchaser of goods or services.
Materials Handling System
Set of activities that move production inputs and other goods within plants, warehouses, and transportation terminals.
Sales Quota
Level of expected sales for a territory, product, customer, or salesperson against which actual results are compared.
Assessment Center
A managerial performance test in which candidates participate in a variety of exercises and situations.
Precedent
An earlier case that decided the same legal issue as that presently in dispute, and which therefore will control the outcome of the current case.
Bond
Written promise to pay the bond's par (or face) value and interest at a stated contract rate; often issued in denominations of $1,000.
Forecasting
Method for predicting how variables will change the future.
Multinational Model
An organization model that consists of the subsidiaries in each country in which a company does business, with ultimate control exercised by the parent company.
Counter-claim
A claim made by the defendant against the plaintiff.
Land Improvements
Assets that increase the benefits of land, have a limited useful life, and are depreciated.
Spreadsheet
Computer program that organizes data by means of formulas and format. Also called Electronic Work Sheet.
Solvency
Company's long-run financial viability and its ability to cover long-term obligations.
Modify
An appellate court order changing a lower court ruling.
Promissory Note
Written promise to pay a specified amount either on demand or at a definite future date; is a note receivable for the lender but a note payable for the lendee. Also called Note.
Development
Teaching managers and professional employees broad skills needed for their present and future jobs.
Straight-Line Depreciation
Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Downward Communication
Information that flows from higher to lower levels in the organization's hierarchy.
Sponsorship
Relationship in which an organization provides funds or in-kind resources to an event or activity in exchange for a direct association with that event or activity.
Homeshoring
Hiring workers to do jobs from their homes.
Substantive Outcomes
An outcome is a consequence that a person receives for his or her performance. Substantive refers to substantial outcomes.
Working Capital
Current assets minus current liabilities at a point in time.
Social Loafing
Occurs when individuals believe that their contributions are not important, others will do the work for them, their lack of effort will go undetected, or they will be the loser if they work hard.
Trade Industries
Retailers or wholesalers that purchase products for resale to others.
Countertrade
Form of exporting whereby goods and services are bartered rather than sold for cash.
Growth Stage
Second stage of the product life cycle, which begins when a firm starts to realize substantial profits from its investment in a product.
Adjudicate
To hold a formal hearing in a disputed matter and issue an official decision.
Accounting Equation
Equality involving a company's assets, liabilities, and equity. Assets = Liabilities + Equity Also called Balance Sheet Equation.
Democratic Style
A management or leadership style characterized by a sharing of decision-making authority with subordinates by the leader.
Accounts Payable Ledger
Subsidiary ledger listing individual creditor (supplier) accounts.
Limited Liability Company
An organization that has the limited liability of a corporation by is not a taxable entity.
Administrative Law
Concerns all agencies, boards, commissions, and other entities created by a federal or state legislature and charged with investigating, regulating, and adjudicating a particular industry or issue.
Goodwill
Amount by which a company's (or a segment's) value exceeds the value of its individual assets less its liabilities.
Termination Interview
A discussion between a manager and an employee about the employee's dismissal.
Sole Sourcing
Purchasing a firm's entire stock of an item from just one vendor.
Cost Variance
Difference between the actual incurred cost and the standard cost.
Extrinsic Rewards
Rewards external to the job such as pay, promotion or fringe benefits.
Democratic Leadership
A form of leadership in which the leader solicits input from subordinates.
Selling Expense Budget
Plan that lists the types and amounts of selling expenses expected in the budget period.
Class Action
A method of litigation a civil lawsuit in which one or more plaintiffs (or occasionally defendants) seek to represent an entire group of people with similar claims against a common opponent.
Trade Dress
Visual components that contribute to the overall look of a brand.
Top-level Managers
Senior executives responsible for the overall management and effectiveness of the organization.
Salvage Value
Estimate of amount to be recovered at the end of an asset's useful life. Also called Residual Value, or Scrap Value.
Fixed Budget
Planning budget based on a single predicted amount of volume; unsuitable for evaluations if the actual volume differs from predicted volume.
Accommodation Party
Someone who does not benefit from an instrument but agrees to guarantee its payment.
Theory Z
A set of approaches to managing people based on the attitudes of Japanese managers about the importance of the individual and of team effort to the organization.
Buying Center
Participants in an organizational buying action.
Monopoly
Market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes.
Ready-Made Solutions
Ideas that have been seen or tried before.
AIO Statements
Items on lifestyle surveys that describe various activities, interest, and opinions of respondents.
Income Statement
Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
Non-cash Items
Expenses charged against revenues that do not directly affect cash flow, such as depreciation.
Creditors
Individuals or organizations entitled to receive payments.
Inelastic Demand
Demand that, throughout an industry, will not change significantly due to a price change.
Statement of Cash Flows
A financial statement that lists cash inflows (receipts) and cash outflows (payments) during a period; arranged by operating, investing, and financing.
Shared Leadership
Rotating leadership, in which people rotate through the leadership role based on which person has the most relevant skills at a particular time.
Long-term Liabilities
Obligations not due to be paid within one year or the operating cycle, whichever is longer.
Recordkeeping
Part of accounting that involves recording transactions and events, either manually or electronically. Also called Bookkeeping.
Consultative Selling
Meeting customer needs by listening to them, understanding their problems, paying attention to details, and following through after the sale.
Marketing (Distribution) Channel
System of marketing institutions that enhances the physical flow of goods and services, along with ownership title, from producer to consumer or business user.
First Mover Strategy
Theory advocating that the company that is first to offer a product in a marketplace will be the long-term market winner.
Strategic Window
Limited periods during which the key requirements of a market and the particular competencies of a firm best fit together.
Direct Method
Presentation of net cash from operating activities on the statement of cash flows that lists major operating cash receipts less major operating cash payments.
Full-Disclosure Principle
Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Founding Fathers
The authors of the United States Constitution, who participated in the Constitutional Convention in Philadelphia in 1787.
Direct Write-off Method
Method that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible; No attempt is made to estimate bad debts.
Extraordinary Repairs
Major repairs that extend the useful life of a plant asset beyond prior expectations; treated as a capital expenditure.
Proprietorship
Business owned by one person that is not organized as a corporation.
Accelerated Depreciation Method
Method that produces larger depreciation charges in the early years of an asset's life and smaller charges in its later years.
Imprest System
Method to account for petty cash; maintains a constant balance in the fund, which equals cash plus petty cash receipts.
Discounted Cash Flow (DCF) Valuation
Calculating the present value of a future cash flow to determine its value today.
Management by Exception
Management process to focus on significant variances and give less attention to areas where performance is close to the standard.
Operating Cycle
Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Foreign Licensing
Agreement that grants foreign marketers the right to distribute a firm's merchandise or to use its trademark, patent, or process in a specified geographic area.
Import Quotas
Trade restrictions that limit the number of units of certain goods that can enter a country for resale.
Owner Capital
Account showing the owner's claim on company assets; Equals owner investments plus net income (or net loss) minus owner withdrawals since the company's inception. Also referred to as Equity.
Plant Assets
Tangible long-lived assets used to produce or sell products and services. Also called Property, Plant, and Equipment, or Fixed Assets.
Cohort Effect
Tendency of members of a generation to be influenced and bound together by events occurring during their key formative years - roughly age 17 to 22.
Unfavorable Variance
Difference in revenues or costs, when the actual value is compared to the budgeted value, that contributes to a lower income.
Delegation
The act by which a party to a contract transfers duties to a third person who is not a party to the contract.
Brand Licensing
Firm's authorization of other companies to use its brand names.
Court of Chancery
In medieval England, the court originally operated by the Chancellor.
Role Conflict
A situation that occurs when contradictory or opposing demands are made on a manager. For example, a boss will suffer role conflict if forced to fire an employee who is also a close friend.
Joint Demand
Demand for a product that depends on the demand for another product used in combination with it.
Preponderance of the Evidence
The level of proof that a plaintiff must meet to prevail in a civil lawsuit. It means that the plaintiff must offer evidence that, in sum, is slightly more persuasive than the defendant's evidence.
Elasticity
Economic term - usually refers to the responsiveness in the quantity demanded of a commodity to changes in environment.
Theory X
Concept described by Douglas McGregor indicating an approach to management that takes a negative and pessimistic view of workers. Theory X attitudes: most employees dislike work and will avoid it when possible.
Innovation
A change in method or technology; a positive, useful departure from previous ways of doing things. The introduction of new goods and services.
Stretch Goals
Targets that are particularly demanding, sometimes even though to be impossible.
Installations
Business products such as factories, assembly lines, and large machinery that are major capital investments.
Task Performance Behaviors
Actions taken to ensure that the work group or organization reaches its goals.
Posting Reference (PR) Column
A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Parading
A team strategy that entails simultaneously emphasizing internal team building and achieving external visibility.
Compromise
A style of dealing with conflict involving moderate attention to both parties' concerns.
Team Leader
A supervisor working in a team who is responsible for its members.
Forward Integration
Process through which a firm attempts to control downstream distribution.
Time-Based Competition
Strategy of developing and distributing goods and services more quickly than competitors.
Results Orientation
Knowing what results are important and focusing resources to achieve them. Focuses on having a diverse, high-performing workforce, and a performance management system that effectively plans, monitors, develops, rates, and rewards employee performance.
Right-to-Work
Legislation that allows employees to work without having to join a union.
Two-Factor Theory
Herzberg's theory describing two factors affecting people's work motivation and satisfaction.
Demonstration
Stage in the personal selling process in which the customer has the opportunity to try out or otherwise see how a good or service works before purchase.
Stakeholder
Someone other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.
Current Assets
Cash or other assets expected to be sold, collected, or used within one year or the company's operating cycle, whichever is longer.
Meeting Competition Method
Method of promotional budgeting that simply matches competitors' outlays.
Spot Strokes
Verbal or written praise to reward performance.
Current Ratio
Ratio used to evaluate a company's ability to pay its short-term obligations, calculated by dividing current assets by current liabilities.
Inputs
Goods and services organizations take in and use to create products or services.
Franchises
Privileges granted by a company or government to sell a product or service under specified conditions.
Sanctions
Negative means, such as threat or punishments, used to encourage subordinates to play their roles as prescribed by superiors or the organization.
Unsought Products
Products marketed to consumers who may not yet recognize a need for them.
Learning Organization
An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.
Downsizing
The planned elimination of positions or jobs.
Creditor Beneficiary
When one party to a contract intends to benefit a third party to whom he owes a debt, that third party is referred to as a creditor beneficiary.
Substitutes
Goods that can be used to satisfy the same needs. The buyer carries out a conscious process of choice. May also refer to leadership theory and using one theory in place of another depending on the situation.
Spending Variance
Difference between the actual price of an item and its standard price.
Contra Account
Account linked with another account and having an opposite normal balance; reported as a subtraction from the other account's balance.
Cross-Selling
Selling multiple, often unrelated goods and services to the same customer based on knowledge of that customer's needs.
Job Rotation
Changing from one routine task to another to alleviate boredom.
Interactive Marketing
Buyer-seller communications in which the customer controls the amount and type of information received from a marketer through such channels as the Internet and virtual reality kiosks.
Positive Aspect of the Commerce Clause
The power granted to Congress to regulate commerce between the states.
Broadband Technology
Extremely high-speed, always-on internet connection.
Unclassified Balance Sheet
Balance sheet that broadly groups assets, liabilities, and equity accounts.
Independent Strategies
Strategies that an organization acting on its own uses to change some aspect of its current environment.
Permanent Accounts
Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called Real Accounts.
Channel
Medium through which a message is delivered.
Strategic Leadership
Behavior that gives purpose and meaning to organizations, envisioning and creating a positive future.
Capital Asset Pricing Model (CAPM)
The equation of the SML showing the relationship between expected return and beta.
Subsidy
Government financial support of a private industry.
Optimizing
Achieving the best possible balance among several goals.
Sarbanes-Oxley Act
An act passed into law by Congress in 2002 to establish strict accounting and reporting rules in order to make senior managers more accountable and to improve and maintain investor confidence.
Pledged Assets to Secured Liabilities
Ratio of the book value of a company's pledged assets to the book value of its secured liabilities.
Common Stock
Corporation's basic ownership share. Also called Capital Stock.
Garbage Can Model
Model of organizational decision making depicting a chaotic process and seemingly random decisions.
Budgetary Control
Management use of budgets to monitor and control company operations.
Creative Selling
Personal selling that involves situations in which a considerable degree of analytical decision making on the buyer's part results in the need for skillful proposals of solutions for the customer's needs.
Mixed Cost
Cost that behaves like a combination of fixed and variable costs.
Debt Ratio
Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Political-Legal Environment
Component of the marketing environment consisting of laws and their interpretations that require firms to operate under competitive conditions and to protect consumer rights.
Interpretive Rules
A formal statement by an administrative agency expressing its view of what existing statutes or regulations mean.
Strategic Planning
A set of procedures for making decisions about the organization's long-term goals and strategies.
Adjusting Entry
Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expense or revenue account.
Inbound Telemarketing
Sales method in which prospects call a toll-free number to obtain information, make reservations, and purchase goods and services.
Venture Team
Associates from different areas of an organization who work together in developing new products.
Third Party (Contract) Logistics Firm
Company that specializes in handling logistics activities for other firms.
Boundaryless Organization
Organization in which there are no barriers to information flow.
Total Quality Management (TQM)
Continuous effort to improve products and work processes with the goal of achieving customer satisfaction and world-class performance.
Natural Resources
Assets physically consumed when used; Examples are timber, mineral deposits, and oil and gas fields. Also called Wasting Assets.
Independent Agency
An administrative agency outside the executive branch of government, such as the Interstate Commerce Commission.
Personal Selling
Interpersonal influence process involving a seller's promotional presentation conducted on a person-to-person basis with the buyer.
Embargo
Complete ban on the import of specified products.
Return on Equity
Ratio of net income to average equity.
Perception
The process of receiving and interpreting information.
Market Rate
Interest rate borrowers are willing to pay and lenders are willing to accept for a specific debt agreement given its risk level.
Percentage-of-Sales Method
Method of promotional budgeting in which a dollar amount is based on a percentage of past or projected sales.
Acquisition
One firm buying another.
Copyright
Right giving the owner the exclusive privilege to publish and sell musical, literary, or artistic work during the creator's life plus 70 years.
Porter's Five Forces
Model developed by strategy expert Michael Porter that identifies five competitive forces that influence planning strategies: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products, and rivalry among competitors.
Expatriates
Parent-company nationals who are sent to work at a foreign subsidiary.
Management
The process of planning, organizing, directing, and controlling human, material, and information resources for the purposes of setting and achieving stated goals; also, a team of people making up an organization's hierarchy.
Contractual Marketing System
VMS that coordinates channel activities through formal agreements among participants.
Bond Certificate
Document containing bond specifics such as issuer's name, bond par value, contract interest rate, and maturity date.
Synergy
Cooperative Action or force of two or more elements pulling together that yields a result greater than the sum of the results that could be achieved separately.
Kohlberg's Model of Cognitive Moral Development
Classifies people based on their level of moral judgment.
Technical Skill
The ability to perform a specialized task involving a particular method or process.
Sources of Cash
A firm's activities that generate cash.
Discount on Bonds Payable
Difference between a bond's par value and its lower issue price or carrying value; occurs when the contract rate is less than the market rate.
Cash
Includes currency, coins, and amounts on deposit in bank checking or savings accounts.
Voucher System
Procedures and approvals designed to control cash disbursements and acceptance of obligations.
Interrogatory
A form of discovery in which one party sends to an opposing party written questions that must be answered under oath.
Trademark or Trade (Brand) Name
Symbol, name, phrase, or jingle identified with a company, product, or service.
Ecocentric Management
Its goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.
Staples
Convenience goods and services that consumers constantly replenish to maintain a ready inventory.
Market Segmentation
Division of the total market into smaller, relatively homogeneous groups.
Expectancy
Employee's perception of the likelihood that their efforts will enable them to attain their performance goals.
Directed Verdict
The decision by a court to instruct a jury that it must find in favor of a particular party because, in the judge's opinion, no reasonable person could disagree on the outcome.
Du Pont Identity
Popular expression breaking ROE into three parts: operating efficiency, asset use efficiency, and financial leverage.
Standard Costs
Costs that should be incurred under normal conditions to produce a product or component or to perform a service.
Rulemaking
The power of an administrative agency to issue regulations.
Mobile Marketing
Marketing messages transmitted via wireless technology.
Double-Declining Balance (DDB) Depreciation
Depreciation equals beginning book value multiplied by 2, times the straight-line rate.
Outputs
The products or services organizations create.
Veto
The power of the president to reject legislation passed by Congress, terminating the bill unless Congress votes by a 2/3 majority to override.
Direct Selling
Strategy designed to establish direct sales contact between producer and final user.
Functional Authority
The right that a manager of a staff department has to make decisions and give orders that affect the way things are done in another department.
Distribution Strategy
Planning that ensures that consumers find a firm's products in the proper quantities at the right times and places.
Remand
The power of an appellate court to return a case to a lower court for additional action.
Takings Clause
Part of the Fifth Amendment, it ensures that when any governmental unit takes private property for public use, it must compensate the owner.
Convertible Bonds
Bonds that bondholders can exchange for a set number of the issuer's shares.
Organizing
The management function of assembling and coordinating human, financial, physical, informational, and other resources needed to achieve goals.
Family Life Cycle
Process of family formation and dissolution.
Devil's Advocate
A person who has the job of criticizing ideas to ensure that their downsides are fully explored.
Retail Cooperative
Group of retailers that establish a shared wholesaling operation to help them compete with chains.
Shareholders
Owners of a corporation. Also called Stockholders.
Protective Tariff
Taxes designed to raise the retail price of an imported product to match or exceed that of a similar domestic product.
Objection
Expression of sales resistance by the prospect.
Participative Leadership
When a manager is willing to share decision-making and problem-solving activities with associates. It also occurs in teams when individual members of a group take part in the decision-making process.
One-way Communication
A process in which information flows in only one direction: from the sender to the receiver, with no feedback loop.
Closing Process
Necessary steps to prepare the accounts for recording the transactions of the next period.
Chart of Accounts
List of accounts used by a company; includes an identification number for each account.
Bounded Rationality
A less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable.
Generic Products
Products characterized by plain labels, no advertising, and the absence of brand names.
Lessee
Party to a lease who secures the right to possess and use the property from another party (the lessor).
Statute
A law passed by a legislative body, such as Congress.
High-involvement Organization
A type of organization in which top management ensures that there is consensus about the direction
Rightsizing
A successful effort to achieve an appropriate size at which the company performs most effectively.
Moral Philosophy
Principles, rules, and values people use in deciding what is right or wrong.
Dual Distribution
Network that moves products to a firm's target market through more than one marketing channel.
General Agreement on Tariffs and Trade (GATT)
International trade accord that has helped reduce world tariffs.
Contest
Sales promotion technique that requires entrants to complete a task such as solving a puzzle or answering questions on a quiz for the chance to win a prize.
Promotion
Communication link between buyers and sellers; the function of informing, persuading, and influencing a consumer's purchase decision.
Aging of Accounts Receivable
Process of classifying accounts receivable by how long they are past due for purposes of estimating uncollectible accounts.
Switching Costs
Fixed costs buyers face when they change suppliers.
Beta Coefficient
The amount of systematic risk present in a particular risky asset relative to that in an average risky asset.
International Model
An organization model that is composed of a company's overseas subsidiaries and characterized by greater control by the parent company over the research function and local product and marketing strategies than is the case in the multinational model.
Geographic Segmentation
Division of an overall market into homogeneous groups based on their locations.
Cafeteria Benefit Program
An employee benefit program in which employees choose from a menu of options to create a benefit package tailored to their needs.
Procedural Justice
Using fair process in decision making and making sure others know that the process was as fair as possible.
Certainty
The state that exists when decision makers have accurate and comprehensive information.
Discounts Lost
Expenses resulting from failures to take advantage of cash discounts on purchases.
Pricing Strategy
Methods of setting profitable and justifiable prices.
Marketing Plan
Detailed description of the resources and actions needed to achieve stated marketing objectives.
Primary Demand
Desire for a general product category.
Oligopoly
Market structure in which relatively few sellers compete and where high start-up costs form barriers to keep out new competitors.
ISO 9000
A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers.
Comparable Worth
Principle of equal pay for different jobs of equal worth.
Amendment
Any addition to a legal document. The constitutional amendments, the first ten of which are known collectively as the Bill of Rights, secure numerous liberties and protections directly for the people.
Strike
The ultimate weapon of a labor union, it occurs when all or most employees of a particular plant or employer walk off the job and refuse to work.
Customer Relationship Manager (CRM)
Combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers.
Exclusive Distribution
Distribution of a product through a single wholesaler or retailer in a specific geographic region.
Multicultural Organization
An organization that values cultural diversity and seeks to utilize and encourage it.
Roles
Different sets of expectations for how different individuals should behave.
Matching Principle
Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Critical Thinking
Determining the authenticity, accuracy, and worth of information, knowledge, claims, and arguments.
Direct Examination
During a hearing, for a lawyer to question his own witness.
Secured Bonds
Bonds that have specific assets of the issuer pledged as collateral.
Operating Cash Flow
Cash generated from a firm's normal business activities.
Norms
Shared beliefs about how people should think and behave.
Groupthink
A phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus. The deterioration of the mental efficiency, reality testing, and moral judgment of the individual members of the group in the interest of group solidarity.
Information Processor
Component of an accounting system that interprets, transforms, and summarizes information for use in analysis and reporting.
Final Consumer
Those who purchase products in their finished form.
Compound Journal Entry
Journal entry that affects at least three accounts.
Just-in-Time (JIT)/Just-in-Time II (JIT II)
Inventory practices that seek to boost efficiency by cutting inventories to absolute minimum levels. With JIT II, suppliers' representatives work at the customer's facility.
Hygiene Factors
Characteristics of the workplace, such as company policies, working conditions, pay, and supervision, that can make people dissatisfied.
Discount
Calculate the present value of some future amount.
Utilitarian Outcomes
Extent to which uses enhances the effectiveness of the job. The manager's behavior results in optimization of satisfaction of people inside and outside the organization. It results in the greatest good for the greatest number of people.
Disadvantages of Teamwork
Some individuals are better and/or faster, process losses from team development time, many companies don't support the best team environment, social loafing.
Competitive Intelligence
Information that helps managers determine how to compete better.
Bank Reconciliation
Report that explains the difference between the book (company) balance of cash and the cash balance reported on the bank statement.
Job Analysis
A tool for determining what is done on a given job and what should be done on that job.
Environmental Scanning
Process of collecting information about the external marketing environment to identify and interpret potential trends.
Market Penetration Strategy
Strategy that seeks to increase sales of existing products in existing markets.
Break-even Time (BET)
Time-based measurement used to evaluate the acceptability of an investment; equals the time expected to pass before the present value of the net cash flows from an investment equals its initial cost.
Job Enrichment
Providing variety, deeper personal interest and involvement, greater autonomy and challenge, or increased responsibility.
Cash Flow to Creditors
A firm's interest payments to creditors less net new borrowings.
Manufacturing Budget
Plan that shows the predicted costs for direct materials, direct labor, and overhead to be incurred in manufacturing units in the production budget.
Present Value (PV)
The current value of future cash flows discounted at the appropriate discount rate.
Future Value (FV)
The amount an investment is worth after one or more periods.
Situational Approach
Leadership perspective proposing that universally important traits and behaviors do not exist, and that effective leadership behavior varies from situation to situation.
Management by Objectives (MBO)
A process in which objectives set by a subordinate and a supervisor must be reached within a given time period.
Entity
Organization that, for accounting purposes, is separate from other organizations and individuals.
Internet Protocol Television (IPTV)
Technology that allows a two-way broadcast signal to be sent through a telephone or cable network by way of a broadband connection.
Production of Documents and Things
A form of discovery in which one party demands that the other furnish original documents of physical things, relating to the suit, for inspection and copying.
Presentation
Personal selling function of describing a product's major features and relating them to a customer's problems or needs.
Conceptual and Decision Skills
Skills pertaining to the ability to identify and resolve problems for the benefit of the organization and its members.
Facilitating Functions
Functions that assist the marketer in performing the exchange and physical distribution functions.
Compatibility Principle
Information system principle that requires an accounting system to conform with a company's activities, personnel, and structure.
Spreadsheet Analysis
Grid that organizes numerical information in a standardized, easily understood format.
Marketing Strategy
Overall, company-wide program for selecting a particular target market and then satisfying consumers in that market through the marketing mix.
Product Development
Introduction of new products into identifiable or established markets.
Span of Control
The number of representatives who report to first-level sales managers.
Equity
The broad powers of a court to fashion a remedy where justice demands it and no common law remedy exists. An injunction is an example of an equitable remedy.
Free Trade Area of the Americas (FTAA)
Proposed free-trade area stretching the length of the entire Western Hemisphere and designed to extend free trade benefits to additional nations in North, Central, and South America.
Marketing Intermediary (Middleman)
Wholesale or retailer that operates between producers and consumers or business users.
Leasehold Improvements
Alterations or improvements to leased property such as partitions and storefronts.
Strategic Management
A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies.
Conversion Rate
Percentage of visitors to a Web site who make a purchase.
Friendship, Commerce, and Navigation (FCN) Treaties
International agreements that deal with many aspects of commercial relations among nations.
Affective Conflict
Emotional disagreement directed toward other people.
Equity Theory
A theory stating that people assess how fairly they have been treated according to two key factors: outcome and inputs.
Assignor
The party who assigns contract rights to a third person.
Receiving Report
Form used to report that ordered goods are received and to describe their quantity and condition.
Diversity
Committing to establish an environment where the full potential of all employees can be tapped by paying attention to, and taking into account their differences in work background, experience, age, gender, race, ethnic origin, etc.
Backward Integration
Process through which a manufacturer attempts to gain greater control over inputs in its production process, such as raw materials.
Leading
The management function that involves the manager's efforts to stimulate high performance by employees.
Unemployment
Proportion of people in the economy who are actively seeking work but do not have jobs.
Trait Approach
A leadership perspective that attempts to determine the personal characteristics that great leaders share.
Statutory Interpretation
A court's power to give meaning to new legislation by clarifying ambiguities, providing limits, and ultimately applying it to a specific fact pattern in litigation.
Schedule of Accounts Payable
List of the balances of all accounts in the accounts payable ledger and their total.
Scoreboarding
Providing feedback on individual and team efforts to reach goals.
Public Service Announcements (PSAs)
Advertisements aimed at achieving socially oriented objectives by focusing on causes and charitable organizations that are included in print and electronic media without charge.
Hierarchy
The various levels of managerial positions and the people chosen to staff an organization's positions of formal authority.
Leadership
The ability to get work done with and through others while winning their respect, confidence, loyalty, and willing cooperation.
Master Budget
Comprehensive business plan that includes specific plans for expected sales, product units to be produced, merchandise (or materials) to be purchased, expenses to be incurred, plant assets to be purchased, and amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet.
Report Form Balance Sheet
Balance sheet that lists accounts vertically in the order of assets, liabilities, and equity.
Obligor
The party to a contract who is required to do something for the benefit of the other party.
Point-of-Purchase (POP) Advertising
Display or other promotion placed near the site of the actual buying decision.
Mission Statement
A mission statement defines the core purpose of the organization - why it exists. Effective missions are inspiring, long-term in nature, and easily understood and communicated.
Harmless Error
A ruling made by a trial court which an appeals court determines was legally wrong but not fatal to the decision.
International Accounting Standards Board (IASB)
Group that identifies preferred accounting practices and encourages global acceptance; issues international Financial Reporting Standards (IFRS).
Physical Distribution Functions
Broad range of activities aimed at efficiently moving finished goods from the end of the production line to the consumer.
Purchase Requisition
Document listing merchandise needed by a department and requesting it be purchased.
Grapevine
Informal communication network.
Frontline Managers
Lower-level managers who supervise the operational activities of the organization.
Transformational Leader
A leader who motivates people to transcend their personal interests for the good of the group.
Continuous Budgeting
Practice of preparing budgets for a selected number of future periods and revising those budgets as each period is completed.
Depreciation
Expense created by allocating the cost of plant and equipment to periods in which they are used; represents the expense of using the asset.
Premium on Bonds
Difference between a bond's par value and its higher carrying value; occurs when the contract rate is higher than the market rate. Also called Bond Premium.
Intensive Distribution
Distribution of a product through all available channels.
Profit Margin
Ratio of a company's net income to its net sales; the percent of income in each dollar of revenue. Also called Net Profit Margin.
Accrued Revenues
Revenues earned in a period that are both unrecorded and not yet received in cash (or other assets); adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Customer Service
The speed and dependability with which an organization can deliver what customers want.
Metropolitan Statistical Area (MSA)
Freestanding urban area with a population in the urban center of at least 50,000 and a total MSA population of 100,000 or more.
Principle of Diversification
Spreading an investment across a number of assets will eliminate some, but not all, of the risk.
Cooperative Strategies
Strategies used by two or more organizations working together to manage the external environment.
Probing
A team strategy, that requires team members to interact frequently with outsiders, diagnose their needs, and experiment with solutions.
Value Analysis
Systematic study of the components of a purchase to determine the most cost-effective approach.
Performance Appraisal (PA)
Assessment of an employee's job performance.
Central American Free Trade Agreement-DR (CAFTA-DR)
Trade agreement among the United States, Central American nations, and the Dominican Republic.
Accessory Equipment
Capital items such as desktop computers and printers that typically cost less and last for shorter periods than installations.
Direct Channel
Marketing channel that moves goods directly from a producer to the business purchaser or ultimate user.
Brand Mark
Symbol or pictorial design that distinguishes a product.
Legislative Rules
Regulations issued by an administrative agency.
Decline Stage
Final stage of the product life cycle, in which a decline in total industry sales occurs.
Ledger
Record containing all accounts (with amounts) for a business. Also called General Ledger.
Long-term Investments
Long-term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
80/20 Principle
Generally accepted rule that 80 percent of a product's revenues come from 20 percent of its total customers.
Internal Control System
All policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies.
Note Payable
Liability expressed by a written promise to pay a definite sum of money on demand or on a specific future date(s).
Accounting
Information and measurement system that identifies, records, and communicates relevant information about a company's business activities.
Corporate Strategy
The set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities.
Gross Domestic Product (GDP)
Sum of all goods and services produced by a nation in a year.
Equal Protection Clause
Part of the Fourteenth Amendment, it generally requires the government to treat equally situated people the same.
Negative Reinforcement
Removing or withholding an undesirable consequence.
Business Segment
Part of a company that can be separately identified by the products or services that it provides or by the geographic markets that it serves. Also called Segment.
Marketing
Organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Sustainable Competitive Advantage
Superior market position that a firm possesses and can maintain for an extended period of time.
Market Prospects
Expectations (both good and bad) about a company's future performance as assessed by users and other interested parties.
External Environment
All relevant forces outside a firm's boundaries, such as competitors, customers, the government, and the economy.
Concentration
A strategy employed for an organization that operates a single business and competes in a single industry.
Off-Balance-Sheet Financing
Acquisition of assets by agreeing to liabilities not reported on the balance sheet.
Creativity
Human activity that produces original ideas or knowledge, frequently by testing combinations of ideas or data to produce unique results.
Cash Flow on Total Assets
Ratio of operating cash flows to average total assets; not sensitive to income recognition and measurement; partly reflects earnings quality.
Benchmarking
Practice of comparing and analyzing a company financial performance or position with other companies or standards.
Closed Sales Territory
Exclusive geographic selling region of a distributor.
Satisficing
Choosing an option that is acceptable, although not necessarily the best or perfect.
Category
Key business unit within diversified firms; also called a strategic business unit (SBU).
Concerted Action
Tactics, such as a strike, used by a union to gain a bargaining advantage.
Accounting Period
Length of time covered by financial statements. Also called Reporting Period.
Cognitive Conflict
Issue-based differences in perspectives or judgments.
Ethnocentrism
The tendency to judge others by the standards of one's group or culture, which are seen as superior.
Purchase Order
Document used by the purchasing department to place an order with a seller (vendor).
Presentment
A holder of an instrument makes a demand for payment.
Situational Analysis
A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration.
Registered Bonds
Bonds owned by investors whose names and addresses are recorded by the issuer; interest payments are made to the registered owners.
Motivators
Factors that make a job more motivating, such as additional job responsibilities, opportunities for personal growth and recognition, and feelings of achievement.
Culture Shock
The disorientation and stress associated with being in a foreign environment.
Core Based Statistical Area (CBSA)
Collective term for metropolitan and micropolitan statistical areas.
Mortgage
Legal loan agreement that protects a lender by giving the lender the right to be paid from the cash proceeds from the sale of a borrower's assets identified in the mortgage.
Rule of Three
Three dominant companies in an industry that will capture 70 to 90 percent of the market.
Common Size Financial Statement
Statement that expresses each amount as a percent of a base amount. In the balance sheet, total assets is usually the base and is expressed as 100%. In the income statement, net sales is usually the base.
Customer-Based Segmentation
Dividing a business-to-business market into homogeneous groups based on buyer's product specifications.
Judicial Activism
The willingness shown by certain courts (and not by others) to decide issues of public policy, such as constitutional questions (free speech, equal protection, etc.) and matters of contract fairness (primary estoppel, unconscionability, etc.).
Agency Problem
The possibility of conflict of interest between stockholders and management of a firm.
Consumer Innovator
People who purchase new products almost as soon as the products reach the market.
Jurisprudence
The study of the purposes and philosophies of the law, as opposed to particular provisions of the law.
Sender
Source of the message communicated to the receiver.
Common-Base Year Statement
A standardized financial statement presenting all items relative to a certain base-year amount.
Illusion of Control
People's belief that they can influence events, even when they have no control over what will happen.
Serial Bonds
Bonds consisting of separate amounts that mature at different dates.
Due Process Clause
Part of the Fifth Amendment, Procedural due process ensures that before depriving anyone of liberty or property, the government must go through procedures which ensure that the deprivation is fair. Substantive due process holds that certain rights, such as privacy, are so fundamental that the government may not eliminate them.
Psychographic Segmentation
Division of a population into groups that have similar psychological characteristics, values, and lifestyles.
Law Merchant
The body of rules and customs developed by traders and businesspersons throughout Europe from roughly the fifteenth to the eighteenth century.
Exhaustion of Remedies
A principle of administrative law that no party may appeal an agency action to a court until she has utilized all available appeals within the agency itself.
Error of Law
A mistake made by a trial judge that concerns a legal issue as opposed to a factual matter. Permitting too many leading questions is a legal error; choosing to believe one witness rather than another is a factual matter.
Contract Rate
Interest rate specified in a bond indenture (or note); multiplied by the par value to determine the interest paid each period. Also called Coupon Rate, Stated Rate, or Nominal Rate.
Authentic Leadership
A style in which the leader is true to himself or herself while leading.
Temporary Accounts
Accounts used to record revenues, expenses, and withdrawals (and dividends for a corporation); they are closed at the end of each period. Also called Nominal Accounts.
Computer Network
Linkage giving different users and different computer users access to common databases and programs.
Close Corporation
A corporation with a small number of shareholders. Its stock is not publicly traded.
Importing
Purchasing foreign goods and services.
Donee Beneficiary
When one party to a contract intends to make a gift to a third party, that third party is referred to as a done beneficiary.
Reverse Channel
Channel designed to return goods to their producers.
Favorable Variance
Difference in actual revenues or expenses from the budgeted value that contributes to a higher income.
Inadequacy
Condition in which the capacity of plant assets is too small to meet the company's production demands.
Business Ethics
The moral principles and standards that guide behavior in the world of business.
Comparative Financial Statement
Statement with data for two or more successive periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.
Issue
All direct descendants such as children, grandchildren, and so on.
Vertical Analysis
Evaluation of each financial statement item or group of items in terms of a specific base amount.
Simultaneous Engineering
A design approach in which all relevant functions cooperate jointly and continually in a maximum effort aimed at producing high-quality products that meet customers' needs.
Flexible Budget Performance Report
Report that compares actual revenues and costs with their variable budgeted amounts based on actual sales volume (or other level of activity) and identifies the differences as variances.
Brand Manager
Marketer within an organization who is responsible for a single brand.
Cash Over and Short
Income statement account used to record cash overages and cash shortages arising from errors in cash receipts or payments.
Fundamental Rights
In constitutional law, those rights that are so basic that any governmental interference with them is suspect and likely to be unconstitutional.
Deposition
A form of discovery in which a party's attorney has the right to ask oral questions of the other party or of a witness. Answers are given under oath.
Duty of Fair Representation
The union's obligation to act on behalf of all members impartially and in good faith.
Writ of Certiorari
Formal notice from the United States Supreme Court that it will accept a case for review.
Marketing Mix
Blending of the four strategy elements - product, distribution, promotion, and price - to fit the needs and preferences of a specific target market.
Enterprise Resource Planning (ERP) Software
Programs that manage a company's vital operations, which range from order taking to manufacturing to accounting.
Source Documents
Source of information for accounting entries that can be in either paper or electronic form. Also called Business Papers.
Substitutes for Leadership
Factors in the workplace that can exert the same influence on employees that leaders would provide.
Verdict
The decision of the factfinder in a case.
Deregulation Movement
Opening of markets to previously subject to government control.
Fiscal Year
Consecutive 12-month (or 52-week) period chosen as the organization's annual accounting period.
Reflecting
Contemplating and considering the significance of the work performed; evaluating the value and meaning of the specific service as it relates to a larger context.
Mentors
Higher level managers who help ensure that high-potential people are introduced to top management and socialized into the norms and values of the organization.
Qualifying
Determining that a prospect has the needs, income, and purchase authority necessary for being a potential customer.
Conglomerate Diversification
A strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities.
Transactional Leaders
Leaders who manage through transactions, using their legitimate, reward, and coercive powers to give commands and exchange rewards for services rendered.
Strategic Business Unit (SBU)
Key business units within diversified firms.
In Camera
"In the judge's chambers," meaning the judge does something out of view of the jury and the public.
Assets
Resources a business owns or controls that are expected to provide current and future benefits to the business.
Slotting Allowances
Money paid by vendors to retailers to guarantee display of merchandise.
Ad Hoc Committee
A committee established to handle a specific situation and that dissolves after the task is accomplished.
Concentrated Marketing
Focusing marketing efforts on satisfying a single market segment. Also called Niche Marketing.
Consumer (B2C) Product
Product destined for use by ultimate consumers.
Activity-Based Budgeting (ABB)
Budget system based on expected activities.
Habit
Can be a negative for group or individual decision making. Groups that always make decisions in the same way without considering new options may no longer be innovative.
Events
Happenings that both affect an organization's financial position and can be reliably measured.
Captive Brand
National brands that are sold exclusively by a retail chain.
Bureaucratic Style
A management style characterized by the manager's reliance on rules, regulations, policies, and procedures to direct subordinates.
Invoice
Itemized record of goods prepared by the vendor that lists the customer's name, items sold, sales price, and terms of sale.
Bonus Pack
Specially packaged item that gives the purchaser a larger quantity at the regular price.
Micromarketing
Targeting potential customers at very narrow, basic levels, such as by zip code, specific occupation, or lifestyle - possibly even individuals themselves.
Trade Allowance
Special financial incentive offered to wholesalers and retailers that purchase or promote specific products.
Work Sheet
Spreadsheet used to draft an unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements.
Corporate Social Responsibility
Obligation toward society assumed by business.
Informal Rulemaking
The process whereby an administrative agency notifies the public of a proposed new rule and permits comment but is then free to promulgate the final rule without a public hearing.
Outsourcing
Using outside vendors to provide goods and services formerly produced in-house. Part of a make-or-buy decision.
Low-Cost Strategy
A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product.
Double Taxation
Corporate income is taxed and then its later distribution through dividends is taxed again for shareholders.
Private Brand
Brand offered by a wholesaler or retailer.
Subpoena Duces Tecum
An order to produce certain documents or things before a court or government body.
Repositioning
Changing the position of a product within the minds of prospective buyers relative to the positions of competing products.
Positioning
Placing a product at a certain point or location within a market in the minds of prospective buyers.
Financial Accounting
Area of accounting mainly aimed at serving external users.
Principle of Right Sizing
This principle deals with matching your organization's size with its business goals. Large corporations used to use this term instead of downsizing. They would say that the organization had gotten too big and they were right sizing.
Operating Leases
Short-term (or cancelable) leases in which the lessor retains risks and rewards of ownership.
Maslow's Need Hierarchy
A conception of human needs organizing needs into a hierarchy of five major types.
Prospectors
Companies that continuously change the boundaries for their task environments by seeking new products and markets, diversifying and merging, or acquiring new enterprises.
Balance Sheet
Financial Statement that lists types and dollar amounts of assets, liabilities, and equity at a specific date.
Standard Industrial Classification (SIC) Code
A U.S. government code used to classify a firm by its type of business operations.
Indirect Method
Presentation that reports net income and then adjusts it by adding and subtracting items to yield net cash from operating activities on the statement of cash flows.
Capital Structure
The mixture of debt and equity maintained by a firm.
Controllable Variance
Combination of both overhead spending variances (variable and fixed) and the variable overhead efficiency variance.
Economic Responsibility
To produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.
Label
Branding component that carries an item's brand name or symbol, the name and address of the manufacturer or distributor, information about the product, and recommended uses.
Risk
Uncertainty about an expected return. The state that exists when the probability of success is less than 100 percent, and losses may occur.
Horizontal Analysis
Comparison of a company's financial condition and performance across time.
Account Form Balance Sheet
Balance sheet that lists assets on the left side and liabilities and equity on the right.
Product Diversification Strategy
Developing entirely new products for new markets.
Fixed-Sum-Per-Unit Method
Method of promotional budgeting in which a predetermined amount is allocated to each sales or production unit.
Financing Activities
Transactions with owners and creditors that include obtaining cash from issuing debt, repaying amounts borrowed, and obtaining cash from or distributing cash to owners.
Upstream Management
Controlling part of the supply chain that involves raw materials, inbound logistics, and warehouse and storage facilities.
Product Manager
Marketer within an organization who is responsible for an individual product or product line; also called a brand manager.
Maker of the Note
Entity who signs a note and promises to pay it at maturity.
Diversification
A firm's investment in a different product, business, or geographic area.
Output Devices
Means by which information is taken out of the accounting system and made available for use.
Trial Court
Any court in a state or federal system that holds formal hearings to determine the facts in a civil or criminal case.
Rewards
A satisfying return or result for performance of a required behavior.
Second Mover Strategy
Theory that advocates observing closely the innovations of first movers and then improving on them to gain advantage in the marketplace.
Earnings
Amount earned after subtracting all expenses necessary for and matched with sales for a period. Also called Income or Profit.
Strategic Control System
A system designed to support managers in evaluating the organization's progress regarding its strategy and, when discrepancies exist, taking corrective action.
Expected Return
The return on a risky asset expected in the future.
Tariff
Tax levied against imported goods.
Accounts Receivable
Amounts due from customers for credit sales; backed by the customer's general credit standing.
Smoothing
Leveling normal fluctuations at the boundaries of the environment.
Bad Debts
Accounts of customers who do not pay what they have promised to pay; an expense of selling on credit. Also called Uncollectible Accounts.
Sustainable Growth
Economic growth and development that meets present needs without harming the needs of future generations.
Marketing Mix
Blending of the four strategy elements - product, distribution, promotion, and pricing - to fit the needs and preferences of a specific target market.
Strategic Goals
Major targets or end results relating to the organization's long-term survival, value, and growth.
Contingent Liability
Obligation to make a future payment if, and only if, an uncertain future event occurs.
Lifetime Value of a Customer
Revenues and intangible benefits that a customer brings to an organization over an average lifetime, minus the investment the firm has made to attract and keep the customer.
Role Playing
Technique used for overcoming shyness. Often a script is given to an individual to act out situations that help the individual become more comfortable.
Quality of Work Life (QWL) Programs
Programs designed to create a workplace that enhances employee well being.
Limited Liability
Owner can lose no more than the amount invested.
Pulling Strategy
Promotional effort by the seller to stimulate final-use demand, which then exerts pressure on the distribution channel.
External Transactions
Exchanges of economic value between one entity and another entity.
Telemarketing
Promotional presentation involving the use of the telephone on an outbound basis by salespeople or on an inbound basis by customers who initiate calls to obtain information and place orders.
Home Shopping Channel
Television direct marketing in which a variety of products are offered and consumers can order them directly by phone or online.
Brand
Name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating them from the competition's.
9/11 Generation
People in their formative years at the time of the September 11, 2001, terrorist attacks.
National Labor Relations Board (NLRB)
The administrative agency charged with overseeing labor law.
Stock
Equity of a corporation divided into units. Also called Shares.
Cash Receipts Journal
Special journal normally used to record all receipts of cash.
Task Force
A temporary grouping of individuals and resources for the accomplishment of a specific objective.
Obscenity
Constitutional law doctrine holding that some works will receive no First Amendment protection because a court determines they depict sexual matters in an offensive way.
Hurdle Rate
Minimum acceptable rate of return (set by management) for an investment.
Reasonable Doubt
The level of proof that the government must meet to convict the defendant in a criminal case. The factfinder must be persuaded to a very high degree of certainty that the defendant did what the government alleges.
Vendor Analysis
Assessment of supplier performance in areas such as price, back orders, timely delivery, and attention to special requests.
Journalizing
Process of recording transactions in a journal.
Monolithic Organization
An organization that has a low degree of structural integration - employing few women, minorities, or other groups that differ from the majority - and thus has a highly homogenous employee population.
Lease
Contract specifying the rental of property.
Business-to-Business (B2B) Product
Product that contributes directly or indirectly to the output of other products for resale; also called industrial or organizational product.
Target Market
Segment to whom a firm decides to direct its marketing efforts and ultimately its goods and services.
Bearer Bonds
Bonds made payable to whoever holds them (the bearer). Also called Unregistered Bonds.
Commission
Incentive compensation directly related to the sales or profits achieved by a salesperson.
Precall Planning
Use of information collected during the prospecting and qualifying stages of the sales process and during previous contacts with the prospect to tailor the approach and presentation to match the customer's needs.
European Union (EU)
Customs union that is moving in the direction of an economic union by adopting a common currency, removing trade restrictions, and permitting free flow of goods and workers throughout the member nations.
Defenders
Companies that stay within a stable product domain as a strategic maneuver.
Environmental Management
Attainment of organizational objectives by predicting and influencing the competitive, political-legal, economic, technologic, and social-cultural environments.
Continuous Process
A process that is highly automated and has a continuous production flow.
Debtors
Individuals or organizations that owe money.
Annuity
Series of equal payments at equal intervals.
Mass Customization
The production of varied, individually customized products at the low cost of standardized, mass-produced products.
Communication
The transmission of information and meaning from one party to another through the use of shared symbols.
Interim Financial Statements
Financial statements covering periods of less than one year; usually based on one-, three-, or six-month periods.
Emergency Goods and Services
Products bought in response to unexpected and urgent needs.
Pension Plan
Contractual agreement between an employer and its employees for the employer to provide benefits to employees after they retire; expensed when incurred.
Diversity Jurisdiction
One of the two main types of civil cases that a United States district court has the power to hear. It involves a lawsuit between citizens of different states, in which at least one party makes a claim for more than $75,000.
Event Marketing
Marketing of sporting, cultural, and charitable activities to selected target markets.
Affirm
A decision by an appellate court to uphold the judgment of a lower court.
Inside Selling
Selling by phone, mail, and electronic commerce.
Fixed Budget Performance Report
Report that compares actual revenues and costs with fixed budgeted amounts and identifies the differences as favorable or unfavorable variances.
Complaint
A pleading, filed by the plaintiff, providing a short statement of the claim.
Reversing Entries
Optional entries recorded at the beginning of a new period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred.
Limited Liability Limited Partnership
In a limited liability limited partnership, the general partner is not personally liable for the debts of the partnership.
Controlling Account
General ledger account, the balance of which (after posting) equals the sum of the balances in its related subsidiary ledger.
Green Marketing
Production, promotion, and reclamation of environmentally sensitive products.
Line Extension
Development of individual offerings that appeal to different market segments while remaining closely related to the existing product line.
Net Working Capital
Current assets less current liabilities.
Brand Insistence
Consumer refusal of alternatives and extensive search for desired merchandise.
Cost Competitiveness
Keeping costs low in order to achieve profits and be able to offer prices that are attractive to consumers.
Positive Reinforcement
Applying consequences that increase the likelihood that a person will repeat the behavior that led to it.
Useful Life
Length of time an asset will be productively used in the operations of a business. Also called Service Life.
Unsecured Bonds
Bonds backed only by the issuer's credit standing; almost always riskier than secured bonds. Also called Debentures.
Demographics
Measures of various characteristics of the people who comprise groups or other social units.
Infrastructure
A nation's basic system of transportation networks, communications systems, and energy facilities.
Revenues
Gross increase in equity from a company's business activities that earn income. Also called Sales.
Bookkeeping
Part of accounting that involves recording transactions and events, either manually or electronically. Also called Recordkeeping.
Check
Document signed by the depositor instructing the bank to pay a specified amount to a designated recipient.
Rules of Evidence
Law governing the proof offered during a trial or formal hearing. These rules limit the questions that may be asked of witnesses and the introduction of physical objects.
Ambush Marketing
Attempt by a firm that is not an official sponsor of an event or activity to link itself to the event or activity.
Post-Closing Trial Balance
List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Vendor
Seller of goods or services.
Category Management
Product management system in which a category manager - with profit and loss responsibility - oversees a product line.
Balance Sheet Equation
Equality involving a company's assets, liabilities, and equity. Assets = Liabilities + Equity Also called Accounting Equation.
Accounting Rate of Return
Rate used to evaluate the acceptability of an investment; equals the after-tax periodic income from a project divided by the average investment in the asset. Also called Rate of Return on Average Investment.
Straight-Line Method
Method allocating an equal amount of bond interest expense to each period in the life of bonds.
Technological Environment
Application of marketing of knowledge based on discoveries in science, inventions, and innovations.
Posting
Process of transferring journal entry information to the ledger.
Leader-Member Exchange (LMX) Theory
Highlights the importance of leader behaviors not just toward the group as a whole but toward individuals on a personal basis.
Marketing Ethics
Marketers' standards of conduct and moral values.
Liquidity
Availability of resources to meet short-term cash requirements.
Social Capital
Goodwill stemming from your social relationships.
Internal Users
Persons using accounting information who are directly involved in managing the organization.
Open-Book Management
Practice of sharing with employees at all levels of the organization vital information previously meant for management's eyes only.
Brand Equity
Added value that a respected, well-known brand name gives to a product in the marketplace.
Canceled Checks
Checks that the bank has paid and deducted from the depositor's account.
Third Party Beneficiary
Someone who stands to benefit from a contract to which she is not a party. An intended beneficiary may enforce such a contract; an incidental beneficiary may not.
Generally Accepted Auditing Standards (GAAS)
Rules that specify acceptable auditing practices.
Goal-Setting Theory
A motivation theory stating that people have conscious goals that energize them and direct their thoughts and behaviors toward a particular end.
Strategy
A pattern of actions and resource allocations designed to achieve the organization's goals.
Decoding
Receiver's interpretation of a message.
Servant Leader
A leader who serves others' needs while strengthening the organization.
Simple Interest
Interest earned only on the original principal amount invested.
Product
Bundle of physical, service, and symbolic attributes designed to satisfy a customer's wants and needs.
Order Processing
Selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders.
Revenue Recognition Principle
The principle prescribing that revenue is recognized when earned.
Cash Disbursements Journal
Special journal normally used to record all payments of cash. Also called Cash Payments Journal.
Contract Carriers
For-hire transporters that do not offer their services to the general public.
Bridge Leaders
A leader who bridges conflicting value systems or different cultures.
Depletion
Process of allocating the cost of natural resources to periods when they are consumed.
360 Degree Appraisal
Process of using multiple sources of appraisal to gain a comprehensive perspective on one's performance.
Laissez-faire
A leadership philosophy characterized by an absence of managerial decision making.
Liquid Assets
Resources such as cash that are easily converted into other assets or used to pay for goods, services, or liabilities.
Ethical Climate
In an organization it refers to the processes by which decisions are evaluated and made on the basis of right and wrong.
Suboptimization
Condition that results when individual operations achieve their objectives but interfere with progress toward broader organizational goals.
Journal
Record in which transactions are entered before they are posted to ledger accounts. Also called Book of Original Entry.
Product-Related Segmentation
Division of a population into homogeneous groups based on their relationships to the product.
Working Papers
Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Engel's Laws
Three general statements about the impact of household income on consumer spending behavior: as household income increases, a smaller percentage of expenditures goes for food; the percentage spent on housing, household operations, and clothing remains constant; and the percentage spent on other items (such as recreation and education) increases.
Factfinder
The one responsible, during a trial, for deciding what occurred, that is, who did what to whom, when, how, and why. It is either the jury or, in a jury-waived case, the judge.
Financial Reporting
Process of communicating information relevant to investors, creditors, and others in making investment, credit, and business decisions.
Commercial Speech
Communication, such as television advertisements, that has the dominant theme proposing a commercial transaction.
Consumer Products
Products bought by ultimate consumers for personal use.
Cannibalization
Loss of sales of an existing product due to competition from a new product in the same line.
Closing Entries
Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, gain, expense, loss, and withdrawal (dividend for a corporation) accounts to the capital account (to retained earnings for a corporation).
Accounts Receivable Turnover
Measure of both the quality and liquidity of accounts receivable; indicates how often receivables are received and collected during the period; computed by dividing net sales by average accounts receivable.
Change in Accounting Estimate
Change in an accounting estimate that results from new information, subsequent developments, or improved judgment impacts current and future periods.
Business Cycle
Pattern of stages in the level of economic activity: Prosperity, Recession, Depression, and Recovery.
Labor Relations
The system of relations between workers and management.
Modified Rebuy
Situation in which a purchaser is willing to reevaluate available options for repurchasing a good or service.
Feedback
Receiver's response to a message.
Sales Budget
Plan showing the units of goods to be sold or services to be provided; the starting point in the budgeting process for most departments.
Answer
The pleading, filed by the defendant in court and served on the plaintiff, which responds to each allegation in the plaintiff's complaint.
Relationship Marketing
Development and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit.
Owner's Equity
Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called Net Assets.
Budgeting
Process of planning future business actions and expressing them as formal plans.
Enabling Legislation
A statute authorizing the creation of a new administrative agency and specifying its powers and duties.
Interpersonal and Communication Skills
People skills; the ability to lead, motivate, and communicate effectively with others.
Injunction
A court order that a person either do or stop doing something.
Accounting Information System
People, records, and methods that collect and process data from transactions and events, organize them in useful forms, and communicate results to decision makers.
Par Value of a Bond
Amount the bond issuer agrees to pay at maturity and the amount on which cash interest payments are based. Also called Face Amount or Face Value.
Liabilities
Creditor's claims on an organization's assets; involves a probable future payment of assets or services that a company is obligated to make due to past transactions or events.
Seller's Market
Market in which there are more buyers for fewer goods and services.
Override
The power of Congress or a state legislature to pass legislation despite a veto by a president or governor. A congressional override requires a two-thirds vote in each house.
Cost of Capital
The minimum required return on a new investment.
Divestiture
A firm selling one or more businesses.
Corporation
Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Transaction-based Marketing
Buyer and seller exchanges characterized by limited communications and little or no ongoing relationships between the parties.
Coalitional Model
Model of organizational decision making in which groups with differing preferences use power and negotiations to influence decisions.
Infomercial
Paid-30 minute or longer product commercial that resembles a regular television program.
Subpoena
An order to appear, issued by a court or government body.
Dumping
Controversial practice of selling a product in a foreign market at a price lower than what it receives in the producer's domestic market.
Lateral Leadership
Style in which colleagues at the same hierarchical level are invited to collaborate and facilitate joint problem solving.
Universal Product Code (UPC)
Numerical bar code system used to record product and price information.
Vision
A mental image of a possible and desirable future state of the organization.
Host-country Nationals
Natives of the country where an overseas subsidiary is located.
Challenge for Cause
An attorney's request, during voir dire, to excuse a prospective juror because of apparent bias.
Motivation Factor
According to Herzberg, a factor that has the potential to stimulate internal motivation to provide better-than-average performance and commitment.
Large Batch
Technologies that produce goods and services in high volume.
Judicial Restraint
A court's preference to abstain from adjudicating major social issues and to leave such matters to legislatures.
Introductory Stage
First stage of the product life cycle, in which a firm works to stimulate sales of a new market entry.
Spanning
This may refer to span of control. Span of control refers to the number of people that a manager can oversee. A wide span of control discourages one-on-one supervision. There are too many subordinates for managers to keep up with on a one-to-one basis.
Consumer Rights
List of legitimate consumer expectations suggested by President Kennedy.
Financial Ratios
Relationships determined from a firm's financial information and used for comparison purposes.
Price Variance
Difference between actual and budgeted revenue or cost caused by the difference between the actual price per unit and the budgeted price per unit.
Financial Statements
Includes the balance sheet, income statement, statement of owner's equity, and statement of cash flows.
Exchange Control
Method used to regulate the privilege of international trade among importing organizations by controlling access to foreign currencies.
Sweepstakes
Sales promotion technique in which prize winners are selected by chance.
Accommodation
A style of dealing with conflict involving cooperation on behalf of the other party but not being assertive about one's own interests.
Plain Meaning Rule
In statutory interpretation, the premise that words with an ordinary, everyday significance will be so interpreted, unless there is some apparent reason not to.
Team Training
Training that provides employees with the skills and perspectives they need to work in collaboration with others.
Promotion
Communication link between buyers and sellers; the function of informing, persuading, and influencing a consumer's purchase decision.
T-Account
Tool used to show the effects of transactions and event on individual accounts.
Category Advisor (Category Captain)
Trade industry vendor who develops a comprehensive procurement plan for a retail buyer.
Valence
The value an outcome holds for the person contemplating it.
Manufacturers' Representative
Agent wholesaling intermediary that represents manufacturers of related by noncompeting products and receives a commission on each sale.
Net Loss
Excess of expenses over revenues for a period.
Operating Activities
Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business.
Marketing Communications
Messages that deal with buyer-seller relationships.
Bill
A proposed statute that has been submitted for consideration to Congress or a state legislature.
Instrumentality
The perceived likelihood that performance will be followed by a particular outcome.
Reply
A pleading, filed by the plaintiff in response to a defendant's counter-claim.
Project and Development Teams
Teams that work on long-term projects but disband once the work is completed.
Scribing
Group role where the individual takes notes for the group or is the record keeper.
Team Selling
Selling situation in which several sales associates or other members of the organization are recruited to help the lead sales representative reach all those who influence the purchase decision.
Special Journal
Any journal used for recording and posting transactions of a similar type.
Systematic Risk Principle
The expected return on a risky asset depends only on that asset's systematic risk.
Programmed Decisions
Decisions encountered and made before, having objectively correct answers, and solvable by using simple rules, policies, or numerical computations.
Lockout
A management tactic, designed to gain a bargaining advantage, in which the company refuses to allow union members to work (and hence deprives them of their pay).
Corporate Marketing System
VMS in which a single owner operates the entire marketing channel.
Gray Goods
Products manufactured abroad under license from a U.S. firm and then sold in the U.S. market in competition with that firm's own domestic product.
Market Development Strategy
Strategy that concentrates on finding new markets for existing products.
Volume Variance
Difference between two dollar amounts of fixed overhead cost; one amount is the total budgeted overhead cost, and the other is the overhead cost allocated to products using the predetermined fixed overhead rate.
Net Present Value (NPV)
Dollar estimate of an asset's value that is used to evaluate the acceptability of an investment; computed by discounting future cash flows from the investment at a satisfactory rate and then subtracting the initial cost of the investment.
Cost per Impression
Measurement technique that relates the cost of an ad to every thousand people who view it.
Field Selling
Sales presentations made at prospective customers' locations on a face-to-face basis.
VALS
Segmentation system that divides consumers into eight psychographic categories: actualizers, fulfillers, believers, achievers, strivers, experiencers, makers, and strugglers.
Related Party Trade
Trade by U.S. companies with their subsidiaries overseas as well as trade by U.S. subsidiaries of foreign-owned firms with their parent companies.
Ethical Issue
Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong.
Caux Principles
Ethical principles established by international executives based in Caux, Switzerland in collaboration with business leaders from Japan, Europe, and the United States.
Straight Rebuy
Recurring purchase decision in which a customer repurchases a good or service that has preformed satisfactorily in the past.
Advantages of Teamwork
Increased competitive advantage, increased productivity, greater creativity and more numerous alternatives for problem solving.
Semi-autonomous Work Groups
Groups that make decisions about managing and carrying out major production activities, but still get outside support for quality control and maintenance.
Segment Return on Assets
Segment operating income divided by segment average (identifiable) assets.
Open Systems
Organizations that are affected by, and that affect their environment.
Brokering
One who acts as an agent for another in return for a fee or a commission.
Line Extension
Development of individual offerings that appeal to different market segments while remaining closely related to the existing product line.
Investing Activities
Transactions that involve purchasing and selling of long-term assets, includes making and collecting notes receivable and investments in other than cash equivalents.
Natural Business Year
Twelve-month period that ends when a company's sales activities are at their lowest point.
Internal Transactions
Activities within an organization that can affect the accounting equation.
Maximizing
A decision realizing the best possible outcome.
Impairment
Diminishment of an asset value.
Networking
Exchanging information for mutual benefit. Using one's friends, family and work-related contacts to help find employment or to advance one's career.
Distribution
Movement of goods and services from producers to customers.
Level 5 Leadership
A combination of strong professional will (determination) and humility that builds enduring greatness.
Reflection
Process by which a person states what he or she believes the other person is saying.
Survivor's Syndrome
Loss of productivity and morale in employees who remain after a downsizing.
User
Individual or group that actually uses a business good or service.
Double-Entry Accounting
Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Monetary Unit Principle
Principle that assumes transactions and events can be expressed in money units.
Product Positioning
Consumers' perceptions of a product's attributes, uses, quality, and advantages and disadvantages relative to competing brands.
Expert Power
The ability to influence related to some expertise, special skill, or knowledge. Expert power is a function of the judgment by the less-powerful person that the other person has knowledge that exceeds his own.
Capital Leases
Long-term leases in which the lessor transfers substantially all risk and rewards of ownership to the lessee.
Selective Distribution
Distribution of a product through a limited number of channels.
Coaching
Dialogue with a goal of helping another be more effective and achieve his or her full potential on the job.
Offshoring
Movement of high-wage jobs from one country to lower-cost overseas locations.
Relevant Benefits
Additional or incremental revenue generated by selecting a particular course of action over another.
Alderfer's ERG Theory
A human needs theory developed by Alderfer postulating that people have three basic sets of needs which can operate simultaneously.
Cost
All normal and reasonable expenditures necessary to get a plant asset in place and ready for its intended use.
Indirect Evaluation
Method for measuring promotional effectiveness by concentrating on quantifiable indicators of effectiveness such as recall and readership.
Coupon Bonds
Bonds with interest coupons attached to their certificates; bondholders detach coupons when they mature and present them to a bank or broker for collection.
Marketing Myopia
Management's failure to recognize the scope of its business.
Bond Indenture
Contract between the bond issuer and the bondholders; identifies the parties' rights and obligations.
Substantive Law
Rules that establish the rights of parties. For example, the prohibition against slander is substantive law, as opposed to procedural law.
Cultural Norms
The way a society solves its problems. Different cultures have developed their own unique ways of solving problems. A key value or belief that the culture in question holds dear.
Judgment non obstante verdicto (n.o.v.)
"Judgment notwithstanding the verdict." A trial judge overturns the verdict of the jury and enters a judgment in favor of the opposing party.
Incremental Model
Model of organizational decision making in which major solutions arise through a series of smaller decisions.
Political Risk Assessment (PRA)
Units within a firm that evaluate the political risks of the marketplaces in which they operate as well as proposed new marketplaces.
Risk Taking
The willingness to make mistakes, advocate unconventional or unpopular positions, or tackle extremely challenging problems without obvious solutions. Risk takers are willing to tackle challenging tasks, even when success is uncertain.
Tactical Planning
A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing.
Structured Interview
Selection technique that involves asking all applicants the same questions and comparing their responses to a standardized set of answers.
Accounts Payable
Liability created by buying goods or services on credit; backed by the buyer's general credit standing.
Planned Obsolescence
Intentional design, manufacture, and marketing products with limited durability.
Common Law
Judge-made law, that is, the body of all decisions made by appellate courts over the years.
Code of Ethics
A written system of standards for ethical conduct.
Budgeted Balance Sheet
Accounting report that presents predicted amounts of the company's assets, liabilities, and equity balances as of the end of the budget period.
Multiple Sourcing
Purchasing from several vendors.
Supply Chain Management
Control of the activities of purchasing, processing, and delivery through which raw materials are transformed into products and made available to final consumers.
Diffusion Process
Process by which new goods or services are accepted in the marketplace.
Services
Intangible tasks that satisfy the needs of consumer and business users.
Accounting Cycle
Recurring steps performed each accounting period, starting with analyzing transactions and continuing through the post-closing trial balance (or reversing entries).
Logistics
Process of coordinating the flow of information, goods, and services among members of the distribution channel.
Subsidiary Ledger
List of individual sub-accounts and amounts with a common characteristic; linked to a controlling account in the general ledger.
Expectancy Theory
A theory proposing that people will behave based on their perceived likelihood that their effort will lead to a certain outcome and on how highly they value that outcome.
Batch Processing
Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or month.
Maturity Stage
Third stage of the product life cycle, in which industry sales level out.
Appellant
The party who appeals a lower court decision to a higher court.
Mediation
The process of using a neutral person to aid in the settlement of a legal dispute. A mediator's decision is non-binding.
Vroom Model
A situational model that focuses on the participative dimension of leadership.
Horizontal Communication
Information shared among people on the same hierarchical level.
Strategic Maneuvering
An organization's conscious efforts to change the boundaries of its task environment.
Accepted Check
A check that the drawee bank has signed. This signature is a promise that the bank will pay the check out of its own funds.
Production Budget
Plan that shows the units to be produced each period.
Computer-Integrated Manufacturing (CIM)
The use of computer-aided design and computer-aided manufacturing to sequence and optimize a number of production processes.
Intrinsic Rewards
Rewards that are part of the job itself. The responsibility, challenge, and feedback characteristics of the job are intrinsic rewards.
Self-Managed Teams
Autonomous work groups in which workers are trained to do all or most of the jobs in a unit, have no immediate supervisor, and make decisions previously made by first-line supervisors.
Ethics
Codes of conduct by which actions are judged as right or wrong, fair or unfair, honest or dishonest.
Cash Basis Accounting
Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Employment-at-Will
The legal concept that an employee may be terminated for any reason.
Flexibility Principle
Information system principle that requires an accounting system be able to adapt to changes in the company, its operations, and needs of decision makers.
Differentiation Strategy
A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.
Custom-Made Solutions
New, creative solutions designed specifically for the problem.
Profitability
Company's ability to generate an adequate return on invested capital.
Consumer Orientation
Business philosophy incorporating the marketing concept that emphasizes first determining unmet consumer needs and then designing a system for satisfying them.
Natural Law
The theory that an unjust law is no law at all, and that a rule is only legitimate if based on an immutable morality.
Quantity Variance
Difference between actual and budgeted revenue or cost caused by the difference between the actual number of units and the budgeted number of units.
Eminent Domain
The power of the government to take private property for public use.
Burden of Proof
The allocation of which party must prove its case. In a civil case, the plaintiff has the burden of proof to persuade the factfinder of every element of her case. In a criminal case, the government has the burden of proof.
Decider
Person who chooses a good or service, although another person may have the formal authority to complete the sale.
Discounting the Future
A bias weighting short-term costs and benefits more heavily than longer-term costs and benefits.
Remanufacturing
Efforts to restore older products to like-new condition.
Brand Recognition
Consumer awareness and identification of a brand.
Trial Balance
List of accounts and their balances at a point in time prior to financial statement preparation; total debit balances equal total credit balances.
Environmental Uncertainty
Lack of information needed to understand or predict the future.
Interest
Charge for using money (or other assets) loaned from one entity to another.
Training
Teaching lower-level employees how to perform their present jobs.
Emotional Intelligence
The skills of understanding yourself, managing yourself, and dealing effectively with others.
Federal Question Jurisdiction
One of the two main types of civil cases that a United States district court has the power to hear. It involves a federal statute or a constitutional provision.
Person Marketing
Marketing efforts designed to cultivate the attention, interest, and preferences of a target market toward a person (perhaps a political candidate or celebrity).
Indefinite Useful Life
Asset life that is not limited by legal, regulatory, contractual, competitive economic, or other factors.
Negative or Dormant Aspect of the Commerce Clause
The doctrine that prohibits a state from any action that interferes with or discriminates against interstate commerce.
Task-Objective Method
Development of a promotional budget based on evaluation of the firm's promotional objectives.
Judicial Review
The power of the judicial system to examine, interpret, and even nullify actions taken by another branch of government.
Exchange Rate
Price of one nation's currency in terms of another country's currency.
Family Brand
Single brand name that identifies several related products.
Core Region
Region from which most major brands get 40 to 80 percent of their sales.
Flexible Processes
Methods for adapting the technical core to changes in the environment.
Outcome
A consequence a person receives for his or her performance.
Organic Structure
An organizational form that emphasizes flexibility.
Theory Y
Concept described by Douglas McGregor reflecting an approach to management that takes a positive and optimistic perspective on workers. Most people find work as natural as play.
Relevance Principle
Information system principle prescribing that its reports be useful, understandable, timely, and pertinent for decision making.
Integrity-Based Ethics Programs
Company mechanisms designed to instill in people a personal responsibility for ethical behavior.
Adverse Impact
When a seemingly neutral employment practice has a disproportionately negative effect on a protected group.
Upward Communication
Information that flows from the lower to higher levels in the organization's hierarchy.
Empowerment
The process of sharing power with employees, thereby enhancing their confidence in their ability to perform their jobs and their belief that they are influential contributors to the organization.
Cash Budget
Plan that shows expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans.
Specialty Advertising
Sales promotion technique that places the advertiser's name, address, and advertising message on useful articles that are then distributed to target customers.
Direct Sales Results Test
Method for measuring promotional effectiveness based on the specific impact on sales revenues for each dollar of promotional spending.
Union Shop
An organization with a union and a union security clause specifying that workers must join the union after a set period of time.
Closing
Stage of the personal selling process in which the salesperson asks the customer to make a purchase decision.
Obsolescence
Condition in which, because of new inventions and improvements, a plant asset can no longer be used to produce goods or services with a competitive advantage.
Task Orientation
Concerned with achieving productivity and success. Focusing on the leader's tasks and skills necessary for success.
Attachment
A court order seizing property of a party to a civil action, so that there will be sufficient assets available to pay the judgment.
Reseller
Marketing intermediaries that operate in the trade sector.
Date of Payment
Date the corporation makes the dividend payment.
Materiality
Prescribes that accounting for items that significantly impact financial statement and inferences from them adhere strictly to GAAP.
Prospecting
Personal selling function of identifying potential customers.
Profit
Amount earned after subtracting all expenses necessary for and matched with sales for a period. Also called Income or Earnings.
Capitalize
Record the cost as part of a permanent account and allocate it over later periods.
Goods
Tangible products that customers can see, hear, smell, taste, or touch.
Effective Interest Method
Allocates interest expense over the bond life to yield a constant rate of interest; interest expense for a period is found by multiplying the balance of the liability at the beginning of the period by the bond market rate at issuance. Also called Interest Method.
Channel Captain
Dominant and controlling member of a marketing channel.
Advertising
Paid, non-personal communication through various media about a business firm, not-for-profit organization, product, or idea by a sponsor identified in a message that is intended to inform or persuade members of a particular audience.
Virtue Ethics
A perspective that what is moral comes from what a mature person with "good" moral character would deem right.
Compound Interest
Interest earned on both the initial principal and the interest reinvested from prior periods.
Common-Size Statement
A standardized financial statement presenting all items in percentage terms. Balance sheet items are shown as a percentage of assets and income statement items as a percentage of sales.
Psychological Contract
A set of perceptions of what employees owe their employers, and what their employers owe them.
Group Maintenance Behaviors
Actions taken to ensure the satisfaction of group members, develop and maintain harmonious work relationships, and preserve the social stability of the group.
Cash Flow From Assets
The total of cash flow to creditors and cash flow to stockholders, consisting of the following: operating cash flow, capital spending, and change in net working capital.
Selection
Choosing from among qualified applicants to hire into an organization.
Outplacement
The process of helping people who have been dismissed from the company to regain employment elsewhere.
Depreciable Cost
Cost of a plant asset less its salvage value.
Risk Aversion
An economic concept related to the behavior of consumers under uncertainty. It is the reluctance of a person to accept something with an uncertain payoff rather than something else with a more certain, but possibly lower, expected payoff.
Self-Monitoring
The individual ascertaining how well he or she is doing.
Human Capital
The knowledge, skills, and abilities of employees that have economic value.
Competitive Strategy
Methods through which a firm deals with its competitive environment.
Publicity
Non-personal stimulation of demand for a good, service, place, idea, person, or organization by unpaid placement of significant news regarding the product in a print or broadcast medium.
Dismiss
To terminate a lawsuit, often on procedural grounds, without reaching the merits of the case.
Capital Expenditures
Additional costs of plan assets that provide material benefits extending beyond the current period. Also called Balance Sheet Expenditures.
Schedule of Accounts Receivable
List of balances for all accounts in the accounts receivable ledger and their total.
Annual Financial Statements
Financial Statements covering a one-year period; often based on a calendar year, but any consecutive 12-month (or 52-week) period is acceptable.
Social Contract
The idea of Beccaria and other members of the Classical School that government can be thought of as created by its citizens for certain shared and common ends. "Social Contract Theory" uses this notion to determine when laws are just or unjust.
Macroenvironment
The most general environment; includes governments, economic conditions, and other fundamental factors that generally affect all organizations.
Payback Period (PBP)
Time-based measurement used to evaluate the acceptability of an investment; equals the time expected to pass before an investment's net cash flows equal to its initial cost.
Filtering
The process of withholding, ignoring, or distorting information.
Supply Chain
Linkages of services or goods extending from suppliers, to the company itself, and on to customers.
Uses of Cash
A firm's activities in which cash is spent. Also called Applications of Cash.
Capital Budgeting
Process of analyzing alternative investments and deciding which assets to acquire or sell.
Alternative Dispute Resolution
Any method of resolving a legal conflict other than litigation, such as: negotiation, arbitration, mediation, mini-trials, and summary jury trials.
Pro Forma Financial Statements
Statements that show the effects of proposed transactions and events as if they had occurred.
Criminal Law
Rules that permit a government to punish certain behavior by fine or imprisonment.
Ethical Leader
One who is both a moral person and a moral manager influencing others to behave ethically.
Concentric Diversification
A strategy used to add new businesses that produce related products or are involved in related markets and activities.
Virtual Sales Team
Network of strategic partners, suppliers, and others who recommend a firm's goods or services.
Micropolitan Statistical Area
Area that has at least one town of 10,000 to 49,999 people with proportionally few of its residents commuting to outside the area.
Marketing Concept
Company-wide consumer orientation with the objective of achieving long-run success.
Accumulated Depreciation
Cumulative sum of all depreciation expense recorded for an asset.
Social Responsibility
Marketing philosophies, policies, procedures, and actions whose primary objective is the enhancement of society.
Consumerism
Social force within the environment that aids and protects the consumer by exerting legal, moral, and economic pressures on business and government.
Computer Hardware
Physical equipment in a computerized accounting information system.
Approach
Salesperson's initial contact with a prospective customer.
North American Free Trade Agreement (NAFTA)
Accord removing trade barriers between Canada, Mexico, and the United States.
Mechanistic Organization
A form of organization that seeks to maximize internal efficiency.
Goal Displacement
A condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.
Product Line
Series of related products offered by one company.
Credit
Recorded on the right side; an entry that decreases asset and expense accounts, and increases liability, equity, and revenue accounts. Abbreviated: Cr
Nominal Group Technique
Technique in which group members follow a generate-discussion-vote cycle until they reach an appropriate decision.
Organization Marketing
Marketing by mutual-benefit organizations, service organizations, and government organizations intended to influence others to accept their goals, receive their services, or contribute to them in some way.
Merger
One or more companies combining.
Sinking Fund Bonds
Bonds that require the issuer to make deposits to a separate account; bondholders are repaid at maturity from that account.
Ethical Responsibilities
Meeting other social expectations, not written as law.
Protective Order
A court order limiting one party's discovery.
Refund
Cash given back to consumers who send in proof of purchasing one or more products.
Differentiated Marketing
Strategy that focuses on producing several products and pricing, promoting, and distributing them with different marketing mixes designed to satisfy smaller segments.
Competing
A style of dealing with conflict involving strong focus on one's own goals, and little or no concern for the other person's goals.
Unavoidable Expense
Expense (or cost) that is not relevant for business decisions; an expense that would continue even if a department, product, or service is eliminated.
Buffering
Creating supplies of excess resources in case of unpredictable needs.
Needs Assessment
An analysis identifying the jobs, people, and departments for which training is necessary.
Invoice Approval
Document containing a checklist of steps necessary for approving an invoice for recording and payment. Also called Check Authorization.
Shopping Products
Products that consumers purchase after comparing competing offerings.
Social-Cultural Environment
Component of the marketing environment consisting of the relationship between marketer, society, and culture.
Discretionary Income
Money available to spend after buying necessities such as food, clothing, and housing.
Note Receivable
Asset consisting of a written promise to receive a definite sum of money on demand or on a specific future date(s).
Portfolio
A group of assets such as stocks and bonds held by an investor.
Human Resources Management (HRM)
Formal systems for the management of people within an organization.
Barriers to Entry
Conditions that prevent new companies from entering an industry.
Bill of Rights
The first ten amendments to the Constitution.
Path-goal Theory
A theory that concerns how leaders influence subordinates' perceptions of their work goals and the paths they follow toward attainment of those goals.
Intangible Assets
Long-term assets (resources) used to produce or sell products or services; usually lack physical form and have uncertain benefits.
General and Administrative Expense Budget
Plan that shows predicted operating expenses not included in the selling expenses budget.
Cohesiveness
The degree to which a group is attractive to its members, members are motivated to remain in the group, and members influence one another.
Lean Manufacturing
An operation that strives to achieve the highest possible productivity and total quality, cost effectively, by eliminating unnecessary steps in the production process and continually striving for improvement.
Merchandise Purchases Budget
Plan that shows the units or costs of merchandise to be purchased by a merchandising company during the budget period.
Realizable Value
Expected proceeds from converting an asset into cash.
Sales Incentives
Programs that reward salespeople for superior performance.
Planning
Process of anticipating future events and conditions and of determining the best way to achieve organizational objectives.
Separation of Powers
The principle, established by the first three articles of the Constitution, that authority should be divided among the legislative, executive, and judicial branches.
Conflict
Opposing pressures from different sources. Two levels of conflict are psychological conflict and conflict that arises between individuals or groups.
Outstanding Checks
Checks written and recorded by the depositor but not yet paid by the bank at the bank statement date.
Novation
If there is an existing contract between A and B, a novation occurs when A agrees to release B from all liability on the contract in return for C's willingness to accept B's liability.
Allowance Method
Procedure that (a) estimates and matches bad debts expense with its sales for the period and/or (b) reports accounts receivable at estimated realizable value.
Discount Rate
Expected rate of return on investments. Also called Cost of Capital, Hurdle Rate, or Required Rate of Return.
Orientation Training
Training designed to introduce new employees to the company and familiarize them with policies, procedures, culture, and the like.
Direct Mail
Communications in the form of sales letters, postcards, brochures, catalogs, and the like conveying messages directly from the marketer to the customer.
Recruitment
The development of a pool of applicants for jobs in an organization.
Net Assets
Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities.
Allowance for Doubtful Accounts
Contra asset account with a balance approximating uncollectible accounts receivable. Also called Allowance for Uncollectible Accounts.
Participation in Decision Making
Leader behaviors that managers perform in involving their employees in making decisions.

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