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business: all profit seeking activities and enterprises that provide goods and services necessary to an economic system
profits: rewards for businesspeople who take the risks involved to offer goods and services to customers
factors of production: four basic inputs for effective operation: natural resources, capital, human resources, and entrepreneurship
private enterprise system: economic system that rewards businesses for their ability to identify and serve the needs and demands of customers
competition: battle among businesses for consumer acceptance
entrepreneur: person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business
brand: name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors' offerings
Internet: world wide network of interconnected computers that, within limits, lets anyone with a PC or other computing device send and receive images and data anywhere
relationship management: collection of activities that build and maintain ongoing, mutually beneficial ties between a business and its customers and other parties
value: customer's perception of the balance between the positive traits of a good or service and its price
customer satisfaction: ability of a good or service to meet or exceed a buyer's needs and expectations
productivity: relationship between the number of units produced and the number of human and other production inputs necessary to produce them
not-for-profit organizations: businesslike organization such a charitable group, social welfare agency, or religious congregation that pursues objectives other than returning profit to its owners
natural resources: all production inputs that are useful in their natural states, including agricultural land, building sites, forests, and mineral deposits
capital: production inputs consisting of technology, tools, information, and physical facilities
human resources: production inputs consisting of anyone who works, including both the physical labor and the intellectual inputs contributed by workers
entrepreneurship: willingness to take risks to create and operate a business
capitalism: economic system that rewards businesses for their ability to perceive and serve the needs and demands of consumers; also called the private enterprise system
competitive differentiation: unique combination of organizational abilities and approaches that sets a company apart from competitors in minds of customers.
private property: most basic freedom under the private enterprise system; the right to own, use, buy, sell, and bequeath land, buildings, machinery, equipment, patents, and various intangible kinds of property
consumer orientation: business philosophy incorporating the marketing concept of first determining unmet consumer needs and then designing a system for satisfying them
branding: process of creating an identity in consumers' minds for a good, service, or company; a major marketing tool of consumer-oriented firms
technology: business applications of knowledge based on scientific discoveries, inventions, and innovations
World Wide Web (WWW or Web): collection of Internet resources that offers easy access to text, graphics, sound, and other multi-media resources
transaction management: traditional business practice of concentrating on building and promoting products in the hope that enough customers will buy them to cover costs and earn acceptable profits
partnership: affiliation of two or more companies with the shared goal of assisting each other in the achievement of common goals; form of business ownership in which the company is operated by two or more people who are co-owners by voluntary legal agreement
strategic alliance: partnership formed to create competitive advantages for the business involved; in international business, a business strategy in which a company finds a partner in the country where it wants to do business
quality: degree of excellence or superiority of a firm's goods and services
gross domestic product (GDP): sum of all goods and services produced within a country's boundaries during a specific time period, such as a year
outsourcing: contracting with another business to perform tasks or functions previously handled by internal staff members
diversity: blending individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities to enrich a firm's chances of success
vision: perception of market place needs and the methods of organization can use to satisfy them.
critical thinking: ability to analyze and assess information to pinpoint problems or opportunities
creativity: capacity to develop novel solutions to perceived organizational problems
business ethics: standards of conduct and moral values involving right and wrong actions arising in the work environment.
social responsibility: business acceptance of the obligation to consider societal well-being, consumer satisfaction, and profit of equal value in evaluating the firm's performance.
conflict of interest: situation in which a business decision may be influenced by the potential for personal gain.
whistleblowing: employee's disclosure to government authorities or the media of illegal, immoral, or unethical practices committed by an organization.
code of conduct: formal statement that defines how the organization expects and requires employees to solve ethical issues.
recycling: reprocessing of used materials for reuse.
green marketing: marketing strategy that promotes environmentally safe products and production methods.
corporate philanthropy: act of an organization giving something back to the communities in which it earns profits.
consumerism: public demand that a business consider the wants and needs of its customers in making decisions.
sexual harassment: inappropriate actions of a sexual nature in the workplace.
Sarabanes-Oxley Act: federal legislations designed to deter and punish corporate and accounting fraud and corruption and protect the interests of workers and shareholders through enhanced financial disclosures, imposing criminal penalties of CEOs and CFOs who defraud investigators, protecting whistleblowers, and establishing a new regulatory body for public accounting firms.
integrity: adhering to deeply felt ethical principles in business situations.
social audit: formal procedure that identifies and evaluates all company activities that relate to social issues such as conservation, employment practices, environmental protection, and philanthropy.
boycott: effort to prevent people for purchasing a firm's goods or services.
pollution: environmental damage caused by a company's products or operating process.
genetic engineering: type of biotechnology that involves altering crops or other living things by inserting genes that provide them with a desirable characteristic.
product liability: responsibility of manufacturers for injuries and damages caused by their products.
family leave: granting up to 12 weeks unpaid leave annually for employees who have or adopt a child, who are becoming foster parents, or who are caring for a seriously ill relative or spouse, or who become seriously ill.
Equal Employment Opportunity Commission (EEOC): government agency created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin in any personnel activity.
sexism: discrimination against members of either sex, but primarily affecting women.
Economics: The social science analyzing the choices made by people and governments in allocating scarce resources
Microeconomics: The study of small economic units, such as individual consumers, families, and businesses.
Macroeconomics: The study of a nations overall economic issues, such as how an economy maintains and allocates resources and how government policies affect the standards of living of its citizens.
Supply: The willingness and ability of sellers to provide goods and services
Recession: Cyclical economic contraction that lasts for six months or longer
Inflation: Rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, human resources, and other factors of production
Monetary Policy: Government action to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans
Fiscal Policy: Government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens, and encourage economic growth
Budget: Organization's plan for how it will raise and spend money during a given period of time.
Demand curve: Graph of the amount of a product that buyers will purchase at different prices; generally slopes downward to reflect larger quantities likely to be purchased as prices decline
Supply Curve: Graph of the amount of a product that suppliers will offer for sale at different prices; generally slopes upward to reflect larger quantities likely to be offered for sale as prices increase
Equilibrium price: Prevailing market prices; the point at which the quantity demanded of a product equals the quantity supplied.
Pure competition: Market structure, like that of small-scale agriculture, in which large numbers of buyers and sellers exchange homogeneous products and where no single participant has a significant influence on price.
Monopolistic competition: Market structure, like that for retailing, in which large numbers of buyers and sellers exchange relatively well-differentiated (heterogenous) products, so each participant has some control over price.
Oligopoly: Market structure, like those
Monopoly: Market structure in which a single supplier dominates trade in a good or service for which buyers can find no close substitute
Deregulation: Regulatory trend toward elimination of legal restraints on competition in industries previously served by a single firm in an attempt to improve customer service and lower prices through increased competition
Planned economy: Economic system in which strict government controls determine business ownership, profits, and resource allocations to accomplish government goals rather than those set by individual business
Socialism: Planned economic system characterized by government ownership and operation of major industries
Mixed market economy: Economic system that combines characteristics of both planned and market economies in varying degrees, including the presence of both government ownership and private enterprise
Privatization: Recent international trend to convert government-owned and operated companies into privately held businesses
Deflation: Falling prices caused by a combination of reduced consumer demand and decreases in the costs of raw materials, human resources, and other factors of production
Consumer Price Index (CPI): Monthly measure of changes in retail price levels by comparisons of changes in the prices of a market basket of goods and services most commonly purchased by urban consumers
Producer Price Index (PPI): Monthly measure of changes in price at the producer and wholesale levels
Unemployment rate: Indicator of a nation's economic health, typically expressed as a percentage of total workforce who are actively seeking work but are currently unemployed
Budget deficit: Funding shortfall in which government spends more than the amount of funds raised through taxes and fees
National debt: Money owed by government to individuals, businesses, and government agencies who purchase Treasury bills, Treasury notes, and Treasury bonds sold as a result of trade deficits and other international expenditures
Budget surplus: Excess funding that occurs when government spends less than the amount of funds raised through taxes and fees
Balanced budget: Situation in which total revenues raised by taxes and fees equal total proposed government spending for the year
Exports: Domestically produced goods and services sold in other countries
Imports: Foreign goods and services purchased by domestic customers
Balance of trade: Difference between a nation's exports and imports
Balance of payments: Difference in money flows into or out of a country
Exchange rate: Value of one nation's currency relative to the currencies of other countries
Tariff: Tax imposed on imported goods
World Trade Organization: 135-member international institution that monitors GATT agreements and mediates international trade disputes
North American Free Trade Agreement (NAFTA): 1994 agreement among the U.S., Canada, and Mexico to break down tariffs and trade restrictions
European Union (EU): 25-nation European economic alliance
Multinational Corporation: Firm with significant operations and marketing activities outside its home country
Global Business Strategy: Offering a standardized, worldwide product and selling it in essentially the same manner throughout a firm's domestic and foreign markets
Multidomestic Business Strategy: Developing and marketing products to serve different needs and tastes of separate national markets
Devaluation: Fall in a currency's value relative to other currencies or to a fixed standard
Infrastructure: Basic system of communication (television, radio, print media, telecommunications), transportation (roads and highways, railroads, and airports), and energy facilities (power plants, gas and electrical utilities)
Quota: Limit set by a nation on the amounts of particular products that can be imported during specified time periods
Dumping: Practice of selling products abroad at prices below production costs or at lower prices than the same products are sold in the home market in an effort to capture market share from domestic competitors
Embargo: Imposition of a total ban on importing specific products or a total halt to trading with a particular country
Exchange control: Administrative trade restriction that sets terms for currency transactions involving international product purchases and sales
General Agreement on Tariffs and Trade (GATT): International trade accord that substantially reduced worldwide tariffs and other trade barriers
World Bank: Organization established by industrialized nations to lend money to less developed and developing countries
International Monetary Fund (IMF): Organization created following the establishment of the World Bank to promote trade, eliminate barriers, and aid member nations that are unable to meet their budgetary expenses by providing short-term loans
Maquiladora: Foreign-owned manufacturing facilities located along the U.S.-Mexican border that produce products for export
Countertrade: Bartering agreement whereby trade between two or more nations involves payment made in the form of local products instead of currency
Franchise: Contractual agreement in which a franchisee gains the right to produce and/or sell the franchisor's products under that company's brand name if it agrees to the franchisor's operating requirements
Foreign licensing agreement: International agreement in which one firm allows another to produce or sell its product, or use its trademark, patent, or manufacturing processes, in a specific geographical area in return for royal-ties or other compensation
Subcontracting: International agreement that involves hiring local companies to produce, distribute, or sell goods or services in a specific country or geographical region
Joint venture: In international business, an arrangement that allows companies to share risks, costs, profits, and management responsibilities with one or more host country nationals; a partnership between companies formed for a specific undertaking
Small business: Firm that is independently owned and operated, not dominant in its field, and meets industry-specific size standards for income or number of employees
Business plan: Written document that provides an orderly statement of a company's goals, the methods by which it intends to achieve those goals, and the standards by which it will measure achievements
Small Business Administration (SBA): Federal agency that assists small businesses by providing management training and consulting, financial advice, and support in securing government contracts
Business incubator: Organization that provides low-cost, shared facilities on a temporary basis to small start-up ventures
Franchising: Contractual agreement that specifies the methods by which a dealer can produce and market a supplier's goods or services
Sole proprietorship: Form of business ownership in which the company is owned and operated by one person
Corporation: Business that stands as a legal entity with assets and liabilities separate from those of its owner(s)
Stockholder: Person or organization who owns shares of stock in a corporation
Board of directors: Elected governing body of a corporation
Merger: Combination of two or more firms to form one company
Acquisition: Procedure in which one firm purchases the property and assumes the obligations of another
Home-based business: Company operated from the residence of the business owner
Overhead costs: Business expenditures such as rent utility expenses that are not directly related to providing specific goods and services
Microloans: Small Business Administration-guaranteed loans of less than $25,000 made to start-ups and other very small firms
Small Business Investment Company (SBIC): Business licensed by the Small Business Administration to provide loans to small businesses
Set-aside program: Component of government contract specifying that certain government contracts (or portions of those contracts) are restricted to small businesses and/or to women- or minority-companies
Franchisee: Small-business owner who contracts to sell the good or service of a supplier (the franchisor) in exchange for a payment (usually a flat fee plus a percentage of sales)
Franchisor: Business owner who permits the franchisee to sell the products and use its name, as well as providing a variety of marketing, management, and other services in return for the payment of fees and/or royalties based on sales by the franchise
S corporation: Modified form of the traditional corporate structure often used by firms with fewer than 75 shareholders; such businesses can elect to pay federal income taxes as partnerships while retaining the liability limitations typical of corporations
Limited Liability Company (LLC): Special legal form of organization allowing business owners to secure the corporate advantage of limited liability while avoiding the double taxation characteristic of corporations
Domestic corporation: Firm operating in the state where it is incorporated
Alien corporation: Firm incorporated in one nation and operating in another nation
Corporate charter: Legal document that formally establishes a corporation
Preferred stock: Stock whose holders receive preference over holders of common stock in the payment of dividends but have limited voting rights
Common stock: Shares of ownership in a corporation
Employee ownership: Business in which workers purchase shares of stock in the firm that employs them
Not-for-profit corporation: Businesslike organization such as a charitable group, social welfare agency, or religious congregation that pursues objectives other than returning a profit to its owners
Vertical merger: Combination of two or more firms operating at different levels in the production and marketing process
Horizontal merger: Combination of two or more firms in the same industry that wish to diversify, increase their customer bases, reduce costs, or offer expanded product lines
Conglomerate merger: Combination of two or more unrelated firms, usually with the goal of diversification, spurring sales growth, or spending a cash surplus that might otherwise make the firm a tempting target for a takeover attempt
Public ownership: Organization owned and operated by a unit or agency of government
Cooperative: Organization whose owners join forces to collectively operate all or part of the functions in their business
Classic entrepreneur: Person who identifies a business opportunity and allocates available resources to tap the market.
Intrapreneur: Enterpreneurially oriented person who develops innovations within the context of a large organization.
Change agent: Manager who tries to revitalize an established firm to keep it competitive
Seed capital: Initial funding needed to launch a new venture.
Debt financing: Borrowed funds that entrepreneurs must repay
Equity financing: Funds invested in new ventures in exchange for part ownership.
Venture capitalist: Business firm or group of individuals who invest in new and growing firms.
Angel investor: Wealthy individuals who invest directly in a new venture in exchange for an equity stake
Intrapreneurship: Process of promoting innovation within the structure of an existing organization
Gazelles: Fast-growing start-up companies that have become the primary job creators in the United States
Skunkworks: Project initiated by a company employee who conceives the idea, convinces top management of its potential, and then recruits human and other resources from within the firm to turn it into a commercial project
world wide web: collection of internet sources that allows easy acces to text, graphics, sound, and other multi-media resources
web site: intergrated document composed of electronic pages that intergrate text, graphics, audio, and video elements, as well as hyper text links and other documents
Internet service provider: organization that provides access to the internet, via a telephone or cable television network
e-mail: electronic messaging sent via the internet
electronic commerce: online marketing of goods and services, including product information, ordering, invoicing, payment processes, and customer service
business-to-business: electronic business transactions between organizations using the internet
business-to-comsumer: electronic business transactions between organizations and final customers using the internet
firewall: electronic barrier between a companies internal network and the internet that limits access into and out of the network
click-through rate: percentage of people presented with a web banner that clicks on it
conversion rate: percentage of visitor to a web site and make a purchase
domain name: string of letters and or words that identyify the owner of a Web site address
Digital Subscriber Line (DSL): broadban technology; a high speed high speed cable modem or a satelitte link to the internet
server: large, specialty computer that holds information, then provides it to clients upon request
client: Another computer or device that relies on the resources of one or more servers for help with its own processing
instant messaging: a recent adaptation of e-mail whereby a message is immediately displayed on the reciepents computer screen
newsgroup: forum for online participants to share information on selected topics
portal: site desingned to be a users starting place when entering the World Wide Web
search engine: software that scans the web to find sites that contain data requested by user
spam: unsolicited e-mail messages; frequently called junk mail
electronic data interchange (EDI): computer to computer exchanges of invoices, purchase orders, price quotations, and other business documents between buyers and sellers
electronic exchange: online marketplace that caters to a specific industries needs
extranet: secure networks accesable from outside a firm, but only by trusted third parties such as familiar customers or suppliers; secure network accesable through a web site bt external customers or organozation for electronic commerce
private exchange: secure web site at which a company and its suppliers share all types of data related to e-commerce, from product design through delivery of orders
intranet: a network that links employees and other authorized users through internet tool such as e-mail, hypertext links, and searches using web browsers
electronic storefront: websites where firms offer items for sale to comsumers
encryption: The process of encoding data for security purposes; software that encodes, or scrambles messges
electronic cash: Buyers register with a bank to pay for purchases out fo their accounts using digital certificates that verify their identities
electronic wallet: Computer data file set up by an online shopper at an e-commerce site's checkout couter that contains not only electronic cash but credit card inromation, owner identificarion, and address
smart card: plastic card that stores encrypted information on embedded computer chip rather than magnetic strips; among the most popular methods of internet payment
electronic signature: Legal contracts such as home mortgages and inusrance policies executed online
Children's Online Privacy Protection Act (COPPA): Federal law requiring Web sites targeting children younger than 13 to obtain "verifiable parental consent" before collecting any data that could be used to identify or contact individual users, including names and e-mail addresses
web host
management: process of achieving organization objects through people and other resources.
planning: process of anticipating future events and conditions and determining courses of action for achieving organizational objectives
mission statement: written explanation of an organization's business intentions and aims.
objectives: guideposts by which managers define the organization's desired performance in such areas as profitability, customer service, growth and employee satisfaction.
decision making: process of recognizing a problem or opportunity, evaluating alternative solutions, selecting and implementing an alternative, and assessing the results.
leadership: ability to direct or inspire people to attain organizational goals.
corporate culture: organization's system of values, principles, and beliefs.
organization: structure grouping of people working together to achieve common goals.
departmentalization: process of dividing work activities into units within the organization.
delegation: ability to direct or inspire people to attain organizational goals.
span of management: act of assigning work activities to subordinates
chain of command: set of relationships that indicates who directs which activities and who reports to whom.
top management: managers at the highest level of the management pyramid who devote most of their time to developing long-range plans for their organizations.
middle management: second tier in the management pyramid that focuses on specific operation within the organizations.
supervisory management: first line management; includes positions such as supervisor, line manager, and group leader.
technical skills: manager's ability to understand and use techniques, knowledge, and tools and equipment of a specific discipline or department.
human skills: interpersonal skills that enable a manager to work effectively with and through people.
conceptual skills: ability to see the organization as a unified whole and to understand how each part interacts with others.
programmed decision: simple, common, and frequently occurring problem from which a solution has already been determined.
directing: guiding and motivating employees to accomplish organizational objectives.
controlling: the function of evaluating an organizations' performance to determine whether it is accomplishing its objective.
strategic planning: process of determining the primary objective of an organization and then adopting courses of action and allocating resources to achieve those goals.
tactical planning: plans designed to implement the activities specified by strategic plans.
operational planning: detailed standards that guide implementation of tactical plans.
contingency planning: plans that allow a firm to resume operations as quickly and as smoothly as possible after a crisis while openly communicating with the public about what happened.
SWOT analysis: method of assessing a company's internal strengths and weaknesses and its external opportunities and threats.
nonprogrammed decision: a complex and unique problem or opportunity with important consequences for the organization.
autocratic leadership: leaders make decision on their own without consulting employees.
democratic leadership: management approach whereby leaders delegate assignments, ask employees for suggestions, and encourage their participation.
empowerment: giving employees authority and responsibility to make decisions about their work without traditional managerial approval and control.
free-rein leadership: leaders believe in minimal supervision and leave most decisions to their subordinates.
organization chart: visual representation of a firm's structure that illustrates job positions and functions.
centralization: decision making based at the top of the management hierarchy.
decentralization: decision making based at lower levels of the organization.
line organization: organizational structure that establishes a direct flow of authority from the chief executive to subordinates.
line-and-staff organization: structure that combines the direct flow of authority of a line organization with staff departments that serve, advise, and support the line departments.
line manager: executive involved with the functions of production, financing, or marketing.
staff manager: executive who provides information, advice, or technical assistance to aid line managers.
committee organization: organizational structure that places authority and responsibility jointly in the hands of individuals rather than a single manager.
matrix structure: project management structure that links employees from different parts of the organization to work together on specific projects.

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