Chapter

Glossary

From IntroductionToBusiness OP 8D04gAa

Concepts

1. What are the foundational concepts of economics, business, and economic policy?

   "barriers to entry: Factors, such as technological or legal conditions, that prevent new firms from competing equally with an existing firm. business: An organization that strives for a profit by prov

2. How do macroeconomic indicators, markets, and organizations operate?

   "full employment: The condition when all people who want to work and can work have jobs. goods: Tangible items manufactured by businesses. gross domestic product (GDP): The total market value of all f

3. How are production, competition, income, and well-being measured?

   "producer price index (PPI): An index of the prices paid by producers and wholesalers for various commodities, such as raw materials, partially finished goods, and finished products. productivity: The

4. What business relationships and economic arrangements support organizations?

   "strategic alliance: A cooperative agreement between business firms; sometimes called a strategic partnership."

5. What philosophies and concepts shape personal ethical standards?

   "Ethics is a set of moral standards for judging whether something is right or wrong. A philosophy in which a person will follow his or her obligations to an individual or society because upholding one

6. How can organizations encourage ethical business behavior?

   "A set of guidelines prepared by a firm to provide its employees with the knowledge of what the firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and sup

7. What is corporate social responsibility and how can businesses practice it?

   "The practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteer efforts of company employees is corporate philanthropy. Th

8. How do countries and businesses participate in international trade?

   "Absolute advantage is the situation when a country can produce and sell a product at a lower cost than any other country or when it is the only country that can provide the product. Buy-national regu

9. How do countries measure and manage international financial transactions?

   "A balance of payments is a summary of a country’s international financial transactions showing the difference between the country’s total payments to and its total receipts from other countries. A ba

10. What forms of international investment and global awareness support business expansion?

    "Direct foreign investment is active ownership of a foreign company or of manufacturing or marketing facilities in a foreign country. A joint venture is an agreement in which a domestic firm buys part

11. How do European integration and the G20 shape international economic cooperation?

    "European integration is the delegation of limited sovereignty by European Union member states to the EU so that common laws and policies can be created at the European level. The European Union is a

12. How do acquisitions, mergers, joint ventures, and leveraged buyouts work?

    "Acquisition: The purchase of a target company by another corporation or by an investor group typically negotiated with the target company board of directors. Board of directors: A group of people ele

13. What are the main features of corporations and cooperatives?

    "Buyer cooperative: A group of cooperative members who unite for combined purchasing power. C corporation: A conventional or basic form of corporate organization. Cooperative corporation: A legal enti

14. How does franchising organize relationships between franchisors and franchisees?

    "Franchise agreement: A contract setting out the terms of a franchising arrangement, including the rules for running the franchise, the services provided by the franchisor, and the financial terms. Un

15. How do partnerships and limited liability companies differ in ownership and liability?

    "General partners: Partners who have unlimited liability for all of the firm’s business obligations and who control its operations. General partnership: A partnership in which all partners share in th

16. Why do people become entrepreneurs, and what types of entrepreneurs exist?

    "Entrepreneurs are innovators who take the risk of starting and managing a business to make a profit. Most want to develop a company that will grow into a major corporation. People become entrepreneur

17. What characteristics do successful entrepreneurs share?

    "Successful entrepreneurs are ambitious, independent, self-confident, creative, energetic, passionate, and committed. They have a high need for achievement and a willingness to take moderate risks. Go

18. What defines a small business and which organizations support it?

    "A small business is a business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its

19. What financing and planning tools are available to entrepreneurs?

    "Angel investors are individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds. A business plan is a formal written statement t

20. How do leadership styles and sources of power influence decision-making?

    "Autocratic leaders: Directive leaders who prefer to make decisions and solve problems on their own with little input from subordinates. Coercive power: Power that is derived from an individual’s abil

21. What skills and roles help managers guide organizations?

    "Conceptual skills: A manager’s ability to view the organization as a whole, understand how the various parts are interdependent, and assess how the organization relates to its external environment. G

22. How do managers plan, monitor, and improve organizational performance?

    "Contingency plans: Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication

23. How do organizational culture, mission, and management levels define an organization?

    "Corporate culture: The set of attitudes, values, and standards that distinguishes one organization from another. Mission: An organization’s purpose and reason for existing; its long-term goals. Missi

24. How do authority, centralization, and organizational decision-making work?

    "Authority is legitimate power, granted by the organization and acknowledged by employees, that allows an individual to request action and expect compliance. Centralization is the degree to which form

25. How are work, jobs, and organizational units grouped?

    "A cross-functional team consists of members from the same organizational level but from different functional areas. Customer departmentalization is departmentalization that is based on the primary ty

26. What are the main features of line, staff, and informal organizations?

    "Group cohesiveness is the degree to which group members want to stay in the group and tend to resist outside influences. An informal organization is the network of connections and channels of communi

27. How do managerial hierarchy, matrix, mechanistic, and organic structures differ?

    "A managerial hierarchy consists of the levels of management within an organization; it typically includes top, middle, and supervisory management. A matrix structure, or project management structure,

28. How do organizations manage human resources and support equal employment opportunities?

    "Affirmative action programs are established by organizations to expand job opportunities for women and minorities. The Equal Employment Opportunity Commission (EEOC) processes discrimination complain

29. How do labor unions and management resolve workplace issues?

    "An agency shop is a workplace in which workers don’t have to join a union but must pay union dues. An open shop is a workplace in which workers do not have to join the union or pay union dues. A labo

30. How do organizations recruit, prepare, and develop employees?

    "A contingent worker is a person who prefers temporary employment, either part-time or full-time. A job fair is an event, typically one or two days, held at a convention center to bring together job s

31. How do organizations evaluate and reward employee performance?

    "Incentive pay is additional pay for attaining a specific goal. A performance appraisal is a comparison of actual performance with expected performance to assess an employee’s contributions to the org

32. How do organizations promote workplace safety and health?

    "The Occupational Safety and Health Administration (OSHA) sets workplace safety and health standards and assures compliance."

33. What major theories explain employee motivation?

    "Equity theory: A theory of motivation that holds that worker satisfaction is influenced by employees’ perceptions about how fairly they are treated compared with their coworkers. Expectancy theory: A

34. How can jobs and work environments influence motivation?

    "Hawthorne effect: The phenomenon that employees perform better when they feel singled out for attention or feel that management is concerned about their welfare. Hygiene factors: Extrinsic elements o

35. What basic concepts describe motivation, needs, and consequences?

    "Motivation: Something that prompts a person to release his or her energy in a certain direction. Need: The gap between what is and what is required. Punishment: Anything that decreases a specific beh

36. How do management theories describe work and employee behavior?

    "Scientific management: A system of management developed by Frederick W. Taylor and based on four principles: developing a scientific approach for each element of a job, scientifically selecting and t

37. How are different production processes and facility layouts organized?

    "Assembly process: A production process in which the basic inputs are either combined to create the output or transformed into the output. Cellular manufacturing: Production technique that uses small,

38. How do technology and integrated systems support operations and procurement?

    "Bill of material: A list of the items and the number of each required to make a given product. Blockchain technology: Refers to a decentralized “public ledger” of all transactions that have ever been

39. How do managers plan, schedule, and control production activities?

    "Operations management: Management of the production process. Production planning: The aspect of operations management in which the firm considers the competitive environment and its own strategic goa

40. How do inventory, quality, and continuous improvement practices strengthen operations?

    "Inventory: The supply of goods that a firm holds for use in production or for sale to customers. Inventory management: The determination of how much of each type of inventory a firm will keep on hand

41. How are markets, customers, and competitive advantages analyzed?

    "Benefit segmentation is the differentiation of markets based on what a product will do rather than on customer characteristics. Big data refers to large data sets and systems and solutions developed

42. How do marketing strategies identify target markets and customers?

    "Leader pricing is the strategy of pricing products below the normal markup or even below cost to attract customers to a store where they would not otherwise shop. A line extension is a new flavor, si

43. How are products and product strategies developed over time?

    "A product is a good, service, or idea, along with its perceived attributes and benefits, that creates value for the customer. The product life cycle is the pattern of sales and profits over time for

44. How do consumer products and relationships influence marketing decisions?

    "Shopping products are items that are bought after considerable planning, including brand-to-brand and store-to-store comparisons. Relationship marketing focuses on forging long-term partnerships with

45. What are the 5Ps and the main elements of a promotional strategy?

    "The traditional 4Ps of marketing: product, price, promotion, and place (distribution), now with packaging added as a key marketing component. The attempt by marketers to inform, persuade, or remind c

46. How do advertising media reach and influence target audiences?

    "Any paid form of nonpersonal presentation by an identified sponsor. The channels through which advertising is carried to prospective customers; includes newspapers, magazines, radio, television, outd

47. How do distribution channels and marketing intermediaries move products to end users?

    "Efficiently managing the acquisition of raw materials by the factory and the movement of products from the producer to industrial users and consumers. The series of marketing entities through which g

48. How do personal selling, prospecting, and e-commerce support marketing exchanges?

    "E-commerce refers to the development and maintenance of a company’s website and the facilitation of commerce on the website, such as the ability for customers to order products online and other activ

49. What are hosted information technology services and providers?

    "Application service providers (ASP): A service company that buys and maintains software on its servers and distributes it through high-speed networks to subscribers for a set period and price. Cloud

50. How do computer networks and internal systems connect users?

    "Computer network: A group of two or more computer systems linked together by communications channels to share data and information. Computer virus: A computer program that copies itself into other so

51. How do organizations store and analyze information?

    "Batch processing: A method of updating a database in which data are collected over some time period and processed together. Data mart: Special subset of a data warehouse that deals with a single area

52. How do management and knowledge systems support organizational decisions?

    "Chief information officer (CIO): An executive with responsibility for managing all information resources in an organization. Decision support system (DSS): A management support system that helps mana

53. What are accounting, financial reporting, and auditing?

    "Accounting is the process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities. Financial accounting focuses on preparing external financial reports that

54. How do assets, liabilities, and liquidity ratios measure financial position?

    "Assets are things of value owned by a firm. Current assets are assets that can or will be converted to cash within the next 12 months. Fixed assets are long-term assets used by a firm for more than a

55. How do activity, debt, and performance ratios evaluate a firm?

    "Activity ratios measure how well a firm uses its assets. Debt ratios measure the degree and effect of a firm’s use of borrowed funds (debt) to finance its operations. The debt-to-equity ratio is the

56. What roles, standards, and financial measures support accounting?

    "A certified management accountant (CMA) is a managerial accountant who has completed a professional certification program, including passing an examination. A certified public accountant (CPA) is an

57. What is money and what are the three parts of the U.S. money supply?

    "Money is anything that is acceptable as payment for goods and services. For money to be a suitable means of exchange, it should be scarce, durable, portable, and divisible. Money functions as a mediu

58. What types of financial institutions provide banking, lending, and savings services?

    "A bank charter is an operating license issued to a bank by the federal government or a state government; it is required for a commercial bank to do business. Commercial banks are profit-oriented fina

59. How does the Federal Reserve influence the money supply and credit?

    "The Federal Reserve System (Fed) is the central bank of the United States and consists of 12 district banks, each located in a major U.S. city. The discount rate is the interest rate that the Federal

60. How do firms manage cash, financing, and long-term investments?

    "Accounts payable: Purchases for which a buyer has not yet paid the seller. Accounts receivable: Sales for which a firm has not yet been paid. Capital budgeting: The process of analyzing long-term pro

61. What securities and financing tools help corporations raise funds?

    "Bond ratings: Letter grades assigned to bond issues to indicate their quality or level of risk; assigned by rating agencies such as Moody’s and Standard & Poor’s (S&P). Bonds: Long-term debt obligati

62. How do different securities markets and market participants operate?

    "Broker markets: National and regional securities exchanges that bring buyers and sellers together through brokers on a centralized trading floor. Dealer markets: Securities markets where buy and sell

63. How do trading rules and contracts affect securities markets?

    "Circuit breakers: Corrective measures that, under certain conditions, stop trading in the securities markets for a short cooling-off period to limit the amount the market can drop in one day. Futures