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Misc Business Terms
Misc information
| Term | Meaning |
|---|---|
| Gross Domestic Product | value of goods produced inside a country's borders by both domestic and foreign companies |
| Federal Budget Deficit/Surplus | the difference between US government revenues and expenses in a given year |
| FED's Tools | Open Market Operations, Discount Rate, Reserve Requirement, Public Relations |
| FOMC | Federal Open Market Committee: principle policy-making group of the Federal Reserve |
| Charters of Commercial Banks | 1/3 charted by Federal Government(national banks), 2/3 charted by states (state banks) |
| Hostile Takeover | an unfriendly attempt to buy or merge a company against it's will |
| Industry Sectors | Services(82%) and Goods(18%) Producing industries |
| Acquisition | the purchase of an entire company or part of a company by another |
| Leveraged Buyout | individual or group borrows money to buy a company, uses assets of the company as collateral for the loan |
| EDGE Act Corporation | a corporation chartered by the Federal Reserve to engage in international banking operations |
| Leading Economic Indicators | used to predict econ. conditions 8-9 months in the future...avg. workweek, stock prices, money supply, credit, etc... |
| Privatization | sale or transfer of management of government-owned businesses to private owners |
| Profit | "the bottom line"--all revenues minus all expenses and taxes |
| Competition | Businesses competing with each other for the consumer's dollar-usually a benefit to the consumer |
| Fiscal Policy | Deals with the revenue and expenses of the government(taxing and spending) |
| Monetary Policy | the Federal Reserve's use of several key tooks to sustain economic activity at an optimum level--to avoid inflation and recession |
| Multiplier Effect | snowballing impact of a change in one economic variable on a whole series of related economic factors |
| Circular Flow of Money | The continuous exchange of goods and services for money |
| Supply and Demand | How much of a product is produced depends on how much is wanted and at what price-as prices go down, the consumer will buy more, and as prices go up, consumers will buy less. |
| Microeconomics | the study of individual units within an economy: departments, companies, etc.. |
| Macroeconomics | study of a nations economy as a whole |
| Golden Hello | a generous package of money and benefits offered to new employees upon signing |
| Small Business Admin. | the principal government agency concerned with small US companies |
| Tender Offer | a proposal to buy controlling interest through of purchase of stock at well above market price |
| Proxy Fight | a battle between management and an outside group for shareholders' voting support |
| Poison Pill | an action by management to increase the number of outstanding shares of stock by allowing shareholdesr to buy addition shares below market value This makes the takeover more expensive. |
| Shark Repellant | a takeover deterrent which makes the takeover subject to approval by a large majority of shareholders |
| White Knight | a friendly takeover whereby the acqurired firm remains independent and the exisiting managerial sturcture remains in place |
| Golden Parachute | a nifty severance package of money and befefits to executives affected by a corporate reorganization |
| Golden Handcuffs | granting stock options of other incentives to encourage employees to resist tempting offers for employment elsewhere |
| National Debt | cumulative total of all past deficits that have not been paid off...currently around $7.5 trillion |
| Business Plan | the heart of the small business undertaking..addresses the full range of questions regarding the new company. The financial information is the most important part of the business plan. |
| Business Incubators | organizations that assit new firms by providing low-cost facilities to small start-up ventures |
| Business Cycle | Prosperity, Recession, Depression, Recovery--alternating periods of economic growth and contraction |
| FDIC | Federal Deposit Insurance Corporation:established with the passing of the Glass Steagall Act to protect the consumer and to prevent bank failures. Insures up to $100,000 |
| Horizontal Merger | a merger of companies in the same industry |
| Vertical Merger | a merger of companies in related industries |
| Conglomerate Merger | a merger of companies in unrelated industries |
| Deregulation-Monetary Control Act of 1980 | Encouraged greater competition in banking industry through deregulation of financial organizations, extended Fed's control of money supply, Made all commercial banks subject to Fed regulation(created NOW accounts) |
| Real GDP | GDP adjusted for inflation |
| Inflation | (blank) |
| Economic Systems | Capitalism, Socialism, Communism |
| Partnership | a legal association of two or more people as co-owners |
| Questions econ. systems must address | How to use limited resources, or what and how much to produce and by whom, how goods and services should be distributed |
| M1 | Most Liquid, includes NOW-accounts(interest bearing checking accounts) |
| Purpose of Banking System | a network of financial institutions designed to facilitate the movement of money and to assist in implementation of Federal Reserve Policy |
| Joint Venture | two or more firms that share an investment in a foreign company |
| Sole Propriatorship | a business owned by just one person. Most widely used for of business ownership in the united states |
| Pet Projects in US budgeting-pork, pork barrel | attaching riders to bills that are designed maily to gain a political advantage with their constituencies |
| Equilibrium Price | a price which satisfies both the buyer and the seller |
| Entrepeneur | someone who starts their own business |
| Comparative Advantage | a result of productivity of the work force |
| reserve requirement | the % of transaction accounts which depository institutions must keep on hand or at the Federal |
| forms of business ownership | sole proprietorship, partnership, LLC, corporation |
| double taxation | paying corporate taxes on profits and personal taxes by shareholders on dividends, declared from earnings |
| board of directors | elected by shareholders-responsible for governing corporate policy |
| planning | establishing missions and goals |
| theory x | workers are inherently lazy and will avoid work if possible |
| theory y | people like to work, they are inclined to make work interesting and challenging |
| Abraham Maslow | Hierarchy of needs |
| Fredrick W. Taylor | Principles of Scientific Management |
| Fair Labor Standards Board | Minimum wage, 40 hour workweek, and overtime |
| National Labor Relations Board | certifies labor unions..established by the National Labor Relations Act of 1935 |
| Job enrichment | (blank) |
| Managment by objectives | MBO: mutual goal setting, performance orientation, focus on goals and objectives |
| job rotation | employees rotate jobs to gain all-around experience |
| chain of command | the flow of authority from top to bottom |
| organizational chart | visual representation of formal structure |
| collective bargaining | formal negotiations between management and labor aimed at producing a contract |
| Mediation | neutral 3rd party offers reccomendations and suggestions but it is voluntary and no authority to force resolutions |
| Featherbedding | union demands that certain jobs be overpopulated--payments for work not performed |
| Arbitration | 3rd party offers suggestions, but it is binding on both sides |
| Grievance Procedure | a formal set of procedures for settling disputes that arise between management and the Union |
| Grapevine | informal communications--rumors |
| Networking | establishing contacts that can help you |
| Delegation | assigning job duties and related authority to subordinates |
| Mentoring | an experienced employee guides a new hire |
| Centralization of Authority | authority and control concentrated at top, little authority dispersed to subordinates |
| Directing | delegating, assisting, guiding |
| Organizing | arranging, developing, establishing, restructuring |
| Job Sharing | two people sharing a single job, each working part of a standard shift |
| Flextime | building a work schedule around 'core hours' established by the company |
| Cafeteria Benefit Plan | employees select from a variety of benefits to find ones that best suit their needs |
| Fringe Benefits | expenditures by employers for various employee programs in excess of wages and salaries |
| Decentralization of Authority | wider dispersal of authority...more subordinates with more responsibilities |
| Scientific Management | improve efficiency in the workplace by having time and motivation studies, determining the best way to do the job, wages tied to output |
| Lockout | refusal by management to allow union members to enter the premises |
| Boycott | refusal to buy a certain company's product |
| Douglas McGregor | developed theory x and theory y |
| Quality of Worklife | QWL: a general philosophy of employee empowerment and participation |
| Formal Organization | structured organization of people, usually in a chart |
| Informal Organization | deals with the interactions of people in the workplace, their attitudes, concerns, and relationships. |
| Wagner Act | legalized collective bargaining, established National Labor Relations Board |
| Norris-LaGuardia Act | Anti-Injunction Act: limited management's use of injunctions to stop union strikes, outlawed 'yellow dog' contracts(YDC force workers to agree not to join unions) |
| Landrum-Griffin Act | union required to make financial disclosures, outlawed 'sweetheart' contracts (deals which didn't serve membership well) |
| Taft-Hartley Act | outlawed 'featherbedding', allowed President to obtain an 80 day injunction if a strike threatens to imperil national safety, specified unfair labor practices |
| Departmentalization | grouping of activities into units within the organization |
| Strategic Planning | (blank) |
| Human Relation Skills | getting along with others, communicating effectively, leads and motivates, earns and gives respect |
| Human Resource Management | covers everything involved in maintaining a competent, motivated, and satisfied work force |
| Human Resource Planning | forecasting the number of employees and the skills required to meet an organization's personnel requirements for some future period. |
| Conceptual Skills | Sees the big picture, sets tone and direction, courageous decision maker |
| Management Pyramid | 3 levels-Supervisory, Middle, and Top. Top is higher execs and handle long range strategy |
| Hierarchy of Objectives | starts with the individual and works up to the company |
| Quality Circles | meetings of small groups to resolve job-related problems |
| Technical Skills | Knowing the details of the job, often a subject matter expert |
| Union Shop | (blank) |
| Labor Union | a group formed primarily to influence employer's decisions about terms and conditions of employment, and to protect the employee's interests. |
| Accountability | responsibilites for activities and results in one's assigned tour of duty |
| Autocratic Management Style | makes decisions alone, intolerant of input from subordinates |
| Hawthorne Effect | employees become more effective because of feeling appreciated--a result of the Hawthorne Studies |
| Human Relations | the way people behave towards each other, especially how employers and managers interact with employees |
| Laissez-faire | (Free Rein)-sets broad objectives, minimal supervision, decisions left to subordinates |
| Line Organization | Establishes a clear line of authority from top to bottom--oldest form of structure |
| MIS | Management Information Systems: The use of computer systems to enhance Management Control and decision making by converting raw data into useful information. tailored for ind. and people are the most important part |
| Levels of Management | (blank) |
| Time Management | being on time, arranging affairs to be the most efficient |
| Henry Ford | invented the assembly line |
| Inventory Management | to have sufficient quantities of raw materials and components on hand to assure efficient production |
| Intensive Distribution | selling your product in every outlet where final customers might reasonably look for it (convenience items) |
| Benchmarking | comparing each of your production processes to those practiced by the best in the field |
| Caveat Emptor | buyer beware |
| Bill of Materials | specifies components needed to manufacture each product |
| Assembly Line | putting parts together piece by piece |
| Advertising Plan | directing a message towards an audience |
| Analytical Process | breaks down raw materials into entirely differnt products |
| Creative Selling | indentify customer needs, offer solutions using skillful proposals |
| Conversion Process (in production) | where inputs are converted to outputs |
| Convenience Item | things that people purchase frequently as needed--intensive distribution (deoderant) |
| Consumer Items | products that people buy, split into 3 groups (convenience, shopping, and specialty) |
| Common Carrier | transportation companies athat perform shipping services for compensation for the general public |
| Distribution Channel | the path that products follow from producer to consumer |
| Exclusive Distrobution | use of very few wholesalers or retailers in a given market |
| Expert Selling | deals w/ speciality items, salesman must have expert knowledge of the product |
| Fixed Position Layout | product stays in one place, workers and equipment come to it |
| Forms of Transportation | railroads, trucks, pipelines, etc.. |
| Marketing Research | identifying consumer needs and wants |
| Marketing Mix | a combination of product, price, promotion, and distribution strategies used to market products and services |
| Marketing Concept | Customer is King |
| Marketing | the process of planning and executing the individual and organizational objectives |
| Market | a group of people with the means($), authority and potention to make purchasing decisions |
| Penetration Pricing | introducing a product at a low price |
| Materials Requirement Planning | (blank) |
| Market Segmentation | Dividing the total market into groups with similar characteristics |
| Material Distribution Strategy | all activites involved with moving a product from producer to end user |
| Mass Production | Making uniform products in great quantities |
| Market Share | the percent of the market controlled by a company or product |
| Missionary Selling | visits customers, has follow-up visits, creates goodwill |
| Mechanization | use of machines to improve worker productivity and to streamline production |
| Physical Inventory | actual physical count of items in stock |
| Pull Strategy | promotion is from the manufacturer to the consumer, who will exert pressure on the retailer to carry the product |
| Push Strategy | thrust of promotional effort is through wholesalers and retailers |
| Product Line | a group of related products with use similarities |
| Product Life Cycle | introduction, growth, maturity, decline |
| Price Skimming | introducing a product at an artificially high price |
| Product Mix | all of a firm's product lines |
| Product Strategy | (blank) |
| FOB Shipping Point | buyer pays transportation to carrier, separate from seller's charge |
| FOB Destination | the common carrier bills the transportation to the shipper, shipper recovers by including it in the price to the buyer |
| Specialization | diving work into the simplest components so workers can become highly skilled in a certain area |
| Utility | the satisfaction provided by a product of service. Form, time, place, ownership |
| Total Product Concept | includes the basic offering, as well as a set of image and service features, all of which the potential consumer may consider |
| Telemarketing | selling by telephone |
| Team Selling | inviting customers, assembling a team of experts to answer questions |
| Target Market | a specific group of consumers toward whom a company directs its marketing efforts |
| Strategic Market Planning (SMP) | (blank) |
| Standardization | uniformity in goods or parts, making them interchangeable |
| Speciality Item | high-priced, few outlets. Exclusive distribution (diamond rings) |
| Shopping Item | things that people shop around for and compare prices. Limited # of outlets, selective distribution (women's suits) |
| Selective Distribution | use a limited number of outlets in a given geographic area (shopping items) |
| Personal Selling | person-to-person sales pitch |
| Promotional Strategy | Push or Pull |
| Operations and Production Management (OPM) | manage the entire range of activities involved in producing products that consumers want |
| Production | the use of people and machinery to convert various inputs and raw materials into products |
| Productivity | efficiency, training, downtime, benchmarking |
| Line of Credit | an agreement with a bank to make a certain amount of credit available on an as-need basis |
| Laddering | artificial inflation of stock prices |
| CFO | Chief Financial Officer-carry out the financial mission of the corporation |
| AICPA | American Institute of CPAs |
| Debt Financing | carried out with borrowed money |
| Common Market | maintains a custom union and seeks to have all trade rules among members in agreement |
| Equity Funds | (blank) |
| Dumping | selling products at a lower price abroad than in the domestic market |
| Factoring | selling accounts receivables at a discount to a financial institution known as a factor |
| Public Corporation | owned by stockholders |
| Discount Rate | (blank) |
| Round Lot | 100 stocks, or another set amount |
| Yield | a percent, dividendsd divided by market price |
| Transactions | (blank) |
| Statement of Cash Flows | "where got, where gone" |
| Risk-Return Trade Off | the higher the risk, the higher the return |
| Return of Equity | net income/total owner's equity |
| Retained Earnings | what's left after deductions of expenses |
| Financial Management | needs for and souces of funds |
| Financial Information | (blank) |
| Financial Control | (blank) |
| Financial Manager's Responsibility | (blank) |
| Owner's Equity | value of the company after liabilities are deducted from assets |
| GAAP | Generally Accepted Accounting Principles...the rules of the game |
| Fixed Assets | property, plant, equipment...relatively permanent |
| Financial Plan | (blank) |
| Financial Statements | Balance sheet, income statement, statement of cash flows, statement of retained earnings |
| Double-Entry Bookkeeping | maintaining balance using 2 entries for every transaction |
| CPA | certified public accountant |
| Current Assets | assets which can be converted to cash within a year |
| Current Ratio | current assets divided by current liabilites |
| Assets | everything you own |
| Internal Auditors | appointed by the board of directors |
| Leverage | (blank) |
| Liability | what you owe |
| Liquidity | measurement of ease of converting to cash |
| Auditing | checking the data in the financial statements |
| Balance Sheet | snapshot of the company's financial position at a given time |
| Accounting | developing and providing reliable financial information |
| Income Statement | shows income, expenses, and profit over a period of time |
| Market Order | make the trade at the best price possible at the time the order is received |
| Export-Import Bank of the US | gives low-interest loans to foreign buyers of American products |
| Exports | the value of all the goods and services shipping from the US to foreign countries |
| Imports | the value of all the goods and services shipping into the US from foreign countries |
| Import Quotas | restricts quantity of imports |
| Absolute Advantage | resulting from natural resources |
| Devaluation (of currency) | the term given to a decrease in one country's currency compared to another |
| Exchange Rate | the value of one nation's currency relative to others |
| Foreign Licensing | contract w/ a foreign company to produce and/or distribute its products in a specific geographic area |
| Multination Corporation | companies that have established major operations in several countries |
| Tariffs | a tax on imports |
| Balance of Payments | all of a company's international financial transactions for a particular time period |
| Balance of Trade | the difference between a nation's exports and imports |
| World Bank | provides low interest long-term loans for specific economic development projects to underdeveloped and developing countries |
| World Trade Association | WTO: to assure equitable trade practices among member nations |
| Nasdaq | computerized quotation system |
| Tracking Stock | tracks the performance of a specific business unit |
| Stock Broker | buys and sells securites for clients in the secondary market |
| Short Selling | borrowing stocks in hope price will go down, pay back at a lower price |
| Securities | the collective name given to stocks and bonds |
| Secured Bonds | backed by specific pledges of company assets-first claim on assets |
| Secondary Market | involves the purchase and sale of securites previously bought and sold |
| Primary Market | involves the sale of new securities |
| Preferred Stockholders | paid before common stockholders, more stable, holders have claims in case of a collapse |
| Open Order | leave your order in until you cancel it |
| Margin Trading | investor borrows part of cost from broker |
| Government Securites | least risk |
| Earnings per share | net income/common shares outstanding |
| DOW Jones Industrial Average | 30 blue-chip corps. |
| Dividend | profits distributed to shareholders |
| Debenture | unsecured bonds, backed only by reputation |
| Convertible Bond | can be converted to common stock at bondholder's option |
| Common Stockholders | hold stock and can vote on company issues |
| Capital Gains | (blank) |
| Bull Market | optimistic market |
| Bear Market | pessimistic market |
| Callable Bond | has the option of redeeming the bond prior to maturity date |
| Bond Indenture | details the terms and conditions of agreement between issuer and investor |
| Bond Rating Services | Moodys, Fitch, etc.. |
| Bondholders | (blank) |
| Limit Order | you set the price limits for that one day |
| Investment Banker | Underwriter: sells new issues of stocks and bonds in the primary market |
| Insider Trading | people who trade and profit from their access to non-public information |
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