Business and Management

a method of cost accounting designed to identify streams of activity, and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities

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adapters

companies that take the current industry structure and its future evolution as givens

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annual report

a document that includes detailed financial information and is presented to stockholders of a corporation once a year

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assets

items of value such as money in the bank, receivables, inventory, fixtures, and equipment that a company owns

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asset-based loan

a loan secured by the value of an asset

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autocratic leadership

a form of leadership in which the leader makes decisions on his or her own and then announces these decisions to the group

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autonomous workgroups

groups that control decisions about and execution of a complete range of tasks requiring raw materials, performing operations, quality control, maintenance, and shipping

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avoidance

a reaction to conflict that involves either ignoring the problem by doing nothing at all, or by de-emphasizing the disagreement

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B

balance sheet

a document that outlines a company's assets, liabilities, and equity of the owner at a particular point in time

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bankruptcy

the condition in which companies or individuals legally declare they are unable to pay their debts

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barrier to entry

a strategy that prevents one's competitors from offering the same product

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behavioral approach

a leadership approach perspective that attempts to identify what good leaders do, or what behaviors they exhibit

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Big Six

the six largest accounting firms in the United States: Arthur Andersen, Ernst & Young, Deloitte & Touche, KPMG Peat Marwick, Price Waterhouse, Coopers & Lybrand

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board of directors

managers elected by stockholders to oversee the daily operations of a corporation

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bond

a debt instrument issued by a company to raise money

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boundaryless organization/a>

organization in which there are no barriers to information flow

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budgeting

the process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences; also called budgetary controlling

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bureaucratic control

the use of rules, regulations, and authority to guide performance

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business plan

a document that outlines a company's goals, defines its product and market, provides financial data and resumes of key personnel, and serves as an operating tool to manage the business and obtain financing

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C

capitalization

the amount of money used to start a business

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cash flow

a measurement of a company's inflow and outflow of cash over a period of time

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Certified Public Accountant

an accountant who has met state requirements and has passed a series of exams

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chamber of commerce

an association of business people that works to promote business in the geographic area

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Chapter 7

a form of bankruptcy in which a company sells its assets in order to pay its debts

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Chapter 11

a form of bankruptcy that allows a company to reorganize in order to meet its financial obligations and then resume operations

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charismatic leader

a person who is dominant, self-confident, convinced of the moral righteousness of his or her beliefs, and is able to arouse a sense of excitement and adventure in subordinates

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clan control

control based on the norms, values, shared goals, and trust among group members; (involves culture, shared values, beliefs, expectations, and trust; works best where there is no one best way to do a job and where employees are empowered to make decisions

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coaching

dialogue with a goal of helping another be more effective and achieve his or her full potential on the job

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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

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collaboration

a style of dealing with conflict involving emphasizing both cooperation and assertiveness in order to maximize both parties' satisfaction

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collateral

something of value used to guarantee a loan. If the borrower defaults, the creditor keeps the item that was pledged as collateral

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communication

the transmission of information and meaning from one party to another through the use of shared symbols

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compromise

a style of dealing with conflict involving competitiveness, strong focus on one's own goals and little or no concern for the other person's goals

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concurrent control

the control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed

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control

the process of measuring progress toward planned performance and applying corrective measures to ensure that performance is in line with managers' objectives

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corporation

a business structure that sets up a company as a separate legal entity from its owners and enables it to raise capital through the sale of stock

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creditor

someone to whom one owes money

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current ratio

a liquidity ratio which indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities

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D

debt financing

a method of raising money for a business through loans or the sale of bonds

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default

failure to pay a debt

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demographics

the characteristics of a population that marketers can use to determine which consumers would be most interested in their merchandise

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direct marketing

a strategy that consists of targeting a group of consumers who have a need for the products or services of a business, and mailing promotional materials to them

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disclosure statement

the document required by the Securities and Exchange Commission (SEC) at the time of a company's initial public offering (IPO) that states the purpose of the business, the number of shares of stock that will be offered, and what the company plans to do with the money it obtain from the sale of stock

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distribution

the process of transporting goods from the factory to the consumer

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dividend

a payment to the owners of stock in a corporation

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E

earnings

a company's income

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economic development agencies

state and local government-operated departments that offer tax and other incentives, sponsor business incubation programs, and relax zoning regulations to encourage businesses to relocate or establish themselves in the area

80/20 rule

the belief that 80 percent of a company's business comes from 20 percent of its customers

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equity

the value of stock

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equity financing

a method of raising money for a business through the sale of stock in exchange for partial ownership of the business

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estimated tax

an amount of tax calculated and prepaid on a quarterly basis

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F

factoring

a method of financing whereby a lender purchases the accounts receivables of a business at a discount to their face value

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fixed costs

a company's expenses that do not change regardless of the sales volume; Examples: rent, utilities, interest, and insurance premiums

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floor planning

a method of financing inventory whereby the lender bases the loan on the credit of the vendor as well as the credit of the business applying for the loan

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franchise

a business that is licensed by a larger company and operates under the regulations of that parent company. McDonald's is an example of a franchise

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freelancer

a person who works independently without commitment to any one company

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G

general partner

the partner in a limited partnership who has responsibility for the day-to-day management of the company

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going public

the process by which a company sells stock to the public

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guarantor

an individual who agrees to be responsible for the debts of another individual or business

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H

holding company

a company whose purpose is to hold stock in another company

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I

income statement

a document that outlines expenses, revenues, and net income of a business. Also known as a profit and loss (P&L) statement

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incorporate

to register a business with the state in order to separate its legal responsibilities from that of its owners

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initial public offering

the first time a stock is offered for sale to the public

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intangible asset

something of value that has no physical properties; customer loyalty, goodwill, reputation, and trademarks

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interest

payment for borrowing money

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inventory

raw materials and finished products a company holds

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inventory turnover

the rate at which a company's inventory is sold out over a period of time

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investor

someone who provides money in exchange for partial ownership of a company

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J

joint venture

business structure that consists of two or more groups of people

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K

k

definition

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L

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liability

an obligation to pay an amount to someone else

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limited liability corporation (LLC)

business structure that is taxed like a partnership and provides limited liability for its owners

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limited partnership

business structure that consists of general manager responsibilities for daily management decisions and who assumes liability for the debts, and investors who have little involvement and whose liability is limited to the amount of their investment

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line of credit

a type of revolving loan that lets a business borrow money as needed up to a set amount without having to reapply each time

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liquidate

to sell assets in order to raise cash

liquidity

the ability of an asset to be converted to cash

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M

majority shareholder

someone who owns at least 51 percent of the stock in a company

markup

the difference between what it costs to produce an item and its selling price

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MBA

an advanced degree in business administration

microprocessor

a chip that acts as the brain of a computer system, handling logic operations that enable the computer to perform its functions. Microprocessors are typically categorized by the speed (in megahertz) in which the chip works, so that a 200MHz chip runs twice as fast as a 100MHz chip. However, task speed is also determined by other factors outside the chip itself. Example Sentence: The first microprocessor designed for a personal computer was the 2MHz 8080 created by Intel in 1974.

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N

Nasdaq

an electronic stock market operated and regulated by the National Association of Securities Dealers (NASD), an organization of brokers and dealers

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net income

total income less taxes and expenses

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net worth

the difference between the assets and liabilities of a company

newsgroup

a feature of the Internet that allows participants to post messages and respond to each other

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New York Stock Exchange (NYSE)

the largest and most active stock market in the world

niche

a narrow segment of a market

nonprofit organization

a business structure whose chief advantage is its exemption from paying taxes; main disadvantage is that it is subject to a strict set of regulations; designed generally for religious organizations, educational institutions, and social welfare organizations

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