F

Fabless production Production subcontracted under strict supervision to outside firms.

Face-to-face skills Effective verbal communication skills, particularly in small groups.

Facilitator Person who helps groups to identify and solve problems by structuring the discussion and intervening to guide the participants to arrive at solutions.

Facility-sustaining activity Operations whose performance helps to sustain an organization as a whole, such as security, safety, and physical maintenance.

Factor 1. Business engaged in FACTORING. 2. Person who acts as an agent for a commission, or factorage.

Factor-comparison method Type of job and pay scales evaluation in which jobs are compared in terms of compensable job factors, such as skill, effort, decision making, working conditions, and responsibility.

Factoring Buying trade debts from a producer, thereby assuming the risk of debt collection and accepting the credit risk. In service factoring, the FACTOR assumes the risk and collects the debt, while in service-plus-finance factoring, the factor also finances up to 90% of the debt.

Factors of production Resources required to produce material goods, such as land and natural resources, labor, capital, raw materials, and managerial ability. For each factor there is an associated cost: for land and natural resources, there is rent; for labor, there are wages; for capital, there is interest; for raw materials, there is cost and inventory; and for managerial ability, there are human resources costs.

Failure mode and effect analysis (FMEA) Technique of analysis showing why systems fail and at what stage or point, as well as the consequences of failure. It also helps in establishing preventive maintenance and contingency or emergency plans.

Fair presentation In accounting, the requirement that accounts presented do not misrepresent the true situation of facts, suggest falsehoods, or suppress the truth.

Fair trade Exchange of products between developed and developing countries, based on guaranteed fair prices.

Fallen angel In finance, a security that has dropped below its original value.

False market Market in which buyers or sellers act on false information or on reports of a glut or scarcity, which distorts prices.

Fama, Eugene Francis (1939–) American economist known for his work on portfolio theory and asset pricing. He was Professor of Finance at the University of Chicago Booth School of Business. He coauthored the textbook, The Theory of Finance.

Family life cycle In marketing, the six stages of family life as they relate to sales of goods and services: (1) young and single; (2) young childless couples; (3) young couples with infants; (4) couples with older dependents; (5) older couples with no children at home; and (6) older singles including widows and widowers.

Fannie Mae Federal National Mortgage Association, founded during the New Deal era in 1938 to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities. It is a government-backed enterprise, although it has been publicly traded since 1938. In 2011 it had total assets of $3.2 trillion.

FAQ 1. Frequently asked questions. 2. Fair average quality.

Fast track Career path for quick advancement, characterized by special training and rapid promotion, designed for people with management potential.

Fatigue In business, the point at which either workers or machines exhibit signs of stress, owing to wear and tear and overwork, either because of aging or poor environment.

Fault tree Analytical technique illustrating the ways in which components of a system are likely to respond or behave under stress.

Fayol, Henri (1841–1925) French pioneer of organizational theory and management, who established the structural principles of formal management. He introduced the concepts of CHAIN OF COMMAND, JOB DESCRIPTION, MANAGEMENT AUDIT, ORGANIZATIONAL CHART, and SPAN OF CONTROL. In his book General and Industrial Management (1916), he identified the major elements of management as planning, organization, command, coordination, and control. His principles of management included esprit de corps and SECURITY OF TENURE.

Fayol ladder The organizational chart or tree developed by Henri Fayol, with dotted-line paths to indicate channels of communication and hierarchic links.

FCPA FOREIGN CORRUPT PRACTICES ACT

FDIC FEDERAL DEPOSIT INSURANCECORPORATION

Feasibility study Investigation into the viability of a project or undertaking based on its risks and benefits, including compliance with laws and regulations.

Featherbedding 1. Restrictive labor practice whereby more staff are employed than necessary as a conciliatory gesture to labor unions. 2. Lax legal regulatory climate in which companies make excessive profits.

Fed General reference to the FEDERAL RESERVE SYSTEM or FEDERAL RESERVE BANK.

Federal Deposit Insurance Corporation (FDIC) U.S. government corporation operating as an independent agency created by the GLASS-STEAGALL ACT of 1933.

Federal funds Non-interest-bearing deposits held at the FEDERAL RESERVE BANK, which are traded between member banks.

Federal fund rate Overnight interest rate paid on federal funds by member banks of the FEDERAL RESERVE SYSTEM. It is a highly volatile money-market interest rate that affects every other financial transaction.

Federal Open Market Committee Policy committee of the FEDERAL RESERVE SYSTEM, which controls the level of money and credit in the U.S. banking system and regulates the money supply. Its members are the governors of the FEDERAL RESERVE BOARD and the presidents of the 12 FEDERAL RESERVE BANKS; they meet at least four times a year.

Federal organization Organizational structure in which departments and subsidiaries have considerable autonomy and are permitted to initiate projects, with overall authority resting in the central corporation. Many multinational companies have a federal organization demanded by their widespread operations.

Federal Reserve Bank Any of the 12 banks that constitute the FEDERAL RESERVE SYSTEM. They are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

Federal Reserve Board Main governing body of the FEDERAL RESERVE SYSTEM charged with overseeing the 12 FEDERAL RESERVE BANKS and with helping shape national monetary policy. Governors are appointed by the President of the United States and confirmed by the U.S. Senate for staggered 14-year terms. The board operates independently of the administration but is required to report annually to the House of Representatives.

Federal Reserve System Central bank of the United States, created by the Federal Reserve Act of 1913. It sets monetary policy, regulates the cost of money, and monitors the money supply. The system is run by the FEDERAL RESERVE BOARD.

Feedback Information or opinions about the quality of products and the performance of employees, obtained from clients and customers or associates and considered essential for evaluation, quality management, and continuous improvement. Feedback can be upward or downward.

Feedback control Management of the performance of an operating system, achieved by monitoring outputs and comparing them with the system’s design parameters, then making adjustments for more efficient operation.

Feedforward control Management of the performance of an operating system, achieved by forecasting future problems and glitches and taking steps to avoid them.

Feigenbaum, Armand Vallin (1922–) American quality control expert who devised the concept of total quality control, later known as TOTAL QUALITY MANAGEMENT. He is the author of Quality Control: Principles, Practice and Administration (1945), Total Quality Control (1951), The Power of Management Capital (2003), and The Power of Management Innovation (2009).

Fiedler, Fred (1922–) One of the leading researchers in industrial and organizational psychology. He was a professor at the University of Washington. He is the author of the Fiedler Contingency Model, which is used to assess the traits and personal characteristics of leaders.

Fiedler Contingency Model Leadership theory of organizational psychology developed by FRED FIEDLER. According to Fiedler, there is no ideal leader. Both task-oriented and relationship-oriented leaders can be effective if their leadership fits the situation. The Contingency Theory can predict the characteristics of the appropriate situation for effectiveness. A favorable situation is when there is a good leader-member relation, a highly structured task, or a high leader position power.

Field In marketing, a district or region where research is conducted by a sales team or manager.

FIFO FIRST-IN, FIRST-OUT COST

Fifth discipline One of the characteristics of a LEARNING ORGANIZATION, which includes (1) systems thinking; (2) personal mastery; (3) mental models; (4) shared vision; and (5) team learning. The concept was formulated by MIT scientist PETER SENGE.

Finance 1. Management and manipulation of money. 2. Capital as a factor in the conduct of a business or in a business transaction. 3. Branch of economics dealing with money and its management.

Financial appraisal Evaluation to decide among a range of alternatives by which money can be obtained or spent. The appraisal usually includes CASH FLOW techniques, RATIO ANALYSIS, PROFITABILITY INDEX, and RISK ANALYSIS.

Financial crisis Collapse of the financial market and its lending institutions, leading to a RECESSION, as in the Wall Street meltdown of 2008.

Financial distress Situation in which a failing business enterprise contemplates insolvency and bankruptcy, leading to a restructuring and a search for working capital.

Financial futures Tradable contract for future purchase of currency, interest rate, or other financial asset. Financial futures enable traders to manage risks more effectively and to gain additional profits, but they are subject to great volatility.

Financial institution Establishment that provides financial services or trades in financial products; for example, banks and savings and loan associations.

Financial instrument Contract involving a financial obligation, such as a stock, bond, loan, and derivative.

Financial modeling Construction and use of planning and decision models based on financial data to simulate actual conditions. The models include discounted CASH FLOW, DECISION TREE, LEARNING CURVE, and BUDGETARY CONTROL.

Financial statement Annual review and report of a business’s financial health, including profit-and-loss accounting, a balance sheet, a statement of gains and losses, and a cash-flow statement.

Financial year Year accepted by a business as constituting the accounting period for which its budgets are established. Also FISCAL YEAR.

Fire fighting Reactive management style that expends considerable effort in dealing with petty crises rather than taking broader actions to prevent them.

Firewall In a conglomerate, a barrier between the funding or ownership of one entity and other entities in the group so as to avoid spreading problems across the corporation. Also, in computers, a protective wall against viruses and worms.

Firm Business organization or partnership as a discrete entity.

Firm commitment In finance, an agreement by which the underwriter of an issue agrees to buy all unsold securities at the offering price.

First-in, first-out (FIFO) Accounting system in which costs for raw materials of each finished batch are determined as their earliest invoiced value.

First-mover advantage Head start gained by the company that is the first in the market with a new product or product line, including an enhanced reputation for being innovative and the ability to set industry standards. First-movers may exploit their head start to provide superior service at lower cost, pre-empt the competition, and displace traditional leaders, and thereby achieve customer loyalty There are also disadvantages to being first, such as investment in perfecting the technology.

First-tier market Main market in which the equity of a large company is traded. Compare SECOND-TIER MARKET.

Fiscal agent 1. Representative for a national financial institution. 2. Individual empowered to collect revenues on behalf of the U.S. Treasury.

Fiscal drag Deflationary impact of an increase in tax revenues under a progressive tax regimen.

Fiscal policy Use of government spending and taxation to influence MACROECONOMIC conditions.

Fiscal year Accounting period, also known as a tax year or assessment year.

Fishbone chart Diagram that identifies problems at each step in a problem-solving effort.

Fishbone technique Problem-solving method employed in TOTAL QUALITY MANAGEMENT.

Five forces model Formulated by theorist MICHAEL PORTER, a model that describes the five main forces of competition: (1) purchasing power of suppliers; (2) purchasing power of buyers; (3) threat of a potential new entry from outside; (4) threat posed by industries producing substitute goods and services; and (5) competition from rivals within the industry. In this model, suppliers can influence profits by raising prices, reducing quality, and reducing output. A supplier’s influence may be strong if there are no available substitutes for the products offered, if there are switching costs, if the supplier has a dominant position, and if the product is unique. Buyers can threaten profitability by forcing prices down and demanding higher quality or more service. They are classified as commercial buyers or end consumers. Buyers have an advantage when the market entertains many sellers, when the products are undifferentiated, when there are available substitutes, and when the purchase represents a significant portion of the buyer’s cost, turnover, or income.

The more powerful the buyer, the greater the leverage. New entrants dilute profitability by forcing a reconfiguration of the cost structures and development of new competitive strategies. The threat of substitute products is an ever-present danger that destabilizes the market. Intense rivalry may result from the existence of a large number of competitors with comparable resources, making it difficult for a winner to emerge and dominate the market. Slow industry growth may also encourage rivalry for market shares, as do lack of product differentiation, high fixed costs creating a temptation to reduce prices, and increased capacity utilization and high exit barriers.

Five Nines In marketing, implication that a product is almost perfect, as in 99.999%.

FiveS Methodology A workplace organization method that uses five Japanese words—seiri, seiton, seiso, seiketsu, and shitsuke—to describe organization of a work space for efficiency and effectiveness by identifying the items used and maintaining the work space. It has five primary phases: sorting, straightening, systematic cleaning, standardizing, and sustaining. Devised by Japanese business consultant Horoyuki Hirano.

Fixed asset Valued resource or investment, whether intangible or tangible. Tangible assets include real estate, plants, and machinery, and they must be written off through depreciation to the profit-and-loss account over their useful economic life. INTANGIBLE ASSETS include goodwill, patents, and trademarks, and they are amortized. Also capital asset, durable asset.

Fixed capital Amount of money tied up in FIXED ASSETS.

Fixed cost Expenses incurred in producing goods and services that are independent of the volume of production, such as rent.

Fixed-interest security Type of security that gives a fixed rate of interest, including GILT-EDGED SECURITIES, bonds, preferred shares, and debentures. They offer less scope for capital appreciation and their prices move inversely with the general level of interest rates.

Fixed pie Assumption that the market for a product is finite and that an increase in one segment will be at the expense of another.

Flag of convenience National flag of certain small countries, such as Panama or Liberia, flown by a ship owned by nationals of another country. Flag is flown to avoid paying high taxes, incurring high labor costs, and meeting stringent safety and environmental regulations.

Flagship Headquarters of a large retail chain that also serves as its largest and most prestigious store.

Flat organization Company with relatively few levels in its hierarchical structure. Compare TALL ORGANIZATION.

Flat tax Tax system with a single tax rate for all payers, with no exemptions except for standard personal allowance. Its advantages are simplicity, reduction of administrative costs, and elimination of loopholes; it also has a high income threshold at which taxes become payable. Its disadvantages are that it militates against the ability-to-pay principle and shifts the tax burden from the wealthiest to lower and middle classes.

Flexible firm Company that follows a flexible model in its division of employees (into core and noncore), number of employees, and pay and fringe benefits.

Flexible manning Work arrangement that allows variations in regard to hours worked, payments scheduled, and number of workers employed.

Flexible manufacturing system Automated and computerized production line that can be easily reprogrammed to manufacture any product in response to consumer demand. It consists of a group of numerically controlled interconnected machine tools, run by a central control system. Its benefits include less waste, fewer work stations, quicker changes of tools, reduced downtime, better quality control, reduced labor, more efficient use of machinery, and less turnaround time. It is best suited for high-volume production of many parts.

Flexible working hours (FWT) Work schedule without fixed starting and closing times. The workday is divided into a core period and several flexible periods from which an employee may choose the most convenient to complete the total number of hours per week or month. The period between the earliest permitted starting time and latest closing time is known as the BANDWIDTH. Additionally, an employee may carry forward a credit or debit of hours to the next work week. In French, this system is known as Horaire Dynamique and in German as Gleitzeit, or gliding time.

Flexibility Ability to adapt to change, maneuver in troubled waters, and take advantage of new opportunities quickly.

Flextime See FLEXIBLE WORKING HOURS.

Flight of capital Movement of money out of a country in response to political or economic instability.

Flight risk In business, an employee who is likely or planning to leave an organization.

Flight to quality Movement of investments to safer assets, such as gold, in times of economic volatility and uncertainty.

Float In business, to launch a new company.

Floating Denoting a debt, exchange rate, interest rate, or warranty not tied to a fixed correlate but, rather, is allowed to move up and down in unison with other indicators.

Floating labor Migrant labor that has no fixed company affiliation and shifts between places of employment, taking on whatever work is available.

Floor 1. Minimum price or rate at which a transaction can take place. 2. Area in a stock exchange set aside for face-to-face transactions.

Flow chart Diagram that shows the flow of materials, people, or information through a system and the hierarchic importance of each level.

Flow production Continuous manufacturing during which raw materials are fed at one end of the process and finished products emerge at the other end, as in petrochemicals, sugar, and steel.

Flow theory In human resources, the description of how people interact under stress or when faced with imminent change, and how they try to synchronize their actions with those of the external environment.

Flurry In finance, a burst of speculative activity in a market.

Flyback timing Work measurement noting each element of a job separately, as opposed to CUMULATIVE TIMING.

Flying-geese model View of economic development in which the developmental status of one nation has an impact on the economy of its neighbors.

FMEA FAILURE MODE AND EFFECT ANALYSIS

Focus group Exploratory research group of 8 to 12 paid participants headed by a moderator, who meet for in-depth discussions of problems and ideas in which they have an interest. In marketing, usually they meet during the conceptual stages of new product development.

Focused improvement Betterment of total performance, resulting from a study of constraints and bottlenecks, and with deliberate efforts made to eliminate them, one by one.

Focused strategy Business tactic by which firms divest themselves of their noncore activities and investments in an effort to maximize performance of the core competencies. Opposite of DIVERSIFICATION.

Follett, Mary Parker (1868–1933) British management writer and an adherent of the CLASSICAL SCHOOL OF MANAGEMENT. Follett was particularly interested in how conflicts are resolved, and she coined the term LAW OF THE SITUATION to describe the depersonalization of conflicts. Her book Creative Experience (1924) advocated integration as a means of reducing conflict without compromise or domination.

Followership In human resources, the study of followers and their psychology and motivations.

Follow-the-leader strategy Pricing strategy in which the bellwether or the market leader sets the price increase or reduction, and the others follow suit. This is common in industries with a weak competitive base.

Football-bell Shape of ideal business organization, recommended by management analysts HAROLD LEAVITT and Thomas L. Whisler in 1980; the model has more innovators in the top layer and fewer middle- and lower-level managers.

Footprint Physical space or premises occupied by a commercial unit.

Force majeure (French, “superior force”) In a contract, an event occurring outside the control of either party, such as a riot, war, or revolution, that may excuse either party from its liabilities or from fulfilling the contractual obligations.

Forced choice In performance appraisal, a method of rating staff by providing descriptive phrases to be selected by the respondent as the most applicable.

Force-field analysis Analytical technique identifying negative and positive factors, and presenting them as a chart.

Ford, Henry (1863–1947) Founder of the Ford Motor Company and the 1913 inventor of the assembly-line model of production.

Fordism Management philosophy of assembly-line mass production, first initiated by Henry Ford.

Forecasting Art of predicting future trends and creating alternate scenarios, based on extrapolation of current trends or a study of past behavior under similar circumstances. Forecasts are based on methods such as the DELPHI TECHNIQUE or market research or polling.

Foreign Corrupt Practices Act (FCPA) 1997 Act of U.S. Congress prohibiting the use of bribes to facilitate the conduct of business in foreign countries.

Foreign exchange market Institutions where traders buy and sell currencies electronically. The principal foreign exchange markets are in New York, London, Tokyo, Singapore, Switzerland, Hong Kong, and Berlin. Nearly 85% of all foreign exchange transactions are in dollar, which is the numeraire.

Forensic accounting 1. Accounting undertaken in relation to a case pending in a court of law. 2. Accounting with the aim of uncovering fraud in past business transactions, initiated on the basis of partial or whistleblower information.

Form 10K Annual report mandated by law to the U.S. Securities and Exchange Commission by companies listed on any of the national stock exchanges. Form 10K is abbreviated quarterly return.

Forrester, Jay Wright (1918–) Pioneer American computer engineer and professor at MIT Sloan School of Management He is the founder of SYSTEMS DYNAMICS, which deals with the simulation of interactions between objects in dynamic systems. He developed ideas and theories that later became the foundation of SUPPLY CHAIN MANAGEMENT.

Forward price Predetermined delivery price of a commodity or currency or asset to be paid at a predetermined date regardless of market conditions.

Forward contract Contract related to the futures contract but is not traded in an exchange.

Forward integration Extension of a company’s business operations further down the chain of production and retailing.

Forward market Exchange for dealing in FORWARDS contracts.

Forwards Contracts for commodities or securities for delivery at a future date, at a price agreed upon beforehand, called the forward price. These differ from FUTURES contracts in that they cannot be closed out by matching transactions.

Four-firm concentration ratio Measure of the combined market share of the four largest firms in a particular industry. A concentration of 40% indicates an OLIGOPOLY and a concentration of 80% is a MONOPOLY.

Four Ps Four fundamental principles of marketing—namely, product, price, place (or channel of distribution), and promotion.

Fourth level of service A company’s highest level of service provided to its consumers.

Fourth market Exchange in unlisted securities, with trading conducted directly between investors.

Fourth World Least developed and poorest countries of the world. Term modeled on the Third World, or the nonindustrialized world and the First World or the industrialized world.

FRAC FREQUENCY, RECENCY, AMOUNT, AND CATEGORY

Fractional unemployment Temporary unemployment even in conditions of full employment, occurring when transitioning from one job to another.

Franchise License granted to a manufacturer, dealer, or trader to use a brand name in a particular area for a stated period, in return for royalties or fees. The licensee may also receive from the licensor technical expertise, financing, and inventory.

Frankfurt Stock Exchange Oldest and largest of the eight regional German stock exchanges, founded in 1820. It accounts for 75% of equity trading in Germany and has four markets, of which one is for bonds and one for small companies.

Freddie Mac Colloquial name for the Federal Home Loan Mortgage Corporation (FHLMC).

Free cash flow Measure of positive cash flow that is generated or consumed by a company, often defined as after-tax operating profit less net capital expenditure. It can be used to pay dividends, acquire other companies, invest in new opportunities, and reduce debt.

Free enterprise Economic system associated with CAPITALISM in which private business operates with minimum state intervention. Free enterprise is self-regulating and autonomous in terms of the control and ownership of businesses.

Free lunch Allusion to a free benefit, which in the negative (“no free lunch”) carries a hidden price tag. The expression comes from the British pub tradition of offering free lunch so long as the consumer buys drinks at a hefty price.

Free market System of commerce that operates free from government interference, characterized by prices governed by supply and demand. Companies in a free market succeed or fail based on their ability to compete.

Free ride In finance, a situation in which traders or investors benefit from developments to which they do not contribute anything.

Free trade Unrestricted trade across national borders, including absence of tariffs and quotas. Free trade is guaranteed under GATT agreements, as well as regional trade agreements such as NAFTA and EFTA. The most important component of a free trade agreement is the MOST-FAVORED-NATION CLAUSE.

Freedom of contract Eligibility and right to enter into a legal contract. In the U.S. Constitution, it is called the obligation of contracts.

Freeze-out Attempt to pressure minority shareholders of a company that has been taken over to sell their stock to the new owners.

Freight absorption Pricing applied to all or part of the shipping costs as a service or bonus to customers.

Frequency marketing Strategies for marketing designed to encourage customers to make more frequent purchases, such as offering frequent-flyer miles.

Frequency, recency, amount, and category (FRAC) Four characteristics used to calibrate consumer behavior. Frequency is the time elapsed between purchases, recency is the date of the last purchase, amount is the average value of the customer’s purchase, and category refers to the product in which the customer is most interested.

Friction-free capitalism Term coined by Microsoft founder BILL GATES to denote market efficiencies introduced by innovations like the Internet, which has abolished the physical distance between seller and buyer and has provided easy access to product information.

Friedman, Milton (1912–2006) American economist, Professor of Economics at the University of Chicago, and winner of the Nobel Prize in Economic Sciences. He is best known as a conservative thinker and the father of SUPPLY-SIDE ECONOMICS. His research into consumption analysis, monetary history and theory, and stabilization policy forms the basis of supply-side economics. He was opposed to all forms of Keynesianism and promoted an alternative macroeconomic policy known as Monetarism. His most influential book was Capitalism and Freedom (1962).

Friedmanite Follower of economist MILTON FRIEDMAN, the high priest of SUPPLY-SIDE ECONOMICS, representing the conservative wing of academic economists and promoting monetary theories that emphasize manipulation of the money supply as a driver of economic activity.

Fringe benefits Additional compensation for employment beyond salary, such as health insurance; fringe benefits are not viewed as taxable income.

Front office, back office Traditional division between the parts of an organization, with front office being open to scrutiny by the public and back office being off-limits. There is more concentration of authority in the back office.

Frozen assets Assets of a government, corporation, or person seized by a government as a hostile act pending the resolution of a dispute.

FTSE 100 Index of the 100 leading shares on the London Stock Exchange, compiled by the Financial Times.

Full employment Complete labor utilization in a country in which all able-bodied persons have gainful employment.

Full-line strategy Tactic by which companies saturate the market with all kinds of variations of a particular brand so as to preempt competition. Also termed deep-line strategy.

Function Discrete activity to which a department in a company is devoted, such as advertising or legal services. Budgets are prepared by departments oriented toward functions.

Functional departmentation Policy of segregating organizational work and allocating tasks according to function. Those performing the same or similar kinds of work are grouped together based on their aptitudes and skills and placed under a common manager. Other kinds of departmentation are by numbers, time of duty, product, process or equipment, customer, or location.

Functional leader Member of a group who emerges to take on a leadership role and is accepted as such by other members.

Functional organization Form of organizational structure in which specialists carry out their functions without authority over the people outside their jurisdiction. The natural arrangement is by specialized FUNCTIONS, including a general manager, research and development, production, human resources, marketing, and finance and accounting. As firms grow, the functions become more fully developed. Finance and accounting are separated, as are sales and marketing; exports become an independent division. When multisite operations commence, they are placed under regional managers. A number of variants are introduced, such as product divisions.

Functional strategy Approach utilizing FUNCTIONS to achieve organizational goals, as a means of maximizing SYNERGY.

Fund Money managed on behalf of a client by a financial institution or to support a designated activity.

Fundamental analysis Evaluation of a security by examining all macroeconomic factors (such as the overall economic conditions) and company-specific factors (such as the financial condition and management). The most important tool of fundamental analysis is the financial statement. It uses top-down or bottom-up methods. The former will include a study of the entire market, the specific technology sector, the industry as a whole and the performance of the stock, competition, and price movements. Opposite of technical analysis.

Fundamental term Key word or phrase in a contract that defines the essential contractual obligations.

Fungible Good or product that can be replaced by another without loss of value.

Fusion In business, the melding of employee outlook with that of management, as a result of indoctrination.

Future shock Term introduced by futurist ALVIN TOFFLER to describe the disorientation caused by too rapid change, not giving people time to adapt or assimilate.

Futures contract Contract between two parties to buy or sell a specified asset for a price (known as the futures price or the strike price) with delivery and payment at a future date (the delivery date). These contracts are exchanged at a futures exchange. The buyer is known as the “long” and the seller as the “short,” reflecting their respective expectations. The assets being transacted may be commodities, bonds, stocks, or currencies as well as intangible assets such as stock indexes and interest rates.

Futures research Identification and study of alternative future scenarios to help in anticipating and planning for future developments.