G
GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
GAAS GENERALLY ACCEPTED AUDITING STANDARDS
Gain sharing Form of output-based incentive that links rewards with the measure of value added. VALUE ADDED is derived from the total profits minus the value of labor, raw materials, energy, and overhead and is considered a reliable index of performance.
Galloping inflation Rapid, out-of-control INFLATION that augurs an economic recession.
Game theory Mathematical approach to predicting the outcome in situations where participants have incomplete information about each other’s intentions. Introduced by JOHN VON NEUMANN and OSKAR MORGENSTERN, and developed by JOHN NASH, JOHN HARSANYI, and RICHARD SELTEN.
Gaming In business, the application of computer-based simulation and decision-making techniques to a business problem or transaction.
Gantt, Henry (1861–1919) American engineer and colleague of F. W. TAYLOR. Gantt was a pioneer in management consultancy and developed the GANTT CHART. He emphasized the human element in management and the role of motivation in increasing productivity.
Gantt chart Graph devised by HENRY GANTT to measure work progress along a time scale. The planned activity is shown on a horizontal line and the completion date is shown on a vertical line.
Gap In finance, the difference between interest rates on loans and interest rates on deposits. This is a measure of risk used in banking.
Gap analysis 1. In marketing, a tabulation of all known types of consumer desire for a category of goods, cross-listed with complementary features in existing products. The analysis reveals the gap between consumer expectations and their fulfillment. 2. In management, the difference between mission and realized performance, and between aspirations and quantified objectives, with the goal of bringing performance up to the level of the goals.
Garage In finance, to transfer assets and liabilities from one nation to another, with the goal of achieving lower tax liabilities.
Garbage in, garbage out (GIGO) Slang expression capturing the belief that the quality of the output will match the quality of the input.
Garden leave clause Wording in an employment contract that provides for an extended period of notice on leaving employment, during which the employee is on full salary but is not required to report to duty. This clause is invoked when an employer wants to prevent an employee from joining a rival firm or divulging trade secrets.
Gatekeeper Manager who determines what information should be disseminated and what should be kept secret or suppressed.
Gates, Bill (1955–) Cofounder of Microsoft, the world’s largest personal computer software company and the world’s richest man.
GATT GENERAL AGREEMENT ON TARIFFS AND TRADE
Gazelle In business, a fast-growing company that creates opportunities and grows by more than 20% annually.
Gazump To raise the price of or accept a higher bid in a situation where a lower sale price had been orally agreed to before a contract had been signed.
Gazunder To accept or offer a lower price before a contract is signed.
GE matrix Tool for analyzing the relative strengths of brands within a large diversified corporation. Two measures are used to score the items: (1) attractiveness of the industry or service and (2) strength of the product. Individual products are shown as pie charts of various sizes, where the diameter of the pie indicates the size of the market and the size of the slice indicates the market share. Also known as McKinsey matrix.
Gearing For a company, the ratio of funds available from ordinary shares to debentures and preference shares. A company has high gearing when the majority of its funding is derived from fixed-rate interest charges and it has low gearing when its capital is predominantly in ordinary shares. If the company does well, the ordinary shareholders share in the windfall.
Genba shugi (Japanese, “respectable shop floor”) Name for a career path in Japan, where top managers start their careers as shop-floor workers.
Gender segmentation Division of a market and its target population on the basis of gender.
General Agreement on Tariffs and Trade (GATT) Trade treaty supported by 95 world nations, with an additional 28 nations accepting its jurisdiction. Its goal is to expand world trade and provide a forum for the resolution of disputes. GATT is periodically revised in discussions called rounds.
General needs description Statement sent to vendors inviting them to submit bids to supply products a company intends to purchase, with specifications and prices.
Generalist Person with no special skills but who is proficient in all fields and can therefore function in a variety of roles. Opposite of a specialist.
Generally accepted accounting principles (GAAP) Standards and concepts of accounting that are applicable to all companies in a particular country.
Generally accepted auditing standards (GAAS) Rules and guidelines set down by the Auditing Standards Board of the American Institute of Certified Public Accountants.
Generation X Men and women born between 1963 and 1981, as constituting a particular cohort in terms of expectations and motivations. They are said to be looking for new but undefined challenges and a work-life balance in which new opportunities for learning are encouraged. See also BABY BOOMER.
Generic advertising Advertisements for a broad industry or a class of products, such as autos or wool, rather than a brand.
Generic strategy Approach to marketing products or services, using three basic elements: cost reduction, product differentiation, and focus. Introduced by MICHAEL PORTER, this approach is aimed at securing a long-term, sustainable advantage for new or existing products in new or existing markets. (1) Cost reduction should be continuous, so that the cost differential over competitors is maintained and reflects all stages of the value chain. That is, the greater the market share, the greater the cost reduction. It is a strategy that works best in stable environments. (2) Product differentiation is achieved either through marketing or through innovation. Differentiation should involve all parts of the value chain, and the markets should be able to be subdivided. This strategy is more appropriate to dynamic industry environments. (3) Focus exploits the differences in cost behavior in some segments and the special needs of buyers in those segments. Porter suggests that all three strategies should be pursued together, but they should not at the cost of the firm’s primary mission; otherwise, the company will be “stuck in the middle,” without any choices.
Gentleman’s agreement Verbal contract that depends on the honor of those involved for its implementation.
Geodemographic segmentation Market segmentation that groups consumers according to demographic variables, such as age, gender, or age, and identifies them by postal code. The goal is to highlight affluent neighborhoods where people are likely to have solid buying habits.
Geographical departmentation Allocation of tasks and organization of work according to location. See FUNCTIONAL DEPARTMENTATION.
Gesellschaft mit beschrankter hafting (GM BH) In Germany, a company with limited liability.
Ghoshal, Sumantra (1948–2004) Management guru who formulated the Three P’s—purpose, process, and people—to replace the THREE SS (strategy, structure, and systems) as a new model for transnational enterprise.
Giffen, Robert (1837–1910) Scottish statistician and economist. He gained a reputation as a financial journalist and later became controller-general of the Board of Trade. His principal publications include American Railways as Investments (1873), Essays on Finance (1884), The Progress of the Working Classes (1884), and The Growth of Capital (1890).
Giffen paradox Observation of Sir ROBERT GIFFEN that consumers buy fewer goods when prices fall and more goods when prices rise.
Gilbreth, Frank (1868–1924) American management scientist who pioneered the time-and-motion study. Along with his wife, LILLIAN GILBRETH, he invented the SIMO CHART and THERBLIG.
Gilbreth, Lillian (1878–1972) Wife of Frank Gilbreth and his partner in many of his studies. Her book Psychology of Management (1914) was one of the earliest dealing with industrial psychology. As Professor of Management at Purdue University, she wrote about worker fatigue, scientific management as applied to home economics, and disabled workers.
Gilt-edged bond (g-bond) Bond that is attractive to investors because of the prestige of the issuing company.
Gilt-edged security High-grade bonds issued by a government or a corporation. They are highly rated investments with very low risk.
Ginnie Mae Colloquial name for the Government National Mortgage Association, which is the principal government-backed mortgage provider and guarantor in the United States.
Giro Method of money transfer in Europe, used for clearing and settling small payments.
Give-back Agreement by which employers persuade workers and unions to take a cut in wages and benefits in times of economic downturn.
Glacier studies Research conducted at the Glacier Metal Company, in London, by management thinkers ELLIOTT JAQUES and FREDERICK EMORY from 1948 to 1965. Their goal was to investigate the development of group relations and changes in employee roles and responsibilities. Out of the study came a methodology called working through, which examined social and personal factors in disputes. It also was discussed in Jaques’s book The Changing Culture of a Factory (1951), where he introduced the concept of TIME SPAN OF DISCRETION, which stated that all jobs have some level of responsibility that requires discretion and judgment.
Glass ceiling General term for the invisible barriers that hinder career advancement for women.
Glass-Steagall Act 1933 legislation that separated commercial banking from investment banking in the United States and that established the FEDERAL DEPOSIT INSURANCE CORPORATION. The legislation was introduced as part of the New Deal to curb the speculation that led to the Great Depression. The act was repealed in 1999.
Global branding Globalization of trademarks and trade names so as to be sensitive to regional differences and national pride. Generally, neutral names are preferred to those with cultural ties to particular ethnicities.
Global brands Consumer products that have established a near-universal presence, like Coca-Cola, Nike, McDonald’s, and Levi’s. The nomenclature and logos of these global brands must have universal applicability.
Global bond Bond that is issued and traded in a country other than the one in which it is issued.
Global custody Safekeeping of securities by banks on behalf of clients.
Global firm Multinational company that operates in several countries, with its headquarters in one country.
Global information system Database that captures, stores, updates, manipulates, analyzes, and displays a whole range of information on a particular field of activity.
Global localization Strategy adopted by global corporations to have a global reach but also be sensitive to local needs. Also termed glocalization.
Global village Term coined by communications thinker HERBERT MARSHALL MCLUHAN to describe the worldwide cultural convergence, propelled by a borderless world communications system.
Globalization 1. Removal or breakdown of national barriers to trade, commerce, and industry, with business activities of all kinds flowing from new technologies, instant communications, deregulation, transnational investments, and better modes of travel and transportation. 2. Internationalization of consumer products, tastes, and skills as a result of broadened educational systems and the growth of English as lingua franca.
Globalization has rendered businesses less reliant on national markets and has given them considerable leeway in choosing industrial sites as well as greater access to cheap labor markets. They are able to offset losses in one country with profits in another country, while also avoiding punitive taxes. On the plus side, globalization has introduced ethnic diversity into management and staffing, and has encouraged devolution of power to local units outside the home country. Globalization follows six patterns: (1) licensing; (2) operation as a domestic corporation with exports through agents or distributors; (3) adoption of a multicountry strategy; (4) become a low-cost supplier to buyers around the world; (5) adoption of a global differentiation strategy to create products under a single brand; and (6) establishment of a strategic niche in important countries or regions. A result of globalization is the increasing homogenization of demand and supply, which can be exploited through radical economies of scale. Trading blocs such as the EUROPEAN UNION and NAFTA also promote incremental globalization.
GMAT GRADUATE MANAGEMENT ADMISSION TEST
GmbH Gesellschaft mit beschrankter Haftung, the abbreviation in Germany for a limited company.
Gnomes of Zurich Term coined by British politician Gordon Brown to characterize Swiss bankers, who have considerable financial clout and who use their laws to protect the identities of depositors who keep vast amounts of illegal money in Swiss bank accounts.
Go private Decision of a company to remove itself from a stock exchange and buy back all outstanding shares.
Go public Decision of a company to sell shares to the public, as listed on a stock exchange.
Gordon, W. J. See SYNECTICS.
Go slow Form of industrial action, often considered illegal, in which workers deliberately reduce their output by alternating periods of physical inactivity.
Goal convergence State of harmony in a business organization, achieved when top executives are in agreement on the goal and direction of the company and there is little or no power struggle, internal strife, or other friction.
Goal divergence State of disharmony in a business organization that occurs when there is open disagreement among executives on the fundamentals, such as the goal and direction of the company, and progress is hampered by power struggles, internal strife, and other friction.
Goal-setting Determining individual or collective performance targets for employees, based on four criteria: (1) challenging but realistic; (2) specific, not vague; (3) measurable; and (4) inclusive of employees. The three most common goal-setting procedures are top-down, bottom-up, and interactive.
Godfather offer Tender offer from a takeover firm that is so high that the management of the target company is compelled to recommend its acceptance.
Goffee, Robert Emeritus Professor of Organizational Behavior at the London Business School. Author of Why Should Anyone be Led by You?
Gogo fund Slang term for a mutual fund aimed at high returns at high risk.
Going concern In accounting, description of a sound enterprise that will continue to operate for the foreseeable future and therefore all assets are shown at cost and not at their breakup value.
Going-rate pricing Method of pricing goods that is based on prices of competing products rather than on SUPPLY AND DEMAND.
Gold standard 1. Monetary system or currency based on the price of gold held in reserve by a country. Almost all countries of the world are now off the gold standard. 2. Ultimate standard of excellence.
Golden handcuffs Financial incentives offered to key executives to persuade them to remain with the firm. Also GOLDEN PARACHUTE.
Golden handshake Compensation for loss of office, including severance pay, made to an executive, especially one who is forced to retire before the expiry of a service contract.
Golden hello Payment made to induce a person to accept employment and sever connections with a prior firm.
Golden parachute Financial benefits promised to executives in the event their employment is terminated, usually as a result of a merger.
Goldilocks economy Ideal economic state, with low inflation, steady growth, and high employment. Term is allusion to the children’s story Goldilocks and the Three Bears, in which the porridge is not too hot nor too cold, but just right.
Goldratt, Eliyahu Israeli management guru who formulated his THEORY OF CONSTRAINTS.
Goodhart’s law Principle developed by economist Charles Goodhart that the validity of an economic law is in inverse relationship to its general acceptance. Thus, the value of a specific variable as an indicator of economic activity decreases when it becomes a target of study. Formerly applied to when the money supply is used as a measure of economic growth.
Goodwill Intangible asset built up by a business over the years, reflecting customers’ trust and confidence in the products and the company’s reputation for fair dealings.
Gopertz curve Name for the curved line on a graph tracing the actual or potential sales of a new product over time, showing discrete stages of growth, plateau, and decline.
Gozinto chart Graphic illustration of how complete assemblies are built and the sequence of the assembly.
Grade creep Tendency in a corporate hierarchy with grades distinguishing levels of positions and functions to move those classifications upward to allow for increases in pay.
Graduate Management Admission Test (GMAT) Standardized test used by business schools to determine admission to graduate business programs.
Gramm-Leach-Billey Act 1999 Financial Services Modernization Act, which removed restrictions on banks entering the securities and investment markets that had been imposed by the GLASS-STEAGALL ACT of 1933. This act empowered the banks to set up holding companies to supply banking, insurance, and investment services.
Grandfathered in Transactions or activities permissible to those already engaged, or completed in the past, that are now prohibited to newcomers.
Grapevine Word-of-mouth form of communication, often characterized by rumor and unconfirmed reports.
Graphology Study of handwriting as an indicator of character, personality, work habits, and performance.
Graveyard market An extreme form of bear market ruled by fear on the part of both buyers and sellers.
Graveyard shift Nighttime work shift, usually from midnight to dawn.
Great man theory In business, the belief that every corporation owes its existence or preeminence to a single leader, who was instrumental in its success.
Green currencies Currencies of members of the EUROPEAN UNION using artificial rates of exchange for the purpose of a common agricultural policy, which serves as insurance against wide variations in rates.
Green marketing Sales of ecologically safe, recyclable, and biodegradable products, known as green products, targeting environmentally friendly consumers.
Greenmailing Purchase of a large bloc of shares in a company to be sold back to the company at a premium over the market value in return for a promise not to launch a takeover bid.
Greenshoe Option given by an issuer of securities to an underwriter, guaranteeing the latter’s right to buy and sell extra shares if there is a high initial demand.
Greenwash In public relations, accentuating the pro-environment policies and programs of a company to gain the accolade of an environmentally concerned community.
Gray-collar Worker who is neither BLUE COLLAR nor WHITE COLLAR.
Gray economy Informal economy comprising unpaid workers whose profits are not reflected in the national accounts. Most home-care workers are in the gray economy.
Gray knight In takeover battles, this is a bidder whose intentions are undeclared, unlike the WHITE KNIGHT, whose advances are welcomed and the BLACK KNIGHT, who is considered hostile.
Gray market 1. Legal market for goods in short supply. 2. Market for goods and services for senior citizens.
Gray wave Company with good long-term prospects but unlikely to be profitable in the near future.
Green card In the United States, a card issued to resident aliens granting them permanent resident status, thereby eligible to work and to apply for citizenship.
Gresham’s law Principle that bad money drives out the good, developed by Sir Thomas Gresham, a financier.
Gross domestic product (GDP) Leading economic indicator, showing the total value of business activity—production, investment, services, and property—within a nation.
Gross national disproduct (GND) Total of all social costs and reductions in existing benefits incurred in producing the GROSS NATIONAL PRODUCT, such as pollution.
Gross national product (GNP) Leading economic indicator that adds the GROSS DOMESTIC PRODUCT to the total value of national income emanating from outside the nation.
Group In business, two or more companies in which one company (the parent) holds more than 50% of the shares of the other (the SUBSIDIARY).
Group decision making Participatory process in which several individuals act collectively to arrive at decisions, evaluate options, and select the appropriate course of action.
Group discussion In marketing, a meeting of between six and eight respondents who discuss a marketing problem under the guidance of an interviewer.
Group dynamics Study of organizational behavior within groups and the interactions of individuals within groups, especially as it applies to corporate functioning. It studies how groups form based on common interests, as well as the types of groups—such as task groups, status groups, age groups, gender groups, cultural and ethnic groups—and group cohesiveness.
Group norm Behavior expected of members of a group working as a team, especially in terms of productivity.
Group role Set of behavior patterns expected by members of a professional corps, partly in response to the expectations of others.
Group technology Arrangement of machines in batch production in which all machines that make a particular product are grouped together.
Group of 20 Major economies of the world represented by the EUROPEAN UNION, China, India, Brazil, Mexico, Australia, the United States, Canada, and others. They account for 80% of the GGP (gross global product) 80% of the world trade, and two-thirds of the global population. They meet annually.
Groupism Japanese business philosophy that puts the interests of the group above those of the individuals who constitute the group.
Groupo In Mexico, a family-owned conglomerate.
Groupthink Tendency of members in a group to adopt homogeneous views and opinions, partly in deference to peer pressure and partly in an effort to get along with others.
Growth In business, relating to or contributing to an increase or expansion, as in growth curve, growth rate, and growth stocks.
Guanxi In China, a relationship in a business and professional context, and a network that develops through such relationships.
Guaranteed annual wage Plan whereby an employer agrees to provide the employees a specified minimum amount of employment or income yearly.
Guerrilla marketing Surreptitious marketing designed to ruin a competitor and reduce its market share.
Guest worker Foreigner allowed into a country on a temporary visa, permitted to join the workforce as a way of meeting labor shortages.
GUI Government-university-industry partnership.
Gun jumping Insider trading.
Guru Expert in some particular area, consulted as a problem solver; similar to a pundit.