Glossary

absolute advantage the ability to produce more goods using fewer resources than other providers.

accounting process of measuring, interpreting, and communicating financial information to enable people inside and outside the firm to make informed decisions.

accounting cycle set of activities involved in converting information and individual transactions into financial statements.

accounting equation formula that states that assets must equal liabilities plus owners' equity.

accrual accounting accounting method that records revenues and expenses when they occur, not necessarily when cash actually changes hands.

acquisition agreement in which one firm purchases another.

advertising paid nonpersonal communication, usually targeted at large numbers of potential buyers.

affective conflict disagreement that focuses on individuals or personal issues.

affinity program marketing effort sponsored by an organization that solicits involvement by individuals who share common interests and activities.

angel investor a wealthy individual who invests money directly in new ventures in exchange for equity.

application service provider (ASP) outside supplier that provides both the computers and the application support for managing an information system.

asset anything of value owned or leased by a business.

balance of payments overall flow of money into or out of a country.

balance of trade difference between a nation's exports and imports.

balance sheet statement of a firm's financial position on a particular date.

balanced budget situation in which total revenues raised by taxes equal the total proposed spending for the year.

benchmarking determining how well other companies perform business functions or tasks.

board of directors governing body of a corporation.

botnet a network of PCs that have been infected with one or more data-stealing viruses.

brand name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors’ offerings.

brand equity added value that a respected and successful name gives to a product.

brand name part of the brand consisting of words or letters included in a name used to identify and distinguish the firm's offerings from those of competitors.

branding process of creating an identity in consumers' minds for a good, service, or company; a major marketing tool in contemporary business.

breakeven analysis pricing technique used to determine the minimum sales volume a product must generate at a certain price level to cover all costs.

budget organization's plan for how it will raise and spend money during a given period of time; a planning and controlling tool that reflects the firm's expected sales revenues, operating expenses, and cash receipts and outlays.

budget deficit situation in which the government spends more than the amount of money it raises through taxes.

budget surplus excess funding that occurs when government spends less than the amount of funds raised through taxes and fees.

business all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.

business (B2B) product good or service purchased to be used, either directly or indirectly, in the production of other goods for resale.

business ethics standards of conduct and moral values governing actions and decisions in the work environment.

business incubator a local program designed to provide low-cost shared business facilities to small start-up ventures.

business intelligence activities and technologies for gathering, storing, and analyzing data to make better competitive decisions.

business plan a written document that provides an orderly statement of a company's objectives, methods, and standards.

C corporation a form of legal organization with assets and liabilities separate from those of its owner(s).

capital an organization's technology, tools, information, and physical facilities.

capital structure mix of a firm's debt and equity capital.

capitalism economic system that rewards firms for their ability to perceive and serve the needs and demands of consumers; also called the private enterprise system.

cause advertising form of institutional advertising that promotes a specific viewpoint on a public issue as a way to influence public opinion and the legislative process.

Central America–Dominican Republic Free Trade Agreement (CAFTA-DR) agreement among the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua to reduce tariffs and trade restrictions.

chief information officer (CIO) executive responsible for managing a firm's information system and related computer technologies.

classic entrepreneur a person who identifies a business opportunity and allocates available resources to tap that market.

cloud computing a type of information delivery under which powerful servers store applications software and databases for users to access on the Web.

code of conduct formal statement that defines how an organization expects its employees to resolve ethical questions.

cognitive conflict disagreement that focuses on problem-and issue-related differences of opinion.

collective bargaining process of negotiation between management and union representatives.

common stock shares that give owners voting rights but only residual claims to the firm's assets and income distributions; basic form of corporate ownership.

communication the meaningful exchange of information through messages.

communism economic system in which all property would be shared equally by the people of a community under the direction of a strong central government.

comparative advantage the ability to produce one good at a relatively lower opportunity cost than other goods.

compensation amount employees are paid in money and benefits.

competitive differentiation unique combination of organizational abilities, products, and approaches that sets a company apart from competitors in the minds of customers.

computer-aided design (CAD) process that allows engineers to design components as well as entire products on computer screens faster and with fewer mistakes than they could achieve by working with traditional drafting systems.

computer-aided manufacturing (CAM) computer tools to analyze CAD output and enable a manufacturer to analyze the steps that a machine must take to produce a needed product or part.

computer-based information system information system that relies on computer and related technologies to store information electronically in an organized, accessible manner.

conflict situation in which the needs of a person or group do not match those of another, and attempts may be made to block the opposing side's intentions or goals.

conflict of interest occurs when a businessperson is faced with a situation in which an action benefiting one person or group has the potential to harm another.

conglomerate merger agreement that combines unrelated firms, usually with the goal of diversification, spurring sales growth, or spending a cash surplus in order to avoid a takeover attempt.

consumer (B2C) product good or service that is purchased by end users.

consumer behavior actions of ultimate consumers directly involved in obtaining, consuming, and disposing of products and the decision processes that precede and follow these actions.

consumer orientation business philosophy that focuses first on determining unmet consumer wants and needs and then designing products to satisfy those needs.

Consumer Price Index (CPI) measurement of the monthly average change in prices of goods and services.

consumerism public demand that a business consider the wants and needs of its customers in making decisions.

controlling function of evaluating an organization's performance against its objectives.

core inflation rate inflation rate of an economy after energy and food prices are removed.

corporate culture an organization's system of principles, beliefs, and values.

corporate philanthropy an organization's effort to contribute to the communities in which it earns profits through cash contributions, donations of equipment and products, and supporting the volunteer efforts of company employees.

cost-based pricing strategy in which an organization calculates total costs per unit and then adds markups to cover overhead costs and generate profits.

creative selling persuasive type of promotional presentation.

creativity capacity to develop novel solutions to perceived organizational problems.

critical thinking ability to analyze and assess information to pinpoint problems or opportunities.

cross-functional team a working group of members from different functions, such as production, marketing, and finance.

crowd funding a source of financial support involving groups of individuals, often connected through the Internet, that pool small sums of money to support new businesses as well as philanthropic causes and artistic endeavors.

cyclical unemployment people who are out of work due to contraction in the economy.

data raw facts and figures that may or may not be relevant to a business decision.

data mining the task of using computer-based technology to evaluate data in a database and identify useful trends.

database centralized integrated collection of data resources.

debt financing borrowed funds that entrepreneurs must repay.

decision making process of recognizing a problem or opportunity, evaluating alternative solutions, selecting and implementing an alternative, and assessing the results.

decision support system (DSS) system that provides direct support to businesspeople during the decision-making process.

deflation opposite of inflation; occurs when prices continue to fall.

delegation managerial process of assigning work to employees.

demand willingness and ability of buyers to purchase goods and services at different prices.

demand curve graph of the amount of a product that buyers will purchase at different prices.

demographic segmentation distinguishes markets on the basis of various demographic or socioeconomic characteristics.

departmentalization process of dividing work activities into units within the organization.

depression prolonged recession or one that causes a significant drop in GDP.

devaluation drop in a currency's value relative to other currencies or to a fixed standard.

directing guiding and motivating employees to accomplish organizational objectives.

discrimination biased treatment of a job candidate or employee.

distribution deals with the marketing activities and institutions involved in getting the right good or service to the firm's customers.

distribution channels path that products—and legal ownership of them—follow from producer to consumers or business user.

diversity in a workforce, the blending of individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities.

divestiture sale of assets by a firm.

double-entry bookkeeping process by which accounting transactions are recorded; each transaction must have an offsetting transaction.

downsizing process of reducing the number of employees within a firm by eliminating jobs.

dumping selling products abroad at prices below production costs or below typical prices in the home market to capture market share from domestic competitors.

economics social science that analyzes the choices individuals, groups, and governments make in allocating scarce resources.

embargo total ban on importing specific products or a total halt to trading with a particular country.

employee benefits additional compensation such as vacation, retirement plans, profit-sharing, health insurance, gym memberships, child and elder care, and tuition reimbursement, offered by the employer.

employee ownership business arrangement in which workers buy shares of stock in the company that employs them.

employee separation broad term covering the loss of an employee for any reason, voluntary or involuntary.

empowerment in an organization, employees' shared authority, responsibility, and decision making with their manager; giving employees authority and responsibility to make decisions about their work.

entrepreneur a person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business.

entrepreneurship ability to see an opportunity and take the risks inherent in creating and operating a business.

Equal Employment Opportunity Commission (EEOC) government commission created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin in any personnel action.

equilibrium price prevailing market price at which you can buy an item.

equity financing funds invested in new ventures in exchange for part ownership.

equity theory an individual's perception of fair and equitable treatment.

European Union (EU) 28-nation European economic alliance.

everyday low pricing (EDLP) strategy devoted to maintaining continuous low prices rather than relying on short-term price-cutting tactics such as cents-off coupons, rebates, and special sales.

exchange process activity in which two or more parties give something of value to each other to satisfy perceived needs.

exchange rate the rate at which a nation's currency can be exchanged for the currencies of other nations.

executive support system (ESS) system that allows senior executives to access the firm's primary databases, often by touching the computer screen, pointing and clicking a mouse, or using voice recognition.

expansionary monetary policy government actions to increase the money supply in an effort to cut the cost of borrowing, which encourages business decision makers to make new investments, in turn stimulating employment and economic growth.

expert system computer program that imitates human thinking through complicated sets of “if-then” rules.

export domestically produced good or service sold in markets in other countries.

external communication meaningful exchange of information through messages transmitted between an organization and its major audiences.

factors of production four basic inputs: natural resources, capital, human resources, and entrepreneurship.

family leave unpaid leave of up to 12 weeks annually for any employee for the birth or adoption of a child; to become a foster parent; or to care for a seriously ill relative, spouse, or self in the event of a serious health condition or injury; prescribed for employers with 50 or more employees by the Family and Medical Leave Act of 1993.

Federal Deposit Insurance Corporation (FDIC) federal agency that insures deposits at commercial and savings banks.

Federal Reserve System (Fed) the central bank of the United States.

finance planning, obtaining, and managing a company's funds to accomplish its objectives as effectively and efficiently as possible.

Financial Accounting Standards Board (FASB) an organization responsible for evaluating, setting, or modifying GAAP in the United States.

financial institutions intermediary between savers and borrowers, collecting funds from savers and then lending the funds to individuals, businesses, and governments.

financial managers executives who develop and implement the firm's financial plan and determine the most appropriate sources and uses of funds.

financial markets market in which securities are issued and traded.

financial plan document that specifies the funds needed by a firm for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds.

financial system process by which money flows from savers to users.

firewall limit data transfers to certain locations and log system use so that managers can identify attempts to log on with invalid passwords and other threats to a system's security.

fiscal policy government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general standard of living, and encourage economic growth.

Foreign Corrupt Practices Act federal law that prohibits U.S. citizens and companies from bribing foreign officials in order to win or continue business.

franchisee individual or business firm purchasing a franchise.

franchising contractual business arrangement between a manufacturer or other supplier and a dealer, such as a restaurant operator or retailer.

franchisor firm whose products are sold to customers by the franchisee.

frequency marketing marketing initiative that rewards frequent purchases with cash, rebates, merchandise, or other premiums.

frictional unemployment experienced by members of the workforce who are temporarily not working but are looking for jobs.

General Agreement on Tariffs and Trade (GATT) international trade accord that substantially reduced worldwide tariffs and other trade barriers.

generally accepted accounting principles (GAAP) guidelines on the conventions, rules, and procedures for determining acceptable accounting and financial reporting practices.

geographic segmentation dividing a market into homogeneous groups on the basis of their location.

goal-setting theory says that people will be motivated to the extent to which they accept specific, challenging goals and receive feedback that indicates their progress toward goal achievement.

grapevine internal information channel that transmits information from unofficial sources.

gross domestic product (GDP) sum of all goods and services produced within a country's boundaries.

hardware all tangible elements of a computer system.

horizontal merger agreement that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines.

human resource management the function of attracting, developing, and retaining employees who can perform the activities necessary to accomplish organizational objectives.

human resources in an organization, anyone who works, providing either the physical labor or intellectual inputs.

hyperinflation economic situation characterized by soaring prices.

import foreign-made product purchased by domestic consumers.

income statement financial record summarizing a firm's financial performance in terms of revenues, expenses, and profits over a given time period, such as a quarter or a year.

inflation economic situation characterized by rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, component parts, human resources, and other factors of production.

information knowledge gained from processing data.

information system organized method for collecting, storing, and communicating past, present, and projected information on internal operations and external intelligence.

insider trading use of material nonpublic information about a company to make investment profits.

institutional advertising involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities.

integrated marketing communications (IMC) coordination of all promotional activities—media advertising, direct mail, personal selling, sales promotion, and public relations—to produce a unified, customer-focused promotional strategy.

integrity adhering to deeply felt ethical principles in business situations.

International Accounting Standards Board (IASB) organization established in 1973 to promote worldwide consistency in financial reporting practices.

International Financial Reporting Standards (IFRS) standards and interpretations adopted by the IASB.

International Monetary Fund (IMF) organization created to promote trade, eliminate barriers, and make short-term loans to member nations that are unable to meet their budgets.

intranet computer network that is similar to the Internet but limits access to authorized users.

intrapreneurship process of promoting innovation within the structure of an existing organization.

inventory control the act of balancing the need to keep stock on hand to meet demand against the costs of carrying inventory.

job requirements the minimum skills, education, and experience that a candidate must have to be considered for the position.

joint venture partnership between companies formed for a specific undertaking.

just-in-time (JIT) system broad management philosophy that reaches beyond the narrow activity of inventory control to influence the entire system of production and operations management.

labor union group of workers who have banded together to achieve common goals in the areas of wages, hours, and working conditions.

leadership ability to direct or inspire people to attain certain goals.

leverage increasing the rate of return on funds invested by borrowing funds.

leveraged buyout (LBO) transaction in which public shareholders are bought out and the firm reverts to private status.

liability anything owed to creditors—the claims of a firm's creditors.

lifetime value of a customer revenues and intangible benefits (referrals and customer feedback) from a customer over the life of the relationship, minus the amount the company must spend to acquire and serve that customer.

limited-liability company (LLC) a business entity that secures the corporate advantage of limited liability while avoiding the double taxation characteristic of a traditional corporation.

listening receiving a message and interpreting its intended meaning by grasping the facts and feelings it conveys.

local area network (LAN) computer network that connects machines within limited areas, such as a building or several nearby buildings.

logistics process of coordinating the flow of goods, services, and information among members of the supply chain.

macroeconomics study of a nation's overall economic issues, such as how an economy uses its resources and how national governmental policies affect people's standard of living.

make, buy, or lease decision choosing whether to manufacture a product or component in-house, purchase it from an outside supplier, or lease it.

malware any malicious software program designed to infect computer systems.

management process of achieving organizational objectives through people and other resources.

management by objectives systematic approach that allows managers to focus on attainable goals and to achieve the best results based on the organization's resources.

management information system (MIS) information system designed to produce reports for managers and other personnel.

management support system information system designed to provide support for effective decision making.

market segmentation process of dividing a total market into several relatively homogeneous groups.

marketing organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

marketing concept companywide consumer orientation to promote long-run success.

marketing mix blending of the four elements of marketing strategy—product, distribution, promotion, and pricing—to fit the needs and preferences of a specific target market.

marketing research collecting and evaluating information to help marketers make effective decisions.

Maslow's hierarchy of needs theory of motivation proposed by Abraham Maslow. According to the theory, people have five levels of needs that they seek to satisfy: physiological, safety, social, esteem, and self-actualization.

materials requirement planning (MRP) a computer-based production planning system that ensures a firm has all the parts and materials it needs to produce its output at the right time and place and in the right amounts.

merger agreement in which two or more firms combine to form one company.

microeconomics study of small economic units, such as individual consumers, families, and businesses.

microloan small-business loan often used to buy equipment or operate a business.

mission statement written explanation of an organization's business intentions and aims.

missionary selling indirect form of selling in which the representative promotes goodwill for a company or provides technical or operational assistance to the customer.

mixed market economy economic system that mixes both private enterprise systems and planned economies.

monetary policy government actions to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans.

monopolistic competition market structure in which large numbers of buyers and sellers exchange heterogeneous products so each participant has some control over price.

monopoly market situation in which a single seller dominates trade of a good or service for which buyers can find no close substitutes.

multinational corporation firm with significant operations and marketing activities outside its home country.

national debt money owed by government to individuals, businesses, and government agencies who purchase Treasury bills, Treasury notes, and Treasury bonds sold to cover expenditures.

natural resources all production inputs that are useful in their natural states, including agricultural land, building sites, forests, and mineral deposits.

nearshoring outsourcing production or services to locations near a firm's home base.

North American Free Trade Agreement (NAFTA) agreement among the United States, Canada, and Mexico to break down tariffs and trade restrictions.

not-for-profit corporation organization whose goals do not include pursuing a profit.

not-for-profit organization businesslike establishment that has primary objectives other than returning profits to owners.

objective quantitative (measurable) outcome by which managers define the organization's desired performance in such areas as new-product development, sales, customer service, growth, environmental and social responsibility, and employee satisfaction.

offshoring relocation of business processes to lower-cost locations overseas.

oligopoly market situation in which relatively few sellers compete and high start-up costs serve as barriers to new competitors.

on-demand computing an organization's rental of software time from application providers, paying only for software usage.

onshoring returning production to its original manufacturing location because of changes in costs or processes.

operational support system information system designed to produce a variety of information on an organization's activities for both internal and external users.

OPM money an entrepreneur raises from others to help start or expand a business.

opportunity cost the highest valued alternative forgone in the pursuit of an activity.

order processing form of selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders.

organization structured group of people working together to achieve common goals.

organizing process of blending human and material resources through a formal structure of tasks and authority: arranging work, dividing tasks among employees, and coordinating them to ensure implementation of plans and accomplishment of objectives.

outsourcing using outside vendors to produce goods or fulfill services and functions previously handled in-house or in-country; transferring jobs from inside a firm to outside the firm.

owners' equity the owner's initial investment in the business plus profits that were not paid out to owners over time in the form of cash dividends.

partnership association of two or more persons who operate a business as co-owners by voluntary legal agreement.

penetration pricing strategy that sets a low price to enter competitive markets.

performance appraisal evaluation of and feedback on an employee's job performance.

personal selling a direct person-to-person promotional presentation to a potential buyer.

physical distribution actual movement of products from producer to consumers or business users.

planned economy economic system in which government controls determine business ownership, profits, and resource allocation to accomplish government goals rather than those set by individual firms.

planning process of anticipating future events and conditions and determining courses of action for achieving organizational objectives.

point-of-purchase (POP) advertising displays or demonstrations that promote products when and where consumers buy them, such as in retail stores.

positioning the act of establishing a product in the minds of customers by communicating meaningful distinctions about the attributes, price, quality, or use of a good or service.

preferred stock shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock.

prestige pricing strategies that establish relatively high prices to develop and maintain an image of quality and exclusiveness.

price the exchange value of a good or service.

primary markets financial market in which firms and governments issue securities and sell them initially to the general public.

private enterprise system economic system that rewards firms for their ability to identify and serve the needs and demands of customers.

private property most basic freedom under the private enterprise system; the right to own, use, buy, sell, and bequeath land, buildings, machinery, equipment, patents, individual possessions, and various intangible kinds of property.

privatization conversion of government-owned and -operated companies into privately held businesses.

problem-solving team temporary combination of workers who gather to solve a specific problem and then disband.

process control system operational support system designed to monitor and control physical processes.

product bundle of physical, service, and symbolic characteristics designed to satisfy consumer wants.

product advertising messages designed to sell a particular good or service.

product liability the responsibility of manufacturers for injuries and damages caused by their products.

product life cycle four basic stages—introduction, growth, maturity, and decline—through which a successful product progresses.

product line group of related products marked by physical similarities or intended for a similar market.

product mix the assortment of product lines and individual goods and services that a firm offers to consumers and business users.

product placement form of promotion in which marketers pay placement fees to have their products showcased in various media, ranging from newspapers and magazines to television and movies.

production use of resources, such as workers and machinery, to convert materials into finished goods and services.

production and operations management overseeing the production process by managing people and machinery in converting materials and resources into finished goods and services.

production control creates a well-defined set of procedures for coordinating people, materials, and machinery to provide maximum production efficiency.

productivity relationship between the goods and services produced in a nation each year and the inputs needed to produce them.

product-related segmentation dividing consumer markets into groups based on buyers' relationships to the good or service.

profits rewards earned by businesspeople who take the risks involved in blending people, technology, and information to create and market want-satisfying goods and services.

promotion informing, persuading, and influencing a purchase decision.

promotional mix combination of personal and nonpersonal selling activities designed to meet the needs of a firm's target customers.

psychographic segmentation dividing consumer markets into groups with similar psychological characteristics, values, and lifestyles.

public accountant accountant who provides accounting services to individuals or business firms for a fee.

public relations organization's communications and relationships with its various public audiences.

publicity nonpersonal stimulation of demand for a good, service, place, idea, event, person, or organization by unpaid placement of information in print or broadcast media.

pulling strategy promoting a product by generating consumer demand for it, primarily through advertising and sales promotion appeals.

pure competition market structure in which large numbers of buyers and sellers exchange homogeneous products and no single participant can significantly influence price.

pushing strategy personal selling to market an item to wholesalers and retailers in a company's distribution channels.

quality good or service that is free of deficiencies.

quality control involves measuring output against established quality standards.

quota limit set on the amounts of particular products that countries can import during specified time periods.

recession cyclical economic contraction that lasts for six months or longer.

recycling reprocessing of used materials for reuse.

regulated monopoly market situation in which local, state, or federal government grants exclusive rights in a certain market to a single firm.

relationship era business era in which firms seek ways to actively nurture customer loyalty by carefully managing their interactions with buyers.

relationship marketing developing and maintaining longterm, cost-effective exchange relationships with partners.

restrictive monetary policy government actions to reduce the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth.

retailer distribution channel members that sell goods and services to individuals for their own use rather than for resale.

risk-return trade-off process of maximizing the wealth of a firm's shareholders by striking the optimal balance between risk and return.

S corporation a form of business organization in which the entity does not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes.

salary pay calculated on a periodic basis, such as weekly or monthly.

sales promotion activities that support advertising and personal selling.

Sarbanes-Oxley Act of 2002 federal legislation designed to deter and punish corporate and accounting fraud and corruption and to protect the interests of workers and shareholders through enhanced financial disclosures, criminal penalties on CEOs and CFOs who defraud investors, safeguards for whistle-blowers, and establishment of a new regulatory body for public accounting firms.

secondary market collection of financial markets in which previously issued securities are traded among investors.

securities financial instruments that represent obligations on the part of the issuers to provide the purchasers with expected stated returns on the funds invested or loaned.

seed capital initial funding used to launch a company.

self-managed team work group with authority to decide how its members complete their daily tasks.

serial entrepreneur person who starts one business, runs it, and then starts and runs additional businesses in succession.

server a dedicated computer that provides services to other computers on a network.

sexism discrimination against members of either sex, but primarily affecting women.

sexual harassment unwelcome and inappropriate actions of a sexual nature in the workplace.

skimming pricing strategy that sets an intentionally high price relative to the prices of competing products.

skunkworks project initiated by an employee who conceives an idea, convinces top management of its potential, and then recruits human and other resources from within the company to the idea into a commercial project.

small business an independent entity with fewer than 500 employees that is not dominant in its market.

Small Business Administration (SBA) principal government agency concerned with helping small U.S. firms.

social entrepreneur a person who recognizes societal problems and uses business principles to develop innovative solutions.

social responsibility management's acceptance of the role that ethics plays in their business and their obligation to consider consumer satisfaction, and societal well-being of equal value to profit in evaluating the firm's performance.

socialism economic system characterized by government ownership and operation of major industries such as communications.

software all the programs, routines, and computer languages that control a computer and tell it how to operate.

sole proprietorship business ownership in which there is no legal distinction between the sole proprietor's status as an individual and his or her status as a business owner.

spyware software that secretly gathers user information through the user's Internet connection without his or her knowledge, usually for advertising purposes.

stakeholders customers, investors, employees, and public affected by or with an interest in a company.

statement of cash flows statement showing the sources and uses of cash during a period of time.

statement of owners' equity record of the change in owners' equity from the end of one fiscal period to the end of the next.

stock markets (exchanges) market in which shares of stock are bought and sold by investors.

stockholder an owner of a corporation due to his or her purchase of stock in the corporation.

structural unemployment people who remain unemployed for long periods of time, often with little hope of finding a new job like their old one.

subcontracting international agreement that involves hiring local companies to produce, distribute, or sell goods or services in a specific country or geographical region.

supply amount of goods and services for sale at different prices.

supply chain complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final consumers.

supply curve graph that shows the relationship between different prices and the quantities that sellers will offer for sale, regardless of demand.

SWOT analysis SWOT is an acronym for strengths, weaknesses, opportunities, and threats. By systematically evaluating all four of these factors, a firm can then develop the best strategies for gaining a competitive advantage.

target market group of people toward whom an organization markets its goods, services, or ideas with a strategy designed to satisfy their specific needs and preferences.

tariff tax, surcharge, or duty on foreign products.

team group of people with certain skills who are committed to a common purpose, approach, and set of performance goals.

team cohesiveness extent to which team members feel attracted to the team and motivated to remain part of it.

team norm standard of conduct shared by team members that guides their behavior.

telemarketing personal selling conducted entirely by telephone, which provides a firm's marketers with a high return on their expenditures, an immediate response, and an opportunity for personalized two-way conversation.

test marketing introduction of a new product supported by a complete marketing campaign to a selected city or TV coverage area.

trade deficit the negative difference between what a country exports compared to what it imports.

trade promotion sales promotion geared to marketing intermediaries rather than to final consumers.

trade surplus the positive difference between what a country exports compared to what it imports.

trademark brand that has been given legal protection.

transaction management building and promoting products in the hope that enough customers will buy them to cover costs and earn profits.

transaction processing system operational support system that records and processes data from business transactions.

Trojan horse program that claims to do one thing but in reality does something else, usually something malicious.

unemployment rate percentage of the total workforce actively seeking work but who are currently unemployed.

utility a measure of the value of a good or service to a consumer; power of a good or service to satisfy a want or need.

venture capitalist a business organization or group of individuals that invests in early-stage, high-potential, and growth companies.

vertical merger agreement that combines firms operating at different levels in the production and marketing process.

virtual private network (VPN) secure connection between two points on the Internet.

virtual team a group of geographically or organizationally dispersed co-workers who use a combination of telecommunications and information technologies to accomplish an organizational task.

virus program that secretly attaches itself to other programs (called hosts) and changes them or destroys data.

vision the ability to perceive marketplace needs and what an organization must do to satisfy them; perception of marketplace needs and the ways a firm can satisfy them.

VoIP alternative version of telecommunication service using the Internet.

volume objective pricing strategy that bases a pricing decision on the attainment of market share.

wage pay based on an hourly rate or the amount of work accomplished.

whistle-blowing employee's disclosure to company officials, government authorities, or the media of illegal, immoral, or unethical practices committed by an organization.

wholesaler distribution channel member that sells primarily to retailers, other wholesalers, or business users.

wide area network (WAN) ties larger geographical regions together by using telephone lines and microwave and satellite transmission.

WiFi wireless network that connects various devices and allows them to communicate with one another through radio waves.

work team relatively permanent group of employees with complementary skills who perform the day-to-day work of organizations.

World Bank organization established by industrialized nations to lend money to less developed countries.

World Trade Organization (WTO) 153-member international institution that monitors GATT agreements and mediates international trade disputes.

worm small piece of software that exploits a security hole in a network to replicate itself.