Chapter 2

Front 1

divesture

Back 1

strategy whereby afirm sells one or more of its business units

Front 2

joint venture

Back 2

strategic alliance in which the collaboration involves joint owndership of a new venture

Front 3

spin-off

Back 3

strategy of setting up one or more coporate units as new, independent corporations

Front 4

chief executive offiecer (CEO)

Back 4

top manager hired by the board of directors to run a corporation

Front 5

aquisition

Back 5

the purchase of one company by another

Front 6

preferred stock

Back 6

stock that guarantees its holders fixed dividends and priority claims over assets but no corporate voting rights

Front 7

employee stock owndership plan (ESOP)

Back 7

arrangement in which a corporation hold its own stock in trust for its employees, who gradually receive owndership of the stock and control its voting rights

Front 8

common stock

Back 8

stock that pays dividends and guarentees corporate voting rights, but offers last claims over assets

Front 9

merger

Back 9

the union of two corporations to form a new coporatoin

Front 10

stockholder

Back 10

owner of shares of stock in a corporation

Front 11

insitututional investors

Back 11

large investors, such as mutual funds and pension funds, that purchase large blocks of corporate stock

Front 12

S corporation

Back 12

hybrid of a closely held corporation and a partnership; organized and operated like a corporation but treated as a partnership for tax purposes

Front 13

unlimited liability

Back 13

legal principle holding owners responsible for paying off all debts of business

Front 14

board of directors

Back 14

governing ody of a corporation that reports to its shareholders and delegates power to run its day to day operation but remains responsible for sustainig its assets

Front 15

production era

Back 15

period during the early 20th centruy in which US business focused primarily on improving productivity and manufacturing efficiency

Front 16

corporate governance

Back 16

roles of shareholders, directors, and other mangers in corporate decision making

Front 17

limited partner

Back 17

partner who doesn't share in a firm's managment and is liable for its debts only to the limit of the said partner's investment

Front 18

limited liablity corporation

Back 18

hybrid of a publicly held corporation and a partenership in which ownders are taxed as partners, but enjoy the benefits of a lmited liability

Front 19

sole proprietorship

Back 19

business owned andusually operated by one person who is responsible for all of its debts

Front 20

proxy

Back 20

authorization granted by shareholders for someone else to vote their shares

Front 21

general partnership

Back 21

business with two or more ownders who shar in both the operation of the frm and in financial responsibility for its debts

Front 22

initial public offering (IPO)

Back 22

first offer of shares in a closely held corporation to outside investors

Front 23

industrial revolution

Back 23

major mid 18th centruy change in production characterized by a shift to teh factory system, mass production andt he specialization of labor

Front 24

strategic alliance

Back 24

strategy in which two or more organizations collaborate on a project for mutual gain

Front 25

master limited partnership

Back 25

form of organization that sells hsares to investors who recieve profits and pay taxes on individual income from profits

Front 26

stock

Back 26

share of ownership in a corporation

Front 27

production era

Back 27

period during the early 20th centruy in which US business focused primarily on improving productivity and manufacturing efficiency

Front 28

multinational or transnational coroporation

Back 28

from of coporation spanning national boundaries

Front 29

professional corporation

Back 29

form of ownderhip allowing professionals to take advantage of corporate benefits while grandintg them lmited business liability and unlmited professional liability

Front 30

limited partnership

Back 30

type of partnership consisting of limited partners and an active or managing partner

Front 31

marketing concept

Back 31

idea that a business must focus on identifying and satisfying conusmer wants in order to be profitable

Front 32

corporation

Back 32

business that is legally considered an entitiy separate from its ownders and is liable for its own debts ; ownwers'liability extends to the limits of their investments

Front 33

cooperative

Back 33

form of organization in which a group of sole propriertorships and/or partnerships agrees to work together for common benefits

Front 34

limited liability

Back 34

legal principle holding investors liable for a firm's debts only to the limits of their personal investments in it

Front 35

general (or active) partner

Back 35

partner who actively manages a firm and who has unlimited liability for its debts

Front 36

double taxation

Back 36

situation in which taxes may be payable both by a corporation on its profits and by sarefholders on dividend incomes

Front 37

tender offer

Back 37

offer to buy shares made by a prospective buyer directly to a target orporation's shareholders, who then make individual decisions about whether to sell

Front 38

closely held corporation

Back 38

corporation whose sotck is held by only a few popeole and is not available for sale to the general public

Front 39

publicly held corporation

Back 39

corporation whose stock is widely held and avalible for sale to the general public