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223 Cards in this Set
- Front
- Back
Business
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an organization that provides goods or services to earn profit.
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Profit
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the difference between a business's revenues and its expenses.
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External Environment
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everything outside an organization's boundaries that might affect it.
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Domestic Business Environment
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the environment in which a firm conducts its operations and drives its revenues.
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Global Business Environment
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the international forces that affect a business
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Technological Environment
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all the ways by which firms create value for their constituents.
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Political-Legal Environment
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the relationship between business and government.
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Sociocultural Environment
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the customs, mores, values, and demographic characteristics of the society in which an organization functions.
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Economic Environment
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relevant conditions that exist in the economic system in which a company operates.
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Economic System
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a nations system for allocating its resources among its citizens.
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Factors of Production
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resources used in the production of goods and services-labor, capital, entrepreneurs, physical resources, and information resources.
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Labor (Human Resources)
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physical and mental capabilities of people as they contribute to economic production.
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Capital
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funds needed to crate and operate a business enterprise.
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Entrepreneur
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individual who accepts the risks and opportunities involved in creating and operating a new business venture.
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Physical Resources
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tangible items that organizations use in the conducts of their businesses.
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Information Resources
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data and other information that businesses use.
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Planned Economy
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economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions.
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Communism
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political system in which the government owns and operates all factors of production.
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Market Economy
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economy in which individuals control production and allocation decisions through supply and demand.
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Market
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mechanism for exchange between buyers and sellers of a particular good or service.
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Capitalism
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system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive.
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Mixed Market Economy
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economic system featuring characteristics of both planned and market economies.
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Privatization
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process of converting government enterprises into privately owned companies.
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Socialism
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planned economic system in which the government owns and operates only selected major sources of production.
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Demand
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the willingness and ability of buyers to purchase a good or service.
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Supply
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the willingness and ability of producers to offer a good or service for sale.
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Law of Demand
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principle that buyers will purchase (demand) more of a product as its price drops and less as its prices increases.
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Law of Supply
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principle that producers will offer (supply) more of a product for sale as its price rises and less as its price drops.
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Demand and Supply Schedule
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assessment of the relationships among different levels of demand and supply at different price levels.
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Demand Curve
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graph showing how many units of product will be demanded (bought) at different prices.
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Supply Curve
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graph showing how many unites of a product will be supplied (offered for sale) at a different price.
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Market Price (Equilibrium Price)
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profit-maximizing price at which the quantity of goods demanded and the quantity of good supplied are equal.
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Surplus
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situation in which quantity supplied exceeds quantity demanded.
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Shortage
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situation in which quantity demanded exceeds quantity supplied.
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Private Enterprise
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economic system that allows individuals to pursue their own interests without undue governmental restriction.
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Competition
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vying among businesses for the same resources or customers.
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Perfect Competition
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market or industry characterized by numerous small firms producing an identical product.
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Monopolistic Competition
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market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors.
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Oligopoly
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market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products.
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Monopoly
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market or industry in which there is only on producer that can therefore set the prices of its products.
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Natural Monopoly
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industry in which one company can most efficiently supply all needed goods or services.
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Economic Indicator
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a statistic that helps assess the performance of an economy.
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Business Cycle
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short-term pattern of economic expansions and contractions.
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Aggregate output
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the quantity of goods and services produced by an economic system during a given period.
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Standard of Living
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the total quantity and quality of goods and services people can purchase with the currency used in their economic system.
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Gross Domestic Product (GDP)
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total value of all goods and services produced within a given period by a national economy through domestic factors of production.
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Gross National Product (GNP)
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total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located.
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Real GDP
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gross domestic product (GDP) adjusted to account for changes in currency values and price changes.
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Nominal GDP
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gross domestic product (GDP) measured in current dollars or with all components valued at current prices.
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Purchasing Power Party
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the principle that exchange rates are set so that the prices of similar products in different countries are about the same.
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Productivity
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a measure of economic growth that compares how much a system produces with the resources needed to produce it.
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Balance of Trade
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the economic value of all the products that a country exports minus the economic value of all the products it imports.
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National Debt
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the amount of money that government owes its creditors.
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Stability
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condition in which the amount of money available in an economic system and the quantity of good and services produced in it are growing at about the same rate.
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Inflation
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occurs when widespread price increases occur throughout an economic system.
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Consumer Price Index (CPI)
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a measure of the prices of typical products purchases by consumers living in urban areas.
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Unemployment
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the level of joblessness among people actively seeking work in an economic system.
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Recession
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a period during which aggregate output, as measured by GDP, declines
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Depression
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a prolonged and deep recession.
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Fiscal Policies
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policies that a government uses to direct how it collects and spends revenue.
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Monetary Policies
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policies that a government uses to control the size of its money supply.
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Stabilization Policy
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government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices.
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Ethics
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beliefs about what is right or wrong and good or bad in actions that affect others.
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Ethical Behavior
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behavior conforming to generally accepted social norms concerning beneficial and harmful actions.
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Unethical Behavior
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behavior that does not conform to generally accepted social norms concerning beneficial and harmful actions.
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Business Ethics
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ethical or unethical behaviors by employees in the context of their jobs.
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Managerial Ethics
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standards of behavior that guide individual managers in their work.
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Social Responsibility
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the attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities.
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Organizational Stakeholders
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those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance.
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Areas of Social Responsibility
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Responsibility towards Environment, Customers, Investors, and Employees.
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Greenwashing
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using advertising to project a green image without adopting substantive environmentally friendly changes.
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Consumerism
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form of social activism dedicated to protecting the rights of consumers in their dealing with businesses.
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Collusion
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illegal agreement between two or more companies to commit a wrongful act.
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Green Marketing
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the marketing of environmentally friendly goods.
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Whistel-Blower
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employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible actions by publicizing them.
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Insider Trading
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illegal practice of using special knowledge about a firm for profit or gain.
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Obstructionist Stance
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approach to social responsibility by which a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment.
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Defensive Stance
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approach to social responsibility by which a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment.
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Accommodative Stance
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approach to social responsibility by which a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment.
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Proactive Stance
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approach to social responsibility by which a company actively seeks opportunities to contribute to the well being of groups and individuals in its social environment.
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Social Audit
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systematic analysis of a firm's success in using funds earmarked for meeting its social responsibility goals.
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Small Business Administration (SBA)
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government agency charged with assisting small businesses.
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Small Business
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independently owned business that has relatively little influence in its market.
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Entrepreneur
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businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture.
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Entrepreneurship
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the process of seeking business opportunities under conditions of risk.
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Business Plan
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document in which an entrepreneur summarized her or his business strategy for a proposed new venture and how that strategy will be implemented.
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Franchise
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arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser).
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Venture Capital Company
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group of small investors who invest money in companies with rapid growth potential.
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Small-Business Investment Company (SBIC)
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government-regulated investment company that borrows money from the SBA to invest in or lend to a small business.
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Small Business Development Center (SBDC) SBA
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program designed to consolidate information from various disciplines and make it available to small businesses.
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Sole Proprietorship
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business owned and usually operated by one person who is responsible for all of its debts.
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Unlimited Liability
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legal principle holding owner's responsible for paying off all debts of a business.
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General Partnership
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business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts.
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Limited Partnership
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type of partnership consisting of limited partners and a general (or active) partner.
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Limited Partner
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partner who does not share in a firm's management and is liable for its debts only to the limits of said partner's investment.
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General (or active) Partner
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partner who actively manages a firm and who has unlimited liability for its debts.
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Master Limited Partnership
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form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits.
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Cooperative
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form of ownership in which a group of sole proprietorship's and/or partnerships agree to work together for common benefits.
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Corporation
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business that is legally considered an entity separate from its owners and is liable for its own debts; owners' liabilities extend to the limits of their investments.
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Limited Liability
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legal principle holding investors liable for a firm's debts only to the limits of their personal investments in it.
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Tender Offer
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offer to buy shares made by a prospective buyer directly to a target corporation's shareholders, who then make individual decisions about whether to sell.
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Double Taxation
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situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes.
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Closely Held (or private) Corporation
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corporation whose stock is held by only a few people and is not available for sale to the general public.
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Publicly Hold (or public) Corporation
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corporation whose stock is widely held and available for sale to the general public.
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S Corporation
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hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes.
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Limited Liability Corporation (LLC)
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hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability.
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Professional Corporation
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form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability.
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Mulitnational (or transnational) Corporation
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form of corporation spanning national boundaries.
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Corporate Governance
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roles of shareholders, directors and other managers in corporate decision making and accountability.
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Stockholder (or shareholder)
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owner of shares of stock in a corporation.
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Board of Directors
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governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets.
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Offers
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top management team of a corporation.
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Chief Executive Offer (CEO)
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top manager who is responsible for the overall performance of a coporation.
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Strategic Alliance
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strategy in which two or more organizations collaborate on a project for mutual gain.
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Joint Venture
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strategic alliance in which the collaboration involves joint ownership of the new venture.
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Merger
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the union of two corporations to form a new corporation.
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Acquisition
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the purchase of one company by another.
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Divestiture
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strategy whereby a firm sells one or more of its business units.
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Spin-off
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strategy of setting up one or more coporate units as new independent coporations.
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Globalization
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process by which the world economy is becoming a single interdependent system.
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Import
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product made or grown abroad but sold domestically.
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Export
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product made or grown domestically but shipped and sold abroad.
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Distinctions based on wealth
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high-income, upper middle-income, lower middle-income, and low-income countries.
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North American Free Trade Agreement (NAFTA)
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agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, and Mexico.
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European Union (EU)
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organization for economic, social and security cooperation among European nations.
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Association of Southeast Asian Nations (ASEAN)
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organization for economic, political, social, and cultural cooperation among Southeast Asian nations.
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General Agreement of Tariffs and Trade (GATT)
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international trade agreement to encourage the multilateral reduction or elimination of trade barriers.
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World Trade Organization (WTO)
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organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices.
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Balance of Trade
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economic value of all products a country exports minus the economics value of all products it imports.
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Trade Deficit
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situation in which a country's imports exceed its exports, creating a negative balance of trade.
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Trade Surplus
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situation in which a country's exports exceed int imports, creating a positive balance of trade.
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Balance of Payments
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the flow of all money into or out of a country.
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Exchange Rate
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rate at which the currency of one nation can be exchanged for the currency of another nation.
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Euro
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a common currency shared among most of the members of the European Union (excluding Denmark, Sweden, and the United Kingdom)
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Absolute Advantage
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the ability to produce something more efficiently than any other country.
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Comparative Advantage
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the ability to produce some products more efficiently than others.
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National Competitive Advantage
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international competitive advantage stemming from a combination of factor conditions, demand conditions, related & supporting industries, & firm strategies, structures & rivalries.
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Outsourcing
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the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services.
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Offshoring
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the practice of outsourcing to foreign countries.
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Exporter
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firm that distributes and sells products to one or more foreign countries.
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Importer
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firm that buys products in foreign markets and then imports them for resale in its home country
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International Firm
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firm that conducts a significant portions of its business in foreign countries.
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Multinational Firm
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fim that designs, produces, and markets products in many nations.
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Independent Agent
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foreign individual or organization that agrees to represent an exporter's interests.
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Licensing Arrangement
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arrangement in which firms choose foreign individuals or organization to manufacture or market their products in another country.
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Branch Office
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foreign office set up by an internation or multinational firm.
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Strategic Alliance
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arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner's country.
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Foreign Direct Investment (FDI)
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arrangement in which a firm buys or establishes tangible assets in another country.
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Quota
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restriction on the number of products of a certain type that can be imported into a country.
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Embargo
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government order banning exportation and/or importation of a particular product or all products from that country.
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Tariff
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tax levied on imported products.
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Subsidy
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government payment to help a domestic business compete with foreign firms.
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Protectionism
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practice of protecting domestic business against foreign competition.
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Local Content Law
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law requiring that products sold in a particular country be at least partly made there.
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Business Practice Law
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law or regulation governing business practices in given countries.
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Cartel
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association of producers whose purpose is to control supply and prices.
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Dumping
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practice of selling product abroad for less than the cost of production.
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Management
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process of planning, organizing, leading, and controlling an organization's resources to achieve its goals.
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Planning
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management process of determining what an organization needs to do and how best to get it done.
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Organizing
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management process of determining how best to arrange an organization's resources and activities into a coherent structure.
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Leading
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management process of guiding and motivating employees to meet an organization's objectives.
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Controlling
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management process of monitoring an organization's performance to ensure that it is meeting its goals.
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Top Manager
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manager responsible for a firm's overall performance and effectiveness.
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Middle Manager
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manager responsible for implementing the strategies and working toward the goals set by top managers.
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First-Line Manager
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manager responsible for supervising the work of employees.
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Technical Skills
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skills needed to perform specialized tasks.
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Human Relations Skills
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skills in understanding and getting along with people.
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Conceptual Skills
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abilities to think in the abstract, diagnose and analyze different situation, and see beyond the present situation.
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Decision-making Skills
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skills in defining problems and selecting the best courses of action.
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Time Management Skills
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skills associated with the productive use of time.
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Strategic Management
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process of helping an organization maintain an effective alignment with its environment.
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Goal
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objective that a business hopes and plans to achieve.
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Strategy
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broad set of organizational plans for implementing the decision made for achieving organizational goals.
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Mission Statement
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organization's statement of how it will achieve its purpose in the environment in which it conducts its business.
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Long-Term Goal
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goal set for an extended time, typically five years or more into the future.
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Intermediate Goal
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goal set for a period of one to five years into the future.
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Short-Term Goal
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goal set for the very near future.
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Corporate Strategy
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strategy for determining a firm's overall attitude toward growth and the way it will manage its businesses or product lines.
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Business (or competitive) strategy
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strategy, at the business-unit or product-line level, focusing on improving a firm's competitive position.
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Functional Strategy
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strategy by which managers in specific areas decide how best to achieve corporate goals through productivity.
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Strategy Formulation
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creation of a broad program for defining and meeting an organization's goals.
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Strategic Goal
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goal derived directly from a firm's mission statement.
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SWOT Analysis
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identification and analysis of organizational strengths and weaknesses and environmental opportunities and threats as part of strategy formulation.
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Environmental Analysis
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process of scanning the business environment for threats and opportunities.
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Organizational Analysis
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process of analyzing a firm's strengths and weaknesses.
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Strategic Plan
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plan reflecting decisions about resource allocations, company priorities, and steps needed to meet strategic goals.
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Tactical Plan
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generally short-term plan concerned with implementing specific aspects of a company's strategic plans.
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Operational Plan
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plan setting short-term targets for daily, weekly, or monthly performance.
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Contingency Planning
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identifying aspects of a business or its environment that might entail changes in strategy.
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Crisis Management
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organization's methods for dealing with emergencies.
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Corporate Culture
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the shared experiences, stories, beliefs, and norms that characterize and organization.
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Organizational Structure
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specification of the jobs to be done within an organization and the ways in which they relate to one another.
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Organization Chart
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diagram depicting a company's structure and showing employees where they fit into its operations.
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Chain of Command
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reporting relationships within a company.
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Job Specialization
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the process of identifying the specific jobs that need to be done and designating the people who will perform them.
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Departmentalization
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process of grouping jobs into logical units.
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Profit Center
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separate company unit responsible for its own costs and profits.
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Product Departmentalization
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dividing an organization according to specific products or services being created.
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Process Departmentalization
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the dividing of an organization according to production processes used to create a good or service.
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Functional Departmentalization
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the dividing of an organization according to groups' functions or activities.
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Customer Departmentalization
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the dividing of an organization to offer products and meet needs for identifiable customer groups.
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Geographic Departmentalization
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the dividing of an organization according to the areas of the country or the world served by a business.
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Centralized Organization
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organization in which most decision-making authority is held by upper-level management.
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Decentralized Organization
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organization in which a great deal of decision-making authority is delegated to levels of management at points below the top.
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Flat Organizational Structure
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characteristic of decentralized companies with relatively few layers of management.
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Tall Organizational Structure
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characteristic of centralized companies with multiple layers of management.
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Span of Control
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number of people supervised by one manager.
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Delegation
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process though which a manager allocates work to subordinates.
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Responsibility
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duty to perform an assigned task.
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Authority
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power to make the decisions necessary to complete a task.
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Accountability
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obligation employees have to their manager for the successful completion of an assigned task.
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Line Authority
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department directly linked to the production and sales of a specific product.
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Staff Authority
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authority based on expertise that usually involves counseling and advising line managers.
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Staff Members
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advisers and counselors who help the department in making decisions, but do not have the authority to make final decisions.
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Committee and Team Authority
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authority granted to committees or teams involved in a firm's daily operations.
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Work Teams
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groups of operating employees who are empowered to plan and organize their own work and to perform that work with a minimum of supervision.
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Functional Structure
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organization structure in which authority is determined by the relationships between group functions and activities.
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Divisional Structure
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organizational structure in which corporate division operate as autonomous businesses under the larger corporate umbrella.
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Division
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department that resembles a separate business in that it produces and markets its own products.
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Matrix Structure
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organizational structure created by superimposing one form of structure onto another.
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International Organizational Structures
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approaches to organizational structure developed in response to the need to manufacture, purchase, and sell in global markets.
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Informal Organization
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network, unrelated tot he firm's formal authority structure, of everyday social interactions among company employees.
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Intrapreneuring
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process of creating and maintaining the inoovation and flexibility of a small business environment within the confines of a large organization.
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